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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
---------------
Date of Report (Date of earliest event reported): May 16, 1997
USX Corporation
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(Exact name of registration as specified in its charter)
Delaware 1-5153 25-0996816
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation
600 Grant Street, Pittsburgh, PA 15219-4776
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(Address of principal executive offices) (Zip Code)
(412) 433-1121
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(Registrant's telephone number,
including area code)
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Item 5. Other Events.
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On May 16, 1997, USX Corporation announced the expiration of its offer
to exchange 6.75% Convertible Preferred Securities of USX Capital Trust I for
its 6.50% Cumulative Convertible Preferred Stock. A registration statement
relating to this offer under the Securities Act of 1933 (Form S-4, File No.
333-23291) became effective on March 27, 1997, and the offer commenced on March
31. The offer expired at midnight on May 15, 1997. A total of 3,937,163 shares
of the 6.50% Preferred were properly tendered and accepted for exchange. The
purpose of this report is to file the executed Dealer Manager Agreement, and
the Multi-Series Indenture, First Supplemental Indenture, and Amended and
Restated Declaration of Trust relating to the 6.75% Preferred Securities.
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits
1.1) Dealer Manager Agreement.
4.3) Multi-Series Indenture, between the Company and The Bank of New
York, as trustee.
4.4) First Supplemental Indenture, between the Company and The Bank
of New York, as trustee.
4.6) Amended and Restated Declaration of Trust of the Trust,
including form of Trust Convertible Preferred Security.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
USX CORPORATION
By /s/ Kenneth L. Matheny
----------------------------------
Kenneth L. Matheny
Vice President & Comptroller
Dated: May 23, 1997
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Exhibit 1.1
DEALER MANAGER AGREEMENT
March 31, 1997
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
250 Vesey Street
New York, New York 10281
Ladies and Gentlemen:
1. USX Corporation, a Delaware corporation (the "Company"), proposes
to exchange 6.75% Convertible Quarterly Income Preferred Securities (the "Trust
Convertible Preferred Securities") of USX Capital Trust I (the "Trust"), a
statutory business trust organized under the Business Trust Act (the "Delaware
Act") of the State of Delaware (chapter 38, Title 12, of the Delaware Code, 12
Del. C. Sec 3801 et seq.) for up to 6,700,000 shares of 6.50% Cumulative
Convertible Preferred Stock (liquidation preference $50.00 per share) (the
"6.50% Convertible Preferred Stock") of the Company on the basis of one Trust
Preferred Convertible Security for each share of 6.50% Convertible Preferred
Stock validly tendered and accepted for exchange. The Trust Convertible
Preferred Securities will be guaranteed (the "Guarantee") by the Company to the
extent described in the Prospectus (as hereinafter defined). The exchange
offer, as it may be amended and supplemented, described above is herein referred
to as the "Exchange Offer."
In connection with the Exchange Offer, the Company will deposit in the
Trust as trust assets its 6.75% Convertible Junior Subordinated Debentures (the
"Debentures") and the Trust will transfer to the Company the Trust Convertible
Preferred Securities and its common securities (the "Trust Common Securities")
as set forth in the Prospectus. The Trust Convertible Preferred Securities will
be issued under the Trust's Amended and Restated Declaration of Trust (the
"Declaration") and the Debentures will be issued under an Indenture between the
Company and The Bank of New York, as trustee (including the related supplemental
indenture governing the Debentures to be deposited in the Trust, the
"Indenture"). The Bank of New York will act as institutional trustee under the
Declaration (the "Institutional Trustee"), trustee under the Indenture (the
"Indenture Trustee") and trustee under the Guarantee (the "Guarantee Trustee").
2. Engagement as Dealer Managers. By this Dealer Manager Agreement
-----------------------------
(the "Agreement"), each of the Company and the Trust hereby engages and appoints
you as the exclusive Dealer Managers for the Exchange Offer and authorizes you
to act as such in connection with the Exchange Offer.
1
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2
As Dealer Managers, you severally agree, in accordance with your
customary practice, to perform in connection with the Exchange Offer those
services as are customarily performed by investment banking concerns in
connection with similar offers, including, without limitation, soliciting from
individuals and institutions the tender of 6.50% Convertible Preferred Stock
pursuant to and in accordance with the terms and conditions of the Exchange
Offer. You shall act as independent contractors in connection with the Exchange
Offer with duties solely to the Company and the Trust and nothing herein
contained shall constitute you as agents of the Company or the Trust in
connection with the solicitation of such 6.50% Convertible Preferred Stock
pursuant to and in accordance with the terms and conditions of the Exchange
Offer; provided, however, that the Company hereby authorizes the Dealer
Managers, and/or one or more registered brokers or dealers chosen by the Dealer
Managers, to act as the Company's agents in making the Exchange Offer to
residents of any jurisdiction in which such agents designation may be necessary
to comply with applicable law. Nothing in this Agreement shall constitute the
Dealer Managers as partners or joint venturers with the Company, the Trust, any
of their subsidiaries or with each other. On the basis of the representations
and warranties and agreements of the Company and the Trust contained herein and
subject to and in accordance with the terms and conditions hereof and of the
Exchange Offer, the Dealer Managers severally agree to act in such capacity.
3. Registration Statement, Prospectus and Offering Materials. (a)
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The Company and the Trust have prepared and filed with the Securities and
Exchange Commission (the "Commission"), under the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder
(collectively, the "Securities Act"), a registration statement on Form S-4
covering the registration of the Trust Convertible Preferred Securities, the
Guarantee, the Debentures, and shares of USX--U.S. Steel Group Common Stock,
$1.00 par value per share (the "Steel Stock"), of the Company issuable upon
conversion of the Trust Convertible Preferred Securities and the Debentures.
Such registration statement, including the exhibits thereto and any documents
incorporated by reference therein, as amended at the time it becomes effective
or as thereafter amended or supplemented from time to time, is herein called the
"Registration Statement." The final prospectus included in the Registration
Statement (including any documents incorporated in the prospectus by reference)
is herein called the "Prospectus," except that if the final prospectus furnished
to the Dealer Managers for use in connection with the Exchange Offer differs
from the prospectus set forth in the Registration Statement (whether or not such
prospectus is required to be filed pursuant to Rule 424(b)), the term
"Prospectus" shall refer to the final prospectus furnished to the Dealer
Managers for such use. The terms "supplement" and "amendment" or "supplemented"
and "amended" as used herein with respect to the Prospectus shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Prospectus and prior to the termination of
the Exchange Offer by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company and the Trust have prepared and filed, or agree that prior
to or on the date of commencement of the Exchange Offer (the "Commencement
Date") they will file, with the Commission under the Exchange Act and the rules
and regulations promulgated thereunder a Statement on Schedule 13E-4 with
respect to the Exchange Offer (including the exhibits thereto and any documents
incorporated by reference therein, the "Schedule 13E-4").
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3
(c) The Registration Statement, Prospectus and the related letters from
the Dealer Managers to registered holders and participants in The Depository
Trust Company, securities brokers, dealers, commercial banks, trust companies
and other nominees, letters to beneficial owners of 6.50% Convertible Preferred
Stock, letters of transmittal (the "Letters of Transmittal"), notice of
guaranteed delivery (the "Notice of Guaranteed Delivery") and any newspaper
announcements, press releases and other offering materials and information the
Company may use or prepare, approve or authorize for use in connection with the
Exchange Offer, including the Schedule 13E-4 as amended or supplemented from
time to time, are herein collectively referred to as the "Exchange Offer
Materials."
4. Use of Exchange Offer Materials. (a) The Exchange Offer
-------------------------------
Materials have been or will be prepared and approved by, and are the sole
responsibility of, the Company and the Trust. The Company shall, to the extent
permitted by law, use its best efforts to disseminate the Exchange Offer
Materials to each registered holder of any 6.50% Convertible Preferred Stock, as
soon as practicable after the Commencement Date, pursuant to Rule 13e-4 under
the Exchange Act and comply with its obligations thereunder. Thereafter, to the
extent practicable until three days prior to the Expiration Date of the Exchange
Offer, the Company shall use its best efforts to cause copies of such Exchange
Offer Materials and a return envelope to be mailed to each person who becomes a
holder of record of any 6.50% Convertible Preferred Stock. The Company and the
Trust acknowledge and agree that you may use the Exchange Offer Materials as
specified herein without assuming any responsibility for independent
verification on your part and the Company and the Trust represent and warrant to
you that you may rely on the accuracy and completeness of any information
delivered to you by or on behalf of the Company or the Trust without assuming
any responsibility for independent verification of such information or without
performing or receiving any appraisal or evaluation of the assets or liabilities
of the Company or the Trust.
(b) The Company and the Trust agree to provide you as many copies as you
may reasonably request of the Exchange Offer Materials. The Company and the
Trust agree that within a reasonable time prior to using or filing with any
federal, state or other governmental agency or instrumentality of the United
States of any Exchange Offer Materials, it will submit copies of such materials
to you and will give reasonable consideration to your and your counsel's
comments, if any, thereon. The Company and the Trust agree prior to the
termination of the Exchange Offer, before amending or supplementing the
Registration Statement or the Prospectus, to furnish copies of drafts to, and
consult with, the Dealer Managers and their counsel within a reasonable time in
advance of filing with the Commission of any amendment or supplement to the
Registration Statement, the Prospectus or the other Exchange Offer Materials.
Neither the Company nor the Trust shall file any such amendment or supplement to
which the Dealer Managers shall reasonably object; provided, however that the
foregoing requirement shall not apply to any of the Company's filings with the
Commission required to be filed pursuant to Section 13(a), 13(c), 14, or 15(d)
of the Exchange Act, copies of which filings the Company will cause to be
delivered to the Dealer Managers promptly after being transmitted for filing
with the Commission.
(c) The Company has furnished or shall use its best efforts to furnish to
you, or cause the transfer agents or registrars for the 6.50% Convertible
Preferred Stock to furnish to you, as soon as practicable after the date hereof
(to the extent not previously furnished), cards or
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4
lists in reasonable quantities or copies thereof showing the names of persons
who were the holders of record or, to the extent available, the beneficial
owners of the 6.50% Convertible Preferred Stock as of a recent date, together
with their addresses and the number of shares of 6.50% Convertible Preferred
Stock held by them. Additionally, the Company and the Trust shall update, or
cause the transfer agents or registrars referred to above to update, such
information from time to time during the term of this Agreement as may be
reasonably requested by you. Except as otherwise provided herein, you agree to
use such information only in connection with the Exchange Offer.
(d) The Company and the Trust authorize the Dealer Managers to use the
Exchange Offer Materials in connection with the Exchange Offer and for such
period of time as any such materials are required by law to be delivered in
connection therewith. The Dealer Managers shall not have any obligation to
cause any Exchange Offer Materials to be transmitted generally to the holders of
6.50% Convertible Preferred Stock.
(e) Each of the Company and the Trust authorizes the Dealer Managers to
communicate with any information agent (the "Information Agent") or exchange
agent (the "Exchange Agent") appointed by the Company or the Trust to act in
such capacity in connection with the Exchange Offer. The Company and the Trust
will arrange for the Exchange Agent to advise you daily, as necessary, as to
such matters relating to the Exchange Offer as you may reasonably request.
(f) The Company and the Trust agree that any reference to the Dealer
Managers in any Exchange Offer Materials or in any newspaper announcement or
press release or other document or communication is subject to the Dealer
Managers' prior consent, which consent shall not be unreasonably withheld.
5. Withdrawal. In the event that either the Company or the Trust (i)
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uses or permits the use of, or files with the Commission, any amendment or
supplement to the Registration Statement and any such document has not been
previously submitted to you for your comment if prior submission is required in
accordance with the provisions of Section 4(b) hereof; or (ii) shall have
breached any of its representations, warranties, agreements or covenants herein,
then you shall be entitled upon written notice to the Company and the Trust to
withdraw as Dealer Managers in connection with the Exchange Offer without any
liability or penalty to you or any other indemnified person (as defined in
Section 11 below) and without loss of any right to indemnification or
contribution provided in Section 11 or to the payment of (x) all fees payable
pursuant to Section 6 with respect to the 6.50% Convertible Preferred Stock
tendered prior to the date of withdrawal and (y) all reasonable expenses payable
hereunder which have accrued through the date of such withdrawal.
6. Fees. (a) The Company shall pay the Dealer Managers a fee of
----
$0.3125 for each share of 6.50% Convertible Preferred Stock validly tendered and
accepted for exchange pursuant to the Exchange Offer.
(b) The Company agrees to pay, or cause to be paid to, each Soliciting
Dealer (including a Dealer Manager) whose name has been inserted in the space
provided in the Letter of Transmittal for that purpose a fee (the "Soliciting
Dealer Fee") equal to $1.00 per
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5
share of 6.50% Convertible Preferred Stock validly tendered and accepted for
exchange pursuant to the Exchange Offer, to the extent that the tender of such
shares was solicited by such Soliciting Dealer from beneficial owners of 5,000
or few shares of 6.50% Convertible Preferred Stock. No Soliciting Dealer Fee
shall be payable to any Soliciting Dealer with respect to the tender of shares
of 6.50% Convertible Preferred Stock by the holder of record, for the benefit of
the beneficial owner, unless the beneficial owner has designated such Soliciting
Dealer. No Soliciting Dealer Fee shall be payable in respect to shares of 6.50%
Convertible Preferred Stock beneficially owned by a Soliciting Dealer or
registered in the name of a Soliciting Dealer, unless such shares are held by
such Soliciting Dealer as nominee and are being tendered for the benefit of such
a beneficial owner. No Soliciting Dealer Fee shall be payable to a Soliciting
Dealer if such Soliciting Dealer is required for any reason to transfer any
portion of such fee to a tendering holder (other than itself). The Soliciting
Dealer Fee shall be paid to the Soliciting Dealers within one week of the
consummation of the Exchange Offer.
7. Expenses and Reimbursement of Expenses. The Company and the
--------------------------------------
Trust, jointly and severally, agree to pay the costs and expenses incident to
the performance of the obligations hereunder, including, without limitation, all
costs and expenses (i) incurred by dealers and brokers (including yourselves),
commercial banks, trust companies and nominees for their customary mailing and
handling expenses incurred in forwarding the Exchange Offer Materials to their
customers, (ii) incident to the preparation, issuance, execution and delivery of
the Trust Convertible Preferred Securities, (iii) incident to the preparation,
printing and filing under the Securities Act of the Registration Statement, the
Prospectus (including, without limitation, in each case all exhibits, amendments
and supplements thereto), (iv) incurred in connection with the registration or
qualification of the Trust Convertible Preferred Securities under the laws of
such jurisdictions as the Dealer Managers may designate (including, without
limitation, reasonable fees of counsel for the Dealer Managers and its
reasonable disbursements), (v) in connection with the printing (including word
processing and duplication costs) and delivery of all Exchange Offer Materials
(including, without limitation, any preliminary and supplemental blue sky
memoranda) including, without limitation, mailing and shipping; (vi) the fees of
the New York Stock Exchange, Inc. (the "NYSE") in connection with the listing of
the Trust Convertible Preferred Securities; (vii) all advertising expenses
related to the Exchange Offer and the fees and expenses of the Exchange Agent
and the Information Agent; (viii) the fees and disbursements of Morris, Nichols,
Arsht & Tunnell, Delaware counsel to the Company and the Trust, Miller &
Chevalier, Chartered, special tax counsel to the Company and the Trust, and
Price Waterhouse, LLP, auditors to the Company; and (ix) the fees and expenses
of the trustees of the Trust (the "Trustees of the Trust"), including the
Institutional Trustee, and the Indenture Trustee and the Guarantee Trustee. In
addition, the Company and the Trust, jointly and severally, agree to reimburse
the reasonable out-of-pocket expenses of the Dealer Managers in connection with
the Exchange Offer (including, without limitation, the reasonable legal fees and
expenses of counsel to the Dealer Managers in connection with the Exchange
Offer).
8. Representations, Warranties and Certain Agreements of the Company
-----------------------------------------------------------------
and the Trust. Each of the Company and the Trust jointly and severally
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represents and warrants to you, and agrees with you (other than with respect to
Sections 8(d), (k) through (m), (o) through (u), (w), (y), (aa), Subsection
8(c)(i) and Section 8(j) (with respect to the Guarantee),
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6
as to which only the Company represents and warrants to you and agrees with
you), that as of the Commencement Date and at all times on or prior to the date
when the Exchange Offer is consummated (the "Closing Date"):
(a) the Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission;
(b) (i) the Exchange Offer Materials, including the Registration
Statement and Prospectus, comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the Exchange Act and the applicable rules and regulations of the
Commission thereunder; (ii) the Registration Statement, when it became
effective, did not contain and as amended or supplemented, if applicable,
will not contain, any 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) none of the Prospectus or
other Exchange Offer Materials contains, and, as amended or supplemented,
if applicable, will contain any untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
except that the representations and warranties set forth in this Section
8(b) do not apply (A) to statements or omissions in the Exchange Offer
Materials, the Registration Statement or the Prospectus based upon
information relating to the Dealer Managers furnished to the Company in
writing by the Dealer Managers expressly for use therein or (B) to that
part of the Registration Statement that constitutes the Statements of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"), of the Institutional Trustee,
the Indenture Trustee or the Guarantee Trustee;
(c) (i) the Company has the corporate power and authority to execute,
deliver and perform its obligations under this Agreement, the Declaration,
the Indenture and the Guarantee; and (ii) the Trust has the business trust
power and authority to execute, deliver and perform its obligations under
this Agreement;
(d) this Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company;
(e) this Agreement has been duly and validly authorized, executed and
delivered by the Trust and is a valid and binding obligation of the Trust;
(f) the Prospectus as amended or supplemented in relation to the
Exchange Offer shall have been filed with the Commission pursuant to Rule
424(b), if required, within the applicable time period prescribed for such
filing by the rules and regulations under the Securities Act;
(g) on or prior to the Commencement Date, an agreement with the
Exchange Agent relating to the Exchange Offer (the "Exchange Agency
Agreement") shall be in full force and effect;
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7
(h) on or prior to the Commencement Date, an agreement with the
Information Agent relating to the Exchange Offer shall be in full force and
effect;
(i) the Trust Convertible Preferred Securities to be issued pursuant
to the Exchange Offer will be duly authorized by the Declaration upon
execution and delivery of the Declaration in the form filed as an exhibit
to the Registration Statement, and, when issued and delivered in accordance
with the terms of this Agreement in exchange for 6.50% Convertible
Preferred Stock pursuant to the Exchange Offer, will be validly issued and
(subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial ownership interests in the assets of the Trust, not
subject to any preemptive or similar rights, and will conform in all
material respects to all statements relating thereto contained in the
Prospectus. Holders of Trust Convertible Preferred Securities will be
entitled, subject to the terms of the Declaration, to the same limitation
of personal liability extended to stockholders of private corporations for
profit;
(j) the Declaration and the Guarantee have been duly authorized by
the Company and, as of the Closing Date, will have been duly executed and
delivered by the Company; assuming due authorization, execution and
delivery of the Declaration by the Trustees of the Trust, the Declaration
will, as of the Closing Date, be valid and binding on, and enforceable
against, the Trust in accordance with its terms, except as enforceability
may be limited by bankruptcy, insolvency, reorganization and other similar
laws relating to or affecting creditors' rights generally, by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and an implied covenant of
good faith and fair dealing; the Guarantee, as of the Closing Date, will be
valid and binding on, and enforceable against, the Company in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing; the
Declaration and the Guarantee have been duly qualified under the Trust
Indenture Act and will conform in all material respects to all statements
relating thereto contained in the Prospectus;
(k) the Indenture has been duly qualified under the Trust Indenture
Act and, assuming due authorization, execution and delivery of the
Indenture by the Indenture Trustee, when executed and delivered by the
Company, will be valid and binding on, and enforceable against, the Company
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating to
or affecting creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing;
(l) the Debentures to be deposited in the Trust as trust assets in
connection with the Exchange Offer have been duly authorized, and, assuming
due authorization, execution and delivery of the Indenture by the Indenture
Trustee, when executed and delivered by the Company to the Indenture
Trustee, and when executed and
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8
authenticated in accordance with the provisions of the Indenture and
delivered to the Trust pursuant to the terms of the Exchange Offer, will be
entitled to the benefits of the Indenture and will be valid and binding on,
and enforceable against, the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, reorganization
and other similar laws relating to or affecting creditors' rights
generally, by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing;
(m) the Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction; and each of its
subsidiaries has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation; and Marathon Oil Company ("Marathon") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Ohio;
(n) the Trust has been duly created and is validly existing as a
business trust in good standing under the Delaware Act, is and will be
treated as a grantor trust for Federal income tax purposes under existing
law, has the business trust power and authority to conduct its business as
presently conducted and as described in the Prospectus, and is not required
to be authorized to do business in any other jurisdiction;
(o) the Company and its subsidiaries have good and marketable title
in fee simple to all real property and good and marketable title to all
personal property owned by them which is material to the business of the
Company or the U.S. Steel Group (as defined in the Prospectus), in each
case free and clear of all liens, encumbrances and defects except such as
are described in the Prospectus or such as do not materially affect the
value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and any
real property and buildings held under lease by the Company and its
subsidiaries which are material to the business of the Company or the U.S.
Steel Group are held by them under valid, subsisting and enforceable leases
with such exceptions as are not material and do not interfere with the use
made and proposed to be made of such property and buildings by the Company
and its subsidiaries;
(p) the Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
nonassessable and conform in all material respects to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of Marathon have been duly and validly
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9
authorized and issued, are fully paid and nonassessable and are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(q) the Debentures are convertible into shares of Steel Stock in
accordance with the terms of the Indenture; all shares of Steel Stock
issuable upon conversion of the Debentures have been duly and validly
authorized, and on or prior to the Closing Date will be reserved for
issuance upon such conversion and, when issued and delivered in accordance
with the terms of the Indenture, will be duly and validly issued, fully
paid and nonassessable and will conform to the description thereof
contained in the Prospectus; and the holders of outstanding capital stock
of the Company are not entitled to preemptive or other rights afforded by
the Company to subscribe for the shares of Steel Stock issuable upon
conversion of the Debentures;
(r) neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements incorporated by
reference in the Prospectus any loss or interference with its business
which is material to the business of the Company or the U.S. Steel Group
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus;
and, since such date, there has not been any material change in the capital
stock or long-term debt of the Company or Marathon or any material adverse
change, or any development likely to involve a prospective material adverse
change, in or affecting the management, consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries or the financial position, stockholders' equity or results of
operations of the U.S. Steel Group, otherwise than as set forth or
contemplated in the Prospectus;
(s) other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries or the financial position, stockholders' equity or results of
operations of the U.S. Steel Group, and, to the best of the Company's
knowledge, no such proceedings are threatened by governmental authorities
or others;
(t) the financial statements (including the related notes and
supporting schedules) incorporated by reference in the Prospectus present
fairly, in all material respects, the financial position and results of
operations of the entities purported to be shown thereby, at the dates and
for the periods indicated, and have been prepared in conformity with
generally accepted accounting principles applied, except as noted therein,
on a consistent basis throughout the periods involved;
(u) to the best knowledge of the Company, Price Waterhouse, who have
certified certain financial statements of the Company and its subsidiaries,
are
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10
independent public accountants as required by the Securities Act and the
rules and regulations of the Commission thereunder and were independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder during the periods covered by the
financial statements on which they reported incorporated by reference in
the Prospectus;
(v) the Company and the Trust are not, and after giving effect to the
consummation of the Exchange Offer will not be, an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended.
(w) except with respect to the Company's Restated Rights Agreement
(as defined in the Prospectus), there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company owned or to be
owned by such person or to require the Company to include such securities
in the securities registered pursuant to the Registration Statement or in
any securities being registered pursuant to any other registration
statement filed by the Company under the Securities Act;
(x) there are no contracts or other documents which are required to
be described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the rules and regulations of the
Commission thereunder which have not been described in the Prospectus or
filed as exhibits to the Registration Statement or incorporated therein by
reference as permitted by the rules and regulations of the Commission
thereunder;
(y) no labor disturbance by the employees of the Company exists or,
to the knowledge of the Company, is imminent which is likely to have a
material adverse effect on the consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries or the financial position, stockholders' equity or results of
operations of the U.S. Steel Group;
(z) the execution and delivery by the Company and the Trust of, and
the performance by the Company and the Trust of their obligations under,
this Agreement, the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Declaration, the
Indenture and the Guarantee, the issuance and delivery by the Trust of the
Trust Convertible Preferred Securities and the consummation of the Exchange
Offer and the fulfillment of the terms herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Trust, the Company or Marathon is a party or by which the Trust, the
Company or Marathon is bound or to which any of the property or assets of
the Trust, the Company or Marathon is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or Marathon or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the
<PAGE>
11
Trust or the Company or Marathon or any of their properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
performance by the Company and the Trust of their obligations under this
Agreement and the issue and exchange of the Trust Convertible Preferred
Securities by the Company pursuant to the Exchange Offer, the issuance of
the Debentures by the Company pursuant to the Indenture, the performance by
the Company under the Guarantee and the issuance of the shares of Steel
Stock issuable upon the conversion of the Trust Convertible Preferred
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, except for the (i) the listing of the Trust
Convertible Preferred Securities and shares of Steel Stock issuable upon
conversion of the Trust Convertible Preferred Securities on the NYSE, (ii)
the registration under the Securities Act of the Trust Convertible
Preferred Securities, the Debentures, the Guarantee and the shares of Steel
Stock issuable upon conversion of the Debentures, (iii) the registration of
the Trust Convertible Preferred Securities under the Exchange Act and (iv)
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws or the
securities laws of non-U.S. jurisdictions in connection with the issue and
exchange of the Trust Convertible Preferred Securities and the issuance of
the shares of Steel Stock issuable upon conversion of the Trust Convertible
Preferred Securities;
(aa) neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material agreement,
indenture or instrument, (iii) is in violation in any respect material to
the business of the Company, Marathon or the U.S. Steel Group of any law,
ordinance, governmental rule, regulation or court decree to which it or its
property may be subject or has failed to obtain any material license,
permit, certificate, franchise or other governmental authorization or
permit necessary to the ownership of its property or to the conduct of its
business or (iv) is in violation of Section 517.075 of the Florida
Securities and Investor Protection Act.
9. Conditions to Dealer Managers' Obligations. The several
------------------------------------------
obligations of the Dealer Managers hereunder are subject, as of the Commencement
Date and at all times on or prior to the Closing Date, to the accuracy of the
representations and warranties on the part of the Company and the Trust herein,
to the accuracy of the statements of officers of the Company and of the Trust
made pursuant to the provisions hereof, to the performance by
the Company and the Trust of their respective obligations hereunder and to the
following additional conditions:
(a) on each of the Commencement Date and the Closing Date, you shall
have received:
(i) a certificate, dated such date and signed by an authorized
officer of the Trust acceptable to you, to the effect that the
representations and warranties of the Trust contained in this
Agreement are true and correct as of such date
<PAGE>
12
and that the Trust has performed all of its obligations to be
performed hereunder on or prior to such date; and
(ii) a certificate, dated such date and signed by an authorized
officer of the Company to the effect that no event described in
subsections 9(i)(i) or (ii) or subsection 9(l) has occurred as of such
date, and to the effect that the representations and warranties of the
Company contained in the Agreement are true and correct as of such
date and that the Company has performed all of its obligations to be
performed hereunder on or prior to such date.
The officers signing and delivering such certificate on behalf of the
Company and the Trust may rely upon the best of their knowledge as to
proceedings threatened;
(b) each of the Company and the Trust shall have furnished to you on
each of the Commencement Date and the Closing Date, such additional
certificates or other documents as are typically delivered in connection
with a transaction of this type and which you may reasonably request;
(c) on the Closing Date (except as to clauses (xiii), (xv), (xvii),
(xix) and (xxii) which will be delivered only on the Commencement Date) and
on the Commencement Date (except as to clauses (xiv), (xvi), (xviii), (xx),
(xxiii) and (xxvi) which will be delivered only on the Closing Date), the
Dealer Managers shall have received a signed opinion of Dan D. Sandman,
Esq., General Counsel of the Company or John A. Hammerschmidt, Assistant
General Counsel and Assistant Secretary of the Company, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such
qualification, or is subject to no material liability or disability by
reason of failure to be so qualified in any such jurisdiction;
(iii) Marathon has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Ohio; and all of the issued shares of capital stock of Marathon
have been duly and validly authorized and issued, are fully paid and
non-assessable, and are owned directly or indirectly by the Company,
free and clear of all liens, encumbrances, equities or claims;
(iv) the Company has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of capital stock
of the Company have been duly and validly authorized and issued and
are fully paid and
<PAGE>
13
nonassessable; and all shares of Steel Stock issuable upon conversion
of the Trust Convertible Preferred Securities have been duly and
validly authorized (and for purposes of the opinion to be delivered on
the Closing Date only, reserved) for issuance upon such conversion
and, when issued and delivered in accordance with the terms of the
Indenture, will be duly and validly issued, fully paid and
nonassessable and will conform in all material respects to the
description thereof contained in the Prospectus;
(v) there are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer
of, the Steel Stock issuable upon conversion of the Debentures
pursuant to the Company's Restated Certificate of Incorporation or by-
laws or any agreement or other instrument known to such counsel, other
than certain rights to subscribe for or to purchase shares of Steel
Stock pursuant to the Restated Rights Agreement, employee stock option
plans or employee benefit plans and certain restrictions upon the
transfer of the Steel Stock pursuant to the Company's 1990 Stock Plan;
(vi) to the best of such counsel's knowledge and other
than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries or the financial position, stockholders' equity
or results of operations of the U.S. Steel Group; and, to the best of
such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) the Registration Statement was declared effective
under the Securities Act as of the date and time specified in such
opinion, the Prospectus was filed with the Commission pursuant to the
subparagraph of Rule 424(b) of the rules and regulations of the
Commission specified in such opinion on the date specified therein and
no stop order suspending the effectiveness of the Registration
Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the
Commission;
(viii) the documents incorporated by reference in the
Prospectus, and, in the case of such opinion delivered on the Closing
Date, any further amendment or supplement thereto made by the Company
prior to the Closing Date (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any of such
documents, when
<PAGE>
14
such documents became effective or were so filed, as the case may be,
contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made when such
documents were so filed, not misleading;
(ix) the Registration Statement and the Prospectus, and,
in the case of such opinion delivered on the Closing Date, any further
amendments and supplements thereto made by the Company prior to such
Closing Date (other than the financial statements and related
schedules therein, as to which such counsel need express no opinion),
comply as to form in all material respects with the requirements of
the Securities Act and the rules and regulations thereunder; persons
subject to his supervision have participated on behalf of the Company
in connection with the preparation of the Registration Statement and
in conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company
and representatives of the Dealer Managers and counsel for the Dealer
Managers, at which conferences the contents of the Registration
Statement and the Prospectus and related matters were discussed; he
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus and makes no representation that he has independently
verified the accuracy, completeness or fairness of such statements,
except as set forth in paragraphs (iv) above and (xxii) below;
however, in the course of the preparation and review of the
Registration Statement and the Prospectus, he has no reason to believe
that, as of its effective date, the Registration Statement, or, in the
case of such opinion delivered on the Closing Date, any further
amendment thereto made by the Company prior to such Closing Date
(other than the financial statements and related statements and
related schedules therein, as to which such counsel need express no
opinion), contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that, as of its date and
the date of such opinion, the Prospectus, or, in the case of such
opinion delivered on the Closing Date, any further amendment or
supplement thereto made by the Company prior to such Closing Date
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion), contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (such counsel
may base such belief on the fact that he is General Counsel of the
Company and supervises attorneys in the Law Department of the Company
who have acted as counsel to the Company in connection with the
preparation of the Registration Statement); and he does not know of
any amendment to the Registration Statement required to be filed or of
any contracts or other documents of a character required to be filed
as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration
<PAGE>
15
Statement or the Prospectus which are not filed or incorporated by
reference or described as required;
(x) this Agreement has been duly authorized, executed and
delivered by the Company;
(xi) the Exchange Agency Agreement has been duly
authorized, executed and delivered by the Company;
(xii) the execution and delivery by the Company and the
Trust of, and the performance by the Company and the Trust of their
obligations under, this Agreement, the execution and delivery by the
Company of, and the performance by the Company of its obligations
under, the Declaration, the Indenture and the Guarantee, the issuance
and delivery by the Trust of the Trust Convertible Preferred
Securities and the consummation of the Exchange Offer and the
fulfillment of the terms herein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Trust,
the Company or Marathon is a party or by which the Trust, the Company
or Marathon is bound or to which any of the property or assets of the
Trust, the Company or Marathon is subject, nor will such action result
in any violation of the provisions of the charter or by-laws of the
Company or Marathon or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Trust or the Company or Marathon or any of their properties;
(xiii) the Guarantee has been duly authorized by the
Company and duly qualified under the Trust Indenture Act and, when
duly executed and delivered by the Company and duly authorized,
executed and delivered by the Guarantee Trustee and upon issuance and
delivery of the Trust Convertible Preferred Securities pursuant to the
Exchange Offer, will be a valid and legally binding agreement of the
Company, enforceable in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws relating to or affecting
creditors' rights generally, by general equitable principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and an implied covenant of good faith
and fair dealing;
(xiv) the Guarantee has been duly authorized, executed
and delivered by the Company and has been duly qualified under the
Trust Indenture Act and is a valid and binding agreement of the
Company, enforceable in accordance with its terms except as the
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights
generally, general principles of equity (regardless of whether
enforceability is considered in a
<PAGE>
16
proceeding at law or in equity) and any implied covenant of good faith
and fair dealing;
(xv) the Declaration has been duly authorized by the
Company and duly qualified under the Trust Indenture Act;
(xvi) the Declaration has been duly authorized, executed
and delivered by the Company and has been duly qualified under the
Trust Indenture Act;
(xvii) the Indenture has been duly authorized by the
Company and has been duly qualified under the Trust Indenture Act and,
when duly executed and delivered by the Company and duly authorized,
executed and delivered by the Indenture Trustee, will constitute a
valid and legally binding agreement of the Company enforceable in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization and other similar laws relating
to or affecting creditors' rights generally, by general equitable
principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing;
(xviii) the Indenture has been duly qualified under the
Trust Indenture Act, has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution and delivery
of the Indenture by the Indenture Trustee, constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the
enforcement of creditors' rights generally, general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and an implied covenant of good faith
and fair dealing;
(xix) the Debentures have been duly authorized by the
Company and, when the Indenture has been duly executed and delivered
by the Company and the Indenture Trustee, when the Debentures have
been duly executed and delivered by the Company and duly authenticated
by the Indenture Trustee and delivered pursuant to the terms of the
Exchange Offer, will be valid and binding obligations of the Company
enforceable in accordance with their terms except as the enforcement
thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or
affecting the enforcement of creditors' rights generally, general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and an implied
covenant of good faith and fair dealing;
(xx) the Debentures have been duly authorized, executed
and delivered by the Company and, assuming due authentication by the
Indenture Trustee and upon delivery pursuant to the terms of the
Exchange Offer, will be valid and binding obligations of the Company
enforceable in accordance with
<PAGE>
17
their terms except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the
enforcement of creditors' rights generally, general principles of
equity (regardless of whether enforceability is considered in a
proceeding at law or in equity) and an implied covenant of good faith
and fair dealing;
(xxi) the Steel Stock issuable upon conversion of the
Debentures has been duly authorized (and, for purposes of the opinion
to be delivered on the Closing Date only, reserved) by the Company for
issuance upon such conversion and, when issued and delivered in
accordance with the Indenture, will be duly and validly issued, fully
paid and nonassessable;
(xxii) the statements made in the Prospectus under the
captions "Description of Trust Convertible Preferred Securities",
"Description of the Guarantee" and "Description of the Convertible
Debentures", insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents and proceedings and constitute accurate summaries, in all
material respects, of the terms of each of the Trust Convertible
Preferred Securities, the Guarantee and the Convertible Debentures as
set forth in the form of exhibits to the Registration Statement. The
statements made in the Prospectus under the captions "Description of
Capital Stock and Amended and Restated Rights Plan" and "Description
of the 6.50% Convertible Preferred Stock", insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and are
accurate in all material respects;
(xxiii) the statements made in the Prospectus under the
captions, "Description of the Trust Convertible Preferred Securities,"
"Description of the 6.50% Convertible Preferred Stock," "Description
of the Convertible Debentures," "Description of the Guarantee," and
"Description of Capital Stock and Amended and Restated Rights Plan"
insofar as such statements constitute a summary of the legal matters,
documents or proceedings referred to therein, fairly present the
information called for with respect to such legal matters, documents
and proceedings and are accurate in all material respects;
(xxiv) neither the Company nor the Trust is, or after
giving effect to the consummation of the Exchange Offer, will be, an
"investment company" as such terms are defined in the Investment
Company Act of 1940, as amended;
(xxv) no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the performance by the
Company and the Trust of their obligations under this Agreement and
the issue and exchange of the Trust Convertible Preferred Securities
by the Company pursuant to the Exchange Offer, the
<PAGE>
18
issuance of the Debentures by the Company pursuant to the Indenture,
the performance by the Company under the Guarantee and the issuance of
the shares of Steel Stock issuable upon the conversion of the
Debentures or the consummation by the Company of the transactions
contemplated by this Agreement, except for such consents, approvals,
authorizations, registrations or qualifications which have been
obtained by the Company or as may be required under state securities
or Blue Sky laws or the securities laws of non-U.S. jurisdictions in
connection with the issue and exchange of the Trust Convertible
Preferred Securities and the shares of Steel Stock issuable upon
conversion of the Trust Convertible Preferred Securities;
(xxvi) to the best of such counsel's knowledge, other
than with respect to the Restated Rights Agreement, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Securities Act with respect to any
securities of the Company owned or to be owned by such person or to
require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
the Company under the Securities Act;
In rendering such opinion, such counsel may state that his opinion is
limited to matters governed by the Federal laws of the United States of
America, the laws of the Commonwealth of Pennsylvania and the General
Corporation Law of the State of Delaware and that such counsel is not
admitted in the State of Delaware. To the extent such opinion relates to
the law of the State of New York (which law the Indenture, this Agreement
and the Guarantee state to be the governing law thereof), such counsel may
state that he assumes that the laws of the Commonwealth of Pennsylvania are
the same as those of the State of New York. As to matters of fact, to the
extent deemed proper, such counsel may rely on certificates of responsible
officers of the Company and public officials.
(d) on the Commencement Date (except with respect to paragraphs (iii)
and (vi) which will be given only on the Closing Date) and the Closing Date
(except with respect to paragraphs (ii) and (v) which will be given only on
the Commencement Date), the Dealer Managers shall have received a signed
opinion of Morris, Nichols, Arsht & Tunnell, Delaware counsel for the
Company and the Trust, dated as of such 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 Act,
and has the business trust power and authority to conduct its business
as described in the Prospectus;
(ii) when duly authorized, executed and delivered by the
Company and the Trustees, the Declaration will be a valid and binding
agreement of the Company and the Trustees, enforceable in accordance
with its terms except as the enforcement thereof may be limited by (i)
bankruptcy, insolvency,
<PAGE>
19
reorganization, moratorium, fraudulent transfer or other similar laws
relating to or affecting the enforcement of creditors' rights
generally, (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity) and
(iii) considerations of public policy or the effect of applicable law
relating to fiduciary duties;
(iii) assuming due authorization, execution and delivery
of the Declaration by the Company and the Trustees, the Declaration is
a valid and binding agreement of the Company and the Trustees,
enforceable in accordance with its terms except as the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or
affecting the enforcement of creditors' rights generally, (ii) general
principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity) and (iii)
considerations of public policy or the effect of applicable law
relating to fiduciary duties;
(iv) assuming due authorization, execution and delivery of
the Declaration by the Company and the Trustees, the execution and
delivery of this Agreement by the Trust, and the performance by the
Trust of its obligations hereunder, will have been duly authorized by
all requisite business trust action on the part of the Trust;
(v) assuming due authorization, execution and delivery of
the Declaration by the Company and the Trustees, the Trust Convertible
Preferred Securities and the Trust Common Securities will be duly
authorized by the Declaration for issuance and, when issued and
delivered in accordance with the Declaration and the Dealer Manager
Agreement, will be validly issued, and, subject to the terms of the
Declaration, fully paid and nonassessable beneficial ownership
interests in the assets of the Trust. The Holders of Trust
Convertible Preferred Securities and Trust Common Securities will be,
subject to the terms of the Declaration, entitled to the same
limitation of personal liability under Delaware law extended to
stockholders of private corporations for profit formed under the
General Corporation Law of the State of Delaware; provided that such
counsel expresses no opinion as to any Holder of Trust Convertible
Preferred Securities or Trust Common Securities that is, was or
becomes a named Trustee of the Trust and may note that Holders of
Trust Convertible Preferred Securities and Trust Common Securities
will be subject to the withholding provisions of Section 11.4 of the
Declaration and will be required to make payment or provide indemnity
or security as set forth in the Declaration and that Holders of Trust
Common Securities will be liable for the debts and obligations of the
Trust to the extent provided in Section 10.1(b) of the Declaration.
(vi) the Trust Convertible Preferred Securities and the
Trust Common Securities have been duly authorized by the Declaration
for issuance and are duly and validly issued and, subject to the terms
of the Declaration, fully paid and nonassessable beneficial ownership
interests in the assets of the Trust. The
<PAGE>
20
Holders of Trust Convertible Preferred Securities and the Trust Common
Securities will be, subject to the terms of the Declaration, 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 that such counsel
expresses no opinion as to any Holder of Trust Convertible Preferred
Securities or Trust Common Securities that is, was or becomes a named
Trustee of the Trust and may note that Holders of Trust Convertible
Preferred Securities and Trust Common Securities will be subject to
the withholding provisions of Section 11.4 of the Declaration and will
be required to make payment or provide indemnity or security as set
forth in the Declaration and that Holders of Trust Common Securities
will be liable for the debts and obligations of the Trust to the
extent provided in Section 10.1(b) of the Declaration; and
(vii) under the Declaration and the Delaware Act, the
issuance of the Trust Convertible Preferred Securities and the Trust
Common Securities is not subject to preemptive rights.
(e) The Dealer Managers shall have received a signed opinion of
Miller & Chevalier, Chartered, tax counsel for the Company and the Trust,
dated as of the Commencement Date and the Closing Date to the effect that
the Trust will be treated as a grantor trust for Federal income tax
purposes under existing law and covering the statements made in the
Prospectus under "Certain Federal Income Tax Considerations";
(f) The Dealer Managers shall have received the opinion of Simpson
Thacher & Bartlett, counsel for the Dealer Managers, dated as of the
Commencement Date and the Closing Date, covering the incorporation and
legal existence of the Company, the issuance and delivery of the Trust
Convertible Preferred Securities, this Agreement, the Registration
Statement, the Prospectus and such other related matters as the Dealer
Managers may require. In giving such opinion such counsel may rely, as to
all matters governed by the laws of jurisdictions other than the law of the
State of New York, and the Federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Dealer Managers;
(g) the Company and the Trust will also furnish to you from time to
time (including on the Closing Date), up to the last acceptance of 6.50%
Convertible Preferred Stock pursuant to the Exchange Offer, any further
opinion of counsel, satisfactory to your counsel, as you may reasonably
request;
(h) you shall have received, on the Commencement Date and the Closing
Date, letters, dated the Commencement Date and the Closing Date, as the
case may be, reasonably satisfactory to you of Price Waterhouse, LLP,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" with respect to the consolidated financial
statements of the Company and certain financial information contained in
the Registration Statement and the Prospectus;
<PAGE>
21
(i) (i) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
incorporated by reference in the Prospectus any loss or interference with
its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since such date there shall not have been any change
in the capital stock or long-term debt of the Company or any of its
subsidiaries or any change, or any development likely to involve a
prospective change, in or affecting the management, consolidated financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries or the financial position, stockholders' equity or results
of operations of the U.S. Steel Group, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the
Exchange Offer on the terms and in the manner contemplated in the
Prospectus;
(j) there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
NYSE; (ii) a suspension or material limitation in trading of the Company's
securities on the NYSE; (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; (iv) the engagement by the United States in hostilities, the
escalation in hostilities involving the United States or the declaration of
a national emergency or war by the United States; or (v) the outbreak of
hostilities or the escalation of hostilities or the declaration of a
national emergency or war or a material adverse change in national or
international economic, political or financial conditions, national or
international equity markets or currency exchange rates or controls which,
in your judgment, makes it impracticable or inadvisable to proceed with the
Exchange Offer on the terms and in the manner contemplated in the
Prospectus;
(k) at the Closing Date, the Trust Convertible Preferred Securities
shall have been duly listed, subject to official notice of issuance, on the
NYSE; and
(l) on or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's senior unsecured debt
securities or preferred stock by Standard & Poor's Ratings Group or Moody's
Investors Services, Inc. and (ii) no such organization shall have publicly
announced that it has under surveillance or review, with possible negative
implications, the rating of any of the Company's senior unsecured debt
securities or preferred stock.
The Company and the Trust will furnish you with such executed or
conformed copies of such opinions, certificates, letters and documents as you
may reasonably request.
10. Covenants of the Company and the Trust. Each of the Company and
--------------------------------------
the Trust covenants with the Dealer Managers:
(a) To use its best efforts to cause the Registration Statement,
including any post-effective amendment thereto, to become effective
promptly and will notify the
<PAGE>
22
Dealer Managers immediately, (i) when any post-effective amendment to the
Registration Statement shall have become effective, or any supplement to
the Prospectus or any amended Prospectus or any amended or additional
Exchange Offer Materials shall have been filed, (ii) of the receipt of any
comments or inquiries from the Commission relating to the Exchange Offer,
(iii) of any request by the Commission to amend the Registration Statement
or amend or supplement the Prospectus or the other Exchange Offer Materials
or for additional information relating to the Exchange Offer and (iv) of
(A) the issuance by the Commission of any stop order suspending the use of
any Exchange Offer Materials or any qualification of the Trust Convertible
Preferred Securities for offering or sale in connection with the Exchange
Offer in any jurisdiction, (B) the institution or threatening of any
proceedings for any of such purposes or (C) the occurrence of any event
which could cause the Company or the Trust to withdraw, rescind, terminate
or modify the Exchange Offer or would permit the Company or the Trust to
exercise any right not to accept 6.50% Convertible Preferred Stock tendered
pursuant to the Exchange Offer. Each of the Company and the Trust will use
its best efforts to prevent the issuance of any such stop order, the
issuance of any order preventing or suspending such use and the suspension
of any such qualification and, if any such order is issued or qualification
suspended, to obtain the lifting of such order or suspension at the
earliest practicable time;
(b) to comply in all material respects with the Securities Act, the
Exchange Act and the Trust Indenture Act in connection with the Exchange
Offer Materials, the Exchange Offer and the transactions contemplated
hereby and thereby, as applicable. If at any time when the Prospectus is
required by the Securities Act or Exchange Act to be delivered in
connection with the Exchange Offer, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel
for the Dealer Managers or counsel for the Company or the Trust, to amend
the Registration Statement or amend or supplement the Prospectus or any
other Exchange Offer Materials in order that the Prospectus or such other
Exchange Offer Materials will 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 Prospectus or such other Exchange Offer Materials, in the
light of the circumstances under which they were made, not misleading or
if, in the opinion of either such counsel, it shall be necessary to amend
the Registration Statement or amend or supplement the Prospectus or any
other Exchange Offer Materials to comply with the requirements of the
Securities Act or Exchange Act, the Company and the Trust will promptly
prepare, file with the Commission, subject to Section 4(b) hereof, and
furnish, at its own expense to the Dealer Managers and to the dealers
(whose names and addresses will be furnished to the Company and the Trust
by the Dealer Managers) to which 6.50% Convertible Preferred Stock may have
been exchanged, such amendment or supplement as may be necessary to correct
such untrue statement or omission or to make the Registration Statement or
the Prospectus or such other Exchange Offer Materials comply with such
requirements;
(c) to endeavor, in cooperation with the Dealer Managers, to qualify
the Trust Convertible Preferred Securities for offering and sale in
connection with the Exchange
<PAGE>
23
Offer under the applicable securities or Blue Sky laws of such
jurisdictions as the Dealer Managers may reasonably request and to maintain
such qualifications in effect for such time as may be required for the
consummation of the Exchange Offer. In each jurisdiction in which the
Trust Convertible Preferred Securities have been so qualified, the Trust
will file such statements and reports as may be required by the laws of
such jurisdiction to continue such qualification in effect for a period of
not less than one year from the effective date of the Registration
Statement;
(d) to make generally available to its security holders and to the
Dealer Managers as soon as practicable an earnings statement covering a
twelve-month period beginning not later than the first day of the Trust's
fiscal quarter next following the effective date of the Registration
Statement that satisfies the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder; and
(e) to use its best efforts to advise or cause the Exchange Agent to
advise the Dealer Managers at 5:00 P.M., New York City time, or promptly
thereafter, daily (or more frequently if requested), by telephone or
facsimile transmission, with respect to 6.50% Convertible Preferred Stock
tendered as follows: (i) the aggregate number of 6.50% Convertible
Preferred Stock validly tendered and represented by certificates physically
held by the Exchange Agent or confirmations of receipt of book-entry
transfer of 6.50% Convertible Preferred Stock pursuant to the procedures
set forth in the Exchange Offer on such day; (ii) the aggregate number of
6.50% Convertible Preferred Stock represented by Notices of Guaranteed
Delivery on such day; (iii) any 6.50% Convertible Preferred Stock properly
withdrawn on such day; and (v) the cumulative totals of the number of 6.50%
Convertible Preferred Stock in categories (i) through (iii), inclusive,
above.
11. Indemnification and Contribution; Settlement of Litigation;
-----------------------------------------------------------
Release. (a) Each of the Company and the Trust jointly and severally agrees
- -------
to indemnify and hold harmless each of the Dealer Managers, the respective
partners, the directors and officers of each of the Dealer Managers and each
person, if any, who controls each of the Dealer Managers ("Indemnified Persons")
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act (i) from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred by each of the Dealer Managers or any such controlling
person in connection with defending or investigating any such action or claim)
(A) caused by any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment thereof, any
related preliminary prospectus, the Prospectus, the Schedule 13E-4 or any other
Exchange Offer Materials (as amended or supplemented if the Company or the Trust
shall have furnished any amendments or supplements thereto), or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading
(except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon and in conformity with information relating to the Dealer Managers
furnished to the Company and the Trust in writing by the Dealer Managers
expressly for use therein); or (B) which arises out of or is based upon a
withdrawal,
<PAGE>
24
rescission or modification of or a failure to make or consummate the Exchange
Offer; and (ii) against any other loss, claim, damage or liability which is
related to, otherwise arises out of or is based upon or asserted against such
Dealer Manager in connection with its acting as Dealer Manager in connection
with the Exchange Offer, rendering financial advisory services to the Company or
the Trust in connection with the Exchange Offer or which arises in connection
with any other matter referred to in this Agreement, except to the extent any
such losses, damages, liabilities or claims referred to in this clause (ii) are
finally judicially determined to have resulted from such Dealer Manager's gross
negligence or bad faith in performing the services that are the subject of this
Agreement. The Company or the Trust also agree that neither of the Dealer
Managers nor any of such Dealer Manager's affiliates, nor any of the partners,
officers, directors, agents, employees or controlling persons (if any), as the
case may be, of such Dealer Manager or any such affiliates, shall have any
liability to the Company or the Trust or any person asserting claims on behalf
of or in right of the Company or the Trust for or in connection with any matter
referred to in this Agreement except to the extent that any loss, damage,
liability or claim incurred by the Company or the Trust results from such Dealer
Manager's gross negligence or bad faith in performing the services that are the
subject of this Agreement.
(b) Each of the Dealer Managers agrees to indemnify and hold harmless each
of the Company and the Trust, their respective directors, trustees and officers
who sign the Registration Statement or the Schedule 13E-4, and each person, if
any, who controls the Company or the Trust within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Trust and the Company to the Dealer Managers
contained in clause (i)(A) of Section 11(a) above, but only with reference to
information relating to such Dealer Manager furnished to the Company or the
Trust in writing by the Dealer Managers expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus, the Schedule 13E-4, any
other Exchange Offer Material or any amendment or supplement thereto;
(c) Promptly after receipt by an Indemnified Person under Section 11 (a)
or (b) of notice of the commencement of any action, such Indemnified Person
shall, if a claim in respect thereof is to be made against the indemnifying
party under such Section (the "Indemnifying Party"), notify the Indemnifying
Party in writing of the commencement thereof; but the omission so to notify the
Indemnifying Party shall not relieve it from any liability which it may have to
any Indemnified Person otherwise than under such Section. In case any such
action shall be brought against any Indemnified Person and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other Indemnifying Party similarly notified, to assume the defense
thereof, with counsel satisfactory to such Indemnified Person (who shall not,
except with the consent of the Indemnified Person, be counsel to the
Indemnifying Party), and, after notice from the Indemnifying Party to such
Indemnified Person of its election so to assume the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Person under such
Section for any legal expenses or other counsel of any other expenses, in each
case subsequently incurred by such Indemnified Person, in connection with the
defense thereof other than reasonable costs of investigation. No Indemnifying
Party shall, without the written consent of the Indemnified Persons, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any
<PAGE>
25
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the Indemnified Persons are
actual or potential parties to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the Indemnified
Persons from all liability arising out of such action or claim and (ii) does not
include a statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any Indemnified Person;
(d) If the indemnification provided for above is unavailable to an
Indemnified Party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party under such
paragraph, in lieu of indemnifying such Indemnified Party thereunder, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (A) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Trust, on the one hand, and the Dealer Managers, on the other hand, from the
Exchange Offer or (B) if the allocation provided by clause (A) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (A) above but also the relative
fault of the Company and the Trust, on the one hand, and of the Dealer Managers,
on the other hand, in connection with the statements or omissions or any other
matter that resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits received by
the Company and the Trust, on the one hand, and the Dealer Managers, on the
other hand, in connection with the Exchange Offer shall be deemed to be in the
same respective proportions as the maximum aggregate liquidation amount of the
Trust Convertible Preferred Securities issuable pursuant to the Exchange Offer
bears to the total Dealer Managers' fee under this Agreement attributable to the
Exchange Offer payable to the Dealer Managers pursuant to this Agreement. The
relative fault of the Company and the Trust, on the one hand, and the Dealer
Managers, on the other hand, (A) in the case of any untrue statement of a
material fact or omission or alleged omission to state a material fact, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Trust, on
the one hand, or by the Dealer Managers, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission and (B) in the case of any other action or
omission, shall be determined by reference to, among other things, whether such
action or omission was taken or omitted to be taken by or at the direction of or
in reliance upon, the Company or the Trust or their affiliates or by the Dealer
Managers, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such action or omission;
(e) The Company, the Trust and the Dealer Managers agree that it would not
be just and equitable if contribution pursuant to Section 11(d) above were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in Section 11(d)
above. The amount paid or payable by an Indemnified Party as a result of the
losses, claims, damages and liabilities referred to in Section 11(d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Agreement, no Dealer Manager shall be required to contribute
any amount in excess of the
<PAGE>
26
fee paid to such Dealer Manager in connection with the Exchange Offer as
provided in this Agreement. 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;
(f) The remedies provided for in this Agreement are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
Indemnified Party at law or in equity; and
(g) the indemnity and contribution provisions contained in this Agreement
and the representations and warranties of the Company and the Trust contained in
this Agreement shall remain operative and in full force and effect regardless of
(A) any termination of this Agreement, (B) any investigation made by or on
behalf of the Dealer Managers or their respective officers, directors, partners
or any person controlling any Dealer Manager, or by or on behalf of the Company
or the Trust, any of their respective officers, directors, trustees or any
person controlling the Company or any Trust or (C) consummation of the Exchange
Offer.
12. Termination. (a) This Agreement shall terminate upon the
-----------
earliest to occur of (i) thirty days after the Expiration Date, (ii) any of the
conditions specified in Section 9 has not been fulfilled as of any date such
condition is required to be fulfilled pursuant to Section 9 (and the Dealer
Managers shall have notified the Company and the Trust thereof) or (iii) the
date on which the Company and the Trust terminate or withdraw the Exchange Offer
for any reason.
(b) Notwithstanding termination of this Agreement pursuant to subsection
(a) above, the obligations of the parties pursuant to Sections 6, 7 and 11 shall
survive any termination of this Agreement.
13. Severability. If any term or other provision of this Agreement
------------
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic and legal substance of the agreements
contained herein is not affected in any manner adverse to any party.
14. Counterparts. This Agreement may be executed by the different
------------
parties hereto in one or more separate counterparts, each of which when executed
shall be deemed an original, but all of which together shall constitute one and
the same agreement.
15. Binding Effect. This Agreement shall be binding upon and inure
--------------
solely to the benefit of each party hereto and the Indemnified Persons, and
nothing in this Agreement, express or implied, is intended to or shall confer
upon any other person any right, benefit or remedy.
16. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
<PAGE>
27
17. Consent to Jurisdiction. (a) Each of the Company and the Trust
-----------------------
(I) agrees that any legal suit, action or proceeding brought by the Dealer
Managers arising out of or relating to this Agreement, the Indenture, the Trust
Convertible Preferred Securities, the Exchange Offer Materials or the
transactions contemplated hereby or thereby may be instituted in any federal or
state court in New York City, (ii) irrevocably waives, to the fullest extent it
may effectively do so, any objection (x) which it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding in any federal or
state court in New York City or (y) that any such suit, action or proceeding has
been brought in an inconvenient forum, and (iii) irrevocably submits to the non-
exclusive jurisdiction of any such court in any such suit, action or proceeding.
(b) Each of the Company and the Trust irrevocably designates and appoints
Dan D. Sandman, Esq., as its authorized agent upon which process may be served
in any legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby which may be instituted in any
federal or state court in New York City, and agrees that service of process upon
such agent, and written notice of said service to the Company or the Trust, as
the case may be, by the person serving the same, shall be deemed in every
respect effective service of process upon the Company or the Trust, as the case
may be, in any such suit or proceeding. Each of the Company and the Trust
further agrees to take any and all actions as may be necessary to maintain such
designation and appointment of such agent in full force and effect.
(c) Each of the Company and the Trust agree that a final judgment in any
such legal suit, action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
18. Entire Agreement. This Agreement constitutes the entire
----------------
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
19. Amendment. This Agreement may not be amended except in a writing
---------
signed by each party to be bound thereby.
20. Notices. All notices and other communications required or
-------
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if delivered in person, by cable, fax, telegram
or telex or by registered or certified mail (postage prepaid, return receipt
requested) to the parties hereto as follows (or, as to each party, at such other
address as shall be designated by such party in a written notice complying as to
delivery with the terms of this paragraph):
<PAGE>
28
(a) If to you:
Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Fax No.: (212) 357-5505
Attention: Registration Department
and
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower - Fifth Floor
250 Vesey Street
New York, New York 10281
Fax No.: (212) 449-8668
Attention: Registration Department
With a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Fax No.: (212) 455-2502
Attention: Raymond Wagner, Esq.
(b) If to the Company or the Trust,
USX Corporation
600 Grant Street
Pittsburgh, PA 15219
Fax No.: (412) 433-2015
Attention: General Counsel
21. Subheadings. The descriptive headings contained in this
-----------
Agreement are included for convenience of reference only and shall not
affect in any way the meaning or interpretation of this Agreement.
<PAGE>
29
Please indicate your willingness to act as Dealer Managers on the
terms set forth herein and your acceptance of the foregoing provisions by
signing in the space provided below for that purpose and returning to us a
copy of this letter, whereupon this letter and your acceptance shall
constitute a binding agreement among us.
Very truly yours,
USX CORPORATION
By:/s/ Robert M. Hernandez
-----------------------
Title: Vice Chairman &
Chief Financial Officer
USX CAPITAL TRUST I
By USX Corporation, as Sponsor
By:/s/ Robert M. Hernandez
-----------------------
Title: Vice Chairman &
Chief Financial Officer
Accepted and agreed as of the date first above written:
/s/ Goldman, Sachs & Co.
- ------------------------
By:/s/ Kevin Singer
----------------
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
<PAGE>
Exhibit 4.3
USX CORPORATION
as Issuer
and
THE BANK OF NEW YORK
as Trustee
MULTIPLE SERIES INDENTURE
Dated as of May 16, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1.
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION..................... 1
Section 1.1 Definitions..................................................... 1
Section 1.2 Form of Documents Delivered to Trustee.......................... 9
Section 1.3 Notices, etc., to Trustee, Company.............................. 10
Section 1.4 Notice to Holders; Waiver....................................... 10
Section 1.5 Legal Holidays.................................................. 11
Section 1.6 Moneys of Different Currencies To Be Segregated................. 11
Section 1.7 Payment To Be in Proper Currency................................ 11
Section 1.8 Language of Notices, etc........................................ 12
ARTICLE 2.
THE SECURITIES............................... 12
Section 2.1 Amount Unlimited; Issuable in Series............................ 12
Section 2.2 Denominations................................................... 15
Section 2.3 Execution, Authentication, Delivery and Dating.................. 16
Section 2.4 Temporary Securities............................................ 18
Section 2.5 Registration; Registration of Transfer and Exchange............. 21
Section 2.6 Mutilated, Destroyed, Lost and Stolen Securities................ 24
Section 2.7 Persons Deemed Owners........................................... 25
Section 2.8 Cancellation.................................................... 26
Section 2.9 Payment of Interest; Interest Rights Preserved.................. 26
Section 2.10 Computation of Interest........................................ 27
Section 2.11 Currency and Manner of Payments in Respect of Securities....... 27
Section 2.12 Compliance with Certain Laws and Regulations................... 32
Section 2.13 Security Forms Generally....................................... 32
Section 2.14 Form of Trustee's Certificate of Authentication................ 33
Section 2.15 Securities in Global Form...................................... 33
Section 2.16 CUSIP Numbers.................................................. 34
ARTICLE 3.
REDEMPTION OF SECURITIES AND SINKING FUNDS................. 34
Section 3.1 Applicability of Article........................................ 34
Section 3.2 Mandatory and Optional Sinking Fund Payments.................... 35
Section 3.3 Election to Redeem: Notice to Trustee........................... 35
Section 3.4 Selection by Trustee of Securities to be Redeemed............... 35
Section 3.5 Notice of Redemption............................................ 36
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Section 3.6 Deposit of Redemption Price..................................... 37
Section 3.7 Securities Payable on Redemption Date........................... 37
Section 3.8 Securities Redeemed in Part..................................... 38
Section 3.9 Satisfaction of Sinking Fund Payments with Securities........... 38
Section 3.10 Redemption of Securities for Sinking Fund...................... 38
Section 3.11 Redemption of Securities During Event of Default............... 39
ARTICLE 4.
PARTICULAR COVENANTS OF THE COMPANY.................... 39
Section 4.1 Payment of Principal, Premium and Interest...................... 39
Section 4.2 Maintenance of Office or Agency................................. 40
Section 4.3 Prohibition of Extension of Claims for Interest................. 41
Section 4.4 Appointment to Fill Vacancy of Trustee.......................... 41
Section 4.5 Paying Agents: Money for Securities Payments Held in Trust...... 41
Section 4.6 Compliance Certificate.......................................... 43
Section 4.7 Additional Amounts.............................................. 43
Section 4.8 Calculation of Original Issue Discount.......................... 44
ARTICLE 5.
SECURITYHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE........................ 44
Section 5.1 Company To Furnish Trustee Names and Addresses of Holders....... 44
Section 5.2 Preservation of Information: Communications to Holders.......... 44
Section 5.3 Reports by Company.............................................. 46
Section 5.4 Reports by Trustee.............................................. 46
ARTICLE 6.
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS IN EVENT OF DEFAULT.................... 48
Section 6.1 Event of Default; Acceleration, Etc. ........................... 48
Section 6.2 Collection of Indebtedness and Suits for Enforcement by Trustee. 50
Section 6.3 Application of Money Collected.................................. 52
Section 6.4 Limitation on Suits: Unconditional Rights of Holders............ 52
Section 6.5 Remedies Cumulative, Restoration of Rights and Remedies......... 53
Section 6.6 Control by Holders: Waiver of Past Default...................... 54
Section 6.7 Notice of Defaults.............................................. 54
Section 6.8 Undertaking for Costs........................................... 55
Section 6.9 Special Record Date for Consents................................ 55
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ARTICLE 7.
CONCERNING THE TRUSTEE........................... 55
Section 7.1 Certain Duties and Responsibilities............................. 55
Section 7.2 Certain Rights of Trustee....................................... 57
Section 7.3 Not Responsible for Recitals or Issuance of Securities.......... 58
Section 7.4 May Hold Securities............................................. 58
Section 7.5 Money Held in Trust............................................. 58
Section 7.6 Compensation and Reimbursement.................................. 58
Section 7.7 Right to Rely on Officers' Certificate.......................... 59
Section 7.8 Disqualification: Conflicting Interests........................ 59
Section 7.9 Corporate Trustee Required; Eligibility......................... 65
Section 7.10 Resignation and Removal: Assignment of Successor............... 65
Section 7.11 Acceptance of Appointment by Successor......................... 67
Section 7.12 Merger, Conversion, Consolidation, Etc. ....................... 68
Section 7.13 Preferential Collection of Claims Against Company.............. 69
Section 7.14 Appointment of Authenticating Agent............................ 72
Section 7.15 Judgment Currency.............................................. 74
Section 7.16 Corporate Trust Office......................................... 75
ARTICLE 8.
CONCERNING THE SECURITYHOLDERS....................... 75
Section 8.1 Acts of Holders................................................. 75
Section 8.2 Authenticity of Instruments..................................... 75
Section 8.3 Authenticity of Bearer Securities............................... 75
Section 8.4 Determination of Principal Amounts of Original Issue Discount
Securities and Securities in Foreign Currencies...................... 76
Section 8.5 Company Solicitation of Holder.................................. 76
ARTICLE 9.
SECURITYHOLDERS' MEETING.......................... 77
Section 9.1 Purposes for Which Meetings May be Called....................... 77
Section 9.2 Call, Notice and Place of Meeting............................... 77
Section 9.3 Call of Meetings by Company or Holders.......................... 78
Section 9.4 Persons Entitled to Vote........................................ 78
Section 9.5 Determination of Voting Rights: Conduct and Adjournment of
Meetings............................................................. 78
Section 9.6 Counting Votes and Recording Action of Meetings................. 79
Section 9.7 No Delay in Exercise of Rights.................................. 79
Section 9.8 Quorum: Action.................................................. 79
Section 9.9 Disregard of Securities Owned by Company or Controlling Person.. 80
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ARTICLE 10.
SUPPLEMENTAL INDENTURES.......................... 81
Section 10.1 Supplemental Indentures Without Consent of Holders............. 81
Section 10.2 Supplemental Indentures With Consent of Holders................ 83
Section 10.3 Effect of Supplemental Indentures.............................. 84
Section 10.4 Reference in Securities to Supplemental Indentures............. 85
ARTICLE 11.
CONSOLIDATION, MERGER, SALE OR CONVEYANCE................. 85
Section 11.1 Company May Consolidate, Etc. Only on Certain Terms............ 85
Section 11.2 Rights and Duties of Successor Corporation..................... 86
ARTICLE 12.
SATISFACTION AND DISCHARGE OF INDENTURE:
UNCLAIMED MONEYS.............................. 87
Section 12.1 Satisfaction and Discharge of Indenture........................ 87
Section 12.2 Application of Trust Money..................................... 88
Section 12.3 Satisfaction, Discharge and Defeasance of Securities of Any
Series............................................................... 88
Section 12.4 Definitions.................................................... 90
Section 12.5 Repayment of Money Held by Trustee............................. 91
ARTICLE 13.
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS........................... 91
Section 13.1 No Recourse: Exemption from Personal Liability................. 91
ARTICLE 14.
MISCELLANEOUS PROVISIONS.......................... 92
Section 14.1 Successors and Assigns......................................... 92
Section 14.2 Validity of Acts by Successor Corporations..................... 92
Section 14.3 Surrender of Powers............................................ 92
Section 14.4 Notices........................................................ 92
Section 14.5 Governing Law.................................................. 92
Section 14.6 Compliance Certificates and Opinions........................... 92
Section 14.7 Effect of Headings and Table of Contents....................... 93
Section 14.8 Conflict with Trust Indenture Act.............................. 93
Section 14.9 Benefits of Trust Indenture.................................... 93
Section 14.10 No Security Interest.......................................... 93
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<PAGE>
Page
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Section 14.11 Execution in Counterparts..................................... 93
Section 14.12 Separability.................................................. 94
ARTICLE 15.
SUBORDINATION............................... 94
Section 15.1 Securities Subordinate to Senior Indebtedness.................. 94
Section 15.2 Payment Over of Proceeds Upon Dissolution, Etc. ............... 94
Section 15.3 No Payment When Senior Indebtedness in Default................. 95
Section 15.4 Payment Permitted in Certain Situations........................ 95
Section 15.5 Subrogation to Rights of Holders of Senior Indebtedness........ 96
Section 15.6 Provisions Solely to Define Relative Rights.................... 96
Section 15.7 Trustee to Effectuate Subordination............................ 96
Section 15.8 No Waiver of Subordination Provisions.......................... 97
Section 15.9 Notice to Trustee.............................................. 97
Section 15.10 Reliance on Judicial Order or Certificate of Liquidating
Agent................................................................ 98
Section 15.11 Trustee Not Fiduciary for Holders of Senior Indebtedness...... 98
Section 15.12 Rights of Trustee as Holder of Senior Indebtedness, Preservation
of Trustee's Rights.................................................. 98
Section 15.13 Article Applicable to Paying Agents........................... 99
Section 15.14 Certain Conversions Deemed Payment............................ 99
ARTICLE 16.
CONVERSION................................. 99
Section 16.1 Applicability of Article....................................... 99
Section 16.2 Conversion Privilege.......................................... 100
Section 16.3 Conversion Procedure.......................................... 100
Section 16.4 Fractional Shares............................................. 100
Section 16.5 Taxes on Conversion........................................... 100
Section 16.6 Company to Provide Securities Issuable Upon Conversion........ 100
Section 16.7 Adjustments................................................... 100
Section 16.8 Valuation..................................................... 100
Section 16.9 Reorganization of Company..................................... 101
Section 16.10 Trustee's Disclaimer......................................... 101
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<PAGE>
EXHIBIT A Forms of Certification
EXHIBIT A.1 Form of Certificate to be Given by Person Entitled to Receive
Bearer Security
EXHIBIT A.2 Form of Certificate to be Given by Euro-Clear, CEDEL S.A. and any
other Entity Performing Similar Functions in connection with the
Exchange of Portion of a Temporary Global Security
EXHIBIT A.3 Form of Certificate to be Given by Euro-Clear, CEDEL S.A. and any
other Entity Performing Singular Functions to obtain Interest
prior to an Exchange Date
EXHIBIT A.4 Form of Certificate to be Given by Beneficial Owners to obtain
Interest prior to an Exchange Date
EXHIBIT A.5 Form of Confirmation to be sent to Purchasers of Bearer
Securities
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<PAGE>
THIS MULTIPLE SERIES INDENTURE, dated as of May 16, 1997 (the
"Indenture"), is between USX CORPORATION, a Delaware corporation (the
"Company"), and THE BANK OF NEW YORK, as trustee (the "Trustee").
ARTICLE 1.
DEFINITIONS AND OTHER
PROVISIONS OF GENERAL APPLICATION
Section 1.1 Definitions. The terms defined in this Section 1.1 (except
-----------
as otherwise expressly provided or unless the context otherwise requires) for
all purposes of this Indenture and of any indenture supplemental hereto shall
have the respective meanings specified in this Section 1.1. All other terms used
in this Indenture which are defined in the Trust Indenture Act of 1939 or which
are by reference therein defined in the Securities Act of 1933 (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as they were in force at the date of the execution of this
Indenture. All accounting terms used herein and not expressly defined shall have
the meaning given to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with respect
to any computation required or permitted hereunder shall mean such accounting
principles which are generally accepted at the date or time of such computation.
The terms "hereof", "herein" 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. Unless the context otherwise requires, the terms defined in
this Article include the plural as well as the singular and the use of the word
"or" in this Indenture is not exclusive.
Certain terms, used principally within an Article of this Indenture, may be
defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified in
Section 8.1.
"Affiliate" of any specified Person shall mean any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purpose of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" shall mean the agent of the Trustee, if any, which
at the time shall be appointed and acting pursuant to Section 7.14 of this
Indenture.
"Authorized Newspaper" means a newspaper of general circulation in the
place of publication, printed in the official language of the country of
publication and customarily
<PAGE>
2
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays. Whenever successive weekly publications in an Authorized Newspaper
are authorized or required hereunder, they may be made (unless otherwise
expressly provided herein) on the same or different days of the week and in the
same or different Authorized Newspapers.
"Bearer Security" means any Security which is not registered in the
Security Register as to principal (including without limitation any Security in
temporary or permanent global bearer form).
"Board of Directors" shall mean the Board of Directors, the Executive
Committee of the Board of Directors or any other committee of the Board of
Directors of the Company with authority to act in the matter.
"Board Resolution" shall mean 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.
"Business Day," when used with respect to any Place of Payment or place of
publication, means each Monday, Tuesday, Wednesday, Thursday and Friday which is
not a day on which banking institutions in that Place of Payment, place of
conversion of currency, if applicable, or place of publication are authorized or
obligated by or pursuant to law, regulation or executive order to close or as
specified for a series of Securities pursuant to Section 2.1 or as specified for
any Security in such Security.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, 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 Depository" has the meaning specified in Section 2.4.
"Company" shall mean USX Corporation, a Delaware corporation, and, subject
to the provisions of Article Eleven, shall also include its successors and
assigns.
"Company Order" and "Company Request" mean, when used with reference to the
Company, a written order or request signed in the name of the Company by its
Chairman of the Board, Chief Executive Officer, President, Chief Operating
Officer, Chief Financial Officer, any Vice President (whether or not designated
by a number or word or words added before or after the title Vice President), or
Treasurer or an Assistant Treasurer, or by its Secretary or an Assistant
Secretary, or its Comptroller or an Assistant Comptroller, as the case may be,
and delivered to the Trustee.
"Component Currency" has the meaning specified in Section 2.11(i).
<PAGE>
3
"Conversion Agent" means any Person authorized by the Company to facilitate
the conversion of any Security which by its terms is convertible into any other
security of the Company.
"Corporate Trust Office" or "Principal Office of the Trustee" shall mean
the office of the Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the date hereof is
set forth in Section 7.16 of this Indenture, except that with respect to the
presentation of Securities (or Coupons, if any, representing an installment
series of interest) for payment or for registration of transfer and exchange,
such term shall mean the office or the agency of the Trustee in said city at
which at any particular time its corporate agency business shall be conducted.
"Corporation" includes corporations, associations, companies and business
trusts.
"Coupon" or "coupon" means any interest coupon appertaining to a Bearer
Security or Partially Registered Security.
"Currency Conversion Date" has the meaning specified in Section 2.11(e).
"Currency Conversion Rate" has the meaning specified in Section 7.15.
"Defaulted Interest" shall have the meaning specified in Section 2.9.
"Dollar" means the coin or currency of the United States as at the time of
payment is legal tender for the payment of public and private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 2.11(h).
"Dollar Equivalent of the Foreign Currency" has the meaning specified in
Section 2.11(g).
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"Euro-clear" means the operator of the Euro-clear System.
"European Communities" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" shall mean any event specified in Section 6.1, continued
for the period of time, if any, and after the giving of notice, if any, therein
designated.
"Exchange Date" has the meaning specified in Section 2.4.
<PAGE>
4
"Exchange Rate Agent" means an entity appointed by the Company pursuant to
Section 2.11(i) from time to time.
"Exchange Rate Officer's Certificate" means a tested telex or a certificate
setting forth (i) the applicable Official Currency Unit Exchange Rate and (ii)
the Dollar or Foreign Currency or currency unit amounts of principal, premium,
if any, and interest, if any, respectively (on an aggregate basis and on the
basis of a Security having a principal amount of 1,000 in the relevant currency
unit), payable on the basis of such Official Currency Unit Exchange Rate, sent
(in the case of a tested telex) or executed (in the case of a certificate) by
the Treasurer or any Assistant Treasurer of the Company and delivered to the
Trustee; such tested telex or certificate need not comply with Section 14.6.
"Foreign Currency" means a currency issued by the government of any country
other than the United States.
"Fully Registered Security" means any Security registered in the Security
Register as to principal and interest, if any.
"Holder," "holder of Securities" and "Securityholder" or other similar term
shall mean, with respect to a Registered Security, the Person in whose name at
the time a particular Registered Security is registered in the Security Register
and, with respect to a Bearer Security and/or a Coupon, the bearer thereof.
"Indebtedness" shall mean and include, without duplication, all items of
indebtedness or liability (except stockholders' equity) which in accordance with
generally accepted accounting principles would be included in determining total
liabilities as shown on the liability side of a balance sheet as at the date as
of which indebtedness is to be determined; indebtedness secured by any mortgage,
pledge or lien existing on property owned subject to such mortgage, pledge or
lien, whether or not the indebtedness secured thereby shall have been assumed;
and guarantees, endorsements (other than the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business) and
other contingent obligations (whether direct or indirect) in respect of, or to
purchase or otherwise acquire, indebtedness of others except guarantees,
endorsements or contingent obligations in connection with the sale or discount
of accounts receivable, trade acceptances and other paper arising in the
ordinary course of business or conditional sales contracts, chattel mortgages,
leases, trust receipts or repurchase or other obligations arising out of the
sale and/or delivery of equipment in the ordinary course of business.
"Indenture" means this instrument as originally executed or as from time to
time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof and shall include the
terms of particular series of Securities established as contemplated hereunder.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
<PAGE>
5
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Market Exchange Rate" has the meaning specified in Section 2.11(i).
"Maturity" when used with respect to any Security means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Officers" Certificate" shall mean a certificate, in the case of the
Company, signed in the name of the Company by its Chairman of the Board, Chief
Executive Officer, President, Chief Operating Officer, Chief Financial Officer,
any Vice President (whether or not designated by a number or word or words added
before or after the title Vice President), or Treasurer or an Assistant
Treasurer, and by its Secretary or an Assistant Secretary, or its Comptroller or
an Assistant Comptroller, as the case may be, and delivered to the Trustee.
"Official Currency Unit Exchange Rate" means with respect to any payment to
be made hereunder, the exchange rate between the relevant currency unit and the
currency or currency unit of payment calculated by the Exchange Rate Agent for
the Securities of the relevant series (in the case of ECU, reported by the
Commission of the European Communities and currently based on the rates in
effect at 2:30 p.m., Brussels time, on the exchange markets of the Component
Currencies of ECU), on the Business Day (in the city in which such Exchange Rate
Agent has its principal office) immediately preceding delivery of any Exchange
Rate Officer's Certificate.
"Opinion of Counsel" shall mean an opinion in writing signed by legal
counsel, who may be an employee of, or of counsel to, the Company, and who is
acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 6.1.
"Outstanding" when used with respect to Securities means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Securities for which payment or redemption money in the necessary
amount and in the required "currency" or currency unit has been theretofore
deposited with
<PAGE>
6
the Trustee or any paying agent (other than the Company) in trust for the
holders of such Securities; provided that, if such Securities 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
(c) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered or which have been paid pursuant to this
Indenture, unless proof satisfactory to the Trustee is presented that any such
Securities are held by Persons in whose hands any of such Securities is a valid,
binding and legal obligation of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or whether a
quorum is present at a meeting of Holders of Outstanding Securities or the
number of votes entitled to be cast by each Holder of a Security in respect of
such Security at any such meeting (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be Outstanding for such purposes shall
be the amount of the principal thereof that would be due and payable as of the
date of such determination upon a declaration of acceleration of the Maturity
thereof pursuant to Section 6.1, (ii) the principal amount of a Security
denominated in a Foreign Currency or currency unit shall be the Dollar
equivalent (as determined by the Company in good faith) as of the date of
original issuance of such Security, of the principal amount (or, in the case of
an Original Issue Discount Security, the Dollar equivalent (as determined by the
Company in good faith) of the amount determined as provided in (i) above) of
such Security, and (iii) Securities owned by the Company or any other obligor
upon the Securities 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, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor.
"Partially Registered Security" means any Security registered in the
Security Register as to principal only.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest, if any, on any Securities on
behalf of the Company.
"Person" shall mean any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
<PAGE>
7
"Place of Payment," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest on the Securities of that series are payable as specified in accordance
with Section 2.1.
"Predecessor Security" or "Predecessor" followed by the title or
designation of a particular Security means every previous Security (or Coupon,
as the case may be) evidencing all or a portion of the same debt as that
evidenced by such particular Security (or Coupon, as the case may be) and, for
the purposes of this definition, any Security (or Coupon, as the case may be),
authenticated and delivered under Section 2.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security (or Coupon, as the case may be),
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security (or Coupon, as the case may be).
"Redemption Date" when used with respect to any Security to be redeemed in
the currency or currency unit in which such Security is payable, means the date
fixed for such redemption pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed
means the price in the currency or currency unit in which such Security is
payable, at which it is to be redeemed pursuant to this Indenture.
"Registered Security" means any Fully Registered Security or any Partially
Registered Security (including without limitation any Security in temporary or
permanent global registered form) which is registered on the Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
on the Fully Registered Securities of any series means the date specified for
that purpose as contemplated by Section 2.1, which date shall be, unless
otherwise specified pursuant to Section 2.1, the fifteenth day preceding such
Interest Payment Date, whether or not such day shall be a Business Day.
"Required Currency" has the meaning specified in Section 1.7.
"Responsible Officer" when used with respect to the Trustee, shall mean the
chairman of the board of directors, the president, any vice president or
assistant vice president, the secretary, the treasurer, or any officer or
employee of the Trustee customarily performing corporate trust functions or to
whom any corporate trust matter is referred because of his knowledge of and
familiarity with the particular subject.
"Securities" shall mean the unsecured debentures, notes, bonds or other
evidences of indebtedness to be issued in one or more series as in this
Indenture provided, and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" shall have the respective
meanings specified in Section 2.5.
<PAGE>
8
"Senior Indebtedness" shall mean, with respect to the Company, the
principal, premium, if any, and interest on (i) all indebtedness of the Company,
whether outstanding on the date hereof or hereafter created, incurred or
assumed, which is for money borrowed, or evidenced by a note or similar
instrument given in connection with the acquisition of any business, properties
or assets, including securities, (ii) any indebtedness of others of the kinds
described in the preceding clause (i) for the payment of which the Company is
responsible or liable (directly or indirectly, contingently or otherwise) as
guarantor or otherwise and (iii) amendments, renewals, extensions and refundings
of any such indebtedness, unless in any instrument or instruments evidencing or
securing such indebtedness or pursuant to which the same is outstanding, or in
any such amendment, renewal, extension or refunding, it is expressly provided
that such indebtedness is not superior in right of payment to the Securities of
any series. The Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of the Senior Indebtedness or
extension or renewal of the Senior Indebtedness.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 2.9.
"Specified Amount" has the meaning specified in Section 2.11(i).
"Stated Maturity" when used with respect to any Security (or Coupon, if
any, representing an installment of interest) or any installment of principal
thereof or interest thereon, means the date specified in such Security (or
Coupon) as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Subsidiary" shall mean, at any given time, any corporation, association or
other business entity of which either stock having by the terms thereof ordinary
voting power to elect a majority of the directors of such entity, whether or not
at the time stock of any other class or classes of such entity shall have or
might have voting power by reason of the happening of any contingency, or other
ownership interest representing more than 50% ownership of an entity, is at the
time, directly or indirectly, owned or controlled by the Company, or by one or
more Subsidiaries of the Company, or by the Company and one or more
Subsidiaries.
"Trustee" shall mean 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 or include each person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series, shall mean only
the Trustee with respect to Securities of that series.
"Trust Indenture Act of 1939" shall mean (except as herein otherwise
provided) the Trust Indenture Act of 1939 as it was in force at the date of
execution of this Indenture.
<PAGE>
9
"U.S. Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more permanent
global Securities, the Person designated as U.S. Depository by the Company
pursuant to Section 2.1 until a successor U.S. Depository shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter "U.S.
Depository" shall mean or include each Person who is then a U.S. Depository
hereunder, and if at any time there is more than one such Person, "U.S.
Depository" as used with respect to the Securities of any such series shall mean
the U.S. Depository with respect to the Securities of that series.
"United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a nonresident alien individual, a
nonresident alien fiduciary of a foreign estate or trust or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a nonresident alien individual or a
nonresident alien fiduciary of a foreign estate or trust.
"United States" means the United States of America (including the states
and the District of Columbia) and its possessions at the relevant date. As of
the date of these Standard Provisions, the possessions of the United States
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island,
and the Northern Mariana Island.
"Valuation Date" has the meaning specified in Section 2.11(e).
"Warrant Agent" shall mean the agent of the Company authorized to deliver
Securities issuable upon due exercise of warrants.
Section 1.2 Form of Documents Delivered to Trustee. In any case where
---------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of 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.
<PAGE>
10
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 1.3 Notices, etc., to Trustee, 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 made, given,
furnished or filed in writing to or with the Trustee at its Corporate Trust
Office and unless otherwise herein expressly provided, any such document shall
be deemed to be sufficiently made, given, furnished or filed upon its receipt by
a Responsible Officer of the Trustee or
(b) the Company by the Trustee or by any Holder shall be made, given,
furnished or filed in writing to or with the Company, as the case may be,
addressed to it at the office specified in Section 14.4 of this instrument or at
any other address previously furnished in writing to the Trustee by the Company,
as the case may be.
Section 1.4 Notice to Holders; Waiver. Where this Indenture provides for
--------------------------
notice to Holders of any event:
(a) if any of the Securities affected by such event are Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, within the time prescribed for the giving of such notice, and
(b) if any of the Securities affected by such event are Bearer Securities,
such notice shall be sufficiently given (unless otherwise herein expressly
provided or unless otherwise specified in such Securities) if
(1) published once in an Authorized Newspaper in The City of New York,
London and such other city or cities as may be specified for the Securities of a
series pursuant to Section 2.1 and
(2) mailed in the manner prescribed in (i) above to such Persons who have
filed their names and addresses with the Trustee within the two-year period
preceding such notice and to all Persons whose names are furnished to the
Trustee pursuant to Section 5.1.
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 to Holders of
Registered Securities by mail, then such notification as shall be made with the
approval of the Trustee shall constitute a sufficient notification for every
purpose hereunder. In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Securities shall
affect the
<PAGE>
11
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
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 of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
Section 1.5 Legal Holidays. Except as otherwise specified as contemplated
--------------
by Section 2.1, in any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or of the
Securities or Coupons, if any) payment of interest or principal (and premium, if
any) need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity, 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, to the next succeeding Business Day at such Place of Payment.
Section 1.6 Moneys of Different Currencies To Be Segregated. The Trustee
-----------------------------------------------
shall segregate moneys, funds and accounts held by the Trustee hereunder in one
currency (or unit thereof) from any moneys, funds or accounts in any other
currencies (or units thereof), notwithstanding any provision herein which would
otherwise permit the Trustee to commingle such amounts.
Section 1.7 Payment To Be in Proper Currency. In the case of any
--------------------------------
Securities denominated in any particular currency or currency unit (the
"Required Currency"), except as otherwise provided herein, therein or in or
pursuant to the related Board Resolution or supplemental indenture, the
obligation of the Company to make any payment of principal, premium or interest
thereon shall not be discharged or satisfied by any tender by the Company, or
recovery by the Trustee, in any currency or currency unit other than the
Required Currency, except to the extent that such tender or recovery shall
result in the Trustee timely holding the full amount of the Required Currency
then due and payable. If any such tender or recovery is made in other than the
Required Currency, the Trustee may take such actions as it considers appropriate
to exchange such other currency or currency unit for the Required Currency. The
costs and risks of any such exchange, including without
<PAGE>
12
limitation the risks of delay and exchange rate fluctuation, shall be borne by
the Company, the Company shall remain fully liable for any shortfall or
delinquency in the full amount of the Required Currency then due and payable and
in no circumstances shall the Trustee be liable therefor. The Company hereby
waives any defense of payment based upon any such tender or recovery which is
not in the Required Currency, or which, when exchanged for the Required Currency
by the Trustee, is less than the full amount of the Required Currency then due
and payable.
Section 1.8 Language of Notices, etc. Any request, demand, authorization,
------------------------
direction, notice, consent or waiver required or permitted under this Indenture
shall be in the English language, except that any published notice may be in an
official language of the country of publication.
ARTICLE 2.
THE SECURITIES
Section 2.1 Amount Unlimited; Issuable in Series. The aggregate principal
------------------------------------
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(a) the title of the Securities of the series (which shall distinguish the
Securities of the series from all other Securities);
(b) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture (except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for in lieu of, other Securities of the series pursuant to Sections
2.4, 2.5, 2.6, 3.8 or 10.4 and except for any Securities which, pursuant to
Section 2.3, are deemed never to have been authenticated and delivered
hereunder);
(c) the date or dates on which the principal of the Securities of the
series is payable or the method of determination thereof;
(d) the rate or rates, or the method of determination thereof, at which
the Securities of the series shall bear interest, if any, the date or dates, or
method of determination thereof, from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be payable on the Regular
Record Date for any interest payable on any Registered Securities of any
Interest Payment Date;
<PAGE>
13
(e) the place or places where the principal of (and premium, if any) and
interest, if any, on Securities and Coupons, if any, of the series shall be
payable and the office or agency for the Securities of the series maintained by
the Company pursuant to Section 4.2;
(f) the period or periods within which, the price or prices at which and
the terms and conditions upon which Securities of the series may be redeemed, in
whole or in part, at the option of the Company;
(g) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of
the series shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
(h) if other than denominations of $1,000, if registered, and $5,000, if
bearer, and any integral multiple of the applicable denominations for Securities
denominated in Dollars, the denominations in which Securities of the series
shall be issuable;
(i) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration on the Maturity thereof pursuant to Section 6.1;
(j) whether Section 12.3 is not applicable to the Securities of such
series or such other means of satisfaction and discharge as may be specified for
the Securities and Coupons, if any, for a series;
(k) any deletions or modifications of or additions to the Events of
Default set forth in Section 6.1, or covenants of the Company set forth in
Article 4 pertaining to the Securities of the series and application, if any, of
Article 15 to Securities of such series;
(l) the forms the Securities and Coupons, if any, of the series;
(m) if other than such coin or currency of the United States as at the
time of payment is legal tender for payment of public or private debts, the coin
or currency or currencies, or currency unit or units, in which payment of the
principal of (and premium, if any) and interest, if any, on the Securities of
the series shall be payable and the Exchange Rate Agent, if any, for such
series;
(n) if the principal of (and premium, if any) or interest, if any, on the
Securities of the series are to be payable at the election of the Company or a
Holder thereof, or under some or all other circumstances, in a coin or currency
or currencies, or currency unit or units, other than that in which the
Securities are denominated, the period or periods within which, and the terms
and conditions upon which, such election may be made, or the other circumstances
under which the Securities are to be so payable, including without limitation
the application of Section 2.11(b) and any deletions to, modifications of or
additions to the
<PAGE>
14
provisions thereof, and any provision requiring the Holder to bear currency
exchange costs by deduction from such payments;
(o) if the amount of payments of principal (and premium, if any) or
interest, if any, on the Securities of the series may be determined with
reference to an index based on (i) a coin or currency or currencies, or currency
unit or units other than that in which the Securities are stated to be payable
or (ii) any method not inconsistent with the provisions of this indenture
specified in or pursuant to such Board Resolution, then in each case (i) and
(ii) the manner in which such amounts shall be determined;
(p) whether the Securities of the series are to be issued as Fully
Registered Securities, Partially Registered Securities or Bearer Securities
(with or without Coupons), or any combination thereof, whether Partially
Registered Securities or Bearer Securities may be exchanged for Fully Registered
Securities of the series and whether Fully Registered Securities may be
exchanged for Partially Registered Securities or Bearer Securities of the series
(if permitted by applicable laws and regulations) and the circumstances under
which and the place or places where any such exchanges, if permitted, may be
made;
(q) whether any Securities of the series are to be issuable initially in
temporary global form with or without coupons and, if so, the name of the Common
Depository with respect to any such temporary global Security, and whether any
Securities of the series are to be issuable in permanent global form with or
without coupons and, if so, the U.S. Depository or Common Depository for such
global Securities and whether beneficial owners of interests in any such
permanent global Security may exchange such interests for definitive Securities
of such series and of like tenor of any authorized form and denomination and the
circumstances under which (including any certification requirements), and the
place or places where, any such exchanges may occur, if other than in the manner
provided in Section 2.5;
(r) if the Securities and Coupons, if any, of the series are to be issued
upon the exercise of warrants, the time, manner and place for Securities to be
authenticated and delivered;
(s) whether and under what circumstances and with what procedures and
documentation the Company will pay additional amounts on the Securities and
Coupons, if any, of the series to any Holder who is a United States Alien
(including a definition of such term), in respect of any tax assessment or
governmental charge withheld or deducted and, if so, whether the Company will
have the option to redeem such Securities rather than pay additional amounts
(and the terms of any such option);
(t) whether the Securities of the series are convertible into any other
security of the Company pursuant to the provisions of Article 16 or as otherwise
specified in the Securities of such series;
(u) the Person to whom any interest on any Registered Securities of the
series shall be payable, if other than the Person in whose name that Security
(or one or more
<PAGE>
15
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, the manner in which, or the Person to whom, any
interest on any Bearer Securities of the series shall be payable, if otherwise
than upon presentation and surrender of the Coupons appertaining thereto as they
severally mature, the extent to which, or the manner in which, any interest
payable on the temporary global Security on any Interest Payment Date will be
paid if other than in the manner provided in Section 2.4 and the extent to
which, or the manner in which, any interest payable on a permanent global
Security on an Interest Payment Date will be paid;
(v) any paying agents, transfer agents, registrars or other agents with
respect to the Securities of the series; and
(w) if Bearer Securities of the series are to be issuable, (x) whether
interest in respect of any portion of a temporary global Security of the series
payable in respect of any Interest Payment Date prior to the exchange of such
temporary global Security for a permanent global Security or for definitive
Securities of the series shall be paid to any clearing organization with respect
to the portion of such temporary global Security held for its account and, in
such event, the terms and conditions (including any certification requirements)
upon which any such interest payment received by a clearing organization will be
credited to the Persons entitled to interest payable on such Interest Payment
Date, and (y) the terms and conditions (including any certification
requirements) upon which interests in such temporary global Security may be
exchanged for interests in a permanent global Security or for definitive
Securities of the series.
(x) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series and the, Coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 2.3) set forth in such Officers' Certificate referred to above or in
any such indenture supplemental hereto.
At the option of the Company, interest on the Registered Securities of any
series that bears interest may be paid by mailing, on the applicable Interest
Payment Date, a check to the address of the Person entitled thereto as such
address shall appear in the Security Register.
If any of the terms of the series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of such action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
Section 2.2 Denominations. The Securities of each series shall be
-------------
issuable in such denominations as may be established and specified in accordance
with Section 2.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities
<PAGE>
16
of such series denominated in Dollars shall be issuable in denominations of
$1,000, if registered, and $5,000, if bearer, and in any integral multiple of
the applicable denominations. The Securities may bear such letters and numbers
distinguishing the several denominations and the several Securities of each
denomination as may be determined by the Company with the approval of the
Trustee. At the office or agency of the Company to be maintained by the Company
as provided in Section 4.2 and in the manner, subject to the limitations and
upon payment of the charges provided herein, Securities of each series may be
exchanged for a like aggregate principal amount of Securities of such series of
other authorized denominations.
Section 2.3 Execution, Authentication, Delivery and Dating. The Securities
----------------------------------------------
shall be executed on behalf of the Company by its Chairman of the Board, its
Chief Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, one of its Vice Presidents (whether or not designated by a
number or word or words added before or after the title Vice President), its
Treasurer or an Assistant Treasurer under its corporate seal reproduced thereon
(which may be by facsimile) and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile. Any Coupons shall be executed on behalf of the
Company by the manual or facsimile signature of any such officer of the Company.
Securities and Coupons 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 Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
Coupons appertaining thereto, executed by the Company to the Trustee for
authentication, together with the Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and make available for delivery such Securities;
provided, however, that definitive Bearer Securities may only be delivered at an
office or agency outside the United States in exchange for a portion of a Bearer
Security in temporary global form of equal aggregate principal amount and series
and only if (x) prior to such delivery, the owner of such Bearer Security or a
financial institution or clearing organization through which the owner holds
such Bearer Security directly or indirectly, shall have furnished a certificate
in the form set forth in Exhibit A.1 to this Indenture (which certificate and
all other certificates to this Indenture may be changed by the Company pursuant
to an Officers' Certificate), dated no earlier than 15 days prior to the date on
which Euro-clear or CEDEL S.A. (or such other entity performing similar
functions as selected by the Company and approved by the Trustee in its
reasonable discretion), as the case may be, furnishes to the Common Depository,
in accordance with the procedures established in Section 2.4, a certificate in
the form set forth in Exhibit A.2 to this Indenture that relates to all or such
portion of such temporary global Security, and (y) the Person to whom such
certificate is provided does not know or have reason to know that the
information contained in such certificate is false. A confirmation in the form
set forth in Exhibit A.5 to this Indenture shall be sent to each purchaser of a
Bearer Security. If any Bearer Security shall
<PAGE>
17
initially be represented by a portion of a temporary global Security, then, for
purposes of this Section and Section 2.4, the notation of a beneficial owner's
interest therein upon exchange for a portion of a permanent global Security
shall be deemed to be delivery of such beneficial owner's interest in such
permanent global Security. Except as permitted by Section 2.6, the Trustee shall
not authenticate and make available for delivery any Bearer Security unless all
appurtenant Coupons for interest then matured have been detached and cancelled.
If the forms or terms of the Securities of the series and any related
Coupons have been established by or pursuant to one or more Board Resolutions as
permitted by Sections 2.13 and 2.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 7.1) shall be fully protected in relying upon, an Opinion of Counsel
stating:
a. if the forms of such Securities and any Coupons have been established by
or pursuant to a Board Resolution as permitted by Section 2.13, that such forms
have been established in conformity with the provisions of this Indenture;
b. if the terms of such Securities and any Coupons have been established by
or pursuant to a Board Resolution as permitted by Section 2.1, that such terms
have been established in conformity with the provisions of this Indenture; and
c. that such Securities, together with any Coupons appertaining thereto,
when authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the Company, entitled to the
benefits of the Indenture and enforceable in accordance with their terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting the enforcement of
creditors' rights and to general equity principles.
If such forms or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 2.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 2.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Registered Security shall be dated the date of its authentication; and
each Bearer Security and any Bearer Security in global form shall be dated as of
the date of original issuance of the indebtedness evidenced by such Bearer
Security.
<PAGE>
18
No Security or Coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security,
or the Security to which such Coupon appertains, a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been duly authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 2.8 together with a written statement (which
need not comply with Section 14.6 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
Section 2.4 Temporary Securities. Pending the preparation of definitive
--------------------
Securities of any series, the Company may execute, and upon Company Orders, the
Trustee shall authenticate and make available for delivery, temporary Securities
which are printed, lithographed, typewritten or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more Coupons or without Coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced conclusively by
their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form representing all or a portion of
the Outstanding Securities of such series. In the case of any series issuable as
Bearer Securities, such temporary Securities shall be delivered in compliance
with the conditions set forth in Section 2.3.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. Except as
otherwise specified pursuant to Section 2.1(w) with respect to a series of
Securities issuable as Bearer Securities, after the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company
maintained pursuant to Section 4.2 in a Place of Payment for such series for the
purpose of exchange of Securities of such series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured Coupons appertaining thereto), the Company
shall execute and the Trustee or an Authenticating Agent shall authenticate and
make available for delivery in exchange therefor a like aggregate principal
amount of definitive Securities of the same series, of like tenor and of
authorized denominations; provided, however, that no definitive Bearer Security
shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in Section 2.3.
<PAGE>
19
All Bearer Securities shall be issued initially in the form of a temporary
global Security, and any such temporary global Security shall, unless otherwise
provided therein, be delivered to the London office of a Depository or common
Depository (the "Common Depository"), for the benefits of Euro-clear and CEDEL
S.A. (and such other entity performing similar functions as selected by the
Company and approved by the Trustee in its reasonable discretion), for credit to
the respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee, or its
agent, definitive Securities, in aggregate principal amount equal to the
principal amount of such temporary global Security, executed by the Company. On
or after the Exchange Date, such temporary global Security shall be surrendered
by the Common Depository to the Trustee or its agent, as the Company's agent for
such purpose, to be exchanged, in whole or from time to time in part, for
definitive Securities without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary global Security, an
equal aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
global security to be exchanged; provided, however, that, unless, otherwise
specified in such temporary global Security, upon such presentation by the
Common Depository, such temporary global Security shall be accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euro-
clear or CEDEL S.A. (or such other entity performing similar functions as
selected by the Company and approved by the Trustee in its reasonable
discretion) in each case as to the portion of such temporary global Security
held for its respective account then to be exchanged, each in the form set forth
in Exhibit A.2 to this Indenture. The definitive Securities to be delivered in
exchange for any such temporary global Security shall be in bearer form,
registered form, permanent bearer global form, permanent global registered form,
or any combination thereof, as specified pursuant to Section 2.1, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that definitive Securities shall be delivered in
exchange for a portion of a temporary global Security only in compliance with
the requirements of Section 2.3.
Unless otherwise specified in such temporary global Security, the interest
of a beneficial owner of Securities of a series in a temporary global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the beneficial owner of the Security, or
a financial institution or clearing organization through which the beneficial
owner directly holds such Security, instructs Euro-clear or CEDEL S.A. (or such
other entity performing similar functions as selected by the Company and
approved by the Trustee in its reasonable discretion), as the case may be, to
request such exchange on his behalf and delivers to Euro-clear or CEDEL S.A. (or
such other entity performing similar functions as selected by the Company and
approved by the Trustee in its reasonable discretion), as the case may be, a
certificate in the form set forth in Exhibit A.1 to this Indenture, dated no
earlier than 15 days prior to the date on which Euro-clear or CEDEL S.A. (or
such other entity performing similar functions as selected by the Company and
approved by the Trustee in its reasonable discretion), as the case may be,
furnishes to the
<PAGE>
20
Common Depository in accordance with the preceding paragraph a certificate in
the form set forth in Exhibit A.2 to this Indenture that relates to the interest
to be exchanged for definitive Securities. Copies of the certificate in the form
set forth in Exhibit A.1 to this Indenture shall be available from the offices
of Euro-clear, CEDEL S.A. (and such other entity performing similar functions as
selected by the Company and approved by the Trustee in its reasonable
discretion), the Trustee, any Authenticating Agent appointed for such series of
Securities and any Paying Agent appointed for such series of Securities. Unless
otherwise specified in such temporary global Security, any such exchange shall
be made free of charge to the beneficial owners of such temporary global
Security, except that a Person receiving definitive Securities must bear the
cost of insurance, postage, transportation and the like in the event that such
Person does not take delivery of such definitive Securities in person at the
offices of Euro-clear or CEDEL S.A. (or such other entity performing similar
functions as selected by the Company and approved by the Trustee in its
reasonable discretion).
The definitive Securities in bearer form to be delivered in exchange for
any portion of a temporary global Security shall be delivered only outside the
United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
pursuant to Section 2.1, interest payable on a temporary global Security on an
Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euro-clear and CEDEL S.A. (and such
other entity performing similar functions as selected by the Company and
approved by the Trustee in its reasonable discretion) on such Interest Payment
Date upon delivery by Euro-clear and CEDEL S.A. (and such other entity
performing similar functions as selected by the Company and approved by the
Trustee in its reasonable discretion) to the Trust of a certificate or
certificates in the form set forth in Exhibit A.3 to this Indenture, for credit
without further interest on or after such Interest Payment Date to the
respective accounts of the Persons who are the beneficial owners of such
temporary global Security (or to such other accounts as they may direct) on such
Interest Payment Date and who have each delivered to Euro-clear or CEDEL S.A.
(or such other entity performing similar functions as selected by the Company
and approved by the Trustee in its reasonable discretion), as the case may be, a
certificate in the form set forth in Exhibit A.4 to this Indenture. If such
interest Payment Date occurs on or after the Exchange Date, Euro-Clear or CEDEL
S.A. (or such other entity performing similar functions as selected by the
Company and approved by the Trustee in its reasonable discretion), as the case
may be, following the receipt of such certificate, shall exchange, in accordance
with the procedures hereinabove provided, the portion of the temporary global
Security that relates to such certificate for definitive Securities (which, in
the absence of instructions to the contrary, shall be an interest in a permanent
global Security). Any interest so received by Euro-clear or CEDEL S.A. (or such
other entity performing similar functions as selected by the Company and
approved by the Trustee in its reasonable discretion) and not paid as herein
provided shall be returned to the Trustee immediately prior to the expiration of
two years after such Interest Payment Date in order to be repaid to the Company
in accordance with Section 12.5.
<PAGE>
21
Section 2.5 Registration; Registration of Transfer and Exchange.
---------------------------------------------------
The Company shall cause to be kept at one of its offices or agencies
maintained, in accordance with Section 4.2, a register (being the combined
register of the Security Registrar and all transfer agents designated pursuant
to Section 4.2 for the purpose of registration of transfer of Securities and
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 Registered Securities and the registration of transfers
of Registered Securities as herein provided. The Company hereby appoints the
Trustee as the "Security Registrar" for the purpose of registering Registered
Securities and transfers of Registered Securities as herein provided, and for
facilitating exchanges of temporary global Securities for permanent global
Securities or definitive Securities or both, or of permanent global Securities
for definitive Securities, or both, as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency of the Company maintained for that purpose as
a Place of Payment for such series, the Company shall execute, and the Trustee
or the Authenticating Agent, if any, shall authenticate and deliver, in the name
of the designated transferee or transferees, one or more new Registered
Securities of the same series (in authorized denominations) of a like aggregate
principal amount.
Notwithstanding any other provision of this Section, unless and until it is
exchanged in whole or in part for Securities in definitive form, a global
Security representing all or a portion of the Securities of a series may not be
transferred except as a whole by the U.S. Depository or Common Depository, as
the case may be, for such series to a nominee of such U.S. Depository or Common
Depository or by a nominee of such U.S. Depository or Common Depository to such
U.S. Depository or Common Depository or another nominee of such U.S. Depository
or Common Depository or by such U.S. Depository or Common Depository or any such
nominee to a successor U.S. Depository or Common Depository for such series or a
nominee of such successor U.S. Depository or Common Depository.
At the option of the Holder, Registered Securities of any series (other
than a global Security, except as set forth below) may be exchanged for other
Registered Securities of the same series of any authorized denominations, of a
like aggregate principal amount and tenor, upon surrender of the Registered
Securities to be exchanged at such office or agency. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee or the
Authenticating Agent, if any, shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Unless otherwise
determined by the Company, Bearer Securities may not be delivered by the Trustee
in exchange for Registered Securities.
At the option of the Holder, except as otherwise specified pursuant to
Section 2.1(w) with respect to a global Security, Bearer Securities of any
series may be exchanged for Registered Securities (if the Securities of such
series are issuable as Registered Securities) or Bearer Securities (if Bearer
Securities of such series are issuable in more than one denomination) of the
same series, of any authorized denominations and of a like aggregate
<PAGE>
22
principal amount and tenor, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured Coupons (except as
provided below) and all matured Coupons in default thereto appertaining. If the
Holder of a Bearer Security is unable to produce any such unmatured Coupon or
Coupons or mature Coupon or Coupons in default, such exchange may be effected if
the Bearer Securities are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing Coupon or Coupons,
or the surrender of such missing Coupon or Coupons, may be waived by the Company
and the Trustee if there is furnished to them such security or indemnity as they
may require to save each of them and any Paying Agent harmless. If thereafter
the Holder of such Security shall surrender to any Paying Agent any such missing
Coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
that, except as otherwise provided in Section 4.2, interest represented by
Coupons shall be payable only upon presentation and surrender of those Coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or agency
on the relevant Interest Payment Date, or (ii) any Special Record Date and
before the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the Coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified pursuant to
Section 2.1, any permanent global Security shall be exchangeable pursuant to
this Section only as provided in this paragraph. If at any time the U.S.
Depository or Common Depository for the Securities of a series notifies the
Company that it is unwilling or unable to continue as U.S. Depository or Common
Depository, as the case may be, for the Securities of such series or if at any
time the U.S. Depository for the Securities of such series shall no longer be
eligible under Section 2.15, the Company shall appoint a successor U.S.
Depository or Common Depository, as the case may be, with respect to the
Securities of such series. If (a) a successor U.S. Depository or Common
Depository, as the case may be, for the Securities of such series is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, (thereby automatically making the
Company's election pursuant to Section 2.1(q) no longer effective with respect
to the Securities of such series), (b) the beneficial owners of interests in a
permanent global Security are entitled to exchange such interests for Securities
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified pursuant to Section 2.1, or (c) the Company in
its sole discretion determines that the Securities of any
<PAGE>
23
series issued in the form of one or more global Securities shall no longer be
represented by such global Security or Securities, then without unnecessary
delay but in any event not later than the earliest date on which such interest
may be so exchanged, if appropriate, the Company shall deliver to the Trustee
definitive Securities in aggregate principal amount equal to the principal
amount of such global Security, executed by the Company. On or after the
earliest date on which such interests may be so exchanged, such global Security
shall be surrendered by the U.S. Depository or Common Depository as, the case
may be, to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities upon
payment, at the option of the Company, of a service charge for such exchange and
of a proportionate share of the cost of printing such definitive Securities, and
the Trustee shall authenticate and deliver, (a) to each Person specified by the
U.S. Depository, or Common Depository, as the case may be, in exchange for each
portion of such global Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized denominations and of like
tenor as the portion of such global Security to be exchanged which, unless the
Securities of the series are not issuable both as Bearer Securities and as
Registered Securities, as specified pursuant to Section 2.1, shall be in the
form of Bearer Securities or Registered Securities, or any combination thereof,
as shall be specified by the beneficial owner thereof and (b) to such U.S.
Depository or Common Depository, as the case may be, a global Security in a
denomination equal to the difference, if any, between the principal amount of
the surrendered global Security and the aggregate principal amount of definitive
Securities delivered to Holders thereof; provided, however, that no such
exchanges may occur during a period beginning at 15 days before the mailing of
notice of selection of Securities of that series to be redeemed and ending on
the relevant Redemption Date; and provided, further, that no Bearer Security
delivered in exchange for a portion of a global Security shall be mailed or
otherwise delivered to any location in the United States; and provided, further,
that no definitive Bearer Security shall be delivered in exchange for a global
Security unless the Company or its agent shall have received from the Person
entitled to receive such definitive Security a certificate substantially in the
form of Exhibit A.1 to this Indenture. If a Registered Security is issued in
exchange for any portion of a permanent global Security after the close of
business at the office or agency where such exchange occurs on (i) any Regular
Record Date and before the opening of business at such office of agency of the
relevant Interest Payment Date, or (ii) any Special Record Date and before the
opening of business at such office or agency on the related proposed date for
payment of Defaulted Interest, interest or Defaulted Interest, as the case may
be, will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but will be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, only to the Person to whom Interest in respect of such portion of such
permanent global Security is payable in accordance with the provisions of this
Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
<PAGE>
24
Every Registered Security presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee or the
Authenticating Agent, if any) 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 and such other documentation as the Trustee may reasonably require.
The Company may require payment of a service charge for any registration of
transfer or exchange of Securities, and 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 Securities, other than
exchanges pursuant to Section 2.4, 3.8 or 10.4 not involving any transfer.
In the event of any redemption in part, the Company shall not be required:
(i) to issue, register the transfer or exchange Securities of any series during
a period beginning at the opening of 15 days before the mailing of notice of
selection of Securities of that series to be redeemed and ending at the close of
business on (A) if Securities of the series are issuable only as Registered
Securities, the day of the mailing of the relevant notice of redemption and (B)
if Securities of the series are issuable only as Bearer Securities, the day of
the first publication of the relevant notice of redemption or, (C) if Securities
of the series are issuable as Registered Securities and Bearer Securities and
there is no publication, the day of mailing of the relevant notice of
redemption, or (ii) to register the transfer or exchange of any Registered
Security so selected for redemption, in whole or in part, except the unredeemed
portion of any Security being redeemed in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may be
exchanged for a Registered Security of that series and like tenor; provided that
such Registered Security shall be simultaneously surrendered for redemption.
Section 2.6 Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or Security with a mutilated Coupon appertaining to it is
surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding with Coupons corresponding to the Coupons, if
any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the mutilation, destruction, loss or theft of any
Security or Coupon, 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 Security or Coupon
has been acquired by a bona fide purchaser, the Company shall execute and upon
its request the Trustee or the Authenticating Agent, if any, shall authenticate
and make available for delivery in lieu of any such destroyed, lost or stolen
Security or in exchange for the Security to which a destroyed, lost or stolen
Coupon appertains (upon surrender to the Trustee of such Security with all
appurtenant Coupons not destroyed, lost or stolen), a new Security of the same
series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding, with Coupons
<PAGE>
25
corresponding to the Coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security or Coupon as otherwise required above, pay
such Security or Coupon; provided, however, that principal of (and premium, if
any) and interest on Bearer Securities shall, except as otherwise provided in
Section 4.2, be payable only at an office or agency located outside the United
States and, unless otherwise specified pursuant to Section 2.1, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.
Upon the issuance of any new Security or Coupon under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee or the Authenticating
Agent, if any) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security or Coupon shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities or Coupons of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or Coupons.
Section 2.7 Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee, the
Authenticating Agent, if any, and any agent of the Company, or Trustee may treat
the Person in whose name such Registered Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of (and
premium, if any), and (subject to Sections 2.5 and 2.9) interest on, such
Security and for all other purposes whatsoever whether or not such Security be
overdue, and notwithstanding any notation of ownership or other writing thereon,
neither the Company, the Trustee, the Authenticating Agent, if any, nor any
agent of the Company, or the Trustee shall be affected by notice or knowledge to
the contrary.
Title to any Bearer Security and any Coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any Coupon
as the absolute owner of such Security or Coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or Coupon be overdue, and neither the Company, the
Trustee nor the agent of the Company or the Trustee shall be affected by notice
or knowledge to the contrary.
<PAGE>
26
Section 2.8 Cancellation. Unless otherwise provided with respect to a
------------
series of Securities, all Securities and Coupons surrendered for payment,
redemption, transfer or exchange or for credit against any sinking fund payment
shall if surrendered to the Company, or any agent of the Company, be delivered
to the Trustee and all such Securities and Coupons so delivered shall be
promptly cancelled by the Trustee. All Bearer Securities and Coupons held by
the Trustee pending such cancellation shall be deemed to be delivered for
cancellation for all purposes of this Indenture and the Securities. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and may deliver to the Trustee (or to any
other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be Promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. The Trustee may destroy, unless otherwise agreed to by the Company,
all cancelled Securities and Coupons and, in which case, Trustee shall deliver a
certificate of such destruction to the Company.
Section 2.9 Payment of Interest; Interest Rights Preserved. Unless
----------------------------------------------
otherwise specified pursuant to Section 2.1 with respect to any series of
Securities, interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Registered Security of any series 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 either clause (1) or (2) below:
(a) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each Registered
Security of such series and the date of the proposed payment (subject to the
limitations on fixing the Special Record Date set forth below), and at the same
time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit prior to
the date of the proposed payment, such money when deposited to be held in trust
for the benefit of the Persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed payment.
The Trustee shall promptly notify the Company of such Special Record Date the
name and at the expense of
<PAGE>
27
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be given as provided in Section
1.4, to each holder of Registered Securities of such series, 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 given,
such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(b) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment, shall be deemed practicable by the Trustee.
Defaulted Interest on any Bearer Security shall be paid upon presentation
of the applicable Coupon for payment.
Subject to the foregoing provisions of this Section and Section 2.5, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
Section 2.10 Computation of Interest. Except as otherwise specified
-----------------------
pursuant to Section 2.1 for Securities of any series, interest on the Securities
of each series shall be computed on the basis of a 360-day year of twelve 30-day
months.
Section 2.11 Currency and Manner of Payments in Respect of Securities.
--------------------------------------------------------
The provisions of this Section shall apply to the Securities of any series
unless otherwise specified pursuant to Section 2.1.
(a) The following payment provisions shall apply to any Registered
Security of any series denominated in Dollars, a Foreign Currency or any
currency unit, including without limitation ECU, except as provided in paragraph
(b) below:
(1) Except as provided in subparagraph (a)(2) or in paragraph (e) below,
payment of principal and premium, if any, on such Registered Security will be
made at the Place of Payment by delivery of a check in the currency or currency
unit in which the Security is denominated on the payment date against surrender
of such Registered Security, and any interest on any Registered Security will be
paid at the Place of Payment by mailing a check in the currency or currency unit
in which such interest is payable (which shall be the same as that in which the
Security is denominated unless otherwise provided) to the Person entitled
thereto at the address of such Person appearing on the Security Register.
<PAGE>
28
(2) Payment of the principal of, premium, if any, and interest, if any, on
such Security, may also, subject to applicable laws and regulations, be made at
other place or places as may be designated by the Company by any appropriate
method.
(b) With respect to any Registered Security of any series denominated in
any currency unit, including without limitation ECU, if the following provisions
(or any substitute therefor, or addition thereto, not inconsistent with this
Indenture) are established pursuant to Section 2.1 and if the Company has not,
before delivery of the election referred to in clause (1) below, deposited funds
or securities in compliance with Section 12.1 or clause (a) or (if specified
pursuant to Section 2.1) clause (b) of Section 12.3 the following payment
provisions shall apply to any payment to be made prior to the giving of any
notice to Holders of any election to redeem pursuant to Section 3.5, except as
otherwise provided in paragraphs (e) and (f) below:
(1) A Holder of Securities of a series shall have the option to elect to
receive payments of principal of, premium, if any, and interest, if any, on such
Securities in a currency or currency unit (including Dollars), other than that
in which the Security is denominated. Such election, as designated in the
certificates for such Securities (or as provided by Section 2.1 or a
supplemental indenture thereto with respect to uncertificated securities), shall
be made by delivering to the Trustee a written election, to be in form and
substance satisfactory to the Trustee, not later than the close of business in
The City of New York, on the day 15 days prior to the applicable payment date.
Such election will remain in effect for such Holder until changed by the Holder
by written notice to the Trustee (but any such written notice must be received
by Trustee not later than the close of business on the day 15 days prior to the
next payment date to be effective for the payment to be made on such payment
date and no such change may be made with respect to payments to be made on any
Security of such series with respect to which notice of redemption has been
given by the Company pursuant to Article Three). Any Holder of any such
Security who shall not have delivered any such election to the Trustee in,
accordance with this paragraph (b) will be paid the amount due on the applicable
payment date in the relevant currency unit as provided in paragraph (a) of this
Section 2.11. Payment of principal of and premium, if any, shall be made on the
payment date therefor against surrender of such Security. Payment of principal
of, premium, if any, and interest, if any, shall be made at the Place of Payment
by mailing at such location a check, in the applicable currency or currency
unit, to the Holder entitled thereto at the address of such Holder appearing on
the Security Register.
(2) Payment of the principal of, premium, if any, and interest, if any, on
such Security may also, subject to applicable laws and regulations, be made at
such other place or places as may be designated by the Company by any
appropriate method.
(c) Payment of the principal of and premium, if any, and interest, if any,
on any Bearer Security shall be made, except as provided in Section 2.4 with
respect to temporary global Securities, unless otherwise specified pursuant to
Section 2.1 and/or Section 10.1(h), at such place or places outside the United
States as may be designated by the Company pursuant to any applicable laws or
regulations by any appropriate method in the currency or currencies or currency
unit or units in which the Security is payable (except as
<PAGE>
29
provided in paragraph (e) below) on the payment date therefor against surrender
of the Bearer Security, in the case of payment of principal and premium, if any,
or the relevant Coupon, in the case of payment of interest, if any, to a Paying
Agent designated for such series pursuant to Section 4.2.
(d) Not later than 10 Business Days (with respect to any Place of Payment)
prior to each payment date, the Trustee (and if a calculation agent is appointed
with respect to any Securities bearing interest at a rate or rates determined by
reference to an interest rate formula, such calculation agent with respect to
such Securities) shall deliver to the Company a copy of its record of the
respective aggregate amounts of principal of, premium, if any, and interest, if
any, on the Securities to be made on such payment date, in the currency or
currency unit in which each of the Securities is payable, specifying the amounts
so payable in respect of Registered Securities and Bearer Securities and in
respect of the Registered Securities as to which the Holders of Securities
denominated in any currency unit shall have elected to be paid in another
currency or currency unit as provided in paragraph (b) above. If the election
referred to in paragraph (b) above has been provided for pursuant to Section 2.1
and if at least one Holder has made such election, then, not later than the
fifth Business Day (with respect to any Place of Payment) prior to the
applicable payment date the Company shall deliver to the Trustee an Exchange
Rate Officer's Certificate in respect of the Dollar or Foreign Currency or
currency unit payments to be made on such payment date. The Dollar or Foreign
Currency or currency unit amount receivable by Holders of Registered Securities
denominated in a currency unit who have elected payment in another currency or
currency unit as provided in paragraph (b) above shall be determined by the
Company on the basis of the applicable Official Currency Unit Exchange Rate set
forth in the applicable Exchange Rate Officer's Certificate.
(e) If a Foreign Currency in which any Security is denominated or payable
ceases to be recognized both by the government of the country which issued such
currency and for the settlement of transactions by public institutions of or
within the international banking community, or if ECU ceases to be used both
within the European Monetary System and for the settlement of transactions by
public institutions of or within the European Communities, or if any other
currency unit in which a Security is denominated or payable ceases to be used
for the purposes for which it was established, in each case determined in good
faith by the Company, then with respect to each date for the payment of
principal of, premium, if any, and interest, if any, on the applicable security
denominated or payable in such Foreign Currency, ECU or such other currency unit
occurring after the last date on which such Foreign Currency, ECU or such other
currency unit was so recognized or used (the "Currency Conversion Date"), the
Dollar shall become the currency of payment for use on each such payment date
(but ECU or the Foreign Currency or the currency unit previously the currency of
payment shall, at the Company's election, resume being the currency of payment
on the first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no longer
prevail, in each case as determined in good faith by the Company). The Dollar
amount to be paid by the Company to the Trustee and by the Trustee or any Paying
Agent to the Holder of such Security with respect to such payment date shall be
the Dollar Equivalent of the Foreign Currency or, in the case of a currency
unit, the Dollar Equivalent of the Currency Unit, as
<PAGE>
30
determined by the Exchange Rate Agent (which shall be delivered in writing to
the Trustee not later than the fifth Business Day prior to the applicable
payment date) as of the Currency Conversion Date or, if later, the date most
recently preceding the payment date in question on which such determination is
possible of performance, but not more than 15 days before such payment date
(such Currency Conversion Date or date preceding a payment date as aforesaid
being called the "Valuation Date") in the manner provided in paragraph (g) or
(h) below.
(f) (i) If the Holder of a Registered Security denominated in a currency
unit elects payment in a specified Foreign Currency or currency unit as provided
for by paragraph (b) and such Foreign Currency ceases to be used both by the
government of the country which issued such currency and for the settlement of
transactions by public institutions of or within the international banking
community, in each case as determined in good faith by the Company, such Holder
shall (subject to paragraph (e) above) receive payment in the currency unit in
which the Security is denominated, and (ii) if ECU ceases to be used both within
the European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities and such Registered Security
is payable in such currency unit, or if any other such currency unit ceases to
be used for the purposes for which it was established and such Registered
Security is payable in such currency unit, in each case as determined in good
faith by the Company, such Holder shall receive payment in Dollars. Each payment
covered by an election pursuant to paragraph (b) above be governed by the
provisions of this paragraph (f) (but, subject to any contravening valid
election pursuant to paragraph (b) above, the specified Foreign Currency in case
(i) or ECU or other currency unit in case (ii) shall, at the Company's election,
resume being the currency or currency unit, as applicable, of payment with
respect to Holders who have so elected, but only with respect to payments on
payment dates preceded by 15 Business Days during which the circumstances which
gave rise to such currency unit in case (i) or the Dollar in case (ii) becoming
the currency unit or currency, as applicable, of payment, no longer prevails, in
each case as determined in good faith by the Company).
(g) "The Dollar Equivalent of the Foreign Currency" shall be determined by
the Exchange Rate Agent as of each Valuation Date and shall be obtained by
converting the specified Foreign Currency into Dollars at the Market Exchange
Rate on the Valuation Date.
(h) The "Dollar Equivalent of the Currency Unit" shall be determined by
the Exchange Rate Agent as of each Valuation Date and shall be the sum obtained
by adding together the results obtained by converting the Specified Amount of
each Component Currency into Dollars at the Market Exchange Rate on the
Valuation Date for such Component Currency.
(i) For purposes of this Section 2.11 the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which, on the Currency
Conversion Date, was a component currency of the relevant currency unit,
including without limitation ECU.
<PAGE>
31
An "Exchange Rate Agent" means a New York clearinghouse bank appointed by
the Company from time to time to determine exchange rates between Dollars and
other currencies or currency units. The Company may appoint different Exchange
Rate Agents for different currencies and currency units and may change an
Exchange Rate Agent at any time after 15 days' notice to the Trustee.
A "Specified Amount" of a Component Currency shall mean the number of units
or fractions thereof which such Component Currency represented in the relevant
currency unit, including without limitation ECU, on the Currency Conversion
Date. If after the Currency Conversion Date the official unit of any Component
Currency is altered by way of combination or subdivision, the Specified Amount
of such Component Currency shall be divided or multiplied in the same
proportion. If after the Currency Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Currency Conversation Date any
Component Currency shall be divided into two or more currencies, the Specified
Amount of such Component Currency shall be replaced by specified amounts of such
two or more currencies, the sum of which, at the Market Exchange Rate of such
two or more currencies on the date of such replacement, shall be equal to the
Specified Amounts of such currencies shall thereafter be Component Currencies.
"Market Exchange Rate" shall mean for any currency the noon Dollar buying
rate for that currency for cable transfers quoted in New York City on the
Valuation Date as certified for customs purposes by the Federal Reserve Bank of
New York. If such rates are not available for any reason with respect to one or
more currencies for which an Exchange Rate is required. The Exchange Rate Agent
shall use such quotation of the Federal Reserve Bank of New York as of the most
recent available date, or quotations from one or more major banks with its head
office in New York City or in the country of issue of the currency in question,
or such other quotations as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate Agent if there is more than one
market for dealing in any currency by reason of foreign exchange regulations or
otherwise, the market to be used in respect of such currency shall be that upon
which a nonresident issuer of securities designated in such currency would, as
determined in its sole discretion and without liability on the part of the
Exchange Rate Agent, purchase such currency in order to make payments in respect
of such securities.
All decisions and determinations of the Exchange Rate Agent regarding the
Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency
Unit and the Market Exchange Rate shall be in its sole discretion and shall, in
the absence of manifest error, be conclusive for all purposes and irrevocably
binding upon the Company and all Holders of the Securities and Coupons
denominated or payable in the relevant currency or currency units. In the event
that a Foreign Currency ceases to be used both by the government of the country
which issued such currency and for the settlement of transactions by public
institutions of or within the international banking community, the Company,
after
<PAGE>
32
learning thereof, will immediately give notice thereof to the Trustee (and
the Trustee will promptly thereafter give notice in the manner provided in
Section 1.4 to the Holders) specifying the Currency Conversion Date. In the
event the ECU ceases to be used both within the European Monetary System and for
the settlement of transactions by public institutions of or within the European
Communities, or any other currency unit in which Securities or Coupons are
denominated or payable, ceases to be used for the purposes for which it was
established, the Company, after learning thereof, will immediately give notice
thereof to the Trustee (and the Trustee will promptly thereafter give notice in
the manner provided in Section 1.4 to the Holders) specifying the Currency
Conversion Date and the Specified Amount of each Component Currency on the
Currency Conversion Date. In the event of any subsequent change in any
Component Currency as set forth in the definition of Specified Amount above, the
Company, after learning thereof, will similarly give notice to the Trustee. Any
actions taken pursuant to the parentheticals at the end of the first sentence of
Section 2.11(e) and at the end of Section 2.11(f) shall be promptly set forth in
like notices from the Company to the Trustee and then from the Trustee to the
Holders (which notice may be mailed with payment to the Holders).
Subject to the provisions of Sections 7.1 and 7.2, the Trustee shall be
fully justified and protected in conclusively relying and acting upon
information received by it from the Company and the Exchange Rate Agent, and
shall not otherwise have any duty or obligation to determine such information
independently.
Section 2.12 Compliance with Certain Laws and Regulations. If any Bearer
--------------------------------------------
Securities are to be issued in any series of Securities, the Company will use
reasonable efforts to provide for arrangements and procedures designed pursuant
to then applicable laws and regulations, if any, to ensure that such Bearer
Securities are sold or resold, exchanged, transferred and paid only in
compliance with such laws and regulations and without adverse consequences to
the Company, the Holders and the Trustee.
Section 2.13 Security Forms Generally. The Securities of each series and
------------------------
the Coupons, if any, to be attached thereto shall be in substantially the forms
as shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate insertions,
omissions, substitutions, and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the applicable laws and regulations and the rules of any
securities exchange or as may, consistently herewith, be determined by the
offices executing such Securities and Coupons, if any, as evidenced by their
executions of the Securities and Coupons, if any. If the forms of Securities of
any series is established by, or by action taken pursuant to a Board Resolution,
a copy of the Board Resolution together with an appropriate record of any action
taken pursuant thereto, which Board Resolution or record of such action shall
have amended thereto a true and correct copy of the forms of Security approved
by or pursuant to such Board Resolution, shall be certified by the Secretary or
an Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 2.3 for the
authentication and delivery of such Securities.
<PAGE>
33
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders and may be produced in any
other manner, as all determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
Section 2.14 Form of Trustee's Certificate of Authentication. The
-----------------------------------------------
Trustee's certificate of authentication shall be in substantially the following
form:
This is one of the Securities of the series designated therein issued under
the within mentioned Indenture.
The Bank of New York, as Trustee
By
Authorized Signatory
Section 2.15 Securities in Global Form. If Securities of a series are
-------------------------
issuable in global form, as specified pursuant to Section 2.1, then,
notwithstanding clause (h) of Section 2.1 and the provisions of Section 2.2,
such Security shall represent such of the Outstanding Securities of such series
as shall be specified therein and may provide that it shall represent the
aggregate amount of Outstanding Securities from time to time endorsed thereon
and that the aggregate amount of Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner and upon written instructions given by such Person or Persons as shall be
specified in such Security or in the Company Order to be delivered to the
Trustee pursuant to Section 2.3 or Section 2.4. Subject to the provisions of
Section 2.3 and, if applicable, Section 2.4, the Trustee shall deliver and
redeliver any Security in permanent global form in the manner and upon written
instructions given by the Person or Persons specified in such Security or in the
applicable Company Order. If a Company Order pursuant to Section 2.3 or 2.4 has
been, or simultaneously is, delivered, any instructions by the Company with
respect to endorsement or delivery or redelivery of a Security in global form
shall be in writing but need not comply with Section 14.6 and need not be
accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Sections 2.13 and 2.9, unless otherwise
specified pursuant to Section 2.1, payment of principal of and any premium and
any interest on any Security in permanent global form shall be made to the
Person or Persons specified therein.
The holders of beneficial interests in any temporary or permanent global
Security shall have no rights under this Indenture with respect to any global
Security held on their behalf by a U.S. Depository or Common Depository, as the
case may be, and such U.S. Depository or Common Depository, as the case may be,
may be treated by the Company, the Trustee, and any agent of the Company or the
Trustee as the owner of such global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee, or any agent of the Company or the Trustee, from giving effect to any
<PAGE>
34
written certification, proxy or other authorization furnished by a U.S.
Depository or Common Depository, as the case may be, or impair, as between a
U.S. Depository or Common, as the case may be, and holders of beneficial
interests in any temporary or permanent global Security as the case may be, the
operation of customary practices governing the exercise of the rights of a
Holder of a Security of any series, including without limitation the granting of
proxies or other authorization of participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action which
a Holder is entitled to give or take under this Indenture.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a global Security or for supervising or reviewing any records
relating to such beneficial ownership interests.
Each U.S. Depository designated pursuant to Section 2.1 for a global
Security in registered form must, at the time of its designation and at all
times while it serves as U.S. Depository, be a clearing agency registered under
the Securities Exchange Act of 1934, as amended, and any other applicable
statute or regulation.
Section 2.16 CUSIP Numbers. The Company in issuing the Securities may use
-------------
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
--------
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE 3
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 3.1 Applicability of Article. Securities (including any Coupons)
------------------------
of any series which are redeemable before their Stated Maturity shall be
redeemable in accordance with their terms and (except as otherwise specified
pursuant to Section 2.1 for Securities (including any Coupons) of any series) in
accordance with this Article.
The provisions of Sections 3.9 to 3.10 of this Article shall be applicable
if any sinking fund is to be provided for the retirement of Securities
(including any Coupons) of any series except as otherwise specified pursuant to
Section 2.1 for Securities (including any Coupons) of such series.
Section 3.2 Mandatory and Optional Sinking Fund Payments. The minimum
--------------------------------------------
amount of any sinking fund payment provided for by the terms of Securities
(including any Coupons) of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities
<PAGE>
35
(including any Coupons) of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities (including any
Coupons) of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.9. Each sinking fund payment shall
be applied to the redemption of Securities (including any Coupons) of any series
as provided for by the terms of Securities (including any Coupons) of such
series.
Section 3.3 Election to Redeem: Notice to Trustee. The election of the
-------------------------------------
Company to redeem any Securities (including any Coupons) shall be evidenced by a
Board Resolution or by an action taken pursuant to a Board Resolution. In case
of any redemption at the election of the Company of less than all of the
Securities (including any Coupons) of any series, the Company shall, at least 45
days prior to the Redemption Date fixed by the Company (unless the Trustee shall
allow a lesser period of time) deliver to the Trustee an Officers' Certificate
(1) notifying the Trustee of such Redemption Date and of the principal amount of
Securities (including any Coupons) of such series to be redeemed and (2) stating
that no defaults in the payment of interest or Events of Default with respect to
the Securities (including any Coupons) of that series have occurred (which have
not been waived or cured). In the case of any redemption of Securities
(including any Coupons) prior to the expiration of any restriction on such
redemption provided in the terms of such Securities (including any Coupons) or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
Section 3.4 Selection by Trustee of Securities to be Redeemed. If less
-------------------------------------------------
than all the Securities (including any Coupons) of any series are to be
redeemed, the particular Securities (including any Coupons) to be redeemed shall
be selected by the Trustee, not more than 45 days prior to the Redemption Date
from the Outstanding Securities of such series 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 the
minimum authorized denomination for Securities (including any Coupons) of that
series, or any integral multiple thereof, of the principal amount of Securities
(including any Coupons) of such series, or of a denomination larger than the
minimum authorized denomination for Securities (including any Coupons) of that
Series.
The Trustee shall promptly notify the Company in writing of the Securities
(including any Coupons) selected for redemption and, in the case of any
Securities (including any Coupons) selected for partial redemption, the
principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities (including any Coupons)
shall relate, in the case of any Security (including any Coupons) redeemed or to
be redeemed only in part, to the portion of the principal of such Security
(including any Coupons) which has been or is to be redeemed.
Securities shall be excluded from liability for selection for redemption if
they are identified by registration and certificate number in an Officers'
Certificate of the Company delivered to the Trustee at least 45 days prior to
the Redemption Date (unless the
<PAGE>
36
Trustee shall allow a lesser period of time) as being owned of record and
beneficially by, and not pledged or hypothecated by, either (a) the Company or
(b) an entity specifically identified in such written statement as an Affiliate
of the Company.
Section 3.5 Notice of Redemption. Notice of redemption shall be given not
--------------------
less than 30 nor more than 60 days prior to the Redemption Date, to each Holder
of Securities to be redeemed, as provided in Section 1.4.
Each such notice of redemption shall specify the CUSIP Number, the
Redemption Date, the Redemption Price, the Place or Places of Payment, that the
Securities of such series are being redeemed at the option of the Company
pursuant to provisions contained in the terms of the Securities of such series
or in a supplemental indenture establishing such series, if such be the case,
together with a brief statement of the facts permitting such redemption, that on
the Redemption Date the Redemption Price will become due and payable upon each
Security redeemed, that payment will be made upon presentation and surrender of
the applicable Securities, that all Coupons, if any, maturing subsequent to the
Redemption Date shall be void, that any interest accrued to the Redemption Date
will be paid as specified in said notice, and that on and after said Redemption
Date any interest thereon or on the portions thereof to be redeemed will cease
to accrue. If the Securities of such series are convertible into other
securities of the Company, the notice shall also state the conversion price, the
last date on which the Securities may be converted prior to the Redemption Date,
and that the Holders who wish to convert their Securities must comply with and
satisfy all the terms, conditions and requirements for conversion as set forth
in the Securities and/or this Indenture. If less than all the Securities of any
series are to be redeemed the notice of redemption shall specify the numbers of
the Securities of such series to be redeemed, and, if only Bearer Securities of
any series are to be redeemed, and if such Bearer Securities may be exchanged
for Registered Securities, the last date on which exchanges of Bearer Securities
for Registered Securities not subject to redemption may be made. In case any
Security of any series is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the Redemption Date, upon surrender of such Security and
any Coupons appertaining thereto, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof and with appropriate
Coupons will be issued, or, in the case of Registered Securities providing
appropriate space for such notation, at the option of the Holders, the Trustee,
in lieu of delivering a new Security or Securities as aforesaid, may make a
notation on such Security of the payment of the redeemed portion thereof.
Notice of redemption of Securities and Coupons, if any, 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 3.6 Deposit of Redemption Price. On or before the opening of
---------------------------
business on any 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 4.5) an amount of money in
the relevant currency (or a sufficient number of currency units, as the case may
be) sufficient to pay the Redemption Price of, and
<PAGE>
37
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities and Coupons, if any, which are to be redeemed on
that date.
Section 3.7 Securities Payable on Redemption Date. Notice of redemption
-------------------------------------
having been given as aforesaid, the Securities 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 interest) such Securities shall
cease to bear interest and the Coupons for such interest appertaining to any
Bearer Securities, so to be redeemed, except to the extent provided below, shall
be void. Upon surrender of any such Security for redemption in accordance with
said notice, together with all Coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest on Bearer Securities whose
Stated Maturity is on or prior to the Redemption Date shall be payable only at
an office or agency located outside the United States (except as otherwise
provided in Section 4.2) and, unless otherwise specified pursuant to Section
2.1, only upon presentation and surrender of Coupons for such interest, and
provided, further, that, unless otherwise specified pursuant to Section 2.1,
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Regular and Special Record Dates according to their
terms and the provisions of Section 2.9.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price an amount equal to the face
amount of all such missing Coupons, or the surrender of such missing Coupon or
Coupons may be waived by the Company and the Trustee if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall
surrender to the Trustee or any Paying Agent any such missing Coupon in respect
of which a deduction shall have been made from the Redemption Price, such Holder
shall be entitled to receive the amount so deducted; provided, however, that
interest represented by Coupons shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 4.2)
and, unless otherwise specified pursuant to Section 2.1, only upon presentation
and surrender of those Coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium shall, until paid, bear
interest from the Redemption Date at the rate prescribed therefor in by the
Security.
Section 3.8 Securities Redeemed in Part. Any Security (including any
---------------------------
Coupons appertaining thereto) which is to be redeemed only in part may be
surrendered at a Place of Payment therefor (with, 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
<PAGE>
38
the Holder of such Security (including any Coupons appertaining thereto) without
service charge to the Holder thereof, a new Security or Securities (including
any Coupons Pertaining thereto) of the same series and Stated Maturity, 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 Security so surrendered. Any Bearer Security that is redeemed only in part
shall be surrendered at an office or agency of the Company located outside the
United States, except as otherwise provided in Section 4.2, and the Company
shall execute, and the Trustee shall authenticate and make available for
delivery to the Holder of such Security outside the United States without
service charge, a new Bearer Security or Bearer Securities of the same series
(or a new Registered Security or Registered Securities of the same series, if
the Securities of such series are issuable as Registered Securities), 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 Security so surrendered; except in either case that if a global Security is
so surrendered, the Company shall execute, and the Trustee shall authenticate
and make available for delivery to the U.S. Depository or Common Depository, as
the case may be, for such global Security, without service charge, a global
Security in a denomination equal to and in exchange for the unredeemed portion
of the principal of the global Security so surrendered.
Section 3.9 Satisfaction of Sinking Fund Payments with Securities. The
-----------------------------------------------------
Company (1) may deliver Outstanding Securities (including any Coupons) of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities (including any Coupons) of a series which have been redeemed
either at the election of the Company pursuant to the terms of such Securities
(including any Coupons) or through the application of permitted optional sinking
fund payments pursuant to the terms of such Securities (including any Coupons),
in each case in satisfaction of all or any part of any sinking fund payment with
respect to the Securities (including any Coupons) of such series required to be
made pursuant to the terms of such Securities (including any Coupons) provided
for by the terms of such series; provided that such Securities (including any
Coupons) have not been previously so credited. Such Securities (including any
Coupons) shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities (including any Coupons) for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly.
Section 3.10 Redemption of Securities for Sinking Fund. Not less than 45
-----------------------------------------
days prior to each sinking fund payment date (unless the Trustee shall allow a
lesser period of time) for any series of Securities (including any Coupons), the
Company will (1) deliver to the Trustee an Officers' Certificate (A) stating
that no defaults in the payment of interest or Events of Default with respect to
Securities (including any Coupons) of that series have occurred (which have not
been waived or cured), (B) specifying the amount of the next ensuing sinking
fund payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
(including any Coupons) of that series pursuant to Section 3.9 and (C) if
applicable, stating whether or not the Company intends to exercise its right to
make an optional sinking fund payment with respect to such series on the next
ensuing sinking fund payment date and, if so, specifying the amount of
<PAGE>
39
such optional sinking fund payment and (2) deliver to the Trustee any Securities
(including any Coupons) to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the Securities
(including any coupons) to be redeemed upon such sinking fund payment date in
the manner specified in Section 3.4 and cause notice of the redemption thereof
to be given in the name of and at the expense of the Company in the manner
provided in Section 3.5.
Section 3.11 Redemption of Securities During Event of Default. The
------------------------------------------------
Trustee shall not redeem or cause to be redeemed any Security (including any
Coupons) of a series with sinking fund moneys or otherwise as provided in this
Article (unless all outstanding Securities (including any Coupons) of such
series are to be redeemed) or mail any notice of any such redemption of
Securities (including any Coupons) of a series during the continuance of a
default in payment of interest on such Securities (including any Coupons) or of
any Event of Default with respect to such series known two Business Days prior
to such payment or mailing to a Responsible Officer of the Trustee except that,
where the mailing of notice of redemption of any Securities (including any
Coupons) shall theretofore have been made, the Trustee shall redeem or cause to
be redeemed such Securities (including any Coupons), provided that it shall have
received from the Company a sum sufficient for such redemption. Except as
aforesaid, any moneys theretofore or thereafter received by the Trustee in
respect of such series of Securities at the time when any such default or Event
of Default shall have occurred shall, during the continuance of such default or
Event of Default, be deemed to have been collected under Article Seven and held
for the payment of all the Securities (including any Coupons) of that series. In
case such Event of Default shall have been waived as provided in Section 6.1 or
the default cured on or before the sixtieth day preceding a sinking fund payment
date or a Redemption Date, as the case may be, such moneys held thereafter shall
be applied in accordance with the provisions of this Article to the redemption
of such Securities including any Coupons).
ARTICLE 4
PARTICULAR COVENANTS OF THE COMPANY
Section 4.1 Payment of Principal, Premium and Interest. The Company
------------------------------------------
covenants and agrees for the benefit of each series of Securities and Coupons,
if any, that it will duly and punctually pay or cause to be paid the principal
of (and premium, if any) and interest, if any, on the Securities and Coupons, if
any, of that series in accordance with the terms of the Securities and Coupons,
if any, of such series and this Indenture.
Section 4.2 Maintenance of Office or Agency. If Securities of a series
-------------------------------
are issuable only as Registered Securities, the Company will maintain in each
Place of Payment for such series an office, which may be an office of the
Trustee, or agency where Securities of that series may be presented or
surrendered for payment, where Securities of that series may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities of that series and this Indenture may
be served. If the Securities of a series are convertible into any other security
of the Company, the Company will maintain in each Place of Payment for such
series an office, which may be
<PAGE>
40
an office of the Trustee, or agency where Securities of that series may be
presented or surrendered for conversion. If Securities of a series are issuable
as Bearer Securities, the Company will maintain (A) in the Borough of Manhattan,
The City of New York, an office, which may be an office of the Trustee, or
agency where any Registered Securities of that series may be presented or
surrendered for payment, where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange, where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served and
where Bearer Securities of that series and related Coupons may be presented or
surrendered for payment in the circumstances described in the last proviso of
this paragraph (and not otherwise), (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office, which may be an office of the Trustee, or
agency where Securities of that series and related Coupons may be presented and
surrendered for payment (including payment of any additional amounts payable on
Securities of that series pursuant to Section 4.7); provided, however, that if
the Securities of that series are listed on The Stock Exchange of the United
Kingdom and the Republic of Ireland, the Luxembourg Stock Exchange or any other
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent reasonably acceptable to
the Trustee for the Securities of that series in London, Luxembourg or any other
required city located outside the United States, as the case may be, so long as
the Securities of that series are listed on such exchange, and (C) subject to
any laws or regulations applicable thereto, in a Place of Payment for that
series located outside the United States, an office, which may be an office of
the Trustee, or agency where any Registered Securities of that series may be
surrendered for registration of transfer, where Securities of that series may be
surrendered for exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee and the Holders of the
location, and any change in the location, of any such office or agency. If at
any time the Company shall fail to maintain any such required office or agency
in respect of any series of Securities or shall fail to furnish the Trustee with
the address thereof, such presentations and surrenders of Securities of that
series may be made and notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of that
series and the related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Bearer Securities of
that series pursuant to Section 4.7) at the London office of the Trustee (or an
agent with a London office appointed by the Trustee and acceptable to the
Company), and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders notices and demands. No payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States or by check mailed to any address
in the United States or by wire transfer to an account maintained in the United
States; provided, however, that, if the Securities of a series are denominated
and payable in Dollars, payment of principal of and any premium and interest on
any Bearer Security (including any additional amounts payable on Securities of
such series pursuant to Section 4.7) shall be made at the office of the
Company's Paying Agent in the Borough of Manhattan, The City of New York, if
(but only if) payment in Dollars of the full amount of such principal, premium,
interest or additional amounts, as the case may be, at all offices or agencies
outside the United States maintained for the purpose
<PAGE>
41
by the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other offices,
which may be offices of the Trustee, or agencies where the Securities of one or
more series may be presented or surrendered for any or all such purposes and may
from time to time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in accordance with the requirements
set forth above for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee and the Holders of any such
designation or rescission and of any change in the location of any such other
office or agency.
Section 4.3 Prohibition of Extension of Claims for Interest. In order to
-----------------------------------------------
prevent any accumulation of claims for interest thereon after maturity thereof,
the Company will not directly or indirectly extend or consent to the extension
of the time for the payment of any claim for interest on any of the Securities
and Coupons, if any, of a series and will not directly or indirectly be a party
to or approve any such arrangement by the purchase or funding of said claims for
interest or in any other manner. No claim for interest, the time of payment of
which shall have been so extended or which shall have been so purchased or
funded, shall be entitled in case of an Event of Default hereunder to the
benefits of this Indenture except after the prior payment in full of the
principal of (and premium, if any) all the Securities and Coupons, if any, of a
series and claims for interest not so extended, purchased or funded; provided,
however, that this Section 4.3 shall not apply in any case where an extension
shall be made pursuant to a plan proposed by the Company to the Holders of all
the Securities and Coupons, if any, of a series, then outstanding. Every
provision of this Indenture specifying the Holders of the Securities and
Coupons, if any, of a series who are entitled to the benefits of this Indenture
or relating to the distribution of the avails of any enforcement hereof shall be
subject to the provisions of this Section 4.3.
Section 4.4 Appointment to Fill Vacancy of Trustee. The Company, whenever
--------------------------------------
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in Section 7.10, a Trustee, so that there shall at all times
be a Trustee hereunder.
Section 4.5 Paying Agents: Money for Securities Payments Held in Trust.
----------------------------------------------------------
(a) Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, at or prior to the opening of business on each
due date of the principal of (and premium, if any) or interest on any Securities
of that series, deposit with a Paying Agent a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act; provided,
however, the Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed upon in writing with the
Company.
<PAGE>
42
The Company will cause each Paying Agent for any series of Securities other
than the Trustee to execute and deliver to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto, including the Company pursuant to the
proviso set forth above in this subsection (a), until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee prompt notice of any default by the Company (or any
other obligor upon the Securities of that series) in making of any payment of
principal (and premium, if any) or interest on the Securities of that series;
and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
(b) The Company may act as its own Paying Agent. If the Company shall act
as its own Paying Agent with respect to any series of Securities, it will, on or
before each due date of the principal of (and premium, if any) or interest on
any of the Securities of that series, set aside, segregate and hold in trust for
the benefit of the Persons entitled thereto a sum sufficient to pay such
principal (and premium, if any) or interest so becoming due. The Company will
promptly notify the Trustee of such action or of any failure by the Company to
take such action or the failure by any other obligor on the Securities to make
any payment of the principal of (and premium, if any) or interest on any of the
Securities of that series when the same shall be due and payable.
(c) 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 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,
such Paying Agent shall be released from all further liability with respect to
such money.
(d) Anything in this Section 4.5 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 4.5 is subject to
the provisions of Section 12.2, Section 12.3 and Section 12.5.
Section 4.6 Compliance Certificate. The Company will deliver to the
----------------------
Trustee for each series of Securities, within 120 days after the end of each
fiscal year ending after the date hereof so long as any Security is outstanding
hereunder, a certificate signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company stating, as to
each signer thereof, that:
<PAGE>
43
(a) a review has been made under his or her supervision of the
activities of the Company during such year and of the performance under this
Indenture; and
(b) to the best of his or her knowledge, based on such review, the Company
has complied with all conditions and covenants under this Indenture throughout
such year. For purposes of this Section, such compliance shall be determined
without regard to any period of grace or requirement of notice provided under
this Indenture.
Section 4.7 Additional Amounts. If the Securities of a series provide for
------------------
the payment of additional amounts, the Company will pay to the Holder of any
Security of such series or any Coupon appertaining thereto who are United States
Aliens additional amounts as provided therein. Whenever in this Indenture there
is mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or payment of any
related Coupon or the net proceeds received on the sale or exchange of any
Security of any series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in this Section to the extent that,
in such context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of additional amounts (if applicable) in any provisions hereof shall not
be construed as excluding additional amounts in those provisions hereof where
such express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the Officers' Certificate to be delivered pursuant
to Section 4.6, the Company will furnish the Trustee and the Company's Paying
Agent or Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of that
series shall be made to Holders of Securities of that series or any related
Coupons who are United States Aliens without withholding for or on account of
any tax, assessment or other governmental charge described in the Securities of
that series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or Coupons and the Company shall
pay to the Trustee or such Paying Agent the additional amounts required by this
Section. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense
reasonably incurred without negligence or bad faith on their part arising out of
or in connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.
Section 4.8 Calculation of Original Issue Discount. The Company shall
--------------------------------------
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on Outstanding Securities as of the end of such
year and (ii) such other specific information
<PAGE>
44
relating to such original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE 5
SECURITYHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 5.1 Company To Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, within one Business Day of each record date in each
year, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of each series of Registered Securities, 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, such list to be, dated as of a date not more than 14 days
prior to the time such list is furnished, and
(c) such information concerning the Holders of Bearer Securities which is
known to the Company; provided, however, that the Company shall not have an
obligation to investigate any matter relating to any Holder of a Bearer Security
or a Coupon;
notwithstanding the foregoing subsections (a) and (b), so long as the Trustee is
the Security Registrar with respect to a particular series of Securities, no
such list shall be required to be furnished in respect of such series.
Section 5.2 Preservation of Information: Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
each series of Securities (1) contained in the most recent list furnished to it
as provided in Section 5.1, and (2) received by it in the Paying Agent and
Security Registrar (if so acting) hereunder. The Trustee shall provide
information to the Company upon receipt of a Company Request for the same by the
Company. The Trustee may destroy any list furnished to it as provided in
Section 5.1 upon receipt of a new list for Securities so furnished.
(b) In case three or more Holders of any series of Securities (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application and such application states that the applicants desire to
communicate with other Holders of Securities of such series with respect to
their rights under this Indenture or under such Securities and is accompanied by
a copy of the form of proxy or other communication which such applicants propose
to transmit, then the
<PAGE>
45
Trustee shall, within five business days after the receipt of such application,
at its election, either
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection (a) of this
Section 5.2, or
(2) inform such applicants as to the approximate number of Holders of
Securities of such series whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section 5.2 and as to the approximate cost of mailing to
such Securityholders the form of proxy or other communication, if any, specified
in such application.
If the Trustee shall not elect to afford such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Securityholder of such series whose name and address appear in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 5.2, a copy of the form of proxy or
other communication which is specified in such request with reasonable
promptness after a tender to the Trustee by such Applicants of the material to
be mailed and of payment, or provision for the payment, of the reasonable
expenses of mailing, unless, within five days after such tender, the Trustee
shall mail to such applicants and file with the Commission, together with a copy
of the material to be mailed, a written statement to the effect that in the
opinion of the Trustee such mailing would be contrary to the best interest of
the Holders of Securities of such series or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for a
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
securityholders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of the Securities or Coupons, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders in accordance with the provisions of
subsection (b) of this Section 5.2, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
Section 5.3 Reports by Company.
-------------------
(a) The Company covenants and agrees to file with the Trustee, with
reasonable promptness, after the Company is required to file the same with the
Commission, copies of the annual reports and of the information, documents, and
other reports (or copies
<PAGE>
46
of such portions of any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934; or, if the Company is not required to file information,
documents or reports pursuant to either of such sections, then to file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents, and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit to the respective holders
of Registered Securities, within thirty days after the filing thereof with the
Trustee, in the manner and to the extent provided in subsection (c) of Section
5.4, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section 5.3 as
may be required by rules and regulations prescribed from time to time by the
Commission.
(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
Section 5.4 Reports by Trustee.
-------------------
(a) On or before 60 days after May 15 in each year, so long as any
Securities are Outstanding hereunder, the Trustee shall transmit to
Securityholders of each series as hereinafter provided in this Section 5.4, a
brief report with respect to any of the following events which may have occurred
within the previous twelve (12) months (but if no such event has occurred within
such period, no report need be transmitted):
(1) any change to its eligibility under Section 7.9 and its qualifications
under Section 7.8;
(2) the creation of or any material change to a relationship specified in
paragraphs (1) through (10) of Section 7.8(c) of this Indenture;
(3) the character and amount of any advances to or on behalf of the
Company (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made
<PAGE>
47
by the Trustee (as such) which remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or charge prior to that
of the Securities on any property or funds held or collected by it as Trustee,
except that the Trustee shall not be required (but may elect) to report such
advances if such advances so remaining unpaid aggregate not more than one-half
of 1% of the principal amount of the Securities Outstanding on the date of such
report;
(4) the amount, interest rate and maturity date of all other indebtedness
owing by the Company (or by any other obligor on the Securities) to the Trustee
in its individual capacity, on the date of such report, with a brief description
of any property held as collateral security therefor, except an indebtedness
based upon a creditor relationship arising in any manner described in paragraphs
(2), (3), (4), or (6) of subsection (b) of Section 7.13;
(5) any change to the property and funds held hereunder, if any,
physically in the possession of the Trustee, as such, on the date of such
report;
(6) any action taken by the Trustee in the performance of its duties under
this Indenture which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default, notice
of which has been or is to be withheld by it in accordance with the provisions
of Section 6.7; and
(7) any additional issue of Securities which the Trustee has not
previously reported.
(b) The Trustee shall transmit to the Securityholders, as hereinafter
provided, a brief report with respect to the character and amount of any
advances (and if the Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) since the date of the last
report transmitted pursuant to the provisions of subsection (a) of this Section
5.4 (or if no such report has yet been so transmitted, since the date of
execution of this Indenture) for the reimbursement of which it claims or may
claim a lien or charge prior to that of the Securities on property or funds held
or collected by it as Trustee and which it has not previously reported pursuant
to this subsection, except that the Trustee shall not be required (but may
elect) to report such advances if such advances remaining unpaid at any time
aggregate 10% or less of the principal amount of Securities outstanding at such
time, such report to be transmitted within 90 days after such time.
(c) Reports to the Holders of Securities pursuant to this Section 5.4
shall be transmitted in the manner as provided in Section 1.4 by mail to all
Holders of Securities.
(d) A copy of each such report shall, at the time of such transmission to
Securityholders, be filed by the Trustee with each stock exchange upon which the
Securities are listed and with the Commission and shall be furnished to the
Company. The Company agrees to notify the Trustee when and as the Securities
become listed on any stock exchange.
ARTICLE 6.
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48
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS IN EVENT OF DEFAULT
Section 6.1 Event of Default; Acceleration, Etc. "Event of Default,"
------------------------------------
wherever used herein with respect to Securities of any series, means any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body), unless it is either
inapplicable to a particular series or it is specifically deleted or modified in
or pursuant to the supplemental indenture or Board Resolution establishing such
series of Securities or in the form of Security for such series:
(a) default in the payment of any installment of interest upon any of the
Securities of that series as and when the same shall become due and payable, and
continuance of such default for a period of 30 days after the date on which
written notice specifying such default and requiring the Company to remedy the
same, shall have been given to the Company by the Trustee by registered mail, or
to the Company and the Trustee by any one or more Holders of the Securities of
that series at the time Outstanding; or
(b) default in the payment of the principal of (or premium, if any, on)
any of the Securities of that series as and when the same shall become due and
payable either at Maturity, by declaration or otherwise; or
(c) default in the deposit of any sinking fund payment when and as due by
the terms of a Security of that series, and continuance of such default for a
period of 30 days after the date on which written notice specifying such default
and requiring the Company to remedy the same, shall have been given to the
Company by the Trustee by registered or certified mail, return receipt
requested, or to the Company and the Trustee by any one or more Holders of the
Securities of that series at the time outstanding; or
(d) failure on the part of the Company duly to observe or perform any
other covenants or agreements (other than as set forth in Section 6.1(a), (b) or
(c) above) on the part of the Company in the Securities of that series or in
this Indenture contained (other than a covenant or warranty which has expressly
been included in this Indenture solely for the benefit of any series of
Securities other than that series) and such failure shall continue unremedied
for a period of 90 days after the date on which written notice of such failure,
requiring the Company to remedy the same, shall have been given to the Company
by the Trustee by registered or certified mail, return receipt requested, or to
the Company and the Trustee by the Holders of at least 25% in principal amount
of the Securities of that series at the time Outstanding; or
(e) a decree or order by a court having jurisdiction in the premises for
relief in respect of the Company under Title 11 of the United States Code, as
now constituted or hereafter in effect, or any other applicable Federal or State
bankruptcy, insolvency or similar law, shall have been entered, either adjudging
the Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization of the Company, and such decree
<PAGE>
49
or order shall have continued undischarged and unstayed for a period of 90 days;
or a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver or liquidator or trustee or custodian or assignee in
bankruptcy or insolvency of the Company, or of its property, or for the winding-
up or liquidation of its affairs, shall have been entered, and such decree or
order shall have remained in force undischarged and unstayed for a period of 90
days; or
(f) the Company shall institute proceedings for relief to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a bankruptcy proceeding
against it, or shall file a petition or answer or consent seeking reorganization
under Title 11 of the United States Code, as now constituted or hereafter in
effect, or any other applicable Federal or State bankruptcy, insolvency or
similar law, or shall consent to the institution of proceedings thereunder or to
the filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or custodian or assignee in bankruptcy or
insolvency of it or of its property, or shall make an assignment for the benefit
of creditors, or shall admit in writing its inability to pay its debts generally
as they become due, or shall fail generally to pay its debts as such debts
become due, or corporate action shall be taken by the Company in furtherance of
any of the aforesaid purposes; or
(g) any other Event of Default with respect to the Securities of that
Series.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, and in each and every such case, unless
the principal of all the Securities of that series shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of that series then Outstanding hereunder, by
notice in writing (except with respect to an Event of Default specified in
subsections (e) and (f), for which such notice shall not be required) to the
Company and to the Trustee, may declare the principal amount (or, if the
Securities of that series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of that series) of all
the Securities of that series to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of that series contained to the
contrary notwithstanding. This provision, however, is subject to the conditions
that if, at any time after such principal amount of the Securities of any series
shall have been so declared due and payable, and before any judgment or decree
for the payment of the moneys due shall have been obtained or entered as
hereinafter provided, the Company shall pay or shall deposit with the Trustee a
sum sufficient to pay all matured installments of interest upon all the
Securities of that series (with interest, to the extent that payment of such
interest is enforceable under applicable law, upon overdue installments of
interest, at the rate borne by the Securities of that series to the date of such
payment or deposit) and such amount as shall be sufficient to cover all sums due
the Trustee and each predecessor Trustee under Section 7.6, and any and all
defaults under the Indenture, other than the nonpayment of the principal amount
of the Securities of that series which shall have become due by acceleration,
shall have been remedied, then and in every such case the Holders of a majority
in aggregate principal amount of the Securities of that series then Outstanding,
by written notice to the Company and to the Trustee, may waive all defaults and
rescind and annul such declaration
<PAGE>
50
and its consequences; but no such waiver or rescission and annulment shall
extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
the Securities of that series shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Company, and the Trustee shall continue as though no such proceedings had been
taken.
Subject to the provisions of Section 7.1, the Trustee shall not be deemed
to have knowledge of any default described in subsections (d), (e), (f), or (g)
of this Section 6.1 unless (i) the Trustee shall have actual knowledge of such
default or (ii) the Trustee shall have received written notice thereof from the
Company or any Holder.
Section 6.2 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that (1) in case it shall default in the payment
- -------
of any installment of interest on any Security, or Coupon, as and when the same
shall become due and payable, and such default shall have continued for a period
of thirty days (unless a different period is provided for with respect to such
Security), or (2) in case it shall default in the payment of the principal of
(or premium, if any, on) any of the Securities when the same shall have become
payable, whether upon Maturity of such Securities or upon declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of such Securities and Coupons, if any,
the whole amount that then shall have become due and payable on all such
Securities and Coupons, if any, for principal (and premium, if any), or
interest, or both, as the case may be, with interest upon the overdue principal
(and premium, if any) and (to the extent that payment of such interest is
enforceable under applicable law) upon overdue installments of interest at the
rate borne by such Securities and Coupons, if any, and, in addition thereto,
such further amount as shall be sufficient to cover all sums due the Trustee and
each predecessor Trustee under Section 7.6.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce such
judgment or final decree against the Company or other obligor upon such
Securities and Coupons, if any, and collect in the manner provided by law out of
the property of the Company or other obligor upon such Securities and Coupons,
if any, wherever situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings in bankruptcy or for the
reorganization of the Company or any other obligor upon the Securities and
Coupons, if any, of any series under Title 11 of the United States Code, as now
constituted or hereafter in effect, or any other applicable bankruptcy,
insolvency or other similar law relative to the
<PAGE>
51
Company or to such other obligor, its creditors or its property, or in case a
receiver or trustee shall have been appointed for its property, or in case of
any other judicial proceedings relative to the Company or other obligor upon the
Securities and Coupons, if any, of such series, its creditors or its property,
the Trustee, irrespective of whether the principal of the Securities of such
series shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 6.2, shall be entitled and empowered,
by intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount of principal (and premium, if any) and interest
owing and unpaid in respect of the Securities and Coupons, if any, of such
series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
sums due the Trustee and each predecessor Trustee under Section 7.6) and of the
Securityholders allowed in any judicial proceedings relative to any obligor upon
the Securities and Coupons, if any, of such series, its creditors or its
property and to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any receiver, liquidator, trustee, custodian or assignee under any of the
provisions of Title 11 of the United States Code, as now constituted or
hereafter in effect, is hereby authorized by each of the Securityholders to make
payments to the Trustee, and, in the event that the Trustee shall consent to the
making of payments directly to the Securityholders, to pay to the Trustee such
amount as shall be sufficient to cover all sums due the Trustee and each
predecessor Trustee under Section 7.6.
All rights of action and of asserting claims under this Indenture or under
any of the Securities and Coupons, if any, of any series may be enforced by the
Trustee without the possession of any of the Securities and Coupons, if any, of
that series or the production thereof at any trial or other proceedings relative
thereto, and any such action or proceedings 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 all amounts due the Trustee and each
predecessor Trustee under Section 7.6, be for the ratable benefit of the Holders
of the Securities and Coupons, if any, of such series.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to, or accept or adopt on behalf of any Securityholder, any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Securityholder, or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
In case of an Event of Default hereunder, the Trustee may in its discretion
proceed to protect and enforce the rights vested in it by this Indenture by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture, or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
<PAGE>
52
Section 6.3 Application of Money Collected. Any moneys collected by the
------------------------------
Trustee pursuant to Section 6.2 shall be applied in the order following, at the
date or dates fixed by the Trustee, and in case of the distribution of such
moneys on account of principal (or premium, if any) or interest upon
presentation of the Securities, and stamping or notation thereon of the payment,
if only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of out-of-pocket costs and expenses of collection,
and reasonable compensation and all other amounts due to the Trustee and each
predecessor Trustee under Section 7.6;
SECOND: In case the principal (or premium, if any) of such Securities
shall not have become due, to the payment of interest on such Securities and
Coupons, if any, in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been collected by
the Trustee) upon the overdue installments of interest at the rate borne by such
Securities and Coupons, if any, such payments to be made ratably to the Persons
entitled thereto, without discrimination or preference;
THIRD: In case the principal of (and premium, if any, on) such Securities
shall have become due, by declaration or otherwise, to the payment of the whole
amount then owing and unpaid upon such Securities and Coupons, if any, for
principal (and premium, if any) and interest, with interest on the overdue
principal (and premium, if any) and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate
borne by such Securities and Coupons, if any; and in case such money shall be
insufficient to pay in full the whole amount so due and unpaid upon such
Securities, then to the payment of such principal and interest, without
preference or priority of principal over interest, or of interest over
principal, or of any installment of interest over any other installment of
interest, or of any Security over any other Security, ratably to the aggregate
of such principal and accrued and unpaid interest; and
FOURTH: To the payment of the remainder and accrued interest remaining on
any money collected by the Trustee pursuant to Section 6.2, if any, to the
Company or its respective successors or assigns, or to whomsoever may be
lawfully entitled to receive the same, or as a court of competent jurisdiction
may direct.
Section 6.4 Limitation on Suits: Unconditional Rights of Holders. No
----------------------------------------------------
Holder of any Security of any series shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise, upon or under or
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless such Holder previously shall have
given to the Trustee written notice of default and of the continuance thereof,
as hereinbefore provided, and unless also the Holders of not less than 25% in
aggregate principal amount of the Securities of that series then Outstanding
shall have made written request upon the Trustee to institute such action or
proceedings in its own name as trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee, for 60 days after its receipt of such notice, request and offer of
security or indemnity, shall
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53
have failed to institute any such action or proceedings and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 6.6; it being understood and intended and being expressly
covenanted by the Holder of every Security of any series with every other Holder
and the Trustee, that no one or more Holders of Securities of that series shall
have any right in any manner whatever by virtue or by availing of any provision
of this Indenture to affect, disturb or prejudice the rights of the Holders of
any other of such Securities, or to obtain or seek to obtain priority over or
preference to any other such Holder, or to enforce any right under this
Indenture, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of such series. For the protection
and enforcement of the provisions of this Section 6.4, each and every
Securityholder and the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or any Coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any),
interest (subject to Section 2.9) on such Security, or Coupon on the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
Notwithstanding any other provision of this Indenture, the right of a
Holder of any Security which is convertible into any other security of the
Company to convert the Security, or to bring suit for the enforcement of the
right to convert the Security, shall not be impaired or affected without the
consent of the Holder.
Section 6.5 Remedies Cumulative, Restoration of Rights and Remedies.
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Except as provided by Section 2.6, all powers and remedies given by this Article
6 to the Trustee or to the Securityholders shall, to the extent permitted by
law, be deemed cumulative and not exclusive of any thereof or of any other
powers and remedies available to the Trustee or the Securityholders, by judicial
proceedings or otherwise, to enforce the performance and observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any Holder of any of the Securities of any series to
exercise any right or power accruing upon any default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 6.4, every power and remedy given by this Article 6 or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
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 to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
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54
No delay or omission of the Trustee or of any Holder of any Securities to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
Section 6.6 Control by Holders: Waiver of Past Default. The Holders of a
------------------------------------------
majority in aggregate principal amount of the Securities of any series at the
time Outstanding shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee affecting the Securities of such
series; provided, however, that, subject to the provisions of Section 7.1
hereof, the Trustee shall have the right to decline to follow any such direction
if the Trustee, being advised by counsel of its selection, determines that the
action so directed may not lawfully be taken, or if the Trustee in good faith
shall, by a Responsible Officer or officers, determine that the action so
directed would be unduly prejudicial to the Holders of the Securities of such
series not taking part in such direction (it being understood that (subject to
Section 7.1) the Trustee shall have no duty to ascertain whether or not such
action is unduly prejudicial to such Holders) or would involve the Trustee in
personal liability. Nothing in this Indenture shall impair the right of the
Trustee to take any other action deemed reasonably proper by the Trustee which
is not inconsistent with such direction. Prior to the declaration of the
maturity of the Securities of such series as provided in Section 6.1 hereof, the
Holders of a majority in aggregate principal amount of the Securities of such
series at the time Outstanding may on behalf of the Holders of all of the
Securities of such series waive any past default hereunder and its consequences,
except a default in the payment of the principal of (or premium, if any) or
interest on any of the Securities of such series or in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Company,
the Trustee and the Holders of the Securities of that series shall be restored
to their former positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon.
Section 6.7 Notice of Defaults. Within 90 days after the occurrence of
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any default hereunder with respect to the Securities of any series, the Trustee
shall transmit notice as provided in Section 5.4(c) of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Securities
of such series; provided, further, that in the case of any default of the
character specified in Section 6.1(d) with respect to Securities of such series,
no such notice to Holders shall be given until at least 30 days after the
occurrence of an Event of Default. For the purpose of this Section, the term
"default" means any event which is, or
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55
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
Section 6.8 Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Security of any series by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section 6.8 shall not apply to
any suit instituted by the Trustee, to any suit instituted by any Securityholder
or group of Securityholders holding in the aggregate more than 10% in principal
amount of the Securities of any series outstanding or to any suit instituted by
any Securityholder for the enforcement of the payment of the principal of (or
premium, if any), or interest on any Security of such series on or after the due
date expressed in such Security (or in the case of redemption, on the Redemption
Date).
Section 6.9 Special Record Date for Consents. The Company may set a
--------------------------------
record date for purposes of determining the identity of Securityholders entitled
to vote or consent to any action by vote or consent authorized or permitted by
Section 6.6 of this Indenture. Such record date shall be the later of thirty
(30) days prior to the first solicitation of such consent or the date of the
most recent list of holders furnished to the Trustee pursuant to Section 5.1 of
this Indenture prior to such solicitation.
ARTICLE 7.
CONCERNING THE TRUSTEE
Section 7.1 Certain Duties and Responsibilities. The Trustee, prior to
-----------------------------------
the occurrence of an Event of Default with respect to Securities of any series
and after the curing or waiving of all Events of Default with respect to
Securities of any series which may have occurred, undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture with
respect to such series. In case an Event of Default with respect to Securities
of any series has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture with
respect to such series, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
Securities of any series and after the curing or waiving of all Events of
Default with respect to Securities of any series which may have occurred:
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56
(1) the duties and obligations of the Trustee shall be determined solely
by the express provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished to
the Trustee by the Company and conforming to the requirements of this Indenture;
but in the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken,
suffered 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 aggregate principal
amount of the Securities of any series at the time Outstanding (determined as
provided in Section 8.4) relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture; and
(d) none of the provisions of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any personal financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate security or indemnity against such risk or
liability is not reasonably assured to it.
Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
7.1.
Section 7.2 Certain Rights of Trustee. Subject to the provisions of
-------------------------
Section 7.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, and order, bond, debenture, note or other
paper or document believed by it to be genuine to have been signed or presented
by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate signed in the
name of the Company (unless other evidence in respect thereof be herein
specifically prescribed); and any resolution
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57
of the Board of Directors of the Company may be evidenced to the Trustee by a
copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel selected by it and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such written advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Securityholders pursuant to the provisions of this Indenture, unless
such Securityholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby;
(e) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, note or other
paper or document, unless requested in writing so to do by the holders of a
majority in aggregate principal amount of the Securities then outstanding;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security conferred upon it by the terms of this Indenture,
the Trustee may require reasonable security or indemnity against such costs,
expenses or liabilities as a condition to such proceeding; the reasonable
expense for such investigation shall be paid by the Company, or if paid by the
Trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 7.3 Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained herein and in the Securities shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for the correctness of
the same. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of any of the Securities or of the proceeds thereof.
Section 7.4 May Hold Securities. The Trustee, any Paying Agent, any
-------------------
Security Registrar, or any agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or warrants to purchase Securities and, subject to Sections 7.8 and 7.13, may
otherwise deal with, and collect obligations owed
<PAGE>
58
to it by, the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar or such agent.
Section 7.5 Money Held in Trust. Subject to the provisions of Section
-------------------
12.5 hereof, all moneys received by the Trustee or any Paying Agent shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds except to the
extent required by law. So long as no Event of Default shall have occurred and
be continuing, all interest allowed on any such moneys pursuant to Section
4.5(a) shall be paid to the Company upon request from time to time.
Section 7.6 Compensation and Reimbursement. The Company covenants and
------------------------------
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed upon in writing (which shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust), and, except as otherwise expressly provided
herein, the Company will pay or reimburse the Trustee upon its request for all
costs and expenses of collection and all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and agents) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee and any predecessor
Trustee for, and to hold each of them harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee or
such predecessor Trustee, as the case may be, arising out of or in connection
with the acceptance or administration of this trust and its duties hereunder,
including the reasonable cost and expense of defending itself against any claim
of liability in connection with the exercise or performance of its powers or
duties hereunder. The obligations of the Company under this Section 7.6 to
compensate and indemnify the Trustee and any predecessor Trustee and to pay or
reimburse the Trustee for costs of collection and expenses, disbursements and
advances shall constitute additional indebtedness hereunder and shall survive
the satisfaction and discharge of this Indenture. Such additional indebtedness
shall be secured by a senior claim to which the Securities are hereby made
subordinate upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Securities.
Section 7.7 Right to Rely on Officers' Certificate. Subject to the
--------------------------------------
provisions of Section 7.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate of the Company delivered to the Trustee and such Certificate, in the
absence of bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken, suffered or omitted by it under the provisions of
this Indenture upon the faith thereof.
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59
Section 7.8 Disqualification: Conflicting Interests.
----------------------------------------
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section 7.8, it shall, within 90 days after ascertaining that it
has such conflicting interest, and if the Event of Default (exclusive of any
period of grace or requirement of notice) to which such conflicting interest
relates has not been cured or duly waived or otherwise eliminated before the end
of each 90-day period, either eliminate such conflicting interest or, except as
otherwise provided below in this Section 7.8, resign in the manner and with the
effect specified in Section 7.10, such resignation to become effective upon the
appointment of a successor trustee and such successor's acceptance of such
appointment, and the Company shall take prompt steps to have a successor
appointed in the manner provided in Section 7.10.
(b) In the event that the Trustee shall fail to comply with the provisions
of subsection (a) of this Section 7.8, with respect to Securities of any series,
the Trustee shall, within 10 days after the expiration of such 90-day period,
transmit notice of such failure to the Securityholders of such series in the
manner and to the extent provided in subsection (c) of Section 5.4.
(c) For the purposes of this Section 7.8, each series issued under this
Indenture will be considered to have been issued under a separate indenture and
the Trustee shall be deemed to have a conflicting interest with respect to any
series issued under this Indenture if there shall have occurred an Event of
Default and:
(1) the Trustee is trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding or is a trustee for more than one
outstanding series of Securities, as hereinafter defined, under a single
indenture of the Company, unless such other indenture is a collateral trust
indenture under which the only collateral consists of Securities issued under
this Indenture; provided that there shall be excluded from the operation of
this paragraph this Indenture with respect to the Securities of any series
other than that series or any indenture or indentures under which other
securities, or certificates of interest or participation in other securities,
of the Company are outstanding, if (i) this Indenture and such other indenture
or indentures and all series of securities issuable are wholly unsecured and
rank equally and such other indenture or indentures (and such series) are
specifically described in Section 7.17 of this Indenture or are hereafter
qualified under the Trust Indenture Act of 1939, unless, in either case, the
Commission shall have found and declared by order pursuant to subsection (b)
of Section 305 or subsection (c) of Section 307 of the Trust Indenture Act of
1939 that differences exist between the provisions of this Indenture (or such
series) and the provisions of such other indenture or indentures (or such
series) which are so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture or such other
indenture or indentures, or (ii) the Company shall have sustained the burden
of proving, on application to the Commission and after opportunity for hearing
thereon, that the trusteeship under this Indenture and such other indenture or
the existence of more than one outstanding series under a single
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60
indenture is not so likely to involve a material conflict of interest as to
make it necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under one of such indentures or
with respect to such series;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with an
underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company or of an underwriter (other than the Trustee itself) for the Company
who is currently engaged in the business of underwriting, except that (A) one
individual may be a director and/or an executive officer of the Trustee and a
director and/or an executive officer of the Company, but may not be at the
same time an executive officer of both the Trustee and the Company; (B) if and
so long as the number of directors of the Trustee in office is more than nine,
one additional individual may be a director and/or an executive officer of the
Trustee and a director of the Company, and (C) the Trustee may, be designated
by the Company or by any underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal agent, escrow agent
or depository, or in any other similar capacity, or, subject to the provisions
of paragraph (1) of this subsection (c), to act as trustee whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is beneficially
owned either by the Company or by any director, partner or executive officer
thereof, or 20% or more of such voting securities is beneficially owned,
collectively, by any two or more of such persons; or 10% or more of the voting
securities of the Trustee is beneficially owned either by an underwriter for
the Company or by any director, partner or executive officer thereof, or is
beneficially owned, collectively, by any two or more of such persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default, (A) 5% or more of the voting
securities, or 10% or more of any other class of security, of the Company, not
including the Securities issued under this Indenture and securities issued
under any other indenture under which the Trustee is also trustee, or (B) 10%
or more of any class of security of an underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter defined in this
subsection), 5% or more of the voting securities of any person who, to the
knowledge of the Trustee, owns
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61
10% or more of the voting securities of, or controls directly or indirectly or
is under direct or indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter defined in this
subsection), 10% or more of any class of security of any person who, to the
knowledge of the Trustee, owns 50% or more of the voting securities of the
Company;
(9) the Trustee owns, on the date of an Event of Default upon the
Securities (exclusive of any period of grace or requirement of notice) or any
anniversary of such Event of Default while such Event of Default upon the
Securities remains outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or conservator, or in
any other similar capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the beneficial
ownership of a specified percentage of which would have constituted a
conflicting interest under paragraphs (6), (7) or (8) of this subsection (c).
As to any such securities of which the Trustee acquired ownership through
becoming executor, administrator or testamentary trustee of an estate which
included them, the provisions of the preceding sentence shall not apply, for a
period of two years from the date of such acquisition, to the extent that such
securities included in such estate do not exceed 25% of such voting securities
or 25% of any such class of security. Promptly after the dates of any such
Event of Default and annually in each succeeding year that such Event of
Default is continuing, the Trustee shall make a check of its holdings of such
securities in any of the above-mentioned capacities as of such dates. If the
Company fails to make payment in full of principal of or interest on any of
the Securities when and as the same become due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a prompt check of its
holdings of such securities in any of the above-mentioned capacities as of the
date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph (9), all such
securities so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure shall
continue, be, considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection (c).
(10) except under the circumstances described in paragraphs (1), (3), (4),
(5) or (6) of Section 7.13(b) of this Indenture, the Trustee shall be or shall
become a creditor of the Company.
For purposes of paragraph (1) of this Section 7.8(c), the term "series of
securities" or "series" means a series, class or group of securities issuable
under an indenture pursuant to whose terms holders of one such series may vote
to direct the indenture trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another such series; provided, that
"series of securities" or "series" shall not include any series of securities
issuable under an indenture if all such series rank equally and are wholly
unsecured.
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The specifications of percentages in paragraphs (5) to (9), inclusive, of
this subsection (c) shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c); or
For the purposes of paragraphs (6), (7), (8) and (9) of this subsection (c)
only, (A) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firm, or any certificate of interest or participation in any such note or
evidence of indebtedness; (B) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be deemed to be the
owner or holder of (i) any security which it holds as collateral security (as
trustee or otherwise) for an obligation which is not in default as defined in
clause (B) above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any default hereunder, or (iii) any
security which it holds as agent for collection, or as custodian, escrow agent
or depository, or in any similar representative capacity.
Except as above provided, the words "security" or "securities" as used in
this Indenture shall mean any note, stock, treasury stock, bond, debenture,
evidence of indebtedness, certificate of interest or participation in any profit
sharing agreement, collateral trust certificate, preorganization certificate or
subscription, transferable share, investment contract, voting trust certificate,
certificate of deposit for a security, fractional undivided interest in oil, gas
or other mineral rights, or, in general, any interest or instrument commonly
known as a "security," or any certificate of interest or participation in,
temporary or interim certificate for, receipt for, guarantee of, or warrant or
right to subscribe to or purchase, any of the foregoing.
Except in the case of a default in the payment of the principal of or
interest on any Security, the Trustee shall not be required to resign as
provided by this subsection if the Trustee shall have sustained the burden of
proving, on application to the Commission and after opportunity for hearing
thereon, that:
(i) the default under this Indenture may be cured or waived during a
reasonable period and under the procedures described in such application, and
(ii) a stay of the Trustee's duty to resign will not be inconsistent with
the interests of holders of the Securities. The filing of such an application
shall automatically stay the performance of the duty to resign until the
Commission orders otherwise.
(d) For the purposes of this Section 7.8:
(1) The term "underwriter" when used with reference to the Company shall
mean every person who, within one year prior to the time as of which the
determination is made, has purchased from the Company with a view to, or has
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63
offered or sold for the Company in connection with, the distribution of any
security of the Company outstanding at such time, or has participated or has
had a direct or indirect participation in any such undertaking, or has
participated or has had a participation in the direct or indirect underwriting
of any such undertaking, but such term shall not include a person whose
interest was limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers' commission.
(2) The term "director" shall mean any director of a corporation or any
individual performing similar functions with respect to any organization
whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust, an unincorporated
organization, or a government or political subdivision thereof. As used in
this paragraph, the term "trust" shall include only a trust where the interest
or interests of the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the Securities.
(6) The term "executive officer" shall mean the president, every vice
president, every trust officer, the cashier, the secretary, and the treasurer
of a corporation, and any individual customarily performing similar functions
with respect to any organization whether incorporated or unincorporated, but
shall not include the chairman of the board of directors.
(e) The percentages of voting securities and other securities specified in
this Section 7.8 shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the Trustee, the
Company or any other person referred to in this Section 7.8 (each of whom is
referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate votes which the
holders of all the outstanding voting securities of such person are entitled
to cast in the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a person means such
percentage of the aggregate amount of securities of the class outstanding.
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(3) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of
shares if relating to capital shares, and the number of units if relating
to any other kind of security.
(4) The term "outstanding" means issued and not held by or for the account
of the issuer. The following securities shall not be deemed outstanding within
the meaning of this definition:
(A) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(B) securities of an issuer held in a sinking fund relating to another
class of securities of the issuer, if the obligation evidenced by such other
class of securities is not in default as to principal or interest or
otherwise;
(C) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or interest or
otherwise;
(D) securities held in escrow if placed in escrow by the issuer thereof;
provided, however, that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to exercise the
voting rights thereof.
(5) A security shall be deemed to be of the same class as another security
if both securities confer upon the holder or holders thereof substantially the
same rights and privileges; provided, however, that, in the case of secured
evidences of indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various series thereof
shall not be deemed sufficient to constitute such series different classes and
provided, further, that, in the case of unsecured evidences of indebtedness,
differences in the interest rates or maturity dates thereof shall not be
deemed sufficient to constitute them securities of different classes, whether
or not they are issued under a single indenture.
Section 7.9 Corporate Trustee Required; Eligibility. The Trustee
---------------------------------------
hereunder shall at all times be a corporation organized and doing business under
the laws of the United States or of any State or of the District of Columbia,
authorized under such laws to exercise corporate trust powers, either (a) having
a combined capital and surplus of at least fifty million dollars ($50,000,000)
or (b) having a combined capital and surplus of at least ten million dollars
($10,000,000) and being a wholly-owned subsidiary of a corporation having a
combined capital and surplus of at least fifty million dollars ($50,000,000),
and in each case subject to supervision or examination by Federal, State or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 7.9, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of
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this Section 7.9, the Trustee shall resign immediately in the manner and with
the effect specified in Section 7.10. Neither the Company or any other obligor
upon the Securities, nor any person directly or indirectly controlling,
controlled by, or under common control with such obligor shall serve as Trustee
under this Indenture.
Section 7.10 Resignation and Removal: Assignment of Successor.
------------------------------------------------
(a) The Trustee, or any Trustee or Trustees hereafter appointed, may
resign at any time with respect to the Securities of one or more series by
giving written notice of resignation to the Company and notice to the
Securityholders of that series in the manner specified in Section 1.4 within 30
days after such notice is given to the Company. Upon receiving such notice of
resignation and, if the Company shall deem it appropriate, evidence satisfactory
to it of such mailing, the Company shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at any time there shall
be only one Trustee with respect to the Securities of any particular series) by
Company Order, one copy of which shall be delivered to the resigning Trustee and
one copy to the successor Trustee. If no successor Trustee with respect to the
Securities of any series shall have been so appointed and have accepted
appointment within 30 days after the mailing of such notice of resignation, the
resigning Trustee of such series may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Securityholder
who has been a bona fide Holder of a Security or Securities of that series for
at least six months may, subject to the provisions of Section 6.8, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor Trustee with respect to the Securities of such
series. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor Trustee with respect to the Securities
of such series.
(b) In case at any time any of the following shall occur
(1) the Trustee shall fail to comply with the provisions of subsection (a)
of Section 7.8 after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security or Securities for
at least six months, unless the Trustee's duty to resign is stayed as provided
in Section 7.8 of this Indenture, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 7.9 and shall fail to resign after written request
therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or a receiver of the Trustee or of its property shall
be appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, or
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(4) the Company shall for any other reason determine that the Trustee
shall be removed, provided that at the time of such removal there exists no
Event of Default or no event which, with the passage of time or giving of
notice, would become an Event of Default, then, in any such case, the Company
may remove the Trustee with respect to all Securities and appoint a successor
Trustee by Order of the Company, one copy of which shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 6.8, any Securityholder who has been a bona fide Holder
of a Security or Securities 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 with respect to all Securities and
the appointment of a successor Trustee or Trustees. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor Trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding may at any time remove the Trustee and
appoint a successor Trustee by delivery to the Trustee so removed, to the
successor Trustee and to the Company of the evidence provided for in Section 8.1
of the action taken by the Securityholders.
(d) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section 7.10 shall
become effective upon acceptance of appointment by the successor Trustee or
Trustees as provided in Section 7.11.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of the Trustee for any cause, with
respect to the Securities of one more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and such successor Trustee
or Trustees shall comply with the applicable requirements of Section 7.11. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to the Securities
of any series shall be appointed by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 7.11, become the successor Trustee with
respect to the Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor Trustee with
respect to the Securities of any series shall have been so appointed by the
Company or the Holders and accepted appointment in the manner required by
Section 7.11, any Holder who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor
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Trustee with respect to the Securities of any series by giving notice of such
event to all Holders of Securities of such series as provided by Section 1.4.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 7.11 Acceptance of Appointment by Successor.
--------------------------------------
(a) Any successor Trustee appointed as provided in Section 8.10 with
respect to all Securities shall execute, acknowledge and deliver to the Company
and to its predecessor Trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor Trustee
shall become effective and such successor Trustee without any further act, deed
or conveyance, shall become vested with all the rights, powers, duties and
obligations of its predecessors hereunder, with like effect as if originally
named as Trustee herein; but, nevertheless, on the written request of the
Company or of the successor Trustee, the Trustee ceasing to act shall execute
and deliver an instrument transferring to such successor Trustee all the rights
and powers of the Trustee so ceasing to act. Upon request of any such successor
Trustee, the Company shall execute any and all instruments in writing for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a
senior claim upon all property or funds held or collected by such Trustee to
secure any amounts then due it pursuant to the provisions of Section 7.6.
(b) In case of the appointment of a successor Trustee as provided in
Section 7.10 with respect to the Securities of one or more (but not all) series,
the Company, the predecessor Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the predecessor Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the predecessor Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
predecessor Trustee with respect to the Securities of that or those series as to
which the predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the predecessor Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but, on
request of the Company or any successor Trustee, such predecessor Trustee shall
duly assign, transfer and deliver to such
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68
successor Trustee all property and money held by such predecessor Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates. Whenever there is a successor
Trustee with respect to one or more (but less than all) series of Securities
issued pursuant to this Indenture, the terms "Indenture" and "Securities" shall
have the meanings specified in the provisos to the respective definitions of
those terms in Section 1.1 which contemplate such situation.
(c) No successor Trustee shall accept appointment as provided in this
Section 7.11 unless at the time of such acceptance such successor Trustee shall
be qualified under the provisions of Section 7.8 and eligible under the
provisions of Section 7.9. Upon acceptance of appointment by a successor
Trustee as provided in this Section 7.11, the Company shall mail to the
Securityholders by first-class mail notice thereof. If the Company fails to
mail such notice within 30 days after acceptance of appointment by the successor
Trustee, the successor Trustee shall, in its discretion, cause such notice to be
mailed at the expense of the Company.
Section 7.12 Merger, Conversion, Consolidation, Etc. Any corporation
--------------------------------------
into which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger or conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such corporation shall be qualified
under the provisions of Section 7.8 and eligible under the provisions of Section
7.9, without the execution or filing of any paper or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture and any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor Trustee; and in all such certificates shall have the full force
which it is anywhere in the Securities or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
Section 7.13 Preferential Collection of Claims Against Company.
-------------------------------------------------
(a) Subject to the provisions of subsection (b) of this Section 7.13, if
the Trustee shall be or shall become a creditor, directly or indirectly, secured
or unsecured, of the Company or of any other obligor on the Securities within
three months prior to a default, as defined in subsection (c) of this Section
7.13, or subsequent to such a default, then, unless and until such default shall
be cured, the Trustee shall set apart and hold in a special account for the
benefit of the Trustee individually, the Holders of the Securities and Coupons,
if any,
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69
and the holders of other indenture securities (as defined in subsection
(c) of this Section 7.13):
(1) an amount equal to any and all reductions in the amount due and owing
upon any claim as such creditor in respect of principal or interest, effected
after the beginning of such three-month period and valid as against the
Company and its creditors, except any such reduction resulting from the
receipt or disposition of any property described in paragraph (2) of this
subsection, or from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been filed by or against
the Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claim as such
creditor, either as security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such three-month period, or an
amount equal to the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of the Company and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account of any
such claim by any person (other than the Company who is liable thereon, and
(ii) the proceeds of the bona fide sale of any such claim by the Trustee to
a third person, and (iii) distributions made in cash, securities or other
property in respect of claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of
the United States Code, as now constituted or hereafter in effect, or
applicable state law;
(B) to realize, for its own account, upon any property held by it as
security for any such claim, if such property was so held prior to the
beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the claim
hereinafter mentioned, upon any property held by it as security for any such
claim, if such claim was created after the beginning of such three-month
period and such property was received as security therefor simultaneously
with the creation thereof and if the Trustee shall sustain the burden of
proving that at the time such property was so received the Trustee had no
reasonable cause to believe that a default as defined in subsection (c) of
this Section 7.13 would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or (C),
against the release of any property held as security for such claim as
provided in such paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
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For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three-month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre- existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned between the
Trustee, the Securityholders and the holders of other indenture securities in
such manner that the Trustee, the Securityholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to Title 11 of the
United States Code, as now constituted or hereafter in effect, or applicable
bankruptcy, insolvency or other similar law, the same percentage of their
respective claims, figured before crediting to the claim of the Trustee anything
on account of the receipt by it from the Company of the finds and property in
such special account and before crediting to the respective claims of the
Trustee, the Securityholders and the holders of other indenture securities
dividends on claims filed against the Company in bankruptcy or receivership or
in proceedings for reorganization pursuant to Title 11 of the United States
Code, as now constituted or hereafter in effect, or applicable bankruptcy,
insolvency or other similar law, but after crediting thereon receipts on account
of the indebtedness represented by their respective claims from all sources
other than from such dividends and from the funds and property so held in such
special account. As used in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such claim, in
bankruptcy or receivership or in proceedings for reorganization pursuant to
Title 11 of the United States Code, as now constituted or hereafter in effect,
or applicable bankruptcy, insolvency or other similar law, whether such
distribution is made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceeding for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee, the Securityholders and the holders of other indenture securities, in
accordance with the provisions of this paragraph, the funds and property held in
such special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of this paragraph
due consideration in determining the fairness of the distributions to be made to
the Trustee, the Securityholders and the holders of other indenture securities
with respect to their respective claims, in which event it shall not be
necessary to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such claim, or to
make a specific allocation of such distributions as between the secured and
unsecured portions of such claims, or otherwise to apply the provisions of this
paragraph as a mathematical formula.
Any Trustee who has resigned or been removed after the beginning of such
three-month period shall be subject to the provisions of this subsection (a) as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior
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71
to the beginning of such three-month period, it shall be subject to the
provisions of this subsection (a) if and only if the following conditions exist:
(1) the receipt of property or reduction of claim which would have given
rise to the obligation to account, if such Trustee had continued as trustee,
occurred after the beginning of such three-month period; and
(2) such receipt of property or reduction of claim occurred within three
months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of this
Section 7.13 a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any indenture,
or any security or securities having a maturity of one year or more at the
time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of competent
jurisdiction, or by this Indenture, for the purpose of preserving any property
which shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances thereon, if notice
of such advance and of the circumstances surrounding the making thereof is
given to the Securityholders at the time and in the manner provided in Section
5.4(c) with respect to reports pursuant to subsections (a) and (b) thereof,
respectively;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar, custodian,
paying agent, fiscal agent or depository, or other similar capacity;
(4) an indebtedness created as a result of services rendered or premises
rented, or an indebtedness created as a result of goods or securities sold in
a cash transaction as defined in subsection (c) of this Section 7.13;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act, as
amended, which is directly or indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of any drafts,
bills of exchange, acceptances or obligations which fall within the
classification of self liquidating paper as defined in subsection (c) of this
Section 7.13.
(c) As used in this Section 7.13:
(1) The term "default" shall mean any failure to make payment in full of
the principal of or interest upon any of the Securities or upon the other
indenture securities when and as such principal or interest becomes due and
payable.
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(2) The term "other indenture securities" shall mean securities upon which
the Company is an obligor (as defined in the Trust Indenture Act of 1939)
outstanding under any other indenture (A) under which the Trustee is also
trustee, (B) which contains provisions substantially similar to the provisions
of subsection (a) of this Section 7.13, and (C) under which a default exists
at the time of the apportionment of the funds and property held in said
special account.
(3) The term "cash transaction" shall mean any transaction in which full
payment for goods or securities sold is made within seven days after delivery
of the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase, processing,
manufacture, shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to, possession of or a lien
upon, the goods, wares or merchandise or the receivables or proceeds arising
from the sale of the goods, wares or merchandise previously constituting the
security, provided the security is received by the Trustee simultaneously with
the creation of the creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" shall mean any obligor upon the Securities.
Section 7.14 Appointment of Authenticating Agent. The Trustee may appoint
-----------------------------------
an Authenticating Agent or Agents (which may be an Affiliate of the Company if
eligible to be an Authenticating Agent hereunder) with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series issued upon original issue or upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 2.6, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Wherever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation having a
combined capital and surplus of not less than the equivalent of $50,000,000 and
subject to supervision or examination by Federal or State authority or the
equivalent foreign authority, in the case of an Authenticating Agent who is not
organized and doing business under the laws of the United States of America, any
State thereof or the District of Columbia. If such Authenticating Agent
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, the combined capital and surplus of such Authenticating Agent
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 an Authenticating
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Agent shall cease to be eligible in accordance with the provisions of this
Section, such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 7.14 without the execution or filing of any paper or any further act on
the part of the Trustee or the Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee, to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving
such a notice of resignation or upon such termination, or in case at any time
any Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 7.14, the Trustee promptly may appoint a successor
Authenticating Agent and shall give written notice of such appointment to the
Company, and shall cause a notice of any such appointment to be given in the
manner prescribed by Section 1.4, to the Holders of Securities of the series
with respect to which such Authenticating Agent shall act. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers, duties and responsibilities of its
predecessor hereunder, with like effect as if originally named as Authenticating
Agent. No successor Authenticating Agent shall be appointed unless eligible
under the provisions of this Section 7.14. The Trustee agrees to pay to the
Authenticating Agent from time to time reasonable compensation for its services,
to the extent such payment has not otherwise been made by the Company, and the
Trustee shall be entitled to be reimbursed for such payments subject to the
provisions of Section 7.6.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein issued under
the within-mentioned Indenture.
The Bank of New York
As Trustee
By
As Authenticating Agent
By
Authorized Officer Signatory
<PAGE>
74
If all of the Securities of a series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment or other place
where the Company wishes to have Securities of such series authenticated upon
original issuance, the Trustee, if so requested by the Company in writing (which
writing need not comply with Section 14.6 and need not be accompanied by an
Opinion of Counsel), shall appoint in accordance with this Section an
Authenticating Agent (which may be an Affiliate of the Company if eligible to be
appointed as an Authenticating Agent hereunder) having an office in such Place
of Payment or other place designated by the Company with respect to such series
of Securities.
Section 7.15 Judgment Currency. If for the purpose of obtaining a
-----------------
judgment in any court with respect to any obligation of the Company hereunder or
under any Security or Coupon, it shall become necessary to convert into any
other currency or currency unit any unit in the currency or currency unit due
hereunder or under such Security or Coupon, then such conversion shall be made
at the Currency Conversion Rate (as defined below) as in effect on the date the
Company shall make payment to any person in satisfaction of such judgment. If
pursuant to any such judgment, conversion shall be made on a date other than the
date payment is made and there shall occur a change between such Currency
Conversion Rate and the Currency Conversion Rate as in effect on the date of
payment, the Company agrees to pay such additional amounts (if any) as may be
necessary to ensure that the amount paid is the amount in such other currency or
currency unit which, when converted at the Currency Conversion Rate as in effect
on the date of payment or distribution, is the amount then due hereunder or
under such Security or Coupon. Any amount due from the Company under this
Section 7.15 shall be due as a separate debt and is not to be affected by or
merged into any judgment being obtained for any other sums due hereunder or in
respect of any Security or Coupon so that in any event the Company's obligations
hereunder or under such Security or Coupon will be effectively maintained as
obligations in such currency or currency unit. In no event, however, shall the
Company be required to pay more in the currency or currency unit stated to be
due hereunder or under such Security or Coupon.
For purposes of this Section 7.15, "Currency Conversion Rate" shall mean
the spot rate at which in accordance with normal banking procedures the currency
or currency unit into which an amount due hereunder or under any Security or
Coupon is to be converted could be purchased with the currency or currency unit
due hereunder or under any Security or Coupon from major banks located in New
York, London or any other principal market for such purchased currency or
currency unit.
Section 7.16 Corporate Trust Office. At the date of this Indenture, the
----------------------
Corporate Trust Office of the Trustee is located at 101 Barclay Street, New
York, New York, 10286. Attention: Corporate Trust Administrator.
<PAGE>
75
ARTICLE 8
CONCERNING THE SECURITYHOLDERS
Section 8.1 Acts of Holders. 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 agent duly appointed in writing. Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of such series may, alternatively, be embodied in
and evidenced by the record of Holders of Securities of such series voting in
favor thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article 9, or a combination of such
instruments and any such record. 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 record (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Holders signing such instrument or instruments or so voting at any such
meeting. Proof of execution of any such instrument, or any such record, or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 7.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Article 8. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 9.6.
Section 8.2 Authenticity of Instruments. The fact and date of the
---------------------------
execution by any Person of any such instrument or writing referred to in Section
8.1 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 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 deems sufficient.
Section 8.3 Authenticity of Bearer Securities.
---------------------------------
(a) The principal amount and serial numbers of Bearer Securities held by
any Person, and the date of holding the same, may be proved by the production of
such Bearer Securities or by a certificate executed by any trust company, bank,
banker or other depository, wherever situated, showing that at the date therein
mentioned such Person had on deposit with such depository, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, (2) such Bearer Security is
produced to the Trustee by some other Person, (3) such
<PAGE>
76
Bearer Security is surrendered in exchange for a Registered Security or (4) such
Bearer Security is no longer Outstanding.
(b) The fact and date of execution of any such instrument or writing
pursuant to clause (a) above, the authority of the Person executing the same and
the principal amount and serial numbers of Bearer Securities held by the Person
so executing such instrument or writing and the date of holding the same may
also be proved in any other manner which the Trustee deems sufficient; and the
Trustee may in any instance require further proof with respect to any of the
matters referred to in this clause.
(c) The principal amount and serial numbers of Registered Securities held
by any Person and the date of holding the same shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of a Holder shall bind every future Holder of the same Security
and/or Coupon and the Holder of every Security and/or Coupon 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 Security and/or Coupon.
Section 8.4 Determination of Principal Amounts of Original Issue Discount
-------------------------------------------------------------
Securities and Securities in Foreign Currencies. Whenever any Act is taken
- -----------------------------------------------
hereunder by the Holders of Original Issue Discount Securities, the principal
amount of an Original Issue Discount Security that will be deemed to be
outstanding will be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof. Whenever any Act is to be taken hereunder by the Holders of two or
more series of Securities denominated in different currencies (currency units),
then, for the purpose of determining the principal amount of Securities held by
such Holders, the aggregate principal amount of the Securities denominated in a
Foreign Currency (or any currency units) shall be deemed to be that amount of
Dollars that could be obtained for such principal amount on the basis of the
spot rate of exchange for such Foreign Currency or such currency unit as
determined by the Company or by any authorized Exchange Rate Agent and evidenced
to the Trustee by an Officers' Certificate as of the date the taking of such Act
by the Holders of the requisite percentage in principal amount of the Securities
is evidenced to the Trustee or such other date selected by the Company which is
not more than 10 days before such date. Any such determination by the Company
or by any such Exchange Rate Agent shall be conclusive and binding on all
Holders, the Company and the Trustee, and neither the Company nor any such
Exchange Rate Agent shall be liable therefor in the absence of bad faith.
Section 8.5 Company Solicitation of Holder. If the Company shall solicit
------------------------------
from the Holders any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of the Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
If such a record date is fixed, such request, demand,
<PAGE>
77
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purpose of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than six months, after the record
date.
ARTICLE 9
SECURITYHOLDERS' MEETING
Section 9.1 Purposes for Which Meetings May be Called.
-----------------------------------------
(a) A meeting of Holders of Securities of any series may be called at any
time and from time to time pursuant to the provisions of this Article Ten for
any of the following purposes:
(1) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Securityholders pursuant to any of the provisions of Article 6;
(2) to remove the Trustee and appoint a successor trustee pursuant to the
provisions of Article 7;
(3) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 10.2; or
(4) to take any other action authorized to be taken by or on behalf of the
Holders of any specified aggregate principal amount of the Securities of a
series under any other provision of this indenture or under applicable law.
Section 9.2 Call, Notice and Place of Meeting. The Trustee may at any
---------------------------------
time call a meeting of Securityholders of any series to take any action
specified in Section 9.1, to be held at such time and at such place in the City
of Pittsburgh, Commonwealth of Pennsylvania, or in the City of New York, State
of New York, as the Company and Trustee shall determine. Notice of every meeting
of the Securityholders of any series setting forth the time and the place of
such meeting and in general term the action proposed to be taken at such
meeting, shall be provided to all Securityholders of such series in the manner
specified in Section 1.4, not less than 21 nor more than 180 days prior to the
date fixed for the meeting.
<PAGE>
78
Section 9.3 Call of Meetings by Company or Holders. In case at any time
--------------------------------------
the Company pursuant to a resolution of its Board of Directors, or the Holders
of at least 25% in aggregate principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of Securityholders
of such series to take any action specified in Section 9.1 by written request
setting forth in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have made publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities of such series in the amount above specified may
determine the time and the location in the City of Pittsburgh, Commonwealth of
Pennsylvania, or the City of New York, State of New York, or the Company may
determine the time and location in any other place, for such meeting and may
call such meeting by providing notice thereof as provided in Section 9.2.
Section 9.4 Persons Entitled to Vote. To be entitled to vote at any
------------------------
meeting of Securityholders of any series a Person shall (a) be a Holder of one
or more Outstanding Securities of such series; or (b) be a Person appointed by
an instrument in writing as proxy for a Holder of one or more Outstanding
Securities of such series. The only Persons who shall be entitled to be present
or to speak at any meeting of Securityholders of any series shall be the Persons
entitled to vote at such meeting and their counsel and any representatives of
the Trustee and its counsel and any representatives of the Company and its
counsel.
Section 9.5 Determination of Voting Rights: Conduct and Adjournment of
----------------------------------------------------------
Meetings. Notwithstanding any other provisions of this Indenture, the Trustee
- --------
may make such reasonable regulations as it may deem advisable for any meeting of
Securityholders of a series, in regard to the proof of the holding of Securities
of such series and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities of a series and the appointment of any proxy shall be proved in
the manner specified in Article 9; provided, however, that such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Article 9.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders of a series as provided in Section 9.3, in which
case the Company or the Securityholders of that series calling the meeting, as
the case may be, shall in like manner appoint a temporary chairman. A permanent
chairman and a secretary of the meeting shall be elected by vote of the holders
of a majority in principal the Outstanding Securities of that series represented
at the meeting and entitled to vote.
Subject to the provisions of Section 9.9, at any meeting each
Securityholder of that series or proxy shall be entitled to one vote for each
$1,000 (or equivalent thereof) principal amount of Outstanding Securities of
such series held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any
<PAGE>
79
Security of that series challenged as not Outstanding and ruled by the chairman
of the meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote other than by virtue of Securities of such series held by him or
instruments in writing as aforesaid duly designating him as the person to vote
on behalf of other Securityholders of that series. Any meeting of
Securityholders of a series duly called pursuant to the provisions of Section
9.2 or 9.3 may be adjourned from time to time, and the meeting may be held as so
adjourned without further notice.
Any meeting of Holders of Securities of any series duly called pursuant to
Section 9.2 or 9.3 at which a quorum is present may be adjourned from time to
time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 9.6 Counting Votes and Recording Action of Meetings. The vote
-----------------------------------------------
upon any resolution submitted to any meeting of Securityholders of any series
shall be by written ballots on which shall be subscribed the signatures of the
Securityholders of such series or of their rep by proxy and the principal amount
and serial numbers of the Outstanding Securities of such series held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports of all votes cast at the meeting. A record of the
proceedings of each meeting of Securityholders of a series shall be prepared by
the secretary of the meeting and there shall be attached to said record the
original reports of the inspectors of votes on any vote by ballot taken thereat
and affidavits by one or more persons having knowledge of the facts setting
forth a copy of the notice of the meeting and showing that said notice was
mailed as provided in Section 9.2 or 9.3 and, if applicable, Section 9.8. The
record shall be signed and verified by the affidavits of the permanent chairman
and secretary of the meeting and shall be delivered to the Company and a copy
shall be delivered to the Trustee to be preserved by the Trustee, the latter to
have attached thereto the ballots voted at the meeting. Any record so signed and
verified shall be conclusive evidence of the matters therein stated.
Section 9.7 No Delay in Exercise of Rights. Nothing in this Article 9
------------------------------
contained shall be deemed or construed to require any delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
Securityholders of a series under any of the provisions of this Indenture or of
the Securities of a series by reason of any call of a meeting of Securityholders
of a series or any rights expressly or impliedly conferred hereunder to make
such call.
Section 9.8 Quorum: Action. The Persons entitled to vote a majority in
--------------
principal amount of the Outstanding Securities of a series shall constitute a
quorum for a meeting of Holders of Securities of such series except as provided
pursuant to Section 2.1. In the absence of a quorum within 30 minutes of the
time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other
case, the meeting may be adjourned for a period of not less than 10 days as
<PAGE>
80
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 10.2, except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Subject to the foregoing, at the reconvening of any such
further adjourned meeting, the Persons entitled to vote 25% in aggregate
principal amount of the Outstanding Securities of such series shall constitute a
quorum for the taking of any action set forth in the notice of the original
meeting. Notice of the reconvening of an adjourned meeting which was adjourned
for lack of a quorum shall state expressly the percentage, as provided above, of
the principal amount of the Outstanding Securities of such series which shall
constitute a quorum.
Except as limited by Section 6.6 and the proviso to Section 10.2, and
subject to the provisions described in the next succeeding paragraph, any
resolution presented to a meeting or adjourned meeting duly reconvened at which
a quorum is present as aforesaid may be adopted by the affirmative vote of the
lesser of (i) the Holders of a majority in principal amount of the Outstanding
Securities of that series and (ii) 66 2/3% in principal amount of Outstanding
Securities of such series represented and voting at such meeting or adjourned
meeting; provided, however, that any resolution with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action which
this Indenture expressly provides may be made, given or taken by the Holders of
a specified percentage which is less than a majority in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the lesser of (i) the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series and (ii) a
majority in principal amount of Securities of such series represented and voting
at such meeting or adjourned meeting. Any resolution passed or decision taken
at any meeting of Holders of Securities of any series duly held in accordance
with this Section shall be binding on all the Holders of Securities of such
series and the related Coupons, whether or not present or represented at the
meeting.
With respect to any consent, waiver or other action which this Indenture
expressly provides may be given by the Holders of a specified percentage of
Outstanding Securities of all series affected thereby (acting as one class),
only the principal amount of Outstanding Securities of any series represented at
a meeting or adjourned meeting duly reconvened at which a quorum is present,
held in accordance with this Section, and voting in favor of such action, shall
be counted for purposes of calculating the aggregate principal amount of
Outstanding Securities of all series affected thereby favoring such action.
Section 9.9 Disregard of Securities Owned by Company or Controlling
-------------------------------------------------------
Person. In determining whether the Holders of the requisite aggregate
- ------
principal amount of Securities have concurred in any direction, consent or
waiver under this Indenture, Securities which are owned by the Company or any
other obligor on the Securities or by any person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Company or any other obligor on the Securities shall be disregarded and deemed
not to be
<PAGE>
81
Outstanding for the purpose of any such determination, except that for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Securities which the Trustee knows
are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section 9.9, if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Securities and that the pledgee is not a person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any such other obligor. In case of a dispute
as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection for the Trustee.
ARTICLE 10
SUPPLEMENTAL INDENTURES
Section 10.1 Supplemental Indentures Without Consent of Holders. The
--------------------------------------------------
Company when authorized by a resolution of its Board of Directors, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as in force at the date of the execution thereof)
for one or more of the following purposes:
(a) to evidence the succession of another corporation to the Company or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Company set forth herein and in the
Securities and any Coupons;
(b) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions as their respective Boards of Directors
and the Trustee shall consider to be for the protection of the Holders of all or
any series of Securities (and if such covenants, restrictions, conditions or
provisions are for the benefit of less than all series of Securities, stating
that such covenants, restrictions, conditions or provisions are expressly being
included solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional covenants,
restrictions, conditions or provisions a default or an Event of Default
permitting the enforcement of all or any of the several remedies provided in
this Indenture as herein set forth, provided, however, that in respect of any
such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such default or may limit the
remedies available to the Trustee upon such default or may limit the right of
the Holders of a majority in aggregate principal amount of the Securities of
that series to waive such default;
(c) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to facilitate the issuance of Securities in bearer
form, registrable or not registrable as to principal, and with or without
interest coupons; to change or eliminate any
<PAGE>
82
restrictions on the payment of principal of or any premium or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for Registered
Securities, to permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations; provided that any such addition or
change shall not materially adversely affect the interests of the Holders of
Securities of any series or any related Coupons in any material respect;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provisions contained herein or in any supplemental
indenture, or to convey, transfer, assign, mortgage or pledge any property to or
with the Trustee, or to make such other provisions in regard to matters or
questions arising under this Indenture, provided, that no such action shall
adversely affect the interests of the Holders of the Securities of any series in
any material respect;
(e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 2.2;
(f) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 7.11;
(g) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is materially adversely affected by such
change in or elimination of such provision;
(h) if allowed under applicable laws and regulations, to permit payment in
the United States of principal, premium or interest on Bearer Securities or
Coupons, if any;
(i) to provide for the issuance of uncertificated Securities of one or more
series in addition to or in place of certificated securities; or
(j) make any other change to this Indenture or the form or terms of
Securities of any series which does not have a materially adverse effect on the
interests of the Holders of the Securities of any series.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
<PAGE>
83
Any supplemental indenture authorized by the provisions of this Section
10.1 may be executed by the Company and the Trustee without the consent of the
Holders of any of the Securities of each series affected by such supplemental
indenture at the time Outstanding, notwithstanding any of the provisions of
Section 10.2.
Section 10.2 Supplemental Indentures With Consent of Holders. With the
-----------------------------------------------
consent (evidenced as provided in Section 8.1) of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of all
series affected by such supplemental indenture (acting as one class), by Act of
said Holders delivered to the Company and the Trustee, the Company when
authorized by resolutions of its Board of Directors, and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act of 1939
as in force at the date of the execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture, or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of such series; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Security of such series so affected,
(a) change the Stated Maturity of the principal of, or any installment of
principal of or interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or reduce the amount of the principal of any Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 6.1, or change any
obligation to pay additional amounts, or change any Place of Payment where, or
the currency, currencies or currency unit or units in which, any Security or any
premium or the interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date),
(b) reduce the percentage in principal amount of the Outstanding Securities
of any series, the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture,
(c) change the obligation of the Company, with respect to Outstanding
Securities of a series, to maintain an office or agency in the places and for
the purposes specified in Section 4.2 for such series,
(d) if the Securities of such series are convertible into any other
security of the Company, make any change that would materially adversely affect
the right to convert such Securities,
(e) change the terms of this Section 10.2.
<PAGE>
84
For purposes of this Section 10.2, if the Securities of any series are
issuable upon the exercise of warrants, each Holder of an unexercised and
unexpired warrant with respect to such series shall be deemed to be a Holder of
Outstanding Securities of such series in the amount issuable upon the exercise
of such warrant. For such purposes, the ownership of any such warrant shall be
determined by the Company in a manner consistent with customary commercial
practices. The Trustee for such series shall be entitled to rely on an
Officers' Certificate as to the principal amount of Securities of such series in
respect of which consents shall have been executed by Holders of such warrants.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
Upon a Company Request, accompanied by a copy of a resolution of its Board
of Directors, certified by the Secretary or an Assistant Secretary of the
Company, authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Securityholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties, or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture. The Trustee, subject to the provisions of
Sections 7.1 and 7.2, may receive an Opinion of Counsel as conclusive evidence
that any such supplemental indenture complies with the provisions of this
Article 10 and shall be entitled to rely on such opinion.
It shall not be necessary for the consent of the Securityholders under this
Section 10.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 10.2, the
Company shall mail a notice to the Securityholders setting forth in general
terms the substance of such supplemental indenture. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 10.3 Effect of Supplemental Indentures. Upon the execution of any
---------------------------------
supplemental indenture pursuant to the provisions of this Article 10, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations, duties
and immunities under this Indenture of the Trustee, the Company and the Holders
of Securities of such series shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be
deemed to be part of the terms and conditions of this Indenture for any and all
purposes.
<PAGE>
85
Section 10.4 Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article 10 or after
any action taken at a Securityholders' meeting pursuant to Article 9, 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 or as to
any such action. New Securities of such series so modified as to conform, in the
opinion of the Trustee and the Board of Directors of the Company to any
modification of this Indenture contained in any such Supplemental indenture or
reflecting such action may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of such series then
Outstanding.
ARTICLE 11
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 11.1 Company May Consolidate, Etc. Only on Certain Terms.
---------------------------------------------------
Nothing contained in this Indenture or in any of the Securities of any series
shall prevent any consolidation or merger of the Company with or into any other
corporation or corporations or successive consolidations or mergers in which the
Company or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the property of the Company as an entirety or
substantially as an entirety to any other corporation authorized to acquire and
operate the same; provided, however, the Company hereby covenants and agrees,
that any such consolidation, merger, sale or conveyance shall be upon the
condition that (a) immediately after such consolidation, merger, sale or
conveyance, the corporation (whether the Company or such other corporation)
formed by or surviving any such consolidation or merger, or to which such sale
or conveyance shall have been made, shall not be in default in the performance
or observance of any of the terms, covenants and conditions of this Indenture to
be kept or performed by the Company; (b) the corporation (if other than the
Company) formed by or surviving any such consolidation or merger, or to which
such sale or conveyance shall have been made, shall be a corporation organized
under the laws of the United States or any State thereof; (c) the due and
punctual payment of the principal of (and premium, if any) and interest on all
of the Securities of any series, according to their tenor, and the due and
punctual performance and observance of all the covenants and conditions of this
Indenture to be performed or observed by the Company, as the case may be,
including, without limitation, the performance of any act or obligation relating
to any conversion of Securities pursuant to Article Sixteen hereof, shall be
expressly assumed, by supplemental indenture, satisfactory in form to the
Trustee, executed and delivered to the Trustee by the corporation formed by such
consolidation, or into which the Company, as the case may be, shall have been
merged, or by the corporation which shall have acquired such property. If at any
time there shall be any consolidation or merger or sale or conveyance of
property to which the covenant of this Section 11.1 is applicable, then in any
such event the successor corporation will promptly deliver to the Trustee:
(a) An Officers' Certificate stating that as of the time immediately after
the effective date of any such transaction the covenants of the Company
contained in this Section
<PAGE>
86
11.1 have been complied with and the successor corporation is not in default
under the provisions of the Indenture; and
(b) An Opinion of Counsel stating that in his opinion such covenants have
been complied with and that any instrument or instrument executed in the
performance of such covenants comply with the requirements thereof.
Section 11.2 Rights and Duties of Successor Corporation. In case of any
------------------------------------------
such consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation, by a supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and interest on all of the Securities of that series
and the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, such
successor corporation shall succeed to and be substituted for the Company with
the same effect as if it had been named herein as the party of the first part.
Such successor corporation thereupon may cause to be signed, and may issue
either in its own name or in the name of the Company any or all of the
Securities of any series issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and upon the Order of
such successor corporation, instead of the Company and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall make available for delivery any Securities of such series
which previously shall have been signed and delivered by the officers of the
Company to the Trustee for authentication, and any Securities of such series
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities of such series so
issued shall in all respects have the same legal rank and benefit under this
Indenture as the Securities of that series theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities of
such series had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance, such changes
in phraseology and form (but not in substance) may be made in the Securities of
such series thereafter to be issued as may be appropriate.
Subject to the provisions of Section 11.1, nothing contained in this
Indenture or in any of the Securities of any series shall prevent the Company
from merging into itself any other corporation (whether or not affiliated with
the Company) or acquiring by purchase or otherwise all or any part of the
property of any other corporation (whether or not affiliated with the Company).
<PAGE>
87
ARTICLE 12
SATISFACTION AND DISCHARGE OF INDENTURE:
UNCLAIMED MONEYS
Section 12.1 Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall, upon Company Request, cease to be of further effect (except as to any
surviving rights of (as applicable) registration of transfer or exchange of
Securities and Coupons, if any, of such series herein expressly provided for),
and the Trustee, at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture with respect to such
series, when
(a) either
(1) all Securities and Coupons of such series theretofore authenticated and
delivered (other than (i) Securities and Coupons of such series which have
been destroyed, lost or stolen and which have been replaced or paid as
provided in Section 2.6, (ii) Securities and Coupons of such series for whose
payment money has theretofore been deposited in and segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust as provided in Section 12.5, (iii) Coupons appertaining to Bearer
Securities surrendered for exchange for Registered Securities and maturing
after such exchange whose surrender is not required or has been waived as
provided in Section 2.5, and (iv) Coupons appertaining to Securities called
for redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 3.7) have been delivered to the Trustee
for cancellation; or
(2) all such Securities and Coupons of such series not theretofore
delivered to the Trustee for cancellation
(A) have become due and payable, or
(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, in
the case of (i), (ii) or (iii) above, has deposited or caused to be
deposited with the Trustee as trust funds in trust for the purpose for which
it was received, an amount in the currency or currency unit in which such
Securities and Coupons of such series are payable sufficient to pay and
discharge the entire indebtedness on such Securities and
<PAGE>
88
Coupons of such series not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and interest, if any, to
the date of such deposit (in the case of Securities and Coupons of such
series which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(3) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(4) 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 with
respect to a series, the obligations of the Company to the Trustee under Section
7.6, the obligations of the Trustee to any Authenticating Agent under Section
7.14 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of clause (1) of this Section, the obligations of the Trustee
under Section 12.2 and Section 12.5 shall survive; and any obligation of the
Company upon or with respect to the conversion of the Securities of a series
into any other security of the Company pursuant to the terms of the Securities
of such series or Article Seventeen hereof, shall survive until the Securities
of such series are no longer Outstanding.
Section 12.2 Application of Trust Money. Subject to Section 12.5, all
--------------------------
money deposited with the Trustee pursuant to Sections 12.1 and 12.3 shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and Coupons, if any, 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 (and premium, if any) and interest for whose payment such money
has been deposited with the Trustee.
Section 12.3 Satisfaction, Discharge and Defeasance of Securities of Any
-----------------------------------------------------------
Series. Unless this Section is specified pursuant to Section 2.1, to be not
- ------
applicable to Securities and Coupons, the Company shall be Discharged (as
defined below) from its obligations with respect to Securities and Coupons, if
any, of such series after the applicable conditions set forth below have been
satisfied:
(a) (1) the Company has paid or caused to be paid all other sums payable
with respect to the Outstanding Securities and Coupons, if any, of such series
(in addition to any required under (b)); and
(2) 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 the entire
indebtedness on all Outstanding Securities and Coupons, if any, of any such
series have been complied with;
(b) (1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as a trust fund specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of the Securities and
Coupons, if any, of such series (i)
<PAGE>
89
money in an amount (in such currency, currencies or currency unit or units in
which any Outstanding Securities and Coupons, if any, of such series are
payable) or (ii) in the case of Securities and Coupons, if any, denominated in
Dollars, U.S. Government Obligations (as defined below) or, in the case of
Securities and Coupons, if any, denominated in a Foreign Currency, Foreign
Government Securities (as defined below), which through the payment of interest
and principal in respect thereof in accordance with their terms will provide,
not later than the due date of any payment of principal (including any premium)
and interest, if any, under the Securities and Coupons, if any, of such series,
money in an amount or (iii) a combination of (i) and (ii) sufficient (in the
opinion with respect to (ii) and (iii) of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee) to pay and discharge each installment of principal of
(including any premium), and interest if any, on, the Outstanding Securities and
Coupons, if any, of such series on the dates such installments of interest or
principal are due, in the currency, currencies or currency unit or units, in
which such Securities and Coupons, if any, are payable; provided, however, that
"Outstanding" for the purpose of this Section 12.3 shall also include all
Securities of such series which may be issued upon exercise of warrants;
provided, further, however, that the Company shall not make or cause to be made
the deposit provided by this clause (1) unless the Company shall have delivered
to the Trustee an Opinion of Counsel to the effect that there will not occur any
violation of the Investment Company Act of 1940, as amended, on the part of the
Company, the trust funds representing such deposit or the Trustee as a result of
such deposit and the related exercise of the Company's option under this Section
12.3;
(2) (i) no Event of Default or event (including such deposit) which with
notice or lapse of time would become an Event of Default shall have occurred
and be continuing on the date of such deposit, (ii) no Event of Default as
defined in clause (f) or (g) of Section 6.1, or event which with notice or
lapse of time or both would become an Event of Default under either such
clause, shall have occurred within 90 days after the date of such deposit and
(iii) such deposit and the related intended consequence under (a) or (b) will
not result in any default or event of default under any material indenture,
agreement or other instrument binding upon the Company, or any Subsidiary or
any of their properties; and
(3) the Company shall have delivered to the Trustee an Opinion of Counsel
or a ruling by the Internal Revenue Service in form and substance satisfactory
to the Trustee, to the effect that Holders of the Securities and Coupons, if
any, of such series will not recognize income, gain or loss for federal income
tax purposes as a result of the Company's exercise of its option under this
Section 12.3 and will be subject to federal income tax in the same amount, in
the same manner and at the same times as would have been the case if such
option had not been exercised.
Any deposits with the Trustee referred to in clause (b)(1) above will be
made under the terms of an escrow trust agreement in form and substance
satisfactory to the Trustee which shall provide that any payment of principal of
(including any premium) or interest on the funds or Securities so deposited in
excess of the amount required to pay each installment of principal of (including
any premium) and interest, if any, on the Outstanding
<PAGE>
90
Securities and Coupons, if any, shall be paid to the Company from time to time.
If any Outstanding Securities and Coupons of such series are to be redeemed
prior to their Stated Maturity, whether pursuant to any mandatory redemption
provisions or in accordance with any mandatory sinking fund requirement, the
applicable escrow trust agreement will provide therefor and the Company will
make arrangements for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
Section 12.4 Definitions. The following terms, as used in this Article
-----------
12, shall have the following meanings:
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under the
Securities and Coupons, if any, of the series as to which this Section is
specified as applicable as aforesaid and to have satisfied all the obligations
under Sections 11.1 and 11.2 of this Indenture relating to the Securities and
Coupons, if any, of such series (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same) except that the rights
of Holders thereof to receive, from the trust fund described in clause (b)(1) of
Section 12.3, payment of (including any premium) the principal of and the
interest, if any, on such Securities and Coupons, if any, when such payments are
due, shall survive such discharge. The Company shall reimburse the trust fund
for any loss suffered by it as a result of any tax, fee or other charge imposed
on or assessed on the Trustee as a result deposited U.S. Government Obligations
or Foreign Government Securities, as the case may be, or any principal or
interest paid on such obligations, and, subject to the provisions of Section
7.6, shall indemnify the Trustee against any claims made against the Trustee in
connection with any such loss.
"Foreign Government Securities" means, with respect to the Securities and
Coupons, if any, of any series that are denominated in a Foreign Currency,
securities that are (i) direct obligations of the government that issued or
caused to be issued such currency for the payment of which obligations its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of such government the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States, which, in either case under clauses (i) or
(ii), are not callable or redeemable at the option of the issuer thereof, and
will also include a depository receipt issued by a bank or trust company as
custodian with respect to any such U.S. Government Obligation or a specified
payment of interest on or principal of any such U.S. Government Obligation held
by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from
<PAGE>
91
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
Section 12.5 Repayment of Money Held by Trustee. Any moneys deposited
----------------------------------
with the Trustee or any Paying Agent for the payment of the principal of (and
premium, if any) or interest on any Securities of any series and not applied but
remaining unclaimed by the Holders of Securities of such series and Coupons, if
any, for two years after the date upon which such payment shall have become due
shall be repaid to the Company by the Trustee upon the Order of the Company, or
(if then held by the Company) shall be discharged from such trust, and the
Holder of such Securities and Coupons, if any, entitled to receive such payment
shall thereafter, as an unsecured general creditor, look only to the Company for
the 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; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, the City of New York, notice that such
money remains unclaimed and that, after a date specified herein, which shall not
be less than 30 days after such publication or mailing, any unclaimed balance of
said moneys then remaining will be returned to the Company.
ARTICLE 13
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 13.1 No Recourse: Exemption from Personal Liability. No recourse
----------------------------------------------
under or upon any obligation, covenant or agreement of this Indenture, or of any
Security of any series or Coupon, if any, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer, director or employee, as such, past, present or future, of
the Company or of any successor corporation, either directly or through the
Company or any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the obligations
issued hereunder are solely corporate obligations, and that no such personal
liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers, directors or employee, as such, of the
Company or of any successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of the Securities
of such series or Coupon, if any, or implied therefrom; and that any and all
such personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, stockholder, officer, director or employee, as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any
Security of any series or Coupon, if any, or implied therefrom, are hereby
expressly waived and released as a condition
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92
of, and as a consideration for, the execution of this Indenture and the issue of
such Securities or Coupon, if any.
ARTICLE 14
MISCELLANEOUS PROVISIONS
Section 14.1 Successors and Assigns. All the covenants, stipulations,
----------------------
promises, and agreements in this Indenture contained by or on behalf of the
Company shall bind their successors and assigns, whether so expressed or not.
Section 14.2 Validity of Acts by Successor Corporations. Any act or
------------------------------------------
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done or performed with like force and effect by the like board, committee or
officer of any corporation that shall at that time be the successor of the
Company.
Section 14.3 Surrender of Powers. The Company by instrument in writing
-------------------
executed by authority of their respective Boards of Directors and delivered to
the Trustee may surrender any of the powers or rights reserved to the Company
and thereupon such power or right so surrendered shall terminate both as to the
Company and as to any successor corporation.
Section 14.4 Notices. Any notice or demand which by any provision of this
-------
Indenture is required or permitted to be given or served by the Trustee or by
the holders of Securities of such series to or on the Company shall be delivered
by hand or sent by first-class mail postage prepaid addressed (until another
address is filed by the Company with the Trustee), as follows:
Company:
USX CORPORATION
600 Grant Street
Pittsburgh, Pennsylvania 15219-4776
Attention: Treasurer
Any notice, direction, request or demand by any Securityholder to or upon
the Trustee shall be deemed to have been sufficiently given or made for all
purposes, if given or made in writing, at the Corporate Trust Office of the
Trustee.
Section 14.5 Governing Law. This Indenture and each Security of each
-------------
series and any Coupon shall be deemed to be a contract made under the laws of
the State of New York and for all purposes shall be governed by and construed in
accordance with the laws of said State, unless otherwise required by mandatory
provisions of law.
Section 14.6 Compliance Certificates and Opinions. Upon any application
------------------------------------
or demand by the Company to the Trustee to take any action under any of the
provisions of this
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93
Indenture, the Company shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent (including any covenant compliance with
which constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that in the opinion of such counsel all such conditions
precedent have been complied with, except that in the case of any such
application or demand as to which the furnishing of such document is
specifically required by any provision of this Indenture relating to such
particular application or demand, no additional certificate or opinion need be
furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture, other than certificates provided pursuant to Section 4.6,
shall include (1) a statement that the person making such certificate or opinion
has read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (4) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
Section 14.7 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 14.8 Conflict with Trust Indenture Act. If and to the extent that
---------------------------------
any provision of this Indenture limits, qualifies or conflicts with another
provision included in this Indenture which is required to be included in this
Indenture by any of Sections 310 to 317, inclusive, of the Trust Indenture Act
of 1939, such required provision shall control.
Section 14.9 Benefits of Trust Indenture. Nothing in this Indenture or in
---------------------------
the Securities of any series or any Coupons, expressed or implied, shall give or
be construed to give to any person, firm or corporation, other than the parties
hereto and the Holders of the Securities of such series any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all its covenants, conditions
and provisions being for the sole benefit of the parties hereto and the Holders
of the Securities of such series.
Section 14.10 No Security Interest. Nothing in this Indenture or in the
--------------------
Securities of any series, expressed or implied, shall be construed to constitute
a security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its Subsidiaries is located.
Section 14.11 Execution in Counterparts. This Indenture may be
-------------------------
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
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94
Section 14.12 Separability. In case any provision in this Indenture or in
------------
the Securities of any series, or coupons, if any, shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not, to the extent permitted by applicable law, in any way be
affected or impaired thereby.
ARTICLE 15.
SUBORDINATION
Section 15.1 Securities Subordinate to Senior Indebtedness. The Company
---------------------------------------------
covenants and agrees, and each Holder of Securities of any series (or any
Coupons appertaining thereto) by the Holder's acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set
forth in this Article 15, the indebtedness represented by the Securities of such
series (or any Coupons appertaining thereto) and the payment of the principal of
(and premium, if any) and interest on each and all of the Securities of such
series (or any Coupons appertaining thereto) are hereby expressly made
subordinate and junior in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, to the extent and in the manner herein set
forth (unless a different manner is set forth in the Securities of such series,
or any Coupons appertaining thereto). No provision of this Article 15 shall
prevent the occurrence of any default or Event of Default hereunder.
Senior Indebtedness shall not be deemed to have been paid in full unless
the holders thereof shall have received cash, securities or other property equal
to the amount of such Senior Indebtedness then outstanding.
Section 15.2 Payment Over of Proceeds Upon Dissolution, Etc.
-----------------------------------------------
In the event of
(i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding
relating to the Company, its creditors or its property,
(ii) any proceeding for the liquidation, dissolution or other winding up
of the Company, voluntary or involuntary, whether or not involving
insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of its creditors, or
(iv) any other marshalling of the assets of the Company,
all Senior Indebtedness shall first be paid in full before any payment or
distribution, whether in cash, securities or other property, shall be made by
the Company on account of the Securities of any series (or any Coupons
appertaining thereto). Any payment or distribution, whether in cash, securities
or other property (other than securities of the
<PAGE>
95
Company or any other corporation provided for by a plan of reorganization or a
readjustment, the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities of any series (or any Coupons appertaining thereto),
to the payment of all Senior Indebtedness at the time outstanding and to any
securities issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series (or any
Coupons appertaining thereto) shall be paid or delivered directly to the holders
of Senior Indebtedness in accordance with the priorities then existing among
such holders until all Senior Indebtedness shall have been paid in full. No
present or future holder of any Senior Indebtedness shall be prejudiced in the
right to enforce subordination of the indebtedness constituting the Securities
of any series (or any Coupons appertaining thereto) by any act or failure to act
on the part of the Company.
Section 15.3 No Payment When Senior Indebtedness in Default.
----------------------------------------------
In the event that
(i) the Company shall default in the payment of any principal, or
premium, if any, or interest on any Senior Indebtedness when the same
becomes due and payable, whether at maturity or at a date fixed for
prepayment or declaration or otherwise; or
(ii) an event of default occurs with respect to any Senior Indebtedness
permitting the holders thereof to accelerate the maturity thereof and
written notice describing such event of default and requesting commencement
of payment blockage on transactions as hereinafter described is given to
the Company by the holders of Senior Indebtedness,
then unless and until such default in payment and event of default shall
have been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made
or agreed to be made on account of the Securities of any series (or any Coupons
appertaining thereto) or any interest thereon in respect of any repayment,
redemption, retirement, purchase or other acquisition of the Securities of any
series (or any Coupons appertaining thereto).
Section 15.4 Payment Permitted in Certain Situations. Nothing contained
---------------------------------------
in this Article 15 or elsewhere in the Indenture or in any of the Securities of
any series (or any Coupons appertaining thereto) shall prevent (a) the Company,
at any time except during the pendency of any dissolution, winding-up,
liquidation or reorganization of the Company, whether voluntary or involuntary
or any bankruptcy, insolvency, receivership or other proceedings of the Company
referred to in Section 15.2 or under the conditions described in Section 15.3,
from making payments at any time of principal of, or premium, if any, or
interest on the Securities of such series, or (b) the application by the Trustee
of any money deposited with it hereunder to the payment of or on account of the
principal of, or premium, if any, or interest on the Securities of such series
(or any Coupons appertaining thereto) or the
<PAGE>
96
retention of such payment by the Holders, if, at the time of such application by
the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article 15.
Section 15.5 Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Upon the payment in full of all Senior Indebtedness, the rights of the Holders
of Securities of any series (or any Coupons appertaining thereto) shall be
subrogated to all the rights of any holders of Senior Indebtedness to receive
any further payments or distributions applicable to the Senior Indebtedness
until the Securities of any series (or any Coupons appertaining thereto) shall
have been paid in full, and such payments or distributions received by the
Holders of Securities of any series (or any Coupons appertaining thereto), by
reason of such subrogation, of cash, securities or other property which
otherwise would be paid or distributed to the holders of Senior Indebtedness,
shall, as between the Company and its creditors other than the holders of Senior
Indebtedness, on the one hand, and the Holders of Securities of any series (or
any Coupons appertaining thereto), on the other, be deemed to be a payment by
the Company on account of Senior Indebtedness, and not on account of the
Securities of any series (or any Coupons appertaining thereto).
Section 15.6 Provisions Solely to Define Relative Rights. The
-------------------------------------------
provisions of this Article 15 are and are intended solely for the purpose of
defining the relative rights of the Holders of Securities of any series (or any
Coupons appertaining thereto) on the one hand and the holders of Senior
Indebtedness on the other hand. Nothing contained in this Article 15 or
elsewhere in the Indenture or in the Securities of such series (or any Coupons
appertaining thereto) is intended to or shall (a) impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Securities of such series (or any Coupons appertaining thereto), the obligation
of the Company, which is absolute and unconditional (and which, subject to the
rights under this Article 15 of the holders of Senior Indebtedness, is intended
to rank equally with all other general obligations of the Company), to pay to
the Holders of Securities of such series (or any Coupons appertaining thereto)
the principal of (and premium, if any) and interest on, the Securities of such
series (or any Coupons appertaining thereto) as and when the same shall become
due and payable in accordance with their terms; or (b) affect the relative
rights against the Company of the Holders of Securities of such series (or any
Coupons appertaining thereto) and creditors of the Company, as the case may be,
other than the holders of Senior Indebtedness; or (c) prevent the Trustee or the
Holder of any Securities of such series (or any Coupons appertaining thereto)
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article 15 of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Section 15.7 Trustee to Effectuate Subordination. Each Holder of
-----------------------------------
Securities of any series (or any Coupons appertaining thereto) 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 15 and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
<PAGE>
97
Section 15.8 No Waiver of Subordination Provisions. 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 any such holder may have or be otherwise 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 Securities of any
series (or any Coupons appertaining thereto), without incurring responsibility
to the Holders of Securities of such series (or any Coupons appertaining
thereto) and without impairing or releasing the subordination provided in this
Article 15 or the obligations hereunder of the Holders of Securities of such
series (or any Coupons appertaining thereto) to the holders of Senior
Indebtedness do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness, and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
Section 15.9 Notice to Trustee. 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 to or by the Trustee in respect
of any Securities of any series (or any Coupons appertaining thereto) pursuant
to the provisions of this Article 15. Notwithstanding the provisions of this
Article 15 or any other provision of the Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of any Securities of any
series (or any Coupons appertaining thereto) pursuant to the provisions of this
Article 15, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 7.2,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall have not received the notice provided for in
this Section 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 (or premium, if any) or interest on
any Securities of any series (or any Coupons appertaining thereto)), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purposes for which they were received, and shall not be affected by any
notice to the contrary that may be received by it within two Business Days prior
to such date.
<PAGE>
98
Subject to the provisions of Section 7.2, the Trustee shall be entitled to
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 therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
therefor). 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 15, 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 rights of
such Person under this Article 15, 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 15.10 Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets of the Company referred to in
- -----
this Article 15, the Trustee, subject to the provisions of Section 7.2, and the
Holders of Securities of any series (or any Coupons appertaining thereto) shall
be entitled to conclusively rely upon any order or decree entered by any court
of competent jurisdiction in which such insolvency, bankruptcy, receivership,
liquidation, reorganization, dissolution, winding up or similar case or
proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities of such series (or any Coupons appertaining thereto),
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of 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 15.
Section 15.11 Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 15, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of Senior Indebtedness and shall not be
liable to any such holders or creditors if it shall in good faith pay over or
distribute to Holders of Securities of any series (or any Coupons appertaining
thereto) or to the Company or to any other Person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article 15 or otherwise.
Section 15.12 Rights of Trustee as Holder of Senior Indebtedness,
--------------------------------------------------
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
- --------------------------------
be entitled to all the rights set forth in this Article 15 with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness and nothing in the Indenture shall
deprive the Trustee of any of its rights as such holder.
<PAGE>
99
Nothing in this Article 15 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.6.
Section 15.13 Article Applicable to Paying Agents. In case at any time
-----------------------------------
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term `Trustee' as used in this Article 15
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article 15 in
addition to or in place of the Trustee: provided, however, that this Section
15.13 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as Paying Agent.
Section 15.14 Certain Conversions Deemed Payment. For the purposes of
----------------------------------
this Article 15 only, (a) the issuance and delivery of junior securities (or
cash paid in lieu of fractional shares) upon conversion of Securities of any
series (or any Coupons appertaining thereto) in accordance with Article 16, or
pursuant to the terms set forth in an Officers' Certificate or established in
one or more indentures supplemental hereto in accordance with Section 2.1, shall
not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest on Securities of such series (or any Coupons
appertaining thereto) or on account of the purchase or other acquisition of
Securities of such series (or any Coupons appertaining thereto), and (b) the
payment, issuance or delivery of cash, property or securities (other than Junior
Securities and cash paid in lieu of fractional shares) upon conversion of a
Securities of any series (or any Coupons appertaining thereto) shall be deemed
to constitute payment on account of the principal of such Securities of such
series (or any Coupons appertaining thereto). Nothing contained in this Article
15 or elsewhere in the Indenture or in the Securities of any series (or any
Coupons appertaining thereto) is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the Holders
of Securities of such series (or any Coupons appertaining thereto), the right,
which is absolute and unconditional, of the Holder of any Securities of such
series (or any Coupons appertaining thereto) to convert such Securities of such
series (or any Coupons appertaining thereto) in accordance with Article 16 and
the terms set forth in an Officers' Certificate or established in one or more
indentures supplemental hereto in accordance with Section 2.1.
ARTICLE 16.
CONVERSION
Section 16.1 Applicability of Article. Securities of any series which are
------------------------
designated as being convertible into any other security of the Company prior to
their stated Maturity shall be convertible in accordance with their terms and
(except as otherwise specified pursuant to Section 2.1 for the Securities of
such series) in accordance with this Article.
Section 16.2 Conversion Privilege. A Holder of a Security of a series,
--------------------
which, by its terms, is convertible into any other security of the Company, may
convert such Security
<PAGE>
100
at any time during the period and in the manner as is set forth in the terms of
the Securities of that series. The number of shares or units of such other
security issuable upon conversion of a Security shall be determined in the
manner set forth in the terms of such Security.
Section 16.3 Conversion Procedure. To convert a Security, the Holder
--------------------
thereof must comply with and satisfy all of the terms, conditions and other
requirements set forth in the terms of such Security. As soon as practicable,
the Company shall deliver through the Conversion Agent a certificate for the
number of shares or units of the Security issuable upon the conversion.
Section 16.4 Fractional Shares. The terms of the Securities shall set
-----------------
forth whether the Company will issue a fractional share or units of a security
upon conversion of a Security or instead will deliver its check for the value of
the fractional share or units of a security.
Section 16.5 Taxes on Conversion. The terms of the Security shall state
-------------------
whether the Company will pay any documentary, stamp or similar issue or transfer
tax, due on the issue of shares or units of the security issuable and whether
upon the conversion the Holder will be required to pay any such tax which is due
because such shares or units are issued in a name other than that of such
Holder.
Section 16.6 Company to Provide Securities Issuable Upon Conversion. The
------------------------------------------------------
Company shall reserve or otherwise provide for a sufficient amount of its
respective securities which would be issuable upon the conversion of the
Securities, including reserving out of its respective authorized but unissued
equity securities or its equity securities held in treasury enough shares of
equity securities to permit the conversion of the Securities.
All shares of equity securities which may be issued upon conversion of the
Securities shall be fully paid and nonassessable.
The Company will endeavor to comply with all securities laws regulating the
offer and delivery of shares or units of its respective securities upon
conversion of Securities and will endeavor to list such shares or units on any
national securities exchange on which such shares or units are listed.
Section 16.7 Adjustments. The terms of the Securities shall set forth the
-----------
nature of mechanics for and notice of any adjustments in the number or price of
securities of the Company issuable upon conversion of the Securities.
Section 16.8 Valuation. The terms of the Securities shall set forth the
---------
method or methods for valuing the securities of the Company issuable upon
conversion of the Securities.
Section 16.9 Reorganization of Company. The terms of the Securities shall
-------------------------
set forth the rights, if any, of the Holders to, convert their Securities in the
event that the
<PAGE>
101
Company is a party to a transaction subject to Article 11 or a merger which
reclassifies or changes its outstanding Securities into which the Securities are
convertible.
Section 16.10 Trustee's Disclaimer. The Trustee has no duty to determine
--------------------
when an adjustment under this Article or the terms of the Securities should be
made, how it should be made or what it should be. The Trustee makes no
representation as to the validity or value of any securities issued upon
conversion of Securities. The Trustee shall not be responsible for the failure
of the Company to comply with this Article. Each Conversion Agent other than
the Company shall have the same protection under this Section as the Trustee.
<PAGE>
102
IN WITNESS WHEREOF, the parties hereto have caused this Multiple Series
Indenture to be duly executed on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
USX CORPORATION
By:/s/ G.R. Haggerty
-----------------
Title: Vice President & Treasurer
THE BANK OF NEW YORK,
as Trustee
By:/s/ Paul J. Schmalzel
---------------------
Title: Assistant Treasurer
<PAGE>
103
EXHIBIT A
FORMS OF CERTIFICATION
<PAGE>
104
EXHIBIT A.1
FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY
CERTIFICATE
USX CORPORATION
Insert title or sufficient description
of Securities to be delivered
This is to certify that the above-captioned Securities are not being
acquired by or for the account or benefit of a United States person or for offer
to resell or for resale to a United States person or any person who is within
the United States, or if a beneficial interest in the Securities is being
acquired by a United States person, that such United States person (i) is a
foreign branch of a United States financial institution (as defined in U.S.
Treas. Reg. section 1.165-12(c)(1)(v)) which has provided to the person from
which it purchased the obligation a certificate stating that it agrees to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986 and the regulations thereunder (a `qualifying foreign
branch'), (ii) acquired such securities through a qualifying foreign branch and
is holding the obligation through such qualifying foreign branch or (iii) is a
financial institution holding for purposes of resale during the restricted
period (as defined in U.S. Treas. Reg. section 1.163-5(c)(2)(i)(D)(7)), which
financial institution has not acquired the obligation for the purposes of resale
directly or indirectly to a United States person or to a person who is within
the United States or its possessions. This is also to certify that the above-
referenced Securities are not being acquired by or for the account or benefit of
a `U.S. person,' as the term is defined in Regulation S under the United States
Securities Act 1933, as amended.
This Certificate excepts and does not relate to principal
amount of the above-captioned Securities held in the name of the undersigned as
to which the undersigned is not yet able to certify and as to which it
understands that exchange and delivery of definitive Securities and payment of
interest on a temporary global Security cannot be made until the undersigned is
able to so certify.
If the undersigned is a clearing organization, the undersigned has obtained
a similar certificate from its member organizations on which this certificate is
based; provided, however, that if the undersigned has actual knowledge that the
information contained in such a certificate is false, the undersigned will not
deliver a Security in temporary or definitive bearer form to the person who
signed such certificate notwithstanding the delivery of such certificate to the
undersigned.
As used herein, `United States person' means an individual who is a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in
<PAGE>
105
or under the laws of the United States or any political subdivision thereof, or
an estate or trust the income of which is subject to United States Federal
income taxation regardless of its source; `United States' means the United
States of America (including the states and the District of Columbia); and
`possessions' of the United States include Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island, and Northern Mariana Islands.
We undertake to advise you by telex if the above statement as to beneficial
ownership is not correct on the date of delivery of the above-captioned
Securities in bearer form as to all of such Securities.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceeding are commenced or threatened in connection with which this certificate
is or would be relevant, we irrevocably authorize you to produce this
certificate or a copy thereof to any interested party in such proceedings.
Dated: , 19
To be dated on or after
, 19 (the date
determined as provided in the Indenture)
(Name of Person Entitled to
Receive Bearer Security
(Authorized Signatory)
Name:
Title:
<PAGE>
106
EXHIBIT A.2
(FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR, CEDEL S.A. AND ANY OTHER ENTITY
PERFORMING SIMILAR FUNCTIONS IN CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY
CERTIFICATE
USX CORPORATION
Insert title or sufficient description
of Securities to be delivered
This is to certify with respect to $ principal amount of the above-
captioned Securities (i) that we have received from each of the persons
appearing in our records as persons entitled to a portion of such principal
amount (our `Qualified Account Holders') a certificate with respect to such
portion substantially in the form set out in Exhibit A.1 to the Indenture
relating to the above-captioned Securities, and (ii) that we are not submitting
herewith for exchange portion of the temporary global Security representing the
above-captioned Securities excepted in such certificates.
To the extent that we have knowledge that any of such certificates is false
and to the extent that we have not received with respect to any Securities such
certificates from Qualified Account Holders, we are not submitting for exchange
any portion of the temporary global Security attributable thereto.
We further certify that as of the date hereof we have not received an
notification from any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any portion of
the part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with certain
tax legislation in the United States. If administrative or legal proceedings
are commenced or threatened in connection with which this certificate is or
would be relevant, we irrevocably authorize you to produce this certificate or a
copy thereof to any interested party in such proceeding.
Date: , 19
To be dated no earlier than
the Exchange Date
, as
Operator of the Euro clear System
CEDEL S.A.
By
<PAGE>
107
EXHIBIT A.3
FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR, CEDEL S.A. AND ANY OTHER ENTITY
PERFORMING SIMILAR FUNCTIONS TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE
CERTIFICATE
USX CORPORATION
Insert title or sufficient
description of Securities
We confirm that the interest payable on the Interest Payment Date on Insert
Date will be paid to each of the persons appearing in our records as being
entitled to interest payable on such (`Qualified Account Holders') from whom we
have received a written certification, dated not earlier than such Interest
Payment Date, substantially in the form set out in Exhibit A.4 to the Indenture
relating to the above-captioned Securities. We undertake to retain certificates
received from our member organizations in connection herewith for four years
from the end of the calendar year in which certificates are received.
To the extent that we have knowledge that any of such certificates is false
and to the extent that we have not received with respect to any Securities such
certificates from Qualified Account Holders, we are not requesting that payment
be made for interest with respect thereto.
We further certify that as of the date hereof we have not received any
notification for any of our Qualified Account Holders to the effect that the
statements made by such Qualified Account Holders with respect to any interest
payment on any portion of the principal amount of the Securities referred to
above are no longer true and cannot be relied upon as of the date hereof.
We undertake that any interest received by us and not paid as provided
above SW b returned to the Trustee for the above Securities immediately prior to
the expiration of two years such Interest Payment Date in order to be repaid by
such Trustee to the above issuer at the end of years after such Interest Payment
Date.
Date: , 19
To be dated on or after the
relevant Interest Payment Date
, as
Operator of the Euro-clear System,
CEDEL S.A.
<PAGE>
108
EXHIBIT A.4
FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS TO OBTAIN INTEREST PRIOR TO
AN EXCHANGE DATE
CERTIFICATE
USX CORPORATION
Insert title or sufficient description
of Securities
This is to certify that as of the Interest Payment Date on Insert Date and
except provided in the third paragraph hereof, none of the above-captioned
Securities held by you for our account was beneficially owned by a United States
person or if such Securities were, as of such date, beneficially owned by a
United States person, such United States person (i) was a foreign branch of a
United States financial institution (as defined in U.S. Treas. Reg. section
1.165-12(c)(1)(z)) which provided to the person from which it purchased the
obligation a certificate stating that it agrees to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 19 and the
regulations thereunder (a `qualifying foreign branch'), (ii) acquired such
securities through qualifying foreign branch and was holding the obligation
through such qualifying foreign branch or (iii) was a financial institution
holding for purposes of resale during the restricted period (as defined U.S.
Treas. Reg. section 1.163-5(c)(2)(i)(D)(7), which financial institution did not
acquire the obligation for the purposes of resale directly or indirectly to a
United States person or to a person who is the United States or its possessions.
As used herein, `United States person' means an individual who is a citizen
or resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or a political
subdivision thereof, or an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source; `United States'
means the United States of America (including the states and the District of
Columbia); and `possessions' of the United States include Puerto Rico, the U.S.
Virgin Islands, Guam, American Samoa, Wake Island, and Northern Mariana Islands.
This certificate excepts and does not relate to U.S. $ principal amount of
the above-captioned Securities appearing in your books as being held for our
account as to which we are not yet able to certify and as to which we understand
interest cannot be credited unless and until we are able to so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
<PAGE>
109
Date: , 19 Name of Person Entitled to
To be dated on or after Receive Interest
the 15th day before the
relevant Interest Payment Date
(Authorized Signature)
Name:
Title:
<PAGE>
110
EXHIBIT A.5
FORM OF CONFIRMATION TO BE SENT TO PURCHASERS OF BEARER SECURITIES
By your purchase of the securities referred to in the accompanying
confirmation (the `Securities'):
You represent that you are not a United States person (as defined below)
other than (i) a foreign branch of a United States financial institution (as
defined in U.S. Treas. Reg. Section 1.165-12(c)(l)(v)) which has provided to the
person from which you purchased the obligation a certificate stating that you
agree to comply with the requirements of Section 165(i)(3)(A), (B) and (C) of
the Internal Revenue of 1986 and the regulations thereunder (a `qualifying
foreign branch'), (ii) a United States person who has acquired the Securities
through a qualifying foreign branch and is holding the Securities through such
qualifying foreign branch or (iii) a financial institution holding for purposes
of resale during the restricted period (as defined in U.S. Treas. Reg. Section
1.163-5(c)(2)(i)(D)(7), which financial institution has not acquired the
obligation for the purposes of resale directly or indirectly to a United States
Person or to a person who is within the United States or its possessions.
`U.S. person' means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof or an estate or
trust the income of which if subject to the United States Federal income
taxation regardless of its source; `United States' means the United States of
America (including the States and the District of Columbia); and the
`possessions' of the United States include Puerto Rico, the U.S. Virgin Islands,
Guam, American Somoa, Wake Island, and Northern Mariana Islands.
You also represent that the Securities are not being acquired by or for the
account or benefit of a `U.S. person', as that term is defined in Regulation S
under the United States Securities Act 1933, as amended.
If you are a dealer, (a) you also represent that you have not offered, sold
or delivered, and agree that you will not offer, sell, resell or deliver, any of
the Securities, directly or indirectly, in the United States or its possessions
or to any United States person other than a United States person defined in (i),
(ii) or (iii) above, or any U.S. person, and (b) you agree that you will deliver
to all purchasers of the Securities from you a written statement in this form.
<PAGE>
Exhibit 4.4
USX CORPORATION
As Issuer
and
THE BANK OF NEW YORK
As Trustee
6.75% Convertible Junior Subordinated Debentures
First Supplemental Indenture
Dated as of May 16, 1997
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS.......................... 1
SECTION 1.1. Definition of Terms............................. 1
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. Designation and Principal Amount................ 9
SECTION 2.2. Maturity........................................ 9
SECTION 2.3. Form and Payment................................ 9
SECTION 2.4. Global Debenture................................ 9
SECTION 2.5. Interest........................................ 10
SECTION 2.6. Ranking......................................... 11
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES............... 11
SECTION 3.1. Trust Special Event Redemption.................. 11
SECTION 3.2. Optional Redemption by Company.................. 12
SECTION 3.3. Redemption of Less Than All Convertible
Debentures.................................... 13
SECTION 3.4. U.S. Steel Group Special Event; Marathon
Group Special Event........................... 13
SECTION 3.5. Notice of Redemption............................ 15
SECTION 3.6. Notice of Certain Events........................ 16
SECTION 3.7. No Sinking Fund................................. 17
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD........... 17
SECTION 4.1. Extension of Interest Payment Period............ 17
SECTION 4.2. Notice of Extension............................. 17
SECTION 4.3. Limitation of Transactions...................... 18
ARTICLE V
EXPENSES....................................... 18
SECTION 5.1. Payment of Expenses............................. 18
SECTION 5.2. Payment Upon Resignation or Removal............. 19
ARTICLE VI
COVENANTS...................................... 19
SECTION 6.1. Covenants as to the Trust........................... 19
SECTION 6.2. Listing or Quotation of Convertible Debentures...... 20
-i-
<PAGE>
Page
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES........... 20
SECTION 7.1. Conversion Rights................................... 20
SECTION 7.2. Conversion Procedures............................... 20
SECTION 7.3. Certain Conversion Price Adjustments................ 22
SECTION 7.4. Special Provisions Regarding Adjustment of
Conversion Price or Other Provisions.............. 31
SECTION 7.5. Trustee Not Responsible for Determining Conversion
Price or Adjustments.............................. 31
ARTICLE VIII
EVENTS OF DEFAULT.................... 32
SECTION 8.1. Events of Default.............................. 32
ARTICLE IX
FORM OF CONVERTIBLE DEBENTURE.................. 32
SECTION 9.1. Form of Convertible Debenture.................. 32
ARTICLE X
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES............. 33
SECTION 10.1. Original Issue of Convertible Debentures...... 33
ARTICLE XI
MISCELLANEOUS.................. 33
SECTION 11.1. Ratification of Base Indenture; Supplemental
Indenture Controls.......................... 33
SECTION 11.2. Trustee Not Responsible for Recitals.......... 33
SECTION 11.3. Governing Law................................. 33
SECTION 11.4. Separability.................................. 33
SECTION 11.5. Counterparts.................................. 33
-ii-
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of May 16, 1997 the
"Supplemental Indenture"), is between USX CORPORATION, a Delaware corporation
(the "Company"), and THE BANK OF NEW YORK, as trustee (the "Trustee").
RECITALS
WHEREAS, the Company has executed and delivered the Base Indenture (as
defined herein) to the Trustee to provide for the issuance of the Company's
Securities from time to time in one or more series as might be determined by the
Company under the Base Indenture, in an unlimited aggregate principal amount as
may be authenticated and delivered as provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its 6.75% Convertible Junior Subordinated Debentures (the "Convertible
Debentures"), the form and substance of such Convertible Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the Base
Indenture and this Supplemental Indenture;
WHEREAS, USX Capital Trust I, a Delaware statutory business trust (the
"Trust"), intends to issue up to $196,860,800 aggregate liquidation amount of
its 6.75% Convertible Quarterly Income Preferred Securities (the "Trust
Convertible Preferred Securities") and up to $6,088,500 aggregate liquidation
amount of its 6.75% Common Securities (the "Trust Common Securities" and,
together with the Trust Convertible Preferred Securities, the "Trust
Securities"), representing undivided beneficial ownership interests in the
assets of the Trust; and
WHEREAS, the Trust proposes to issue Trust Securities to the Company in
exchange for Convertible Debentures in an aggregate principal amount equal to
the aggregate liquidation amount of the Trust Securities issued:
NOW, THEREFORE, in consideration of the issuance to the Company of Trust
Securities by the Trust and the acceptance of the Convertible Debentures in
exchange therefor by the Trust, and for the purpose of setting forth, as
provided in the Base Indenture, the form and substance of the Convertible
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definition of Terms.
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
<PAGE>
2
(a) unless otherwise defined herein, the capitalized terms used herein
that are defined in the Base Indenture have the same meanings when used in this
Supplemental Indenture;
(b) 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;
(c) 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;
(d) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States of America, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with respect to
any computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States of America at the date
of such computation;
(e) a reference to a Section or Article (or subdivision thereof) or the
Recitals is to a Section or Article (or subdivision thereof) or the Recitals of
this Supplemental Indenture;
(f) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not affect
interpretation;
(h) the terms defined as follows shall have the meanings assigned to them
as follows:
"Additional Interest" has the meaning specified in Section 2.5(c).
"Adjustment Date" has the meaning specified in Section 7.3(a)(iii).
"Adjustment Trigger Date" has the meaning specified in Section 7.3(a)(iii).
"Administrative Action" means an official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations.
"Base Indenture" means that Indenture dated as of even date hereof between
the Company and the Trustee, as it may be amended, restated, supplemented and/or
modified from time to time.
<PAGE>
3
"Board of Directors" or "Board" means, at any time, the duly elected or
acting board of directors (or duly authorized committee thereof) of the Company
at such time.
"Business Day" means any day other than a Saturday, Sunday, or any other
day on which banking institutions in New York, New York or Pittsburgh,
Pennsylvania are permitted or required by any applicable law to close.
"Certificate of Incorporation" means the Company's Restated Certificate of
Incorporation, as amended from time to time.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation, that is acting as depositary for the
Convertible Debentures and in whose name or in the name of a nominee of that
organization shall be registered a Global Debenture and which shall undertake to
effect book entry transfers and pledges of the Convertible Debentures. The
initial Clearing Agency shall be The Depository Trust Company.
"Closing Price" of shares of any class of common stock of the Company for
any day means the last reported sales price, regular way on such day, or, if no
reported sale takes place on such day, the average of the reported closing bid
and asked prices on such day, regular way, in either case as reported on the
NYSE Composite Tape or, if such common stock is not listed or admitted to
trading on the NYSE, 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, on the NASDAQ Stock Market or, if
such common stock is not quoted on the NASDAQ Stock Market, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if closing bid and asked prices for such common stock on
such day shall not have been reported through NASDAQ, the average of the closing
bid and asked prices on such day as furnished by any NYSE member firm regularly
making a market in such common stock selected for such purpose by the Board of
Directors.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Trust Common Security substantially in the form
of Exhibit A-2 to the Declaration.
"Company" has the meaning specified in the first paragraph hereof.
"Compounded Interest" has the meaning specified in Section 4.1.
"Constituent Person" has the meaning specified in Section 7.3(c).
"Conversion Agent" means the Institutional Trustee acting as Conversion
Agent for a Holder.
"Conversion Date" has the meaning specified in Section 7.2(b).
<PAGE>
4
"Conversion Notice" has the meaning specified in Section 7.2(a).
"Conversion Price" means $46.25, as of the date of this Supplemental
Indenture, as may be adjusted from time to time as set forth in Article VII.
"Convertible Debentures" has the meaning specified in the Recitals.
"Convertible Preferred Security Certificate" means a certificate
representing a Trust Convertible Preferred Security substantially in the form of
Exhibit A-1 to the Declaration.
"Coupon Rate" has the meaning specified in Section 2.5.
"Current Market Price" shall mean, with respect to any class of common
stock of the Company, the average of the daily Closing Prices of a share of such
common stock during the five consecutive Trading Days selected by the Company
commencing not more than 20 Trading Days before, and ending not later than, the
date in question; provided, however, that (i) if the "ex" date for any event
(other than the issuance or distribution requiring such computation) that
requires an adjustment to the Conversion Price pursuant to Sections 7.3(a)(ii)
through (v) occurs on or after the 20th Trading Day prior to the day in question
and prior to the "ex" date for the issuance or distribution requiring such
computation, the Closing Price for each Trading Day prior to the "ex" date for
such other event shall be adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be adjusted as a result
of such other event, (ii) if the "ex" date for any event (other than the
issuance or distribution requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Sections 7.3(a)(ii) through (v) occurs on or
after the "ex" date for the issuance or distribution requiring such computation
and on or prior to the day in question, the Closing Price for each Trading Day
on and after the "ex" date for such other event shall be adjusted by multiplying
such Closing Price by the reciprocal of the fraction by which the Conversion
Price is so required to be adjusted as a result of such other event, and (iii)
if the "ex" date for the issuance or distribution requiring such computation is
on or prior to the day in question, after taking into account any adjustment
required pursuant to clause (ii) of this proviso, the Closing Price for each
Trading Day on or after such "ex" date shall be adjusted by adding thereto the
amount of any cash and the fair market value on the day in question (as
determined by the Board of Directors in a manner consistent with any
determination of such value for purposes of Section 7.3(a)(iii) or (iv)) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of the applicable class of common stock of the Company
as of the close of business on the day before such "ex" date. For purposes of
this definition, the term "ex" date, with respect to any class of common stock
of the Company, (i) when used with respect to any issuance or distribution,
means the first date on which such common stock trades regular way on such
exchange or in the relevant market from which the Closing Price was obtained
without the right to receive such issuance or distribution, (ii) when used with
respect to any subdivision or combination of shares of such common stock, means
the first date on which such common stock trades regular way on such exchange or
in such market after the time at which such subdivision or combination becomes
effective, and (iii) when used with respect to any tender
<PAGE>
5
or exchange offer means the first date on which such common stock trades regular
way on such exchange or in such market after the expiration time of such tender
or exchange offer.
"Declaration" means the Amended and Restated Declaration of Trust of the
Trust, dated as of May 16, 1997, as it may be amended, restated, supplemented
and/or modified from time to time.
"Deferred Interest" has the meaning specified in Section 4.1.
"Delaware Trustee" means the Delaware Trustee, if any, of the Trust.
"Delhi Group" means the Delhi Group of the Company.
"Delhi Stock" means shares of USX--Delhi Group Common Stock, par value
$1.00 per share, of the Company.
"Disposition" means the sale, transfer, assignment or other disposition
(whether by consolidation, sale or contribution of assets or stock or otherwise)
of properties or assets.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Trust Special Event, the Trust is to be dissolved in
accordance with the Declaration, and the Convertible Debentures held by the
Institutional Trustee are to be distributed to the holders of the Trust
Securities issued by the Trust pro rata in accordance with the Declaration.
"Dissolution Tax Opinion" means an opinion of independent tax counsel
experienced in such matters to the effect that, on or after May 15, 1997, as a
result of (a) any amendment to, clarification of, or change (including any
announced proposed change) in the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein affecting taxation, (b) any Administrative Action or any judicial
decision or (c) any amendment to, clarification of, or change in the official
position or the interpretation of such Administrative Action or judicial
decision that differs from the theretofore generally accepted position, there is
more than an insubstantial risk that (i) the Trust is or, within 90 days of the
date thereof, will be subject to United States federal income tax with respect
to interest accrued or received on the Convertible Debentures, (ii) the Trust is
or, within 90 days of the date thereof, will be subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii) interest
payable in cash by the Company to the Trust on the Convertible Debentures (other
than interest attributable to the Trust Common Securities) is not, or within 90
days of the date thereof will not be, deductible, in whole or in part, by the
Company for United States federal income tax purposes; provided, however, that
such an opinion shall not be deemed to be a "Dissolution Tax Opinion" if the
occurrence of any of the events described in (a), (b) or (c) above requires the
Company for United States federal income tax purposes to defer taking a
deduction for any OID that accrues with respect to the Convertible Debentures
until the interest payment related to such OID is paid by the Company in cash,
provided the occurrence of any of the events described in (a), (b) or (c) above
does not create more than an insubstantial risk that the Company will
<PAGE>
6
be prevented from taking a deduction for OID accruing with respect to the
Convertible Debentures as of a date that is no later than the date the interest
payment related to such OID is actually paid by the Company in cash.
"Distribution" means a distribution to the holders of Trust Securities of
the amount of any interest (including Compounded Interest and Additional
Interest), premium and/or principal paid on the Convertible Debentures.
"Exercise Trigger Date" has the meaning specified in Section 7.3(a)(iii).
"Extended Interest Payment Period" has the meaning specified in Section
4.1.
"Global Debenture" has the meaning specified in Section 2.4.
"Guarantee" means that Guarantee Agreement, dated as of even date hereof,
between the Company and the Guarantee Trustee (as defined therein) for the
benefit of the holders of Trust Securities.
"Institutional Trustee" means the Institutional Trustee of the Trust.
"Interest Payment Date" has the meaning specified in Section 2.5.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority on or after
May 15, 1997, there is more than an insubstantial risk that the Trust is or will
be considered an "investment company" which is required to be registered under
the Investment Company Act of 1940, as amended.
"Marathon Group" means the Marathon Group of the Company.
"Marathon Group Subsidiary" has the meaning set forth in the Certificate of
Incorporation.
"Marathon Stock" means shares of USX-Marathon Group Common Stock, par value
$1.00 per share of the Company.
"maturity advancement" has the meaning specified in Section 3.1.
"Maturity Date" means the date on which the Convertible Debentures mature
and on which the principal shall be due and payable, together with any accrued
and unpaid interest thereon, including Compounded Interest and Additional
Interest, if any.
"Ministerial Action" has the meaning specified in Section 3.1.
<PAGE>
7
"NASDAQ" means the National Association of Securities Dealers, Inc.
Automated Quotations System or any successor thereto.
"90-Day Period" has the meaning specified in Section 3.1.
"Non Book-Entry Convertible Preferred Securities" has the meaning specified
in Section 2.4.
"non-electing share" has the meaning specified in Section 7.3(c).
"No Recognition Opinion" means an opinion of independent tax counsel
experienced in such matters (which opinion may rely on published revenue rulings
of the Internal Revenue Service) to the effect that the holders of the Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and the distribution of
Convertible Debentures.
"NYSE" means the New York Stock Exchange, Inc. or any successor thereto.
"OID" means original issue discount.
"Optional Redemption Price" has the meaning specified in Section 3.2.
"Price Trigger Date" has the meaning specified in Section 7.3(a)(iii).
"Principal Amount of One Convertible Debenture" means $50.
"Purchase Date" shall have the meaning specified in Section 7.3(a)(iii).
"Redemption Tax Opinion" means an opinion of 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 even after the Convertible Debentures were distributed to the holders
of Trust Securities in liquidation of such holders' interests in the Trust as
described in the Declaration.
"Regular Record Date" has the meaning specified in Section 2.5(a).
"Regular Trustee" means the Regular Trustee of the Trust.
"Restated Rights Agreement" has the meaning specified in Section
7.3(a)(iii).
"Securities" has the meaning set forth in Section 7.3(a)(iii).
"Special Redemption Price" has the meaning specified in Section 3.1.
<PAGE>
8
"Steel Stock" means shares of USX--U.S. Steel Group Common Stock, par value
$1.00 per share, of the Company.
"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries. For the purposes of this definition, "voting stock"
means stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such voting
power by reason of any contingency.
"substantially all of the properties and assets of the U.S. Steel Group"
and "substantially all of the properties and assets of the Marathon Group" means
a portion of such properties and assets that represents at least 80% of either
of the then-current market value of, or the aggregate revenues for the
immediately preceding twelve fiscal quarterly periods of the Company derived
from, the properties and assets of the U.S. Steel Group or the Marathon Group,
respectively, as of such date (excluding the properties and assets of any
person, entity or group in which the Company, directly or indirectly, owns less
than a majority interest).
"Supplemental Indenture" has the meaning specified in the first paragraph
hereof.
"Tax Event" means that the Regular Trustees have received a Dissolution Tax
Opinion.
"Trading Day" means, with respect to any class of common stock of USX, any
day on which such common stock is traded on the NYSE, or if such common stock is
not listed or admitted to trading on the NYSE, on the principal national
securities exchange on which such common stock is listed or admitted, or if not
listed or admitted to trading on any national securities exchange, on the NASDAQ
Stock Market, or if such common stock is not quoted on the NASDAQ Stock Market,
in the applicable securities market in which such common stock is traded.
"Transaction" has the meaning specified in Section 7.3(c).
"Trust" has the meaning specified in the first paragraph hereof.
"Trust Common Securities" has the meaning specified in the Recitals.
"Trust Convertible Preferred Securities" has the meaning specified in the
Recitals.
"Trustee" has the meaning specified in the Recitals.
"Trust Securities" has the meaning specified in the Recitals.
"Trust Special Event" means a Tax Event or an Investment Company Event.
<PAGE>
9
"U.S. Steel Group" means the U.S. Steel Group of the Company.
"U.S. Steel Group Subsidiary" has the meaning set forth in the Certificate
of Incorporation.
ARTICLE II
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. Designation and Principal Amount. There is hereby authorized
--------------------------------
a series of Debentures designated the "6.75% Convertible Junior Subordinated
Debentures," limited in aggregate principal amount to $335,000,000, which amount
shall be as set forth in a Company Order for the authentication and delivery of
Convertible Debentures pursuant to Section 2.3 of the Base Indenture.
SECTION 2.2. Maturity. The Maturity Date is March 31, 2037, unless a
--------
maturity advancement occurs pursuant to Section 3.1 as a result of a Tax Event,
in which case such advanced maturity date.
SECTION 2.3. Form and Payment. Except as provided in Section 2.4, the
----------------
Convertible Debentures shall be issued in fully registered certificated form
without Coupons, in denominations of the Principal Amount of One Convertible
Debenture and integral multiples thereof. Principal, premium, if any, and
interest on the Convertible Debentures issued in certificated form will be
payable, the transfer of such Convertible Debentures will be registrable, and
such Convertible Debentures will be exchangeable for Convertible Debentures
bearing identical terms and provisions, at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Institutional Trustee, the payment of the
principal of, premium, if any, and interest (including Compounded Interest and
Additional Interest, if any) on such Convertible Debentures held by the
Institutional Trustee will be made at such place and to such account as may be
designated by the Institutional Trustee.
SECTION 2.4. Global Debenture. (a) In connection with a Dissolution
----------------
Event,
(i) the Convertible Debentures in certificated form may be
presented to the Trustee by the Institutional Trustee in exchange for a
global Convertible Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Convertible Debentures (a
"Global Debenture"), to be registered in the name of the Clearing Agency,
or its nominee, and delivered by the Trustee to the Clearing Agency for
crediting to the accounts of its participants pursuant to the instructions
of the Regular Trustees. The Company, upon any such presentation, shall
execute a Global Debenture in such aggregate principal amount and deliver
the same to the Trustee for authentication and delivery in accordance with
the Base Indenture.
<PAGE>
10
Payments on the Convertible Debentures issued as a Global Debenture will be
made to the Clearing Agency; and
(ii) any Convertible Preferred Security Certificate which
represents Trust Convertible Preferred Securities other than Trust
Convertible Preferred Securities held by the Clearing Agency or its nominee
("Non Book-Entry Convertible Preferred Securities") will be deemed to
represent beneficial ownership interests in Convertible Debentures having
an aggregate principal amount equal to the aggregate liquidation amount of,
with an interest rate identical to the distribution rate of, and accrued
and unpaid interest (including Compounded Interest) equal to accumulated
and unpaid distribution on the Non Book-Entry Convertible Preferred
Securities until such Convertible Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at which
time such Convertible Preferred Security Certificates will be cancelled and
a Convertible Debenture, registered in the name of the Holder of the
Convertible Preferred Security Certificate or the transferee of the Holder
of such Convertible Preferred Security Certificate, as the case may be,
with an aggregate principal amount equal to the aggregate liquidation
amount of the Convertible Preferred Security Certificate cancelled, will be
executed by the Company and delivered to the Trustee for authentication and
delivery in accordance with the Base Indenture. On issue of such
Convertible Debentures, Convertible Debentures with an equivalent aggregate
principal amount that were presented by the Institutional Trustee to the
Trustee will be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Clearing Agency, or to a successor Clearing
Agency selected or approved by the Company or to a nominee of such successor
Clearing Agency.
SECTION 2.5. Interest. (a) Each Convertible Debenture will bear
--------
interest at the rate of 6.75% per annum (the "Coupon Rate") from March 31, 1997
until the principal thereof becomes due and payable, and on any overdue
principal and (to the extent that payment of such interest is enforceable under
applicable law) on any overdue installment of interest at the Coupon Rate,
compounded quarterly, payable (subject to the provisions of Article IV)
quarterly in arrears on the last calendar day of each March, June, September and
December of each year (each, an "Interest Payment Date"), commencing on June 30,
1997, to the Holder of such Convertible Debenture, at the close of business on
the record date for such Interest Payment Date, which record date (the "Regular
Record Date"), (i) shall be the close of business on the Business Day next
preceding that Interest Payment Date, in respect of (A) Convertible Debentures
of which the Institutional Trustee is the only Holder and the related Trust
Convertible Preferred Securities are in book-entry only form or (B) a Global
Debenture, and (ii) shall be any date selected by the Company but in any event
at least one Business Day before that Interest Payment Date in respect of
Convertible Debentures other than as set forth in (i).
(b) The amount of interest payable for any full quarterly interest
period shall 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
<PAGE>
11
quarterly period for which interest is computed, shall be computed on the basis
of 30-day months and, for periods of less than a month, the actual number of
days elapsed per 30-day month. In the event that any date on which interest is
payable on the Convertible Debentures is not a Business Day, then payment of
interest payable on such date shall be made on the next succeeding day that 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.
(c) The Company shall pay as additional interest ("Additional
Interest") on the Convertible Debentures any and all taxes, duties, assessments
or governmental charges of whatever nature directly imposed on the Trust, in its
capacity as a legal entity or as a holder of the Convertible Debentures, by the
United States, or any other taxing authority, so that the net amounts received
and retained by such Trust and the Institutional Trustee after paying such
taxes, duties, assessments or governmental charges will be equal to the amounts
such Trust and the Institutional Trustee would have received had no such taxes,
duties, assessments or governmental charges been incurred by or imposed on such
Trust.
SECTION 2.6. Ranking. The Convertible Debentures shall rank on a
-------
parity in right of payment with Indebtedness under the Loan Agreement (the "LLC
Loan Agreement"), dated as of March 3, 1994, between the Company and USX Capital
LLC (including any amendments, renewals, extensions or refundings thereof) and
Indebtedness under the LLC Loan Agreement shall not be Senior Indebtedness with
respect to the Convertible Debentures.
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. Trust Special Event Redemption. If a Trust Special
------------------------------
Event has occurred and is continuing and: (a) the Company has received a
Redemption Tax Opinion; or (b) the Regular Trustees have been informed by
independent tax counsel experienced in such matters that, for substantive
reasons, it cannot deliver a No Recognition Opinion to the Trust, then,
notwithstanding Section 3.2 but subject to Section 3.3, (a) the Company shall
have the right to shorten the maturity of the Convertible Debentures to the
minimum extent required, but in any event to a date not earlier than May 16,
2002 (the action referred to in this subclause (a) being referred to herein as a
"maturity advancement"), such that, in the opinion of counsel to the Company
experienced in such matters, after advancing the stated maturity, interest paid
on the Convertible Debentures will be deductible for federal income tax
purposes, or (b) if in the opinion of counsel to the Company who rendered the
Redemption Tax Opinion, there would in all cases, after effecting a maturity
advancement, be more than an insubstantial risk that the Company would continue
to be precluded from deducting interest on the Convertible Debentures, the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures to redeem the Convertible
Debentures, in whole or in part, for cash, within 90 days following the
occurrence of such Trust Special Event (the "90-Day Period"), at a redemption
price equal to 100% of the principal amount to be redeemed, together with
accrued and unpaid interest (including any Compounded Interest and Additional
Interest) thereon to, but excluding, the
<PAGE>
12
date of such redemption (the "Special Redemption Price"), provided that, if at
the time there is available to the Company the opportunity to eliminate, which
elimination shall be complete within the 90-Day Period, such Trust Special Event
by taking some ministerial action (such as filing a form or making an election,
or pursuing some other similar reasonable measure) that has no adverse effect on
the Company, the Trust or the Holders of the Trust Securities, or does not
subject any of them to more than de minimis regulatory requirements
("Ministerial Action"), the Company shall pursue such Ministerial Action in lieu
of redemption, and, provided, further, that the Company shall have no right to
redeem the Convertible Debentures while the Trust is pursuing any Ministerial
Action pursuant to its obligations under the Declaration; provided such
Ministerial Action can eliminate such Trust Special Event during the 90-Day
Period. The Special Event Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date fixed by the Company for such redemption or at such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Special Event Redemption Price
by 10:00 a.m., New York time, on the date such Special Event Redemption Price is
to be paid.
SECTION 3.2. Optional Redemption by Company. Subject to the
------------------------------
provisions of Section 3.3 and to the provisions of Article 3 of the Base
Indenture, the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, for cash, from time to time upon not less than
30 days nor more than 60 days notice to the Holders, at the following prices
(expressed as percentages of the principal amount of the Convertible Debentures)
(the "Optional Redemption Price"), together with any accrued and unpaid interest
(including Compounded Interest and Additional Interest, if any) thereon to, but
excluding, the date of such redemption, if redeemed during the 12-month period
beginning on April 1 of the following years:
Year Redemption Price
---- ----------------
1997 103.90%
1998 103.25%
1999 102.60%
2000 101.95%
2001 101.30%
2002 100.65%
2003 and thereafter 100.00%
No Convertible Debentures may be redeemed in accordance with this
Section 3.2 if the Company shall be advised on or prior to the related
redemption date by either Moody's Investors Service, Inc. ("Moody's") (provided
that Moody's is then rating the senior unsecured debt of the Company) or
Standard & Poor's Ratings Group ("S&P") (provided that S&P is then rating the
senior unsecured debt of the Company) that such redemption would result in an
immediate lowering by Moody's or S&P, as the case may be, of the credit rating
on the Company's senior unsecured debt from its then existing level, unless the
Company shall have received from the issuance of common stock of the Company,
since the date which
<PAGE>
13
is two years prior to the related redemption date, net proceeds in an aggregate
amount at least equal to the aggregate principal amount of the Convertible
Debentures to be redeemed.
If Convertible Debentures are redeemed on the last calendar day of any
March, June, September or December, accrued and unpaid interest shall be payable
to Holders on the relevant record date. The Company shall issue a press release
announcing any redemption pursuant to this Section 3.2.
The Optional Redemption Price plus such accrued and unpaid interest
thereon shall be paid prior to 12:00 noon, New York time, on the date fixed by
the Company for such redemption or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price, plus accrued and unpaid
interest thereon, by 10:00 a.m., New York time, on the date such Optional
Redemption Price is to be paid.
SECTION 3.3. Redemption of Less Than All Convertible Debentures. If
--------------------------------------------------
the Convertible Debentures are only partially redeemed, the Convertible
Debentures will be redeemed pro rata by the Trustee. The Company may not redeem
any Convertible Debentures unless all accrued and unpaid interest (including
Compounded Interest and Additional Interest, if any) has been paid on all of the
outstanding Convertible Debentures for all quarterly interest periods
terminating on or prior to the last Interest Payment Date before the date of
redemption.
SECTION 3.4. U.S. Steel Group Special Event; Marathon Group Special
------------------------------------------------------
Event. (a) The Company shall redeem the Debentures, in whole, for cash, at the
- -----
Special Redemption Price, if any of the following events with respect to the
U.S. Steel Group occur (such events, collectively, the "U.S. Steel Group Special
Events"):
(i) (A) the Company exchanges all of the outstanding shares of
Steel Stock for all of the outstanding shares of common stock of the
U.S. Steel Group Subsidiary (as provided in Section 2(b)(iii) of
Division I of the Certificate of Incorporation) (the "Steel Group
Subsidiary Exchange") or (B) in the event of a Disposition of all or
substantially all of the properties and assets of the U.S. Steel
Group, the Company either pays a dividend on the Steel Stock in, or
redeems a number of shares of Steel Stock for, an amount equal to the
Net Proceeds (as defined in the Certificate of Incorporation) of such
Disposition (as provided in Section 2(b)(i)(A) or Section 2(b)(i)(B),
respectively, of Division I of the Certificate of Incorporation) (the
"Steel Group Disposition Dividend" or the "Steel Group Disposition
Redemption", respectively); or
(ii) the Company pays a dividend on, or the Company or any of
its Subsidiaries consummates a tender offer or exchange offer for,
shares of Steel Stock and the aggregate amount of such dividend or the
consideration paid in such tender offer or exchange offer is an amount
equal to all or substantially all of the properties and assets of the
U.S. Steel Group (the "Steel Group
<PAGE>
14
Special Dividend" or the "Steel Group Tender or Exchange Offer",
respectively); provided that the calculation of all or substantially
all of the properties and assets of the U.S. Steel Group shall be made
without giving effect to any money borrowed by the Company or any of
its Subsidiaries in connection with such dividend or tender offer or
exchange offer, as the case may be.
The redemption date of Debentures by the Company pursuant to this Section 3.4(a)
shall be, if the applicable U.S. Steel Group Special Event is (I) the Steel
Group Subsidiary Exchange, the date of such exchange, (II) the Steel Group
Disposition Dividend or the Steel Group Special Dividend, the date such dividend
is paid, (III) the Steel Group Disposition Redemption, the date of such
redemption or (IV) the Steel Group Tender or Exchange Offer, the date such
tender offer or exchange offer is consummated. Notwithstanding anything to the
contrary contained in this Section 3.4(a), any redemption pursuant to this
Section 3.4(a) shall be conditioned upon the actual exchange of Steel Stock for
shares of common stock of the U.S. Steel Group Subsidiary, payment of the Steel
Group Disposition Dividend or the amount due as a result of the Steel Group
Disposition Redemption (in each case in the required kind of capital stock,
cash, securities and/or other property), payment of the Steel Group Special
Dividend or the consummation of the Steel Group Tender or Exchange Offer, as the
case may be.
(b) The Company shall redeem Convertible Debentures, in whole, for
cash, at the Special Redemption Price, if following the Disposition of all or
substantially all of the properties and assets of the U.S. Steel Group, the
Company exchanges all of the outstanding shares of Steel Stock for Marathon
Stock (as provided in Section 2(b)(i)(C) of Division I of the Certificate of
Incorporation) and, at any time subsequent to such exchange, any of the
following events with respect to the Marathon Group occur (such events,
collectively, the "Marathon Group Special Events"):
(A) the Company exchanges all of the outstanding shares of
Marathon Stock for all of the outstanding shares of common stock of
the Marathon Group Subsidiary (as provided in Section 2(a)(i) of
Division I of the Certificate of Incorporation) (the "Marathon Group
Subsidiary Exchange"); or
(B) the Company pays a dividend on, or the Company or any of its
Subsidiaries consummates a tender offer or exchange offer for, shares
of Marathon Stock and the aggregate amount of such dividend or the
consideration paid in such tender offer or exchange offer is an amount
equal to all or substantially all of the properties and assets of the
Marathon Group (the "Marathon Group Special Dividend" or the "Marathon
Group Tender or Exchange Offer", respectively); provided that the
calculation of all or substantially all of the properties and assets
of the Marathon Group shall be made without giving effect to any money
borrowed by the Company or any of its Subsidiaries in connection with
such dividend or tender offer or exchange offer, as the case may be;
provided, further, that, at the time of the payment of such dividend
on, or the consummation of such tender or exchange offer for,
<PAGE>
15
Marathon Stock, there is another class of common stock, other than
Marathon Stock, of the Company then outstanding.
The redemption date of Convertible Debentures by the Company pursuant to this
Section 3.4(b) shall be, if the applicable Marathon Group Special Event is (I)
the Marathon Group Subsidiary Exchange, the date of such exchange, (II) the
Marathon Group Special Dividend, the date such dividend is paid or (III) the
Marathon Group Tender or Exchange Offer, the date such tender offer or exchange
offer is consummated. Notwithstanding anything to the contrary contained in
this Section 3.4(b), any redemption pursuant to this Section 3.4(b) shall be
conditioned upon the actual exchange of Marathon Stock for shares of common
stock of the Marathon Group Subsidiary, payment of the Marathon Group Special
Dividend or the consummation of the Marathon Group Tender or Exchange Offer, as
the case may be.
(c) Prior to giving a notice of redemption resulting from a U.S. Steel
Group Special Event or a Marathon Group Special Event, the Company shall pay all
accrued and unpaid interest (including Compound Interest and Additional
Interest, if any) on the Convertible Debentures through the Interest Payment
Date next preceding the date of such notice.
SECTION 3.5. Notice of Redemption. Notice of any redemption of the
--------------------
Convertible Debentures (other than as a result of a redemption pursuant to
Section 3.4) will be given by the Company by mail to each Holder of Convertible
Debentures to be redeemed not fewer than 30 nor more than 60 days before the
date fixed for redemption of the Convertible Debentures. In the event the
Company shall redeem Convertible Debentures pursuant to Section 3.4, notice of
such redemption shall be given by the Company, (x) if such redemption is a
result of the Steel Group Tender or Exchange Offer or the Marathon Group Tender
or Exchange Offer, on the date of the public announcement of such tender offer
or exchange offer by the Company or any of its Subsidiaries, but in any event
not less than 30 days prior to such redemption, and on the date of the public
announcement of any extension thereof, (y) if such redemption is a result of the
Steel Group Disposition Dividend or the Steel Group Disposition Redemption, on a
date not less than 45 days prior to the date selected by the Board of Directors
for the payment of such dividend or such redemption and (z) otherwise, on a date
at least 30 days but not more than 60 days prior to the date fixed by the Board
for the redemption of Convertible Debentures, in each case to each Holder.
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this Section 3.5, a notice
shall be deemed to be given on the day such notice is first mailed by first-
class mail, postage prepaid, or by such other means suitable to assure delivery
of such written notice, to Holders of Convertible Debentures. Each notice shall
be addressed to the Holders of Convertible Debentures at the address of each
such Holder appearing in the books and records of the Company. No defect in the
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. Any notice which was mailed in the manner herein provided
shall be conclusively presumed to have been duly given on the date mailed
whether or not the holder receives the notice. Each such notice shall state, as
appropriate: (A) the redemption date; (B) the aggregate principal
<PAGE>
16
amount of Convertible Debentures to be redeemed, including CUSIP numbers, and,
if less than all the Convertible Debentures held by such Holder are to be
redeemed, the aggregate principal amount of such Convertible Debentures to be
redeemed from such Holder; (C) the redemption price to be paid in respect of the
redemption; (D) the then current Conversion Price and, if any event then known
to the Company will result in an adjustment to the Conversion Price on or prior
to the redemption date, such adjusted conversion price and the date of such
adjustment; (E) if such redemption of Convertible Debentures is the result of a
U.S. Steel Group Special Event or a Marathon Group Special Event, that such
redemption is conditioned upon the occurrence of the applicable U.S. Steel Group
Special Event or Marathon Group Special Event and if that U.S. Steel Group
Special Event is the Steel Group Disposition Dividend or the Steel Group
Disposition Redemption, the last date on which the Convertible Debentures may be
converted into shares of Steel Stock; (F) that interest on the Convertible
Debentures to be redeemed shall cease to accrue on the redemption date, provided
that if such redemption of Convertible Debentures is the result of a U.S. Steel
Group Special Event or a Marathon Group Special Event, the conditions to such
redemption shall have been satisfied; and (G) a place for the Convertible
Debentures to be redeemed.
SECTION 3.6. Notice of Certain Events. (a) If the Company intends:
------------------------
(i) to effect a U.S. Steel Group Special Event or a Marathon
Group Special Event; or
(ii) exchange shares of Steel Stock for Marathon Stock or Delhi
Stock following a Disposition of all or substantially all of the properties
and assets of the U.S. Steel Group,
then the Company shall cause to be filed with the Institutional Trustee for the
Trust, and shall cause to be mailed to each Holder of Convertible Debentures,
not less than 45 days prior to the Steel Group Disposition Dividend or the Steel
Group Disposition Redemption and not less than 30 days prior to any other U.S.
Steel Group Special Event, any Marathon Group Special Event or any such exchange
of Steel Stock for shares of Marathon Stock or Delhi Stock, a notice stating, as
applicable, (A) the record date for any dividend that is a U.S. Steel Group
Special Event or a Marathon Group Special Event, (B) the date on which any
redemption or exchange that is a U.S. Steel Group Special Event, a Marathon
Group Special Event or an exchange of Steel Stock for shares of Marathon Stock
or Delhi Stock is expected to become effective, and the date as of which it is
expected that holders of record of Steel Stock or Marathon Stock shall be
entitled to exchange their shares of Steel Stock or Marathon Stock,
respectively, for securities or other property deliverable upon such redemption
or exchange or (C) the date on which the Steel Group Tender or Exchange Offer or
the Marathon Group Tender or Exchange Offer commenced, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto). In addition, from and after any exchange of Steel Stock for Delhi
Stock, effected in accordance with Section 2(b)(i) of Division I of the
Certificate of Incorporation, the Company shall give similar notice of the
Company's intention to exchange Delhi Stock for shares of the Delhi Group
Subsidiary, if Steel Stock has been exchanged therefor, or to pay a dividend on,
or redeem shares of, Delhi Stock following the Disposition of all or
substantially all of the properties and assets of the
<PAGE>
17
Delhi Group. Failure to give or receive any such notice or any defect therein
shall not affect the legality or validity of the related transaction. In the
event of any conflict between the notice provisions of this Section 3.6 and
those of Section 7.3(g), the notice provisions of this Section 3.6 shall govern.
SECTION 3.7. No Sinking Fund. The Convertible Debentures are not
---------------
entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period. As long as an
------------------------------------
Event of Default under Section 6.01(a) of the Base Indenture shall not have
occurred and be continuing, the Company shall have the right, at any time and
from time to time during the term of the Convertible Debentures, to defer
payments of interest by extending the interest payment period of such
Convertible Debentures for a period not exceeding 20 consecutive quarters (an
"Extended Interest Payment Period"), during which Extended Interest Payment
Period no interest shall be due and payable on the Convertible Debentures;
provided that no Extended Interest Payment Period may extend beyond the Maturity
Date. To the extent permitted by applicable law, interest, the payment of which
has been deferred during an Extended Interest Payment Period, shall bear
interest thereon at the Coupon Rate compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). Before the
termination of any such Extended Interest Payment Period the Company may further
extend such Extended Interest Payment Period, provided that such Extended
Interest Payment Period together with all such previous and further extensions
thereof shall not exceed 20 consecutive quarters, or extend beyond the Maturity
Date. At the end of the Extended Interest Payment Period, the Company shall pay
all interest accrued and unpaid on the Convertible Debentures, including any
Additional Interest and Compounded Interest (together, "Deferred Interest") that
shall be payable to the Holders of Convertible Debentures in whose names the
Convertible Debentures are registered in the Security Register on the first
record date after the termination of the Extended Interest Payment Period. Upon
the termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may commence a new Extended Interest
Payment Period, subject to the foregoing requirements. No interest shall be due
and payable during an Extended Interest Payment Period, except at the end
thereof, but the Company may pay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension. (a) If the Institutional Trustee
-------------------
shall be the only Holder of the Convertible Debentures at the time the Company
elects an Extended Interest Payment Period, the Company shall give written
notice to the Regular Trustees, the Institutional Trustee and the Trustee of its
election of such Extended Interest Payment Period one Business Day before the
earlier of (i) the date on which Distributions on the Trust Securities are
payable for the first quarter of such Extended Interest Payment Period, or (ii)
the date the Regular Trustees are required to give notice of the record date or
the date such Distributions are payable for the first quarter of such Extended
Interest Payment Period to any
<PAGE>
18
national stock exchange or other organization on which the Trust Convertible
Preferred Securities are listed or quoted or to holders of Trust Convertible
Preferred Securities, but in any event at least one Business Day before such
record date or such payment date.
(b) If the Institutional Trustee shall not be the Holder of the
Convertible Debentures at the time the Company elects an Extended Interest
Payment Period, the Company shall give the Holders of Convertible Debentures
written notice of its election of such Extended Interest Payment Period at least
10 Business Days before the earlier of (i) the Interest Payment Date for the
first quarter of such Extended Interest Payment Period, or (ii) the date the
Company is required to give notice of the record date or the date of such
interest payment for the first quarter of such Extended Interest Payment Period
to any national stock exchange or other organization on which the Convertible
Debentures are listed or quoted or to Holders of Convertible Debentures.
(c) The quarter in which any notice is given pursuant to subsections
(a) or (b) of this Section 4.2 shall be, and shall be counted as, one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. Limitation of Transactions. If the Company shall
--------------------------
exercise its right to defer payment of interest as provided in Section 4.1, then
during such Extended Interest Payment Period (a) the Company shall not declare
or pay any dividend on, make any distributions 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 capital
stock in connection with any employee benefit plan or program, director plan or
program, dividend reinvestment, stock repurchase or other similar plans
available to stockholders of the Company, or any option, warrant, right or
exercisable, exchangeable or convertible security outstanding as of May 15,
1997, (ii) as a result of a reclassification of the Company's capital stock
pursuant to the exchange or conversion provisions 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 its capital stock or the capital securities
of a subsidiary (including a trust such as the Trust), 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 security being
converted or exchanged), and (b) the Company shall not make any payment of
interest, principal or premium, if any, on, or repay, repurchase or redeem or
make any guarantee payment (other than pursuant to the Guarantee) with respect
to, any debt securities issued by the Company that rank on a parity with or
junior to the Convertible Debentures.
ARTICLE V
EXPENSES
SECTION 5.1. Payment of Expenses. In connection with the Company's
-------------------
issuance of the Convertible Debentures to the Institutional Trustee in exchange
for the Trust Common Securities, the Company, in its capacity as borrower with
respect to the Convertible Debentures, shall:
<PAGE>
19
(a) pay all costs and expenses relating to the offering, sale,
issuance and/or exchange of the Convertible Debentures and the Trust Securities,
including fees payable pursuant to the Dealer Manager Agreement, dated as of
March 31, 1997, by and among the Company, Goldman Sachs & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated and compensation of the Trustee under the
Base Indenture in accordance with the provisions of Section 7.6 of the Base
Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization, maintenance and
dissolution of the Trust, the fees and expenses of the Institutional 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);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of its rights as a Holder of Convertible Debentures;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(e) pay any and all taxes directly imposed on the Trust and all
liabilities, costs and expenses with respect to such taxes of the Trust.
SECTION 5.2. Payment Upon Resignation or Removal. Upon termination
-----------------------------------
of this Supplemental Indenture or the Base Indenture or the removal or
resignation of the Trustee pursuant to Section 7.10 of the Base Indenture, the
Company shall pay to the Trustee all amounts owed to the Trustee accrued to the
date of such termination, removal or resignation.
ARTICLE VI
COVENANTS
SECTION 6.1. Covenants as to the Trust. If the Institutional Trustee
-------------------------
is the Holder of the Convertible Debentures, the Company shall (a) maintain 100%
direct or indirect ownership of the Trust Common Securities; provided, however,
that any permitted successor of the Company under the Base Indenture may succeed
to the Company's ownership of the Common Securities, (b) use its reasonable
efforts to cause the Trust (i) to remain a statutory business trust, except in
connection with a distribution of Convertible Debentures to the holders of Trust
Securities, the redemption of all of the Trust Securities, or certain mergers,
consolidations or amalgamation, each as permitted by the Declaration, and (ii)
to continue to be classified as a grantor trust for United States federal income
tax purposes, and (c) use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial ownership interest in
the Convertible Debentures.
<PAGE>
20
SECTION 6.2. Listing or Quotation of Convertible Debentures. If the
----------------------------------------------
Convertible Debentures are to be distributed to the holders of Trust Securities
upon a Dissolution Event, the Company shall use its reasonable efforts to
arrange to list, or seek approval for quotation of, such Convertible Debentures
on any stock exchange or other organization on which the Trust Convertible
Preferred Securities are then listed or quoted, if any.
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. Conversion Rights. (a) Subject to and upon compliance
-----------------
with the provisions of this Article VII, the Convertible Debentures are
convertible, at the option of the Holder thereof, at any time prior to the close
of business (New York time) on March 31, 2037 (or earlier as provided in Section
7.1(b)) into that number of fully paid and nonassessable shares of Steel Stock
obtained by dividing the principal amount of the Convertible Debentures to be
converted by the Conversion Price (as in effect on the date provided for in
Section 7.2(b)). The initial Conversion Price is $46.25 per share of Steel
Stock. The Conversion Price is subject to adjustment as described in this
Article VII.
(b) The right to convert Convertible Debentures shall terminate prior
to the close of business (i) on March 31, 2037 (unless the stated maturity of
the Convertible Debentures is shortened following a Tax Event, in which case the
advanced maturity date) or (ii) in the case of Convertible Debentures called for
redemption, on the related redemption date, unless (A) the Company shall default
in making payment of any moneys payable upon such redemption under Article III
or (B) if the redemption is the result of a U.S. Steel Group Special Event or a
Marathon Group Special Event, the conditions to such redemption shall not have
been satisfied; provided, that if the Company has given notice of a redemption
pursuant to Section 3.4 which is conditioned on the occurrence of the Steel
Group Disposition Dividend or the Steel Group Disposition Redemption, the right
to convert Convertible Debentures shall terminate on the 31st day prior to the
date selected by the Board for such dividend or redemption.
SECTION 7.2. Conversion Procedures. (a) In order to convert all or
---------------------
a portion of the Convertible Debentures, the Holder thereof shall (i) sign and
deliver to the Conversion Agent an irrevocable notice of election to convert
("Conversion Notice") setting forth the principal amount of Convertible
Debentures to be converted (which shall equal the Principal Amount of One
Convertible Debenture or integral multiples thereof), together with the name or
names, if other than the Holder, in which the shares of Steel Stock should be
issued upon conversion, (ii) if such Convertible Debentures are definitive
Convertible Debentures, surrender to the Conversion Agent the Convertible
Debentures to be converted, with such endorsements or transfer documents as
requested by the Conversion Agent, and (iii) pay any transfer or similar tax, if
required. In addition, a holder of Trust Securities may exercise its right
under the Declaration to convert such Trust Securities into Steel Stock by
delivering to the Conversion Agent an irrevocable conversion request setting
forth the information called for by the preceding sentence and directing the
Conversion Agent (i) to exchange such Trust Securities for a portion of the
Convertible Debentures held by the Trust
<PAGE>
21
(at an exchange rate of $1 of principal amount of Convertible Debentures for
each $1 liquidation amount of Trust Securities) and (ii) to immediately convert
such Convertible Debentures, on behalf of such holder, into Steel Stock pursuant
to this Article VII and, if such Trust Securities are in definitive form,
surrendering such Convertible Preferred Security Certificates or Common Security
Certificates, as the case may be, duly endorsed or assigned to the Trust or in
blank. So long as any Trust Convertible Preferred Securities are outstanding,
the Trust shall not convert any Convertible Debentures except pursuant to a
conversion request delivered to the Conversion Agent by a holder of Trust
Securities.
Except as provided below, accrued but unpaid interest shall not be
paid in cash on Convertible Debentures that are converted by a Holder into Steel
Stock, nor shall such accrued interest be converted into additional shares of
Steel Stock, but such accrued interest shall be deemed to be paid in full and
then returned by the Holder to the Company as partial consideration for the
Steel Stock received upon conversion. Holders of Convertible Debentures at the
close of business on a Regular Record Date shall be entitled to receive the
interest payable on such Convertible Debentures (except that holders of
Convertible Debentures called for redemption on a redemption date between such
Regular Record Date and the Interest Payment Date shall not be entitled to
receive such interest on such Interest Payment Date) on the corresponding
Interest Payment Date notwithstanding the conversion of such Convertible
Debentures following such Regular Record Date and prior to such Interest Payment
Date. However, Convertible Debentures surrendered for conversion during the
period between the close of business on any Regular Record Date and the opening
of business on the corresponding Interest Payment Date (except Convertible
Debentures called for redemption on a redemption date during such period) shall
be accompanied by payment of an amount equal to the interest payable on such
Convertible Debentures on such Interest Payment Date. A Holder of Convertible
Debentures on a Regular Record Date who (or whose transferee) tenders any such
Convertible Debentures for conversion into shares of Steel Stock on such
Interest Payment Date shall receive the interest payable by the Company on such
Convertible Debentures on such date, and the converting Holder need not include
payment of the amount of such interest upon surrender of Convertible Debentures
for conversion. The Company shall make no payment or allowance for dividends on
the shares of Steel Stock issued upon conversion.
(b) Each conversion shall be deemed to have been effected immediately
prior to the close of business on the day on which the Conversion Notice was
received (the "Conversion Date") by the Conversion Agent from the Holder or from
a holder of the Trust 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 Steel Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such Steel 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 Conversion Notice, a certificate
or certificates for the number of full shares of Steel 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.
<PAGE>
22
(c) The Company's delivery upon conversion of the fixed number of
shares of Steel Stock into which the Convertible 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 the
Maturity Date of the portion of Convertible Debentures so converted and any
unpaid interest (including Compounded Interest and any Additional Interest)
accrued on such Convertible Debentures at the time of such conversion.
(d) No fractional shares or scrip representing fractions of shares of
Steel Stock or any other common stock of the Corporation shall be issued upon
conversion of the Convertible Debentures. Instead of any fractional interest in
a share of Steel Stock or such other common stock that would otherwise be
deliverable upon the conversion of the Convertible Debentures, the Company shall
pay to the Conversion Agent an amount in cash (and the Conversion Agent in turn
will pay such cash amount to the Holder of such Convertible Debentures or the
holder of the Trust Securities so converted, as appropriate) based upon the
Closing Price of Steel Stock or such other common stock on the Trading Day
immediately preceding the date of conversion. If more than one Convertible
Debenture shall be surrendered for conversion at any one time by the same
Holder, the number of full shares of Steel Stock or such other common stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
principal amount of Convertible Debentures so surrendered.
(e) In the event of the conversion of any Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures for the
unconverted portion thereof will be issued in the name of the Holder thereof
upon the cancellation thereof in accordance with Section 2.8 of the Base
Indenture.
(f) In effecting the conversion transactions described in this
Section 7.2, the Conversion Agent is acting as agent of the holders of Trust
Securities (in the exchange of Trust Securities for Convertible Debentures) and
as agent of the Holders of Convertible Debentures (in the conversion of
Convertible Debentures into Steel Stock), as the case may be. The Conversion
Agent is hereby authorized (i) to exchange Convertible Debentures held by the
Trust from time to time for Trust Securities in connection with the conversion
of such Trust Securities in accordance with this Article VII and (ii) to convert
all or a portion of the Convertible Debentures into Steel Stock and there upon
to deliver such shares of Steel Stock in accordance with the provisions of this
Article VII and to deliver to the Trust a new Convertible Debenture or
Convertible Debentures for any resulting unconverted principal amount.
SECTION 7.3. Certain Conversion Price Adjustments. (a) The
------------------------------------
Conversion Price per share of Steel Stock shall be adjusted from time to time as
follows:
(i) If the Company shall after the date on which Convertible
Debentures are initially issued (A) pay a dividend or make a distribution
on any class of its capital stock in shares of Steel Stock, (B) subdivide
the outstanding Steel Stock into a greater number of shares or (C) combine
the outstanding Steel Stock into a smaller number of
<PAGE>
23
shares, then the Conversion Price in effect at the opening of business on
the day next following the date fixed for the determination of stockholders
entitled to receive such dividend or distribution or at the opening of
business on the day next following the day on which such subdivision or
combination becomes effective, as the case may be, shall be adjusted so
that the Holder of any Convertible Debenture thereafter surrendered for
conversion shall be entitled to receive the number of shares of Steel Stock
that such Holder would have owned or have been entitled to receive after
the happening of any of the events described above had such Convertible
Debenture been converted immediately prior to the record date in the case
of a dividend or distribution or the effective date in the case of a
subdivision or combination. An adjustment made pursuant to this Section
7.3(a)(i) shall become effective immediately after the opening of business
on the day next following the record date (except as provided in Section
7.3(b) below) in the case of a dividend or distribution and shall become
effective immediately after the opening of business on the day next
following the effective date in the case of a subdivision or combination.
(ii) If the Company shall issue after the date on which
Convertible Debentures are initially issued rights or warrants (other than
any rights or warrants (including the Rights) referred to in Section
7.3(a)(iii) below) to all holders of Steel Stock entitling them (for a
period expiring within 45 days after the record date mentioned below) to
subscribe for or purchase Steel Stock at a price per share less than the
Current Market Price per share of Steel Stock on the record date for the
determination of stockholders entitled to receive such rights or warrants,
then the Conversion Price in effect at the opening of business on the day
next following such record date shall be adjusted to equal the price
determined by multiplying (I) the Conversion Price in effect immediately
prior to the opening of business on the day next following the date fixed
for such determination by (II) a fraction, the numerator of which shall be
the sum of (A) the number of shares of Steel Stock outstanding at the close
of business on the date fixed for such determination and (B) the number of
shares that the aggregate proceeds to the Company from the exercise of such
rights or warrants for Steel Stock would purchase at such Current Market
Price, and the denominator of which shall be the sum of (A) the number of
shares of Steel Stock outstanding on the close of business on the date
fixed for such determination and (B) the number of additional shares of
Steel Stock offered for subscription or purchase pursuant to such rights or
warrants. Such adjustment shall become effective immediately after the
opening of business on the day next following such record date (except as
provided in Section 7.3(h)). In determining whether any rights or warrants
entitle the holders of Steel Stock to subscribe for or purchase shares of
Steel Stock at less than the Current Market Price thereof, there shall be
taken into account any consideration received by the Company upon issuance
and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of
Directors.
(iii) If the Company shall distribute to all holders of the
Steel Stock any shares of capital stock (other than common stock of the
Company), evidences of indebtedness, cash or other assets of the Company
(including securities, but excluding
<PAGE>
24
(w) any dividend or distribution referred to in Section 7.3(a)(i), (x) any
rights or warrants referred to in Section 7.3(a)(ii) or in the second or
third paragraph of this Section 7.3(a)(iii), (y) any dividend or
distribution paid exclusively in cash or (z) any stocks, securities or
other property received as a result of a transaction referred to in Section
7.3(c)) (any of the foregoing being hereinafter referred to in this Section
7.3(a)(iii) as the "Securities"), then in each such case the Conversion
Price shall be adjusted so that it shall equal the price determined by
multiplying (I) the Conversion Price in effect immediately prior to the
close of business on the date fixed for the determination of stockholders
entitled to receive such distribution by (II) a fraction, the numerator of
which shall be the Current Market Price per share of Steel Stock on the
record date mentioned below less the then fair market value (as determined
by the Board of Directors) of the portion of the Securities so distributed
to one share of Steel Stock, and the denominator of which shall be the
Current Market Price per share of Steel Stock on the record date mentioned
below. Such adjustment shall become effective immediately at the opening
of business on the day next following the record date for the determination
of stockholders entitled to receive such distribution (except as provided
in Section 7.3(h)).
With respect to the Amended and Restated Rights Agreement, dated as of
October 1, 1992 (as amended or otherwise modified from time to time, the
"Restated Rights Agreement"), between the Company and Mellon Bank, N.A.
(terms used in this paragraph and not otherwise defined herein having the
meanings set forth in the Restated Rights Agreement), the Conversion Price
will be adjusted only when the Rights issuable pursuant thereto become
exercisable after the Company's right of redemption thereunder has expired.
Subject to the foregoing, upon the later to occur of the Distribution Date
and a Section 11(a)(ii) Event (the "Adjustment Date"), the Conversion Price
in effect at the opening of business on the Adjustment Date shall be
adjusted to equal the price determined by multiplying such Conversion Price
by a fraction the numerator of which shall be equal to the Current Market
Price per share of Steel Stock on the Trading Day immediately prior to the
Adjustment Date less an amount equal to the quotient of (x) the aggregate
fair market value on the Adjustment Date (as determined by the Board of
Directors) of the Rights distributed under the Restated Rights Agreement
divided by (y) the number of shares of Steel Stock outstanding on such day
prior to the Adjustment Date and the denominator of which shall be equal to
such Current Market Price per share of Steel Stock. Such adjustment shall
become effective immediately after the opening of business on the day next
following such Adjustment Date.
In case the Company shall (other than pursuant to the Restated Rights
Agreement) distribute rights or warrants to purchase Steel Stock pro rata
to all holders of Steel Stock which rights or warrants are not at such time
immediately exercisable but, upon the occurrence of a specified event or
events ("Exercise Trigger Date") will become exercisable and once they
become exercisable will entitle, or upon the occurrence of an additional
specified event or events ("Price Trigger Date") will entitle, the Holder
thereof to purchase Steel Stock at a price per share of Steel Stock less
than the Current Market Price of the Steel Stock on the Trading Day next
<PAGE>
25
succeeding the later of the Exercise Trigger Date or the Price Trigger Date
("Adjustment Trigger Date") and there shall have occurred such Adjustment
Trigger Date, thus permitting the holders of such rights or warrants
irrevocably to exercise any exchange, subscription or purchase rights
conferred by such rights or warrants at a price per share of Steel Stock
less than such Current Market Price, then the Conversion Price in effect at
the opening of business on the Adjustment Trigger Date shall be adjusted by
multiplying (I) such Conversion Price by (II) a fraction, the numerator of
which shall be equal to the Current Market Price per share of the Steel
Stock on the Trading Day immediately prior to the Adjustment Trigger Date
less an amount equal to the quotient of (x) the aggregate fair market value
on the Adjustment Trigger Date of the rights or warrants so distributed (as
determined by the Board of Directors) divided by (y) the number of shares
of Steel Stock outstanding on such day prior to the Adjustment Trigger Date
and the denominator of which shall be equal to such Current Market price
per share of the Steel Stock. Such adjustment shall become effective
immediately after the opening of business on the day next following such
Adjustment Trigger Date.
(iv) If the Company shall, by dividend or otherwise, at any time
distribute to all holders of the Steel Stock cash (excluding any regular
quarterly dividend payable solely in cash, any cash that is distributed as
part of a distribution requiring a Conversion Price adjustment pursuant to
Section 7.3(a)(iii) and cash that is distributed in a merger or
consolidation to which Section 7.3(c) applies) in an aggregate amount that,
together with (A) the aggregate amount of any other distributions to all
holders of the Steel Stock made exclusively in cash (to which this Section
7.3(a)(iv) would otherwise apply) within the 12 months preceding the date
of payment of such distribution and in respect of which no Conversion Price
adjustment has been made and (B) all Excess Purchase Payments in respect of
each tender offer or exchange offer or other negotiated purchase for Steel
Stock concluded by the Company or any of its Subsidiaries within the 12
months preceding the date of payment of such distribution and in respect of
which no Conversion Price adjustment has been made, exceeds an amount equal
to 12 1/2% of the product of the Current Market Price per share of Steel
Stock on the date fixed for determination of holders of Steel Stock
entitled to receive such distribution times the number of shares of Steel
Stock outstanding on such date, then the Conversion Price shall be adjusted
so that it shall equal the price determined by multiplying (I) such
Conversion Price in effect immediately prior to the Conversion Price
adjustment contemplated by this Section 7.3(a)(iv) by (II) a fraction the
numerator of which shall be the Current Market Price per share of the Steel
Stock on the date fixed for determination of holders of Steel Stock
entitled to receive such distribution less the combined amount of such cash
and such Excess Purchase Payments so distributed applicable to one share of
Steel Stock and the denominator of which shall be such Current Market Price
per share of the Steel Stock on such date of determination. Such
adjustment shall become effective immediately prior to the opening of
business on the day next following the date fixed for such determination.
<PAGE>
26
(v) In case a tender offer or exchange offer or other negotiated
purchase made by the Company or any of its Subsidiaries for all or any
portion of the Steel Stock shall be consummated, if the aggregate amount of
any Excess Purchase Payment, together with (A) the aggregate amount of any
distributions made to all holders of Steel Stock made exclusively in cash
(excluding any regular quarterly dividend payable solely in cash, any cash
that is distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to Section 7.3(a)(iii) and cash that is distributed in
a merger or consolidation to which Section 7.3(c) applies) within the 12
months preceding the consummation of such tender or exchange offer or other
negotiated purchase and in respect of which no Conversion Price adjustment
has been made, and (B) all other Excess Purchase Payments in respect of
each tender or exchange offer or other negotiated purchase for Steel Stock
concluded by the Company or any of its Subsidiaries within the 12 months
preceding the consummation of such tender or exchange offer or other
negotiated purchase and in respect of which no Conversion Price adjustment
has been made, exceeds an amount equal to 12 1/2% of the product of the
Current Market Price per share of Steel Stock on the consummation date of
such tender or exchange offer or other negotiated purchase (any such date,
the "Purchase Date") times the number of shares of Steel Stock outstanding
(including any tendered, exchanged or purchased shares) on such Purchase
Date, then the Conversion Price shall be adjusted so that it shall equal
the price determined by multiplying (I) such Conversion Price in effect
immediately prior to such Purchase Date by (II) a fraction, the numerator
of which shall be the Current Market Price per share of the Steel Stock on
such Purchase Date less the combined amount of Excess Purchase Payments and
such cash so distributed applicable to one share of Steel Stock and the
denominator of which shall be such Current Market Price per share on such
Purchase Date. Such adjustment shall become effective immediately prior to
the opening of business on the day next following such Purchase Date.
(vi) The Company from time to time may reduce the Conversion
Price by any amount for any period of at least 20 Business Days (or such
other period as may then be required by applicable law), provided that the
Board of Directors shall have determined that such reduction is in the best
interests of the Company. No reduction in the Conversion Price pursuant to
this Section 7.3(a)(vi) shall become effective unless the Company shall
have mailed a notice, at least 15 days prior to the date on which such
reduction is scheduled to become effective, to each Holder of Convertible
Debentures and to each holder of the Trust Securities. Such notice shall
be given by first class mail, postage prepaid, at such holder's address as
the same appears on the records of the Company. Such notice shall state
the amount per share by which the Conversion Price will be reduced and the
period for which such reduction will be in effect.
(vii) The Company may make such reductions in the Conversion
Price, in addition to those required by Sections 7.3(a)(i) through (v), as
the Board determines to be necessary in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights will not
be taxable to the recipients; provided that any such reduction shall not be
effective until written evidence of the action of the
<PAGE>
27
Board authorizing such reduction shall be filed with the Secretary of the
Company and notice thereof shall have been given by first class mail,
postage prepaid, to each Holder of Convertible Debentures at such Holder's
address as the same appears on the stock transfer books of the Company.
(b) No adjustment in the Conversion Price shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in such price; provided, however, that any adjustments that by reason of this
Section 7.3(b) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made; and provided, further,
that any adjustment shall be required and made in accordance with the provisions
of this Article VII (other than this Section 7.3(b)) not later than such time as
may be required in order to preserve the tax-free nature of a distribution to
the holders of shares of Steel Stock or any other common stock into which
Convertible Debentures are convertible. Notwithstanding any other provisions of
this Article VII, the Company shall not be required to make any adjustment of
any Conversion Price established hereunder for the issuance of any shares of
common stock of the Company (including Steel 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 such
common stock under such plan. All calculations under this Article 7 shall be
made to the nearest 1/100 of a cent (with $.00005 being rounded upward) or to
the nearest 1/10,000 of a share (with .00005 of a share being rounded upward),
as the case may be.
(c) If the Company shall be a party to any transaction (including,
without limitation, a merger or consolidation of the Company and excluding any
transaction as to which Sections 7.3(a)(i) through (vi) or 7.3(f) apply), in
each case as a result of which shares of Steel Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), (each of the foregoing being referred to herein as a
"Transaction"), each Convertible Debenture which is not converted into the right
to receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder of
that number of shares or fraction thereof of Steel Stock into which one
Convertible Debenture was convertible immediately prior to such Transaction,
assuming such holder of Steel Stock (i) is not a person with which the Company
consolidated or into which the Company merged or which merged into the Company
or to which such sale or transfer was made, as the case may be (a "Constituent
Person"), or an affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of stock, securities
and other property (including cash) receivable upon such Transaction (provided
that if the kind or amount of stock, securities and other property (including
cash) receivable upon such Transaction is not the same for each share of Steel
Stock of the Company held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this Section 7.5 the kind and amount of stock, securities and other
property (including cash) receivable upon such Transaction by each non-electing
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the non-electing shares). The Company shall not be a
<PAGE>
28
party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this Section 7.5 and it shall not consent or agree to the
occurrence of any Transaction until the Company has entered into an agreement
with the other party or parties to such transaction for the benefit of the
Holders of Convertible Debentures that will contain provisions enabling the
holders of such shares that remain outstanding after such Transaction to convert
into the consideration received by holders of Steel Stock at the Conversion
Price in effect immediately prior to such Transaction. The provisions of this
Section 7.5 shall similarly apply to successive Transactions.
(d) The reclassification of common stock into which Convertible
Debentures are then convertible into securities which include securities other
than such common stock (other than any reclassification upon a consolidation or
merger to which Section 7.3(c) applies), shall be deemed to involve (i) a
distribution of such securities other than such common stock to all holders of
such common stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of stockholders entitled to
receive such distribution") and (ii) a subdivision or combination, as the case
may be, of the number of shares of such common stock outstanding immediately
prior to such reclassification into the number of shares of such common stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be the effective date of such subdivision or
combination).
(e) If the Company shall, by dividend or otherwise, distribute to all
holders of Steel Stock or other class of common stock into which Convertible
Debentures are then convertible shares of common stock other than Steel Stock or
any class of common stock into which Convertible Debentures are then convertible
(other than pursuant to Section 7.3(f)), each Convertible Debenture shall be
convertible, in addition to the number of shares of Steel Stock and/or such
other common stock into which such share is then convertible, into the number of
shares of such other common stock receivable upon payment of such distribution
to a holder of that number of shares or fraction thereof of Steel Stock or such
other common stock into which one Convertible Debenture was convertible
immediately prior to the record date fixed for the determination of stockholders
entitled to receive such distribution. Convertible Debentures shall become so
convertible immediately after the opening of business on the day next following
such record date (except as provided in Section 7.3(h)). In addition, a
Conversion Price shall be established with respect to such common stock in an
amount equal to the quotient of (i) the initial Principal Amount of One
Convertible Debenture divided by (ii) the number of shares or fraction thereof
of such common stock that a holder of one share of Steel Stock or such other
common stock into which Convertible Debentures are then convertible would be
entitled to receive on the payment date for such distribution from and after any
such date of determination of stockholders entitled to receive such distribution
and, thereafter, Conversion Price adjustments as nearly as equivalent in type as
may be practicable to the adjustments pursuant to Sections 7.3(a) through (c)
which are to be made in respect of Steel Stock shall be made in respect of
shares of such common stock. Notwithstanding the foregoing and the provisions
of Section 7.3(a)(iii), if the Company shall make such a distribution in common
stock and, thereafter, all of the shares of such common stock cease to be
outstanding, on the date such shares of common stock cease to be outstanding (x)
the Convertible Debentures shall cease to be convertible into shares of such
<PAGE>
29
common stock, (y) a distribution of shares of such common stock shall be deemed
to have occurred on such date and (z) the Conversion Price for the class of
common stock upon which such distribution was made, or if no shares of such
class are then outstanding because shares of such class were exchanged for
shares of another class of common stock, of such other class of common stock,
shall be adjusted in the manner set forth in Section 7.3(a)(iii) to the same
extent as if shares of the common stock in which such distribution was made were
within the meaning of the term "Securities" in Section 7.3(a)(iii).
(f) After the date, if any, on which all outstanding shares of Steel
Stock or of any other common stock into which Convertible Debentures are then
convertible are exchanged for shares of another class of common stock (as
provided in Section 2(b)(i)(C) or 2(b)(iii) of Division I of the Certificate of
Incorporation), each Convertible Debenture shall thereafter be convertible into
the number of shares of such other class of common stock receivable upon such
exchange by a holder of that number of shares or fraction thereof of Steel
Stock, and/or such other common stock into which Convertible Debentures are then
convertible, into which the Principal Amount of One Convertible Debenture was
convertible immediately prior to such exchange. From and after any such
exchange, Conversion Price adjustments as nearly equivalent as may be
practicable to the adjustments pursuant to Sections 7.3(a) through (f) which,
prior to such exchange, were made in respect of Steel Stock and/or such other
common stock into which Convertible Debentures are then convertible shall
instead be made pursuant to such Sections 7.3(a) through (f) in respect of
shares of such other class of common stock.
(g) Subject to the provisions of Section 3.6, if:
(i) the Company takes any action that would require an
adjustment of the Conversion Price pursuant to this Section 7.3; or
(ii) there shall be any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company is required; or
(iii) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Company; or
(iv) the Company or any of its Subsidiaries shall commence a
tender offer or exchange offer for all or a portion of the outstanding
shares of Steel Stock (or shall amend any such tender or exchange offer),
then the Company shall cause to be filed with the Trustee and the transfer agent
for the Trust Convertible Preferred Securities and the Convertible Debentures,
and shall cause to be mailed to the Holders of Convertible Debentures and the
holders of the Trust Securities at their addresses as shown on the securities
transfer records of the Company, as promptly as possible, but at least 15 days
prior to the earliest applicable date hereinafter specified, a notice stating,
as applicable, (A) the proposed record date for a dividend or distribution or
the proposed effective date of a consolidation, merger, sale, transfer,
liquidation, dissolution or winding up, (B) the date as of which it is expected
that holders of Steel Stock of record shall
<PAGE>
30
be entitled to exchange their shares of Steel Stock for securities or other
property, if any, deliverable upon such consolidation, merger, sale, transfer,
liquidation, dissolution or winding up or (C) the date on which such tender or
exchange offer is scheduled to expire unless extended, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto). Failure to give or receive such notice or any defect therein shall
not affect the legality or validity of the related transaction.
(h) In any case in which Section 7.3(a) or 7.3(e) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Company may defer until the occurrence of such event (A) issuing to
the holder of any Convertible Debenture converted after such record date and
before the occurrence of such event the additional shares of Steel Stock or any
other common stock of the Company issuable upon such conversion by reason of the
adjustment required by such event over and above the number of shares of Steel
Stock or such other common stock issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount in cash in
lieu of any fraction thereof pursuant to Section 7.2(d).
(i) For purposes of this Article VII, the number of shares of Steel
Stock or any other common stock of the Company at any time outstanding shall not
include any shares of Steel Stock or such other common stock then owned or held
by or for the account of Company. The Company shall not pay a dividend or make
any distribution on shares of Steel Stock or such other common stock held in the
treasury of the Company.
(j) The Company shall at all times reserve and keep available, free
from preemptive rights, out of the aggregate of its authorized but unissued
shares of Steel Stock (and/or, if the Convertible Debentures are then
convertible into other common stock of the Company, such other common stock) or
its issued shares of Steel Stock or such other common stock, as the case may be,
held in its treasury, or both, for the purpose of effecting conversion of the
Convertible Debentures, the full number of shares of Steel Stock or such other
common stock deliverable upon the conversion of all the Convertible Debentures
then outstanding and not theretofore converted. Any shares of Steel Stock or
other shares of common stock of the Company issued upon conversion of the
Convertible Debentures shall be duly authorized, validly issued and fully paid
and nonassessable. The Company shall deliver the shares of Steel Stock or
shares of such other common stock 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.
The Company shall endeavor to list the shares of Steel Stock or other common
stock of the Company required to be delivered upon conversion of the Convertible
Debentures, prior to such delivery, upon each national securities exchange, if
any, upon which the outstanding Steel Stock or such other common stock is listed
at the time of such delivery. Prior to the delivery of any securities that the
Company shall be obligated to deliver upon conversion of Convertible Debentures,
the Company shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority. For purposes of this Section 7.3(j), the number of shares of Steel
Stock or such other shares of common stock that shall be deliverable upon the
conversion of all outstanding Convertible Debentures
<PAGE>
31
shall be computed as if at the time of computation all such outstanding
Convertible Debentures were held by a single Holder.
(k) The Company will pay any and all documentary, stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of shares of
Steel Stock or other securities or property on conversion of Convertible
Debentures pursuant hereto; provided, however, that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of shares of Steel Stock or other securities or
property in a name other than that of the holder of such shares to be converted
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Company the amount of any such
tax or established, to the reasonable satisfaction of the Company, that such tax
has been paid.
(l) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Institutional Trustee for the Trust an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment,
which certificate shall be prima facie evidence of the correctness of such
adjustment. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date of such adjustment and shall
send such notice of such adjustment of the Conversion Price by first class mail,
postage prepaid, to the Holders of the Convertible Debentures, at such Holders'
address as the same appears on the records of the Company.
SECTION 7.4. Special Provisions Regarding Adjustment of Conversion
-----------------------------------------------------
Price or Other Provisions. In the event that the provisions of this Article VII
- -------------------------
specifying the methods by which the Conversion Price or other provisions are
adjusted would require an adjustment that is determined in good faith by the
Board of Directors to be inconsistent with the purposes of the provisions hereof
providing for Conversion Price or other adjustments (generally, to place the
holders of the Convertible Debenture and the Trust Securities in a position
equivalent to the position they were in prior to the event requiring an
adjustment to the Conversion Price or other adjustments), the Board of Directors
may make an adjustment (in lieu of that required pursuant to such provisions)
that it determines in good faith to place the Holders of the Convertible
Debentures in a position at least equivalent to the position they were in prior
to such event, which determination shall be described in a Board Resolution.
There shall be no adjustment of the Conversion Price in case of the issuance of
any stock of the Company in a reorganization, acquisition or other similar
transaction except as specifically set forth in this Article VII. If any action
or transaction would require adjustment of any Conversion Price established
hereunder pursuant to more than one paragraph of this Article VII, only the
adjustment which would result in the largest reduction of such Conversion Price
shall be made.
SECTION 7.5. 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 Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the
<PAGE>
32
nature or extent of any such adjustment when made, or with respect to the method
employed, or whether this supplemental indenture need be entered into. 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 Steel Stock or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Convertible 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
Steel Stock or stock certificates or other securities or property upon the
surrender of any Convertible Debenture for the purpose of conversion.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Events of Default. (a) In addition to those events set
-----------------
forth in Section 6.1 of the Base Indenture, "Event of Default" with respect to
the Convertible Debentures, shall include the following events:
(i) in the event the Institutional Trustee is the Holder of the
Convertible Debentures, the Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of Convertible Debentures to holders of
Trust Securities in liquidation of their interest in the Trust, (ii) the
redemption of all of the outstanding Trust Securities, or (iii) certain mergers,
consolidations or amalgamation, each as permitted by the Declaration; and
(ii) the failure by the Company to deliver the Steel Stock or other
shares of common stock of the Company upon a valid conversion election by a
Holder of Convertible Debentures to convert such Convertible Debentures into
shares of Steel Stock or other shares of common stock of the Company (whether or
not such conversion is prohibited by the subordination provisions set forth in
the Base Indenture).
(b) Notwithstanding any other provision to the contrary, a valid
extension of the interest payment period of the Convertible Debentures pursuant
to Section 4.1 shall not constitute a default in the payment of an installment
of interest under Section 6.1(a) of the Base Indenture.
ARTICLE IX
FORM OF CONVERTIBLE DEBENTURE
SECTION 9.1. Form of Convertible Debenture. The Convertible
-----------------------------
Debentures and the Trustee's Certificate of Authentication to be endorsed
thereon shall be substantially in the form set forth as Annex I to this
Supplemental Indenture.
<PAGE>
33
ARTICLE X
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 10.1. Original Issue of Convertible Debentures. Convertible
----------------------------------------
Debentures in the aggregate principal amount of up to $__________ may, upon or
following execution of this Supplemental Indenture, be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Convertible Debentures to or
upon the written order of the Company, signed by its Chairman, its Vice
Chairman, its President, or any Vice President and its Treasurer or an Assistant
Treasurer, without any further action by the Company.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Ratification of Base Indenture; Supplemental Indenture
------------------------------------------------------
Controls. The Base Indenture, as supplemented by this Supplemental Indenture,
- --------
is in all respects ratified and confirmed, and this Supplemental Indenture shall
be deemed part of the Base Indenture in the manner and to the extent herein and
therein provided. The provisions of this Supplemental Indenture shall supersede
the provisions of the Base Indenture to the extent the Base Indenture is
inconsistent herewith.
SECTION 11.2. Trustee Not Responsible for Recitals. The recitals
------------------------------------
herein contained are made by the Company and not by the Trustee,and the Trustee
assumes no responsibility for the correctness thereof. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.
SECTION 11.3. Governing Law. This Supplemental Indenture and each
-------------
Convertible Debenture shall be deemed to be a contract made under the internal
laws of the State of New York, and for all purposes shall be construed in
accordance with the laws of said State.
SECTION 11.4. Separability. In case any one or more of the
------------
provisions contained in this Supplemental Indenture or in the Convertible
Debentures shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Supplemental Indenture or of the Convertible
Debentures, but this Supplemental Indenture and the Convertible Debentures shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
SECTION 11.5. Counterparts. This Supplemental Indenture may be
------------
executed in any number of counterparts each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
<PAGE>
34
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed on the date or dates indicated in the
acknowledgements and as of the day and year first above written.
USX CORPORATION
By:/s/ G.R. Haggerty
-----------------
Title: Vice President & Treasurer
THE BANK OF NEW YORK,
as Trustee
By:/s/ Paul J. Schmalzel
---------------------
Title: Assistant Treasurer
<PAGE>
35
ANNEX I
FORM OF CONVERTIBLE DEBENTURE
FORM OF FACE OF CONVERTIBLE DEBENTURE
IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE
FOLLOWING: This Convertible Debenture 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 of a Depositary. This Convertible Debenture is
exchangeable for Convertible Debentures registered in the name of a Person other
than the Depositary or its nominee only in the limited circumstances described
in the Indenture, and no transfer of this Convertible Debenture (other than a
transfer of this Convertible Debenture as a whole by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in such limited
circumstances. IF THE CLEARING AGENCY IS THE DEPOSITORY TRUST COMPANY, INSERT
THE FOLLOWING: Unless this Convertible Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Convertible Debenture issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.
No. CUSIP No.
USX CORPORATION
6.75% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
USX Corporation, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to The Bank of New York, or
registered assigns, the principal sum of ________________ Dollars
($______________) on March 31, 2037 (or if a maturity advancement occurs, as
provided in Section 3.1 of the Supplemental Indenture, on such advanced maturity
date), and to pay interest on said principal sum from March 31, 1997, or from
the most recent date on which interest has been paid to which interest has been
paid or duly provided for, quarterly (subject to deferral as set forth herein)
in arrears on the last calendar day of March, June, September and December of
each year (each, an "Interest Payment Date") commencing June 30, 1997, at the
rate of 6.75% per annum until the principal hereof shall have become due and
payable, and on any overdue principal and premium, if any, and overdue
installment of interest at the same rate per annum compounded quarterly (without
duplication and to the extent that payment of such interest is enforceable under
applicable law). The amount of interest payable on any Interest Payment Date
for any full quarterly interest period shall be computed on the basis of a 360-
day year of twelve
<PAGE>
36
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 30-day months and, for
periods of less than a month, the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that 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. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof), be paid
to the person in whose name this Convertible Debenture is registered on the
Regular Record Date for such interest installment. Any such interest
installment not punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holders on such Regular Record Date and may be paid to
the Person in whose name this Convertible Debenture is registered at the close
of business on a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the registered
Holders of the Convertible Debentures not less than 10 days prior to such
special record date, or may be paid at anytime in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Convertible Debentures may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The principal of
(and premium, if any) and the interest on this Convertible Debenture shall be
payable at the office or agency of the Trustee maintained for that purpose in
any coin or currency of the United States of America that at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest may be made at the option of the Company by check mailed to
the registered Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of this Convertible
Debenture is the Institutional Trustee, the payment of the principal of (and
premium, if any) and interest on this Convertible Debenture will be made at such
place and to such account as may be designated by the Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Convertible Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such Holder upon said
provisions.
<PAGE>
37
This Convertible Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed by
or on behalf of the Trustee. The provisions of this Convertible Debenture are
continued on the reverse side hereof and such continued provisions shall for all
purposes have the same effect as though fully set forth at this place.
<PAGE>
38
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
USX CORPORATION
By:
Name:
Title
Attest:
By:
Name:
Title:
<PAGE>
39
FORM OF CERTIFICATE OF AUTHENTICATION
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of Convertible
Debentures issued under the within-mentioned Indenture.
Dated:
THE BANK OF NEW YORK,
as Trustee
By By
Authorized Signatory Authorized Signatory
<PAGE>
40
FORM OF REVERSE OF DEBENTURE
This Convertible Debenture is one of a duly authorized series of
Securities of the Company specified in the Indenture, all issued or to be issued
in one or more series under and pursuant to an Indenture (the "Base Indenture"),
dated as of May 16, 1997, duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"), as supplemented by the
Supplemental Indenture dated as of May 16, 1997, between the Company and the
Trustee (the "Supplemental Indenture" and such Supplemental Indenture, as it
supplements the Base Indenture, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of Convertible Debentures. By the
terms of the Indenture, the Securities are issuable thereunder in series that
may vary as to amount, date of maturity, rate of interest and in other respects
as provided in the Indenture. This series of Securities is limited in aggregate
principal amount as specified in said Supplemental Indenture and is herein
sometimes referred to as the "Convertible Debentures."
Because of the occurrence and continuation of a Trust Special Event,
in certain circumstances, this Convertible Debenture may become due and payable,
in whole or in part, at 100% of the principal amount to be redeemed together
with any interest accrued thereon, including any Compounded Interest and
Additional Interest to, but excluding, the redemption date (the "Special
Redemption Price"). The Special Event Redemption Price shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Company determines. In addition, the Company shall have the right
to redeem this Convertible Debenture at the option of the Company, upon not less
than 30 nor more than 60 days notice, in whole or in part at any time at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Interest and Compounded Interest)
thereon to, but excluding, the redemption date, if redeemed during the 12 month
period beginning on April 1 of the following years:
Year Redemption Price
---- ----------------
1997 103.90%
1998 103.25%
1999 102.60%
2000 101.95%
2001 101.30%
2002 100.65%
2003 and thereafter 100.00%
No Convertible Debentures may be redeemed in accordance with the
preceding paragraph if the Company shall be advised on or prior to the related
redemption date by either Moody's Investors Service, Inc. ("Moody's") (provided
that Moody's is then rating the senior unsecured debt of the Company) or
Standard & Poor's Corporation ("S&P") (provided
<PAGE>
41
that S&P is then rating the senior unsecured debt of the Company) that such
redemption would result in an immediate lowering by Moody's or S&P, as the case
may be, of the credit rating on the Company's senior unsecured debt from its
then existing level, unless the Company shall have received from the issuance of
common stock of the Company, since the date which is two years prior to the
related redemption date, net proceeds in an aggregate amount at least equal to
the product of the aggregate principal amount of the Convertible Debentures to
be redeemed.
In the event of a U.S. Steel Group Special Event or a Marathon Group
Special Event, the Company also has the right, as set forth in the Supplemental
Indenture, to redeem the Convertible Debentures, in whole, for the Special
Redemption Price.
The Company may not redeem any Convertible Debentures unless all
accrued and unpaid interest has been paid on all outstanding Convertible
Debentures for all quarterly interest payment periods terminating on or prior to
the last Interest Payment Date before the date of redemption. If Convertible
Debentures are redeemed on the last calendar day of any March, June, September
or December, accrued and unpaid interest shall be payable to Holders on the
relevant record date. The Company shall issue a press release announcing any
redemption.
If the Convertible Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Convertible Debentures will be
redeemed pro rata.
In the event of redemption of this Convertible Debenture in part only,
a new Convertible Debenture or Convertible Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
may be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Securities of each series affected at the time
outstanding, as defined in the Indenture, to execute supplemental indentures for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of such
series; provided, however, that no such supplemental indenture shall (a) extend
the fixed maturity of any Securities of any series, or reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption thereof, or make any
change that adversely affects the right to convert any Securities of any series
or make any change in the subordination provisions that adversely affects the
rights of any Holders of any Securities of any series, without the consent of
the Holder of each Debenture so affected, or (b) reduce the aforesaid percentage
of Securities of such series, the Holders of which are required to consent to
any such supplemental indenture,
<PAGE>
42
without the consent of the Holders of each Security of any series then
outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Securities of any series at the time outstanding affected thereby, on behalf of
all of the Holders of the Securities of such series, to waive any past default
in the performance of any of the covenants contained in the Indenture, or
established pursuant to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal of or premium, if
any, or interest on any Securities of such series or a failure to convert any
Securities of such series in accordance with its terms upon an election by the
Holders thereof. Any such consent or waiver by the registered Holder of this
Convertible Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such Holder and upon all future Holders and owners
of this Convertible Debenture and of any Convertible Debenture issued in
exchange herefor or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible 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
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money to the extent herein prescribed.
As long as an Event of Default under Section 6.1 of the Base Indenture
or Section 8.1 of the Supplemental Indenture shall not have occurred and be
continuing, the Company shall have the right, at any time and from time to time
during the term of the Convertible Debentures, to defer payments of interest by
extending the interest payment period of the Convertible Debentures for a period
not exceeding 20 consecutive quarters (an "Extended Interest Payment Period")
during which Extended Interest Payment Period no interest shall be due and
payable on the Convertible Debentures; provided, that no Extended Interest
Payment Period may extend beyond the Maturity Date. To the extent permitted by
applicable law,interest, the payment of which has been deferred during an
Extended Interest Payment Period, shall bear interest thereon at the rate
specified for these Convertible Debentures, compounded quarterly for each
quarter of the Extended Interest Payment Period ("Compounded Interest"). Before
the termination of any such Extended Interest Payment Period, the Company may
further extend such Extended Interest Payment Period, provided, that such
Extended Interest Payment Period together with all such previous and further
extensions thereof shall not exceed 20 consecutive quarters, or extend beyond
the Maturity Date. At the end of the Extended Interest Payment Period, the
Company shall pay all interest then accrued and unpaid on the Convertible
Debentures, including any Additional Interest and Compounded Interest, that
shall be payable to the Holders of Convertible Debentures on the first record
date after the termination of the Extended Interest Payment Period. Upon the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest (including Compounded Interest to the extend
permitted by applicable law), the Company may commence a new Extended Interest
Payment Period. The Company may pay at any time all or any portion of the
interest accrued during an Extended Interest Payment Period, subject to the
requirements set forth in the Indenture.
<PAGE>
43
As provided in the Indenture and subject to certain limitations
therein set forth, this Convertible Debenture is transferable by the registered
Holder hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his or her attorney
duly authorized in writing, and thereupon one or more new Convertible Debentures
of authorized denominations and for the same aggregate principal amount and
series will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
relation thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to
the contrary. No recourse shall be had for the payment of the principal of or
the interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any in corporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any 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, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
Subject to and upon compliance with Article VII of the Supplemental
Indenture, the Holder of this Convertible Debenture has the right, exercisable
at anytime and prior to the close of business on (i) March 31, 2037 or, in the
case of a maturity advancement pursuant to Section 3.1 of the Supplemental
Indenture, on such advanced maturity date, or (ii) in the event this Convertible
Debenture is called for redemption, on the related redemption date, subject to
limited exceptions specified in the Supplemental Indenture, to convert the
principal amount hereof (or any portion thereof that is an integral multiple of
the Principal Amount of One Convertible Debenture) into that number of fully
paid and nonassessable shares of Steel Stock obtained by dividing the principal
amount of the Convertible Debentures to be converted by the Conversion Price in
effect on the Conversion Date. The initial Conversion Price is $46.25 per share
of Steel Stock. The Conversion Price is subject to adjustment as described in
the Indenture. All conversion price and conversion provision calculations shall
be made to the nearest 1/100 of a cent (with $.00005 being rounded upward) or to
the nearest 1/10,000 of a share (with .00005 of a share being rounded upward),
as the case may be.
To convert all or a portion of this Convertible Debenture, a Holder
must (a) complete and sign an irrevocable notice of election to convert
substantially in the form
<PAGE>
44
attached hereto and deliver such Conversion Notice to the Conversion Agent, (b)
surrender the Convertible Debenture to the Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. Except as provided
below, accrued but unpaid interest shall not be paid in cash on Convertible
Debentures that are converted by a Holder into Steel Stock, nor shall such
accrued interest be converted into additional shares of Steel Stock, but such
accrued interest shall be deemed to be paid in full and then returned by the
Holder to the Company as partial consideration for the Steel Stock received upon
conversion. Holders of Convertible Debentures at the close of business on a
Regular Record Date shall be entitled to receive the interest payable on such
Convertible Debentures (except that holders of Convertible Debentures called for
redemption on a redemption date between such Regular Record Date and the
Interest Payment Date shall not be entitled to receive such interest on such
Interest Payment Date) on the corresponding Interest Payment Date
notwithstanding the conversion of such Convertible Debentures following such
Regular Record Date and prior to such Interest Payment Date. However,
Convertible Debentures surrendered for conversion during the period between the
close of business on any Regular Record Date and the opening of business on the
corresponding Interest Payment Date (except Convertible Debentures called for
redemption on a redemption date during such period) shall be accompanied by
payment of an amount equal to the interest payable on such Convertible
Debentures on such Interest Payment Date. A Holder of Convertible Debentures
on a Regular Record Date who (or whose transferee) tenders any such Convertible
Debentures for conversion into shares of Steel Stock on such Interest Payment
Date shall receive the interest payable by the Company on such Convertible
Debentures on such date, and the converting Holder need not include payment of
the amount of such interest upon surrender of Convertible Debentures for
conversion. The Company shall make no payment or allowance for dividends on the
shares of Steel Stock issued upon conversion.
No fractional shares will be issued upon conversion but a cash payment
shall be made by the Company in lieu of such fractional interest. The
outstanding principal amount of any Convertible Debenture shall be reduced by
the principal amount thereof converted into shares of Steel Stock or other
shares of common stock of the Company.
The Company's delivery upon conversion of the fixed number of shares
of Steel Stock or other shares of common stock of the Company into which the
Convertible Debentures are convertible (together with cash in lieu of fractional
shares) shall be deemed to satisfy the Company's obligation to pay the principal
amount at the Maturity Date of the portion of Convertible Debentures so
converted and any unpaid interest (including Compounded Interest) accrued on
such Convertible Debentures at the time of such conversion.
The Convertible Debentures of this series are issuable only in
registered form without Coupons in denominations of the Principal Amount of One
Convertible Debenture and any integral multiple thereof. IF THE CONVERTIBLE
DEBENTURE IS TO BE A GLOBAL DEBENTURE, SUBSTITUTE THE FOLLOWING FOR THE PREVIOUS
SENTENCE: This Global Debenture is exchangeable for Convertible Debentures in
definitive form only under certain limited circumstances set forth in the
Indenture. Convertible
<PAGE>
45
Debentures of this series so issued are issuable only in registered form without
Coupons in denominations of the Principal Amount of One Convertible Debenture
and any integral multiple thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Convertible Debentures of this series are
exchangeable for a like aggregate principal amount of Convertible Debentures of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
<PAGE>
46
FORM OF ELECTION TO CONVERT
To: The Bank of New York
The undersigned Holder of this Convertible Debenture hereby
irrevocably exercises the option to convert this Convertible Debenture, or the
portion below designated, into Steel Stock of USX CORPORATION ("USX"), or any
other class of common stock of USX, as permitted by the Restated Certificate of
Incorporation of USX, in accordance with the terms of the Indenture referred to
in this Convertible Debenture, 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:
in whole in part
Portion of principal amount of the Convertible Debenture to
be converted (the Principal Amount of One Convertible
Debenture or integral multiples thereof):
$
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
Signature Guarantee:/1/
/1/ 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 Conversion
Agent, 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
Conversion Agent in addition to, or in substitution
for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
<PAGE>
47
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Convertible 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 Convertible Debenture on the books of the Trust. The agent may
substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this Convertible
Debenture)
Signature Guarantee:/1/
- -----------------------
/1/ 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 Debenture
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
<PAGE>
Exhibit 4.6
AMENDED AND RESTATED DECLARATION
OF TRUST
OF
USX CAPITAL TRUST I
Dated as of May 16, 1997
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS....................... 1
SECTION 1.1 Definitions.............................................. 1
ARTICLE II
TRUST INDENTURE ACT............................ 9
SECTION 2.1 Trust Indenture Act: Application........................ 9
SECTION 2.2 Lists of Holders of Securities........................... 9
SECTION 2.3 Reports by the Institutional Trustee..................... 10
SECTION 2.4 Periodic Reports to Institutional Trustee................ 10
SECTION 2.5 Evidence of Compliance with Conditions Precedent......... 10
SECTION 2.6 Events of Default; Waiver................................ 10
SECTION 2.7 Event of Default: Notice................................. 12
ARTICLE III
ORGANIZATION................................ 13
SECTION 3.1 Name..................................................... 13
SECTION 3.2 Office................................................... 13
SECTION 3.3 Purposes and Functions................................... 13
SECTION 3.4 Authority................................................ 13
SECTION 3.5 Title to Property of the Trust........................... 13
SECTION 3.6 Powers, Duties and Authority of the Regular Trustees..... 14
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees..... 16
SECTION 3.8 Powers and Duties of the Institutional Trustee........... 17
SECTION 3.9 Certain Duties and Responsibilities of the
Institutional Trustee................................... 19
SECTION 3.10 Certain Rights of Institutional Trustee.................. 21
SECTION 3.11 Delaware Trustee......................................... 23
SECTION 3.12 Execution of Documents................................... 23
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities... 23
SECTION 3.14 Duration of Trust........................................ 23
SECTION 3.15 Mergers.................................................. 23
ARTICLE IV
SPONSOR.................................. 25
SECTION 4.1 Issuance of Securities to Sponsor........................ 25
SECTION 4.2 Responsibilities of the Sponsor.......................... 25
<PAGE>
Page
----
ARTICLE V
TRUSTEES................................ 26
SECTION 5.1 Number of Trustees.................................... 26
SECTION 5.2 Delaware Trustee...................................... 26
SECTION 5.3 Institutional Trustee; Eligibility.................... 26
SECTION 5.4 Certain Qualifications of Regular Trustees and
Delaware Trustee Generally........................... 27
SECTION 5.5 Regular Trustees...................................... 27
SECTION 5.6 Initial Delaware Trustee.............................. 28
SECTION 5.7 Appointment, Removal and Resignation of Trustees...... 28
SECTION 5.8 Vacancies Among Trustees.............................. 29
SECTION 5.9 Effect of Vacancies................................... 29
SECTION 5.10 Meetings.............................................. 29
SECTION 5.11 Delegation of Power by Regular Trustees............... 30
SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.......................................... 30
ARTICLE VI
DISTRIBUTIONS............................. 31
SECTION 6.1 Distributions......................................... 31
ARTICLE VII
ISSUANCE OF SECURITIES......................... 31
SECTION 7.1 General Provisions Regarding Securities............... 31
SECTION 7.2 Execution and Authentication.......................... 31
SECTION 7.3 Form and Dating....................................... 32
SECTION 7.4 Paying Agent.......................................... 32
ARTICLE VIII
TERMINATION OF TRUST.......................... 33
SECTION 8.1 Dissolution and Termination of Trust.................. 33
ARTICLE IX
TRANSFER OF INTERESTS......................... 34
SECTION 9.1 Transfer of Securities................................ 34
SECTION 9.2 Transfer of Certificates.............................. 34
SECTION 9.3 Deemed Security Holders............................... 35
SECTION 9.4 Book Entry Interests.................................. 35
- ii -
<PAGE>
Page
----
SECTION 9.5 Notices to Clearing Agency............................. 36
SECTION 9.6 Appointment of Successor Clearing Agency............... 36
SECTION 9.7 Definitive Convertible Preferred Security Certificates. 36
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates...... 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS................ 37
SECTION 10.1 Liability.............................................. 37
SECTION 10.2 Exculpation............................................ 38
SECTION 10.3 Fiduciary Duty......................................... 38
SECTION 10.4 Indemnification........................................ 39
SECTION 10.5 Outside Business....................................... 42
ARTICLE XI
ACCOUNTING................................ 42
SECTION 11.1 Fiscal Year............................................ 42
SECTION 11.2 Certain Accounting Matters............................. 42
SECTION 11.3 Banking................................................ 43
SECTION 11.4 Withholding............................................ 43
ARTICLE XII
AMENDMENTS AND MEETINGS......................... 43
SECTION 12.1 Amendments............................................. 43
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent.................................... 45
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE........................... 47
SECTION 13.1 Representations and Warranties of
Institutional Trustee................................. 47
SECTION 13.2 Representations and Warranties of
Delaware Trustee...................................... 47
- iii -
<PAGE>
Page
----
ARTICLE XIV
MISCELLANEOUS.............................. 48
SECTION 14.1 Notices................................................ 48
SECTION 14.2 Governing Law.......................................... 49
SECTION 14.3 Intention of the Parties............................... 49
SECTION 14.4 Headings............................................... 49
SECTION 14.5 Successors and Assigns................................. 49
SECTION 14.6 Partial Enforceability................................. 50
SECTION 14.7 Counterparts........................................... 50
EXHIBITS
Exhibit A-1 Form of 6.75% Convertible Quarterly Income Preferred
Securities
Exhibit A-2 Form of Common Securities
- iv -
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
USX CAPITAL TRUST I
May 16, 1997
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") by and
among the Trustees (as defined herein), the Sponsor (as defined herein) and the
holders, from time to time, of undivided beneficial ownership interests in the
Trust to be issued pursuant to this Declaration is dated and effective as of May
16, 1997.
RECITALS
WHEREAS, the Trustees and the Sponsor established USX Capital Trust I
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
-----
Declaration of Trust dated as of March 13, 1997 (the "Original Declaration"),
--------------------
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on March 13, 1997, for the sole purpose of issuing certain securities
representing undivided beneficial ownership interests in the assets of the Trust
in exchange for certain Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business 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 ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 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
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
<PAGE>
2
(c) all references to "the Declaration" or "this Declaration" are to
--------------- ----------------
this Declaration, including the Annexes and Exhibits hereto, as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Recitals, Annexes, and Exhibits are to Articles, Sections and the Recitals of,
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; and
(f) a reference to the singular includes the plural and vice versa.
"Administrative Action" has the meaning set forth in Annex I.
---------------------
"Affiliate" has the same meaning as given to that term in Rule 405 of
---------
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
-----
"Authorized Officer" of a Person means any Person that is authorized
------------------
to bind such Person.
"Base Indenture" means that Indenture, dated as of May 16, 1997,
--------------
between USX and The Bank of New York, as Trustee.
"Board of Directors" or "Board" has the meaning set forth in Annex I.
------------------ -----
"Book Entry Interest" means a beneficial interest in a Global
-------------------
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday, or any
------------
other day on which banking institutions in New York, New York or Pittsburgh,
Pennsylvania are permitted or required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
------------------
Code, 12 Del. Code (S) 3801 et seq., as it may be amended from time to time, or
any successor legislation.
"Certificate" means a Common Security Certificate or a Convertible
-----------
Preferred Security Certificate.
"Certificate of Incorporation" has the meaning set forth in Annex I.
----------------------------
<PAGE>
3
"Change in 1940 Act Opinion" has the meaning set forth in Annex I.
--------------------------
"Clearing Agency" 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 of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers, and (2) pledges of the
Convertible Preferred Securities. The initial Clearing Agency shall be The
Depository Trust Company.
"Clearing Agency Participant" means a broker, dealer, bank, other
---------------------------
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Price" has the meaning set forth in Annex I.
-------------
"Code" means the Internal Revenue Code of 1986, as amended from time
----
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
----------
"Common Securities" has the meaning specified in Section 7.1.
-----------------
"Common Security Certificate" means a definitive certificate in fully
---------------------------
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Conversion Agent" has the meaning set forth in Section 7.4.
----------------
"Conversion Date" has the meaning set forth in Annex I.
---------------
"Conversion Price" has the meaning set forth in Annex I.
----------------
"Conversion Request" has the meaning set forth in Annex I.
------------------
"Convertible Preferred Securities" has the meaning specified in
--------------------------------
Section 7.1.
"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 Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Convertible Preferred Security Certificate" means a certificate
------------------------------------------
representing a Convertible Preferred Security substantially in the form of
Exhibit A-1.
"Corporate Trust Office" means the office of the Institutional Trustee
----------------------
at which the corporate trust business of the Institutional Trustee shall be, at
any particular time,
<PAGE>
4
principally administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, New York, New York 10286.
"Coupon Rate" has the meaning set forth in Annex I.
-----------
"Covered Person" means: (a) any officer, director, shareholder,
--------------
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Securities.
"Dealer Manager Agreement" means the Dealer Manager Agreement, dated
------------------------
as of March 31, 1997 among USX, Goldman, Sachs & Co. and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.
"Debenture Issuer" means USX Corporation (or its successor) in its
----------------
capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means The Bank of New York, as trustee under the
-----------------
Indenture until a successor is appointed thereunder, and thereafter means such
successor trustee.
"Debentures" means the series of 6.75% Convertible Junior Subordinated
----------
Debentures issued or to be issued by the Debenture Issuer under the Indenture
and held by the Institutional Trustee.
"Definitive Convertible Preferred Security Certificates" has the
------------------------------------------------------
meaning set forth in Section 9.7.
"Delaware Trustee" has the meaning set forth in Section 5.2.
----------------
"Delhi Stock" has the meaning set forth in Annex I.
-----------
"Direct Action" has the meaning set forth in Section 3.8(e).
-------------
"Disposition" means the sale, transfer, assignment or other
-----------
disposition (whether by consolidation, sale or contribution of assets or stock
or otherwise) of properties or assets.
"Dissolution Tax Opinion" has the meaning set forth in Annex I.
-----------------------
"Distribution" has the meaning set forth in Section 6.1.
------------
"Event of Default" in respect of the Securities means an Indenture
----------------
Event of Default has occurred and is continuing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, or any successor legislation.
<PAGE>
5
"Extension Period" has the meaning set forth in Annex I.
----------------
"Fiduciary Indemnified Person" has the meaning set forth in Section
----------------------------
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
-----------
"Global Certificate" has the meaning set forth in Section 9.4(a).
------------------
"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 Business Trust Act.
"Indemnified Person" means a Sponsor Indemnified Person or a Fiduciary
------------------
Indemnified Person.
"Indenture" means the Base Indenture, as supplemented by the
---------
Supplemental Indenture pursuant to which the Debentures are or are to be issued.
"Indenture Event of Default" means an "Event of Default" as defined in
-------------------------- ----------------
the Indenture.
"Institutional Trustee" has the meaning set forth in Section 5.3.
---------------------
"Institutional Trustee Account" has the meaning set forth in Section
-----------------------------
3.8(c).
"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, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I.
------------------------
"Legal Action" has the meaning set forth in Section 3.6(g).
------------
"Liquidation" has the meaning set forth in Annex I.
-----------
"Liquidation Distribution" has the meaning set forth in Annex I.
------------------------
"List of Holders" has the meaning set forth in Section 2.2.
---------------
"Majority in liquidation amount of the Securities" means, except as
------------------------------------------------
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
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 accrued and unpaid Distributions to the date
<PAGE>
6
upon which voting percentages are determined), of all outstanding Securities or,
if the context so requires, Holders of outstanding Convertible Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class who are the record owners of more than 50% of the aggregate liquidation
amount of all outstanding securities of the relevant class.
"Marathon Group Special Event" has the meaning set forth in Annex I.
----------------------------
"maturity advancement" has the meaning set forth in Annex I.
--------------------
"Ministerial Action" has the meaning set forth in Annex I.
------------------
"NASDAQ" has the meaning set forth in Annex I.
------
"NYSE" has the meaning set forth in Annex I.
----
"90-Day Period" has the meaning set forth in Annex I.
-------------
"No Recognition Opinion" has the meaning set forth in Annex I.
----------------------
"Officers' Certificate" means, with respect to any Person, a
---------------------
certificate signed by two Authorized Officers of such Person or, if such Person
is an individual, signed by such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(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.
"OID" has the meaning set forth in Annex I.
---
"Original Declaration" has the meaning set forth in the Recitals.
--------------------
"Payment Amount" has the meaning set forth in Section 6.1.
--------------
"Paying Agent" has the meaning set forth in Section 3.8(h).
------------
<PAGE>
7
"Person" means a legal person, including any individual, corporation,
------
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, business trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Pro Rata" has the meaning set forth in Annex I.
--------
"Quorum" means a majority of the Regular Trustees or, if there are
------
only two Regular Trustees, both of them.
"Redemption/Distribution Notice" has the meaning set forth in Annex I.
------------------------------
"Redemption Tax Opinion" has the meaning set forth in Annex I.
----------------------
"Regular Trustee" has the meaning set forth in Section 5.1.
---------------
"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 Institutional
-------------------
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice president, any assistant vice president, any
assistant secretary, any assistant treasurer or other officer of the Corporate
Trust Office of the Institutional 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.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
---------
"Securities" means the Common Securities and the Convertible Preferred
----------
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time or any successor legislation.
"Securities Guarantee" means the guarantee agreement, to be dated as
--------------------
of May 16, 1997, of the Sponsor in respect of the Securities.
"6.50% Convertible Preferred Stock" means the 6.50% Cumulative
---------------------------------
Convertible Preferred Stock of USX.
"Special Redemption Price" has the meaning set forth in Annex I.
------------------------
"Sponsor" means USX Corporation (or its successor), in its capacity as
-------
sponsor of the Trust, and any transferee of the Common Securities permitted by
Article IX.
<PAGE>
8
"Sponsor Indemnified Person" means (a) any Regular Trustee; (b) any
--------------------------
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Steel Stock" means shares of the USX--U.S. Steel Group Common Stock,
-----------
par value $1.00 per share, of USX.
"Successor Delaware Trustee" has the meaning set forth in Section
--------------------------
5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
----------------
"Successor Securities" has the meaning set forth in Section
--------------------
3.15(b)(i)(B).
"Successor Institutional Trustee" has the meaning set forth in Section
-------------------------------
5.7(b)(i).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
--------------
"Supplemental Indenture" means that First Supplemental Indenture,
----------------------
dated as of May 16, 1997, between USX and The Bank of New York, as Trustee.
"Tax Event" has the meaning set forth in Annex I.
---------
"10% in liquidation amount of the Securities" means, except as
-------------------------------------------
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) 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 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 of the relevant class.
"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" has the meaning set forth in the Recitals.
-----
"Trust Special Event" has the meaning set forth in Annex I.
-------------------
"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 each other Person who may from time to
time be duly appointed, qualified and serving as
<PAGE>
9
a Trustee 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.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
-------------------
amended from time to time, or any successor legislation.
"U.S. Steel Group" means the U.S. Steel Group of USX.
----------------
"U.S. Steel Group Special Event" has the meaning set forth in Annex I.
------------------------------
"USX" means USX Corporation, a Delaware corporation, or any successor
---
entity in a merger, consolidation or amalgamation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 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 and shall, to the
extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by (S)(S) 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 Trust's classification as a grantor trust for United States
federal income tax purposes and shall not affect the nature of the Securities as
equity securities representing undivided beneficial ownership interests in the
assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
------------------------------
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i), except while the Convertible
Preferred Securities remain in book-entry only form, at least one Business Day
prior to the date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date relating to
---------------
the payment of such Distributions, provided that neither the Sponsor nor the
Regular Trustees on behalf of the Trust shall be obligated to provide such List
of Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the
<PAGE>
10
Institutional Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust, and (ii) at any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than 14 days before
such List of Holders is given to the Institutional Trustee. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
(S)(S) 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee. Within 60 days
------------------------------------
after May 15 of each year, the Institutional Trustee shall provide to the
Holders of the Convertible Preferred Securities such reports as are required by
(S) 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by (S) 313 of the Trust Indenture Act. The Institutional Trustee shall
also comply with the requirements of (S) 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee. Each of the
-----------------------------------------
Sponsor and the Regular Trustees on behalf of the Trust shall provide to the
Institutional Trustee such documents, reports and information as required by (S)
314 (if any) and the compliance certificate required by (S) 314 of the Trust
Indenture Act in the form, in the manner and at the times required by (S) 314 of
the Trust Indenture Act. Delivery of such reports, information and documents to
the Institutional Trustee is for informational purposes only and the
Institutional Trustee's receipt of such shall not constitute constructive notice
of any information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent. Each
------------------------------------------------
of the Sponsor and the Regular Trustees on behalf of the Trust shall provide to
the Institutional 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 (S) 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to (S) 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
-------------------------
(a) 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 in respect of
the Convertible Preferred Securities and its consequences, provided that, if the
underlying Indenture Event of Default:
(i) is not waivable under the Indenture, such Event of Default
under the Declaration shall also not be waivable; or
<PAGE>
11
(ii) requires the consent or vote of the holders of greater than
a majority (a "Super Majority") in principal amount of the Debentures to be
--------------
waived under the Indenture, such Event of Default under the Declaration may
only be waived by the vote of the Holders of at least the same Super
Majority percentage in liquidation amount of the Convertible Preferred
Securities as is required under the Indenture of aggregate principal amount
of the Debentures outstanding. The foregoing provisions of this Section
2.6(a) shall be in lieu of (S) 316(a)(1)(B) of the Trust Indenture Act and
such (S) 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 Indenture Event of 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 Indenture Event of Default or 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 Common Securities of any such Event of Default with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Indenture
Event of Default:
(i) is not waivable under the Indenture, such Event of Default
under the Declaration shall also not be waivable unless the Holders of the
Common Securities are deemed to have waived such Event of Default under the
Declaration as provided below in this Section 2.6(b);
(ii) requires the consent or vote of a Super Majority in
principal amount of the holders of the Debentures to be waived under the
Indenture, such Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the same Super Majority percentage
in liquidation amount of the Common Securities as is required under the
Indenture of aggregate principal amount of the Debentures outstanding,
unless the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this Section
2.6(b);
provided further, each Holder of Common Securities will be deemed to have waived
- -------- -------
any such Indenture Event of Default and all Events of Default with respect to
the 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 with respect to the
Convertible Preferred Securities have been so cured, waived or otherwise
eliminated, the Institutional 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
<PAGE>
12
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of (S)(S) 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act and such (S)(S) 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 2.6(b), upon such cure, waiver or other elimination,
any such Indenture Event of Default shall cease to exist and any Event of
Default with respect to the Common Securities arising therefrom shall be deemed
to have been cured, waived or otherwise eliminated for every purpose of this
Declaration, but no such cure, waiver or other elimination shall extend to any
subsequent or other Indenture Event of Default or Event of Default with respect
to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Indenture Event of Default by the Institutional
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 2.6(c) shall be in lieu
of (S) 316(a)(1)(B) of the Trust Indenture Act and such (S) 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 2.7 Event of Default: Notice.
------------------------
(a) The Institutional 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 Institutional
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
--------
defined to be an Indenture Event of Default, not including 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 (or
premium, if any) or interest on any of the Debentures, the Institutional Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Institutional Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 6.01(a) or (b) of the Base
Indenture; or
(ii) any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the Declaration
shall have actual knowledge.
ARTICLE III
ORGANIZATION
<PAGE>
13
SECTION 3.1 Name. The Trust is named "USX Capital Trust I." Such
---- --------------------
name may be modified from time to time by the Regular Trustees following written
notice to the Holders of Securities. The Trust's activities may be conducted
under the name of the Trust or any other name deemed advisable by the Regular
Trustees.
SECTION 3.2 Office. The address of the principal office of the Trust
------
is c/o The Bank of New York, Corporate Finance Unit, 101 Barclay Street, New
York, New York, 10286. The mailing address of the Trust is c/o USX Corporation,
600 Grant Street, Pittsburgh, Pennsylvania 15219, Attention: Treasurer. On 10
Business Days' written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
SECTION 3.3 Purposes and Functions. The sole purposes and functions
----------------------
of the Trust are (a) to issue Securities in exchange for Debentures having an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, 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 3.4 Authority. Subject to the limitations provided in this
---------
Declaration and to the specific duties of the Institutional Trustee, the Regular
Trustees shall have exclusive and complete authority to carry out the purposes
and functions 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 Institutional Trustee on behalf of the Trust in
accordance with its powers shall constitute the act of and serve to bind the
Trust. 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 3.5 Title to Property of the Trust. Except as provided in
------------------------------
Section 3.8 with respect to the Debentures and the Institutional 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 an undivided ownership
beneficial interest in the assets of the Trust.
SECTION 3.6 Powers, Duties and Authority of the Regular Trustees.
----------------------------------------------------
The Regular Trustees shall have the exclusive power, duty and authority to cause
the Trust to engage in the following activities:
(a) to issue and sell or exchange the Convertible Preferred
Securities and the 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 Common
Securities, and, provided further, that there shall be no interests in the
<PAGE>
14
Trust other than the Securities, and the issuance of Securities shall be limited
to an issuance of Convertible Preferred Securities and Common Securities in
exchange for Debentures;
(b) in connection with the issuance of the Securities in exchange for
the Debentures, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-4 prepared by the Sponsor, including any amendments
thereto, pertaining to the issuance of Convertible Preferred Securities in
exchange for the Debentures and the exchange by the Sponsor of the
Convertible Preferred Securities for the 6.50% Convertible Preferred Stock;
(ii) 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 in which the Sponsor has determined to qualify or register such
Convertible Preferred Securities for sale;
(iii) if desired by the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York Stock Exchange, the
American Stock Exchange or any other national stock exchange or the NASDAQ
Stock Market for listing or quotation upon notice of issuance of any
Convertible Preferred Securities;
(iv) execute and file with the Commission a request for
exemption from the reporting requirements of the Securities Exchange Act of
1934, as amended;
(v) execute, deliver and cause the Trust to perform and enter
into the Dealer Manager Agreement;
(c) to acquire the Debentures in exchange for Convertible Preferred
Securities and Common Securities; provided, however, that the Regular Trustees
shall cause legal title to the Debentures to be held of record in the name of
the Institutional Trustee for the benefit of the Holders of the Convertible
Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Trust Special Event; provided that the Regular
Trustees shall consult with the Sponsor and the Institutional Trustee before
taking or refraining from taking any Ministerial Action in relation to a Trust
Special Event;
(e) 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 (S)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, holders of Common
Securities and, to the extent applicable, to any stock exchange or other
organization on which the Convertible Preferred Securities are listed or quoted,
as to such actions and applicable record dates;
<PAGE>
15
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, settle, terminate,
arbitrate, resort to legal action, or otherwise adjust claims or demands of or
against the Trust ("Legal Action"), unless pursuant to Section 3.8(e), the
------------
Institutional Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants to conduct only those services that the Regular Trustees have the
authority to conduct directly and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give to the Institutional Trustee the certificate required by
(S) 314(a)(4) of the Trust Indenture Act which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes or functions of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures as permitted under the Indenture;
(n) 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 Securities or
to enable the Trust to effect the purposes for which the Trust was created;
(o) 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 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust not to be classified as other than a
grantor trust for United States federal income tax purposes; and
<PAGE>
16
(iii) cooperating with the Debenture Issuer so that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes, provided that such action does
not adversely affect the interests of Holders;
(p) 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; and
(q) to execute all documents, agreements 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.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Trustees (including the Institutional Trustee)
shall not, engage in any activity, on behalf of the Trust, other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust not
to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) 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
except as specifically provided herein;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
<PAGE>
17
(vii) other than as provided in this Declaration or Annex I, (A)
direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all the
Debentures shall be due and payable, or (D) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required unless the Trust shall have received an opinion
of counsel to the effect that such modification will not cause more than an
insubstantial risk that for United States federal income tax purposes the
Trust will not be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee. (a)
----------------------------------------------
Unless distributed to the Holders of the Securities in accordance with the terms
thereof, the legal title to the Debentures shall be owned by and held of record
in the name of the Institutional Trustee in trust for the benefit of the Holders
of the Securities. The right, title and interest of the Institutional Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 5.7. Such vesting
and succession of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or, if the Institutional
Trustee does not also act as Delaware Trustee, to the Delaware Trustee.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
-----------------------------
under the exclusive control of the Institutional Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds made
in respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Institutional Trustee Account and make payments to the
Holders of the Convertible Preferred Securities and Holders of the Common
Securities from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a
banking institution the rating on whose long-term unsecured indebtedness is
at least equal to the rating assigned to the Convertible Preferred
Securities by a "nationally recognized statistical rating organization",
-----------------------------------------------------
within the meaning of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Convertible
Preferred Securities and the Common Securities to the extent the 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 activities as
<PAGE>
18
shall be necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the occurrence of certain special
events (as may be defined in the terms of the Securities) arising from a
change in law or a change in legal interpretation or other specified
circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
-------------
Debentures. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of
Convertible Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Convertible Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holder of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions on behalf of the Trust with
------------
respect to all securities and any such Paying Agent shall comply with (S) 317(b)
of the Trust Indenture Act. Any Paying
<PAGE>
19
Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers, or the authority of the Regular
Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
--------------------------------------------------------
Trustee.
- -------
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) 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:
(A) the duties and obligations of the Institutional Trustee shall
be determined solely by the express provisions of this Declaration,
and the Institutional Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Declaration, and no implied covenants or obligations
shall be read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of the Institutional
Trustee, the Institutional 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
Institutional 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 Institutional Trustee, the Institutional Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Declaration;
<PAGE>
20
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional 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 Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional 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 liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Institutional 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 Institutional Trustee need not
be segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional 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 Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee. (a) Subject
---------------------------------------
to the provisions of Section 3.9:
<PAGE>
21
(i) the Institutional 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;
(ii) 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
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional 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 Sponsor or the Regular
Trustees;
(iv) the Institutional 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 Institutional Trustee may consult with counsel of its
selection 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 Institutional 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 Institutional 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 Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional 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 Institutional
Trustee provided, that, nothing contained in this Section 3.10(a)(vi) shall
be taken to relieve the Institutional Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument,
<PAGE>
22
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document,
but the Institutional Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the Institutional
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 Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the Securities,
and the signature of the Institutional 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 Institutional
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 Institutional Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(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 or accordance with such
instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Institutional 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 Institutional 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 Institutional 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 Institutional
Trustee shall be construed to be a duty.
<PAGE>
23
SECTION 3.11 Delaware Trustee. Notwithstanding any other provision
----------------
of this Declaration other than Section 5.2, 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 Institutional Trustee
described in this Declaration. Except as set forth in Section 5.2, the Delaware
Trustee shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of (S) 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents. Except as otherwise required by
----------------------
the Business Trust Act, any Regular Trustee is authorized to execute on behalf
of the Trust any documents that the Regular Trustees have the power and
authority to execute pursuant to Section 3.6; provided that, the registration
statement referred to in Section 3.6(b)(i), including any amendments thereto,
shall be signed by all of the Regular Trustees.
SECTION 3.13 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 3.14 Duration of Trust. The Trust, unless terminated
-----------------
pursuant to the provisions of Article VIII hereof, shall have existence for
thirty (30) years from the date of the Original Declaration.
SECTION 3.15 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 corporation or
other body, except as described in Sections 3.15(b) and (c) or Section 9 of
Annex I.
(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
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any state; provided
that:
(i) such successor entity (the "Successor Entity") either:
----------------
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Convertible Preferred Securities
(the "Successor Securities") so long as the Successor Securities rank
--------------------
the same as the Convertible Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and otherwise;
<PAGE>
24
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Debenture Issuer uses its reasonable efforts to
cause the Convertible Preferred Securities or any Successor Securities to
be listed or quoted, or to cause any Successor Securities to be listed or
quoted upon notification of issuance, on any national securities exchange
or with another organization on which the Convertible Preferred Securities
are then listed or quoted;
(iv) 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;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such Holders'
interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of
the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of independent counsel to
the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does
not adversely affect the legal rights, preferences and privileges of
the Holders of the Securities (including any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company under the Investment
Company Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be,
or will be, classified as a grantor trust for United States federal
income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation,
<PAGE>
25
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.
ARTICLE IV
SPONSOR
SECTION 4.1 Issuance of Securities to Sponsor. The Sponsor will
---------------------------------
issue and exchange Debentures for Securities issued by the Trust. The
Debentures exchanged for Convertible Preferred Securities shall be in the same
aggregate principal amount as the aggregate stated liquidation amount of the
Convertible Preferred Securities exchanged therefor. The Debentures exchanged
for Common Securities shall be in the same aggregate principal amount as the
aggregate stated liquidation amount of the Common Securities exchanged therefor,
provided, that, the aggregate stated liquidation amount of Common Securities
outstanding at any time shall be no less than 3% of the capital of the Trust.
SECTION 4.2 Responsibilities of the Sponsor. In connection with the
-------------------------------
issuance of the Convertible Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-4, including any amendments thereto, pertaining
to the issuance of the Convertible Preferred Securities in exchange for the
Debentures, the exchange of the Convertible Preferred Securities for the 6.50%
Convertible Preferred Stock, and the issuance of the Securities Guarantees;
(b) determine the States in which to take appropriate action to
qualify or register all or part of the Convertible Preferred Securities and the
Securities Guarantees and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing 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;
(c) if the Sponsor so desires, to prepare for filing by the Trust an
application to the New York Stock Exchange or any other national stock exchange
or the Nasdaq Stock Market for listing upon notice of issuance of any
Convertible Preferred Securities; and
(d) to negotiate the terms of the Dealer Manager Agreement.
<PAGE>
26
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees. The number of Trustees initially
------------------
shall be five (5), 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 liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities or by written consent; provided, however, that the number
of Trustees shall in no event be less than two (2); provided further that (i) if
required by Section 5.2, one Trustee shall be the Delaware Trustee; (ii) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (iii) if required by Section 5.3,
---------------
one Trustee shall be the Institutional Trustee, and such Institutional Trustee
may also serve as Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 Delaware Trustee. (a) If required by the Business Trust
----------------
Act, one Trustee (the "Delaware Trustee") shall be:
----------------
(i) a natural person who is a resident of the State of
Delaware; or
(ii) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the
requirements of applicable law.
(b) If the Institutional Trustee meets the requirements of Section
5.2(a), then the Institutional Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility. (a) For so long as
----------------------------------
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, there shall at all times be one Trustee (the "Institutional
-------------
Trustee") which shall:
- -------
(i) not be an Affiliate of the Sponsor; 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
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
<PAGE>
27
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 5.3(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 Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of (S) 310(b) of the Trust Indenture
- ---------------------
Act, the Institutional Trustee and the Holder of the Common Securities (as if it
were the obligor referred to in (S) 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of (S) 310(b) of the Trust Indenture
Act.
(d) The Securities Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be The Bank of New York.
SECTION 5.4 Certain Qualifications of Regular Trustees and Delaware
-------------------------------------------------------
Trustee Generally. Each Regular Trustee and the Delaware Trustee (unless the
- -----------------
Institutional 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 5.5 Regular Trustees. (a) The initial Regular Trustees
----------------
shall be A.G. Adkins, P.J. Kuntz and M. K. Stewart.
(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 Business 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 Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees personally or by power of attorney.
SECTION 5.6 Initial Delaware Trustee. The initial Delaware Trustee
------------------------
shall be The Bank of New York (Delaware).
<PAGE>
28
SECTION 5.7 Appointment, Removal and Resignation of Trustees. (a)
------------------------------------------------
Subject to Section 5.7(b), 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 liquidation amount of the Common Securities voting
as a class at a meeting of the Holders of the Common Securities.
(b) (i) The Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Institutional
Trustee (a "Successor Institutional Trustee") has been appointed and has
-------------------------------
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.7(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 5.2
and 5.4 (a "Successor Delaware Trustee") has been appointed and has
--------------------------
accepted such appointment by written instrument executed by such Successor
Delaware Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
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
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been appointed
and has accepted such appointment by instrument executed by such
Successor Institutional Trustee and delivered to the Trust, the
Sponsor and the resigning Institutional 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.
<PAGE>
29
(d) The Holders of the Common Securities shall use their best efforts
to promptly appointment a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.8 Vacancies Among Trustees. If a Trustee ceases to hold
------------------------
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.1, or if the number of Trustees is increased pursuant to Section 5.1,
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 5.7.
SECTION 5.9 Effect of Vacancies. 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 Section 5.7,
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 5.10 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 Trustee 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 notice of such meeting except where a
Regular Trustee attends a meeting for the express purpose of
<PAGE>
30
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 unanimous written consent 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.
SECTION 5.11 Delegation of Power by Regular Trustees. (a) Any
---------------------------------------
Regular Trustee may, by power of attorney consistent with applicable law,
delegate to any other natural person over the age of 21 such Regular Trustee's
power for the purpose of executing any documents, including, but not limited to
those contemplated by Sections 3.6, 3.12 and 5.5(b), or by executing or making
any other governmental filing.
(b) 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.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Institutional Trustee or 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 Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions. Holders shall receive Distributions (as
-------------
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Convertible Preferred Securities
and the Common Securities in accordance with their respective terms. If and to
the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Institutional Trustee (the amount of any such payment being a "Payment
-------
Amount"), the Institutional 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.
<PAGE>
31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities. (a) The
---------------------------------------
Regular Trustees shall on behalf of the Trust issue one class of 6.75%
convertible trust preferred securities having such terms as are set forth in
Annex I (the "Convertible Preferred Securities") and one class of convertible
--------------------------------
common securities having such terms as are set forth in Annex I (the "Common
------
Securities"). The Securities represent undivided beneficial ownership interests
- ----------
in the assets of the Trust. The Trust shall issue no securities or other
interests in the assets of the Trust other than the Convertible Preferred
Securities and the Common Securities.
(b) 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.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(d) 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 7.2 Execution and Authentication. (a) The Certificates
----------------------------
shall be signed on behalf of the Trust by a Regular Trustee. In case any
Regular Trustee of the Trust who shall have signed any of the Securities 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 Certificate may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Security, 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 Trustee.
(b) Regular Trustee shall sign the Convertible Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Convertible Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Institutional Trustee. The signature shall be conclusive evidence that the
Convertible Preferred Security has been authenticated under this Declaration.
<PAGE>
32
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Preferred Securities for original
issue.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Securities. An
authenticating agent may authenticate Convertible Preferred Securities whenever
the Institutional Trustee may do so. Each reference in this Declaration to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Company or an Affiliate.
SECTION 7.3 Form and Dating. The Convertible Preferred Securities
---------------
and the Institutional Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-1 and the Common Securities 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. Certificates may be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof.
The Securities 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 Institutional Trustee in writing.
Each Convertible Preferred Security Certificate shall be dated the date of its
authentication. The terms and provisions of the Securities set forth in Annex I
and the forms of Securities set forth in Exhibits A-1 and A-2 are part of the
terms of this Declaration and to the extent applicable, the Institutional
Trustee and the Sponsor, by their execution and delivery of this Declaration,
expressly agree to such terms and provisions and to be bound thereby.
SECTION 7.4 Paying Agent. In the event that the Convertible
------------
Preferred Securities are not represented by one or more Global Certificates, the
Trust shall maintain in the Borough of Manhattan, City of New York, State of New
York, an office or agency where the Convertible Preferred Securities may be
presented for payment ("Paying Agent"). The Trust shall maintain an office or
------------
agency where Securities may be presented for conversion ("Conversion Agent").
----------------
The Trust may appoint the Paying Agent and the Conversion Agent and may appoint
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 or
Conversion Agent without prior notice to any Holder. The Trust shall notify the
Institutional Trustee in writing of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Paying Agent or Conversion Agent, the Institutional Trustee shall act
as such. The Trust or any of its Affiliates may act as Paying Agent or
Conversion Agent. The Trust shall act as Paying Agent and Conversion Agent for
the Common Securities.
The Trust initially appoints the Institutional Trustee as Conversion
Agent and Paying Agent for the Convertible Preferred Securities.
<PAGE>
33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination 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; upon the consent of a majority in
liquidation amount of the Securities voting together as a single class to
file a certificate of cancellation with respect to the Trust or the
revocation of the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Trust Special
Event pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Debentures held by the
Institutional Trustee shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(vi) upon the distribution of the Steel Stock or any other
class of common stock of USX to all Securities Holders upon conversion of
all outstanding Convertible Preferred Securities;
(vii) the expiration of the term of the Trust on March 31,
2037; or
(viii) before the issuance of any Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Trustees shall wind up and liquidate the
Trust and file a certificate of cancellation with the Secretary of State of the
State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall
survive the termination of the Trust.
<PAGE>
34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
----------------------
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of independent counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would be classified for United States federal
income tax purposes as other than a grantor trust; and
(ii) the Trust would be an Investment Company required to be
registered under the Investment Company Act.
SECTION 9.2 Transfer of Certificates. The Regular Trustees shall
------------------------
provide for the registration of Certificates and of transfers of Certificates,
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 government
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
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.
SECTION 9.3 Deemed Security Holders. The Trustees 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
<PAGE>
35
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.
SECTION 9.4 Book Entry Interests. (a) On original issuance to the
--------------------
Sponsor, the Convertible Preferred Securities Certificates will be issued by or
on behalf of the Trust in the form of one or more, fully registered, global
Convertible Preferred Security Certificates (each a "Global Certificate"),
------------------
either to the Sponsor or to the initial Clearing Agency for the benefit of the
Sponsor. The Convertible Preferred Securities Certificates, upon the initial
transfer from the Sponsor, will be in the form of Global Certificates held by
the Clearing Agency.
(b) Except as provided in Sections 9.4(a) and 9.7:
(i) Global Certificates delivered to the Clearing Agency shall
be registered on the books and records of the Trust in the name of the
Clearing Agency or its nominee, and no Convertible Preferred Security
Beneficial Owner will receive a definitive Convertible Preferred Security
Certificate representing such Convertible Preferred Security Beneficial
Owner's interests in such Global Certificates;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency 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 and the sole holder of the Global Certificates and
shall have no obligation to the Convertible Preferred Security Beneficial
Owners;
(iii) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions of
this Section 9.4 shall control; and
(iv) the rights of the Convertible Preferred Security
Beneficial Owners shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between such
Convertible Preferred Security Beneficial Owners and the Clearing Agency
and/or the Clearing Agency Participants and receive and transmit payments
of Distributions on the Global Certificates to such Clearing Agency
Participants. The Clearing Agency will make book entry transfers among the
Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Convertible Preferred Security Holders is required under
this Declaration, unless and until Definitive Convertible Preferred Security
Certificates shall have been issued to the Convertible Preferred Security
Beneficial Owners pursuant to Section 9.7, the Regular Trustees shall give all
such notices and communications specified herein to be given to the Convertible
Preferred Security Holders to the Clearing Agency, and shall have no notice
obligations to the Convertible Preferred Security Beneficial Owners.
<PAGE>
36
SECTION 9.6 Appointment of Successor Clearing Agency. If any
----------------------------------------
Clearing Agency 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 Clearing Agency with respect to such
Convertible Preferred Securities.
SECTION 9.7 Definitive Convertible Preferred Security Certificates.
------------------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Convertible Preferred Securities,
then:
(c) definitive, fully registered Convertible Preferred Security
Certificates (the "Definitive Convertible Preferred Security Certificates")
------------------------------------------------------
shall be prepared by the Regular Trustees on behalf of the Trust with respect to
such Convertible Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Convertible Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
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 Clearing Agency. The
Definitive Convertible Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
Convertible Preferred Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates. If:
-------------------------------------------------
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless, then, in the
absence of notice that such Certificate shall have been acquire by a bona fide
purchaser, any Regular Trustee on behalf of the Trust shall execute and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection
<PAGE>
37
with the issuance of any new Certificate under this Section 9.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability. (a) Except as expressly set forth in this
---------
Declaration, the Securities 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) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Pursuant to (S) 3803(a) of the Business Trust Act, the Holders of
the Common Securities shall 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,
the Holder of the 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 (S) 3803(a) of the Business Trust Act, the Holders of
the Convertible Preferred Securities shall 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.
SECTION 10.2 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 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 willful
misconduct with respect to such acts or omissions.
<PAGE>
38
(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 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, 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 10.3 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 Institutional 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
any Covered Persons; 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 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
<PAGE>
39
(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 10.4 Indemnification.
---------------
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Sponsor 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 Sponsor Indemnified Person against expenses (including
reasonable 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 Sponsor 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.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Sponsor 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 Sponsor 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 Sponsor 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 Sponsor 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 10.4(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 reasonable attorneys' fees)
actually and reasonably incurred by him in connection therewith.
<PAGE>
40
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Sponsor Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) 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,
(2) 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 (3) by the Common Security Holder of the Trust.
(v) Expenses (including reasonable attorneys' fees) incurred by
a Sponsor Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Sponsor in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Sponsor Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Sponsor as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Regular Trustees
by a majority vote of a quorum of disinterested Regular Trustees, (ii) 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 (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Regular Trustees, counsel or the Common
Security Holder at the time such determination is made, such Sponsor
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 Sponsor 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 Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 10.4(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 Sponsor
or Convertible Preferred Security Holders 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 10.4(a) shall be deemed to be provided by a contract between the
Sponsor and each Sponsor Indemnified Person who serves in such capacity at
any time while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
<PAGE>
41
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Sponsor 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
Sponsor would have the power to indemnify him against such liability under
the provisions of this Section 10.4(a)
(viii) For purposes of this Section 10.4(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 10.4(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 10.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a Sponsor Indemnified Person and shall inure to the benefit of
the heirs, executors and administrators of such a person. The obligation
to indemnify as set forth in this Section 10.4(a) shall survive the
satisfaction and discharge of this Declaration.
(b) The Sponsor agrees to indemnify the (i) Institutional Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Institutional Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Institutional 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 loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or 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 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 Outside Business. Any Covered Person, the Sponsor, the
----------------
Delaware Trustee and the Institutional 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. No Covered
Person, the Sponsor, the Delaware Trustee, or the Institutional 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,
<PAGE>
42
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 Delaware Trustee and the Institutional
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 of its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 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 11.2 Certain Accounting Matters. (a) At all times during
--------------------------
the existence of the Trust, Trustees shall keep, or cause to be kept, full
books, records and supporting documents, which shall reflect detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting in compliance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for the 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 of the Trust by a firm of independent certified
public accountants selected by the Regular Trustees.
(b) 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 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. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(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 United States federal
income tax law, 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 11.3 Banking. The Trust shall maintain one or more bank
-------
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of
<PAGE>
43
funds in respect of the Debentures held by the Institutional Trustee shall be
made directly to the Institutional Trustee Account and no other funds of the
Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
provided, however, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.
SECTION 11.4 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 Trustees
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 over withholding, 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 XII
AMENDMENTS AND MEETINGS
SECTION 12.1 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:
(i) the Regular Trustees (or, if there are more than two
Regular Trustees a majority of the Regular Trustees) ;
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee.
(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
Institutional Trustee shall have first received an Officers' Certificate
from each of the Trust and the
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44
Sponsor that such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first received:
(A) 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); and
(B) an opinion of counsel (who may be counsel to the Trust or the
Sponsor, including an employee of the Sponsor) 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 be classified for purposes of United
States federal income taxation as other than a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act.
(c) At such time after the Trust has issued any securities that
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 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(f) The rights of the holders of the 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 liquidation
amount of the Common Securities.
(g) Notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
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45
(i) cure any ambiguity;
(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; and
(iv) to 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 right, preferences or privileges of the
Holders.
SECTION 12.2 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 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 at least 10% in 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 Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities 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:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 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 stock exchange on which the
Convertible Preferred Securities are listed or admitted for trading, 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
<PAGE>
46
writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder 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 11 months 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
(iv) unless 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, otherwise
provides, 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 XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
-------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants, as applicable, to the
Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is eligible to act as such under
Section 5.3(a);
<PAGE>
47
(b) the Institutional Trustee is duly organized, validly existing and
in good standing, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;
(c) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional 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);
(d) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking or other regulatory authority is
required for the execution, delivery or performance by the Institutional
Trustee, of the Declaration.
SECTION 13.2 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 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 a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing, 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 Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law 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);
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking or other regulatory authority is
required for the execution, delivery or performance by the Delaware Trustee, of
the Declaration; and
<PAGE>
48
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity that has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices. All notices provided for in this Declaration
-------
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied 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 in Section 3.2 hereof, telecopy: (412) 433-
1121.
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center
Rte 273
Newark, DE 19711
Attention: Corporate Trust Department
Telecopy: (212) 815-5917
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Trustee Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of the
Securities).
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
USX Corporation
600 Grant Street
Pittsburgh, PA 15219-4776
(412) 433-1121
Attention: Treasurer
(e) if given to any other 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
<PAGE>
49
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 14.2 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 of the State of
Delaware or any other jurisdiction that would call for the application of the
law of any jurisdiction other than the State of Delaware; provided, however,
that there shall not be applicable to the Trust, the Trustees or this
Declaration any provision of the laws (statutory or common) of the State of
Delaware pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof, (i) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges, (ii) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (iii) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (iv) fees or other sums payable to trustees, officers,
agents or employees of a trust, (v) the allocation of receipts and expenditures
to income or principal, (vi) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets, or
(vii) the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the Trustees as set
forth or referenced in this Declaration. Section 3540 of Title 12 of the
Delaware Code shall not apply to the Trust.
SECTION 14.3 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 14.4 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 14.5 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 14.6 Partial Enforceability. 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 14.7 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
<PAGE>
50
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
<PAGE>
51
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:/s/ Mary Jane Morrissey
-----------------------
Title: Authorized Signatory
THE BANK OF NEW YORK,
as Institutional Trustee
By:/s/ Paul J. Schmalzel
---------------------
Title: Assistant Treasurer
USX CORPORATION,
as Sponsor
By:/s/ G.R. Haggerty
-----------------
Title: Vice President & Treasurer
/s/ A.G. Adkins
----------------
Title: Regular Trustee
/s/ P.J. Kuntz
--------------
Title: Regular Trustee
/s/ M.K. Stewart
----------------
Title: Regular Trustee
<PAGE>
ANNEX I
TERMS OF
6.75% CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
(Convertible QUIPS/SM/ Securities)
6.75% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust of USX Capital Trust I (the "Trust"), dated as of May 16, 1997 (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 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.
--------------------------------
Up to 3,937,216 convertible preferred securities of the Trust with an
aggregate initial liquidation amount with respect to the assets of the Trust of
up to ONE HUNDRED NINETY-SIX MILLION EIGHT HUNDRED SIXTY THOUSAND EIGHT HUNDRED
DOLLARS ($196,860,800), and an initial liquidation amount with respect to the
assets of $50.00 per convertible preferred security, are hereby designated for
the purposes of identification only as "6.75% Convertible Quarterly Income
----------------------------------
Preferred Securities" (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 stock
exchange or other organization on which the Convertible Preferred Securities are
listed or quoted.
(b) Common Securities.
-----------------
Up to 121,770 common securities of the Trust with an aggregate initial
liquidation amount with respect to the assets of the Trust of up to SIX MILLION
EIGHTY-EIGHT THOUSAND FIVE HUNDRED DOLLARS ($6,088,500), and an initial
liquidation amount with respect to the assets of the Trust of $50.00 per common
security, are hereby designated for the purposes of identification only as
"6.75% Common Securities" (the "Common Securities"). The Common Security
-----------------
Certificates evidencing the 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 6.75% (the "Coupon Rate") of the initial liquidation amount of any
-----------
Security, such rate being
<PAGE>
2
the rate of interest payable on the Debentures held or to be held by the
Institutional Trustee. To the extent permitted by applicable law, Distributions
not paid on the regularly scheduled payment date therefor will accumulate
interest thereon at the Coupon Rate compounded quarterly. The term
"Distributions" as used herein includes such cash distributions and any such
- --------------
interest payable unless otherwise stated. Distributions are payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period shall 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, shall be computed on
the basis of 30-day months and, for periods of less than a month, the actual
number of days elapsed per 30-day month.
(b) Distributions on the Securities shall be cumulative, shall
accumulate from and including March 31, 1997, and shall be payable quarterly in
arrears on the last calendar day of March, June, September and December,
commencing on June 30, 1997, when, as and if funds are available for payment and
except as otherwise described below. So long as the Debenture Issuer shall not
be in default in the payment of interest on the Debentures, the Debenture Issuer
has the right under the Indenture, at any time, and from time to time, to defer
payments of interest by extending the interest payment period on the Debentures
for a period not exceeding 20 consecutive quarterly interest payment periods
(each an "Extension Period"), during which Extension Period no interest shall be
----------------
due and payable on the Debentures, provided that no Extension Period shall last
beyond the date of maturity of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. To the extent permitted by
applicable law, during such Extension Period, deferred quarterly Distributions
will continue to accumulate with interest thereon at the Coupon Rate, compounded
quarterly for each quarter of the Extension Period. Before the termination of
any such Extension Period, the Debenture Issuer 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 date of maturity of the Debentures. At the end of the
Extension Period, payments of accumulated Distributions shall be payable to
Holders of Convertible Preferred Securities on the first record date after the
termination of such Extension Period. Upon the termination of any such
Extension Period and the payment of all amounts then due on the Debentures, the
Debenture Issuer may commence a new Extension Period, subject to the above
requirements.
(c) Distributions on the Securities shall be payable to the Holders
thereof as they appear on the books and records of the Trust as of the close of
business on the relevant record dates. While the Convertible Preferred
Securities are represented by a Global Certificate, the relevant record dates
shall be the close of business on the Business Day next preceding such
distribution payment date, unless otherwise provided in the Declaration or
unless a different regular record date is established or provided for the
corresponding interest payment date on the Debentures. The relevant record
dates for the Common Securities shall be the same as for the Convertible
Preferred Securities. If the Convertible Preferred Securities shall not
continue to remain represented by Global Certificates, the relevant record dates
for the Convertible Preferred Securities shall be selected by the Regular
Trustees, which
<PAGE>
3
dates shall conform to the rules of any securities exchange or other
organization on which the Securities are listed or quoted, if any, and, shall be
at least one Business Day prior to the relevant payment dates, which payment
dates correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, shall 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 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 payment
date.
(d) Except as provided below, accumulated but unpaid Distributions
will not be paid in cash on Securities that are converted by the Holder into
Steel Stock pursuant to the terms of the Securities as set forth in this Annex I
nor will such accumulated Distributions be converted into additional shares of
Steel Stock, but such accumulated Distributions will be deemed to be paid in
full and then returned by the Holder to the Sponsor as partial consideration for
the Steel Stock received upon conversion. Holders of Securities at the close of
business on a record date for determining Holders entitled to receive a
Distribution shall be entitled to receive the Distribution payable on such
shares on the corresponding distribution payment date (except that Holders of
Securities called for redemption on a redemption date between such record date
and the distribution payment date shall not be entitled to receive such
Distribution on such distribution payment date) notwithstanding the conversion
thereof following such distribution record date and prior to such distribution
payment date. However, Securities surrendered for conversion during the period
between the close of business on any distribution record date and the opening of
business on the corresponding distribution payment date (except Securities
called for redemption on a redemption date during such period) must be
accompanied by payment of an amount equal to the Distribution payable on such
shares on such distribution payment date. A Holder of Securities on a
distribution record date who (or whose transferee) tenders any such shares for
conversion into shares of Steel Stock on a distribution payment date will
receive the Distribution payable by the Trust on such Securities on such date,
and the converting Holder need not include payment of the amount of such
Distribution upon surrender of such Securities for conversion. USX shall make
no payment or allowance for dividends on the shares of Steel Stock issued upon
conversion.
(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 herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
-----------------------------------------
<PAGE>
4
In the event of any voluntary or involuntary dissolution, winding-up
and liquidation of the Trust (a "Liquidation"), the Holders of the Securities on
-----------
the date of Liquidation shall be entitled to receive out of the assets of the
Trust available for distribution to Holders of Securities after satisfaction of
liabilities to creditors, if any, an amount equal to the aggregate initial
liquidation amount of the Securities plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
-----------
Distribution"), unless, in connection with such Liquidation, in accordance with
- ------------
Section 4(c), Debentures in an aggregate principal amount equal to the aggregate
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 in exchange for such
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.
4. Redemption and Distribution; Shortening of Stated Maturity of
-------------------------------------------------------------
Debentures.
- ----------
(a) Upon the repayment of the Debentures in whole or in part, whether
at maturity or upon redemption, the proceeds from such repayment or payment
shall be substantially simultaneously applied to redeem Securities having an
aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed at a redemption price per Security equal to the
redemption price of the Debentures, together with accumulated and unpaid
Distributions thereon through the date of the redemption, payable in cash.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Convertible Preferred Securities will be
redeemed Pro Rata (as defined in Section 9 below) and the Convertible Preferred
Securities to be redeemed will be as described in Section 4(j) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each, a "Trust Special Event") shall occur and be continuing, the Regular
-------------------
Trustees may, with the consent of the Debenture Issuer, except in certain
limited circumstances described in this Section 4(c), dissolve the Trust and,
after satisfaction of liabilities to creditors, cause Debentures held by the
Institutional Trustee, having an aggregate principal amount equal to the
aggregate liquidation amount of, with an interest rate identical to the Coupon
Rate of, and accrued and unpaid interest equal to accumulated and unpaid
Distributions on, and having the same record date for payment as the Securities,
to be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Trust Special Event (the "90-Day Period"); provided,
-------------
however, that such dissolution and distribution shall be conditioned on (i) the
Regular Trustees' receipt of an opinion of independent tax counsel experienced
in such matters (a "No Recognition Opinion"), which opinion may rely on
----------------------
published revenue rulings of the Internal
<PAGE>
5
Revenue Service, to the effect that the Holders of the Securities will not
recognize any gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of Debentures, (ii)
the Debenture Issuer or the Trust being unable to eliminate, which elimination
shall be complete within the 90-Day Period, such Trust Special Event by taking
some ministerial action (such as filing a form or making an election, or
pursuing some other reasonable measure) that has no adverse effect on the Trust,
the Debenture Issuer, the Sponsor or the Holders of the Securities or does not
subject any of them to more than de minimis regulatory requirements
("Ministerial Action"), and (iii) the Debenture Issuer's prior written consent
------------------
to such dissolution and distribution.
Furthermore, if in the event of a Trust Special Event (i) after
receipt of a Dissolution Tax Opinion (as defined hereinafter) by the Regular
Trustees, the Debenture Issuer has received an opinion (a "Redemption Tax
--------------
Opinion") of independent tax counsel experienced in such matters that, as a
- -------
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even after the
Debentures were distributed to the Holders of Securities in liquidation of such
Holders' interests in the Trust as described in this Section 4(c), or (ii) after
receipt, by the Regular Trustees, of a Dissolution Tax Opinion or a Change in
1940 Act Opinion, such Regular Trustees shall have been informed by independent
tax counsel experienced in such matters that it, for substantive reasons, cannot
deliver a No Recognition Opinion to the Trust, (a) the Debenture Issuer shall
have the right to shorten the stated maturity of the Debentures to the minimum
extent required, but in any event to a date not less than five years from the
date of original issuance (the action referred to in this subclause (a) being
referred to herein as a "maturity advancement"), such that, in the opinion of
--------------------
counsel to Debenture Issuer experienced in such matters, after advancing the
stated maturity, interest paid on the Debentures will be deductible for federal
income tax purposes, or (b) if in the opinion of counsel to the Debenture Issuer
who rendered the Redemption Tax Opinion, there would in all cases, after
effecting a maturity advancement, be more than an insubstantial risk that the
Debenture Issuer would continue to be precluded from deducting interest on the
Debentures, the Debenture Issuer shall have the right, upon not less than 30 nor
more than 60 days notice, to redeem the Debentures, in whole or in part, at 100%
of the principal amount thereof, plus accrued and unpaid interest thereon to but
excluding the date of redemption (the "Special Redemption Price"), for cash
within 90 days following the occurrence of such Trust Special Event. Following
such redemption, Securities with an aggregate initial liquidation amount equal
to the aggregate principal amount of the Debentures so redeemed shall be
redeemed by the Trust at a redemption price equal to 100% of the liquidation
amount to be redeemed on a Pro Rata basis, plus accumulated but unpaid
Distributions thereon to but excluding such redemption date; provided, however,
that if at the time there is available to the Debenture Issuer or the Trust the
opportunity to eliminate, which elimination shall be complete within the 90-Day
period, such Trust Special Event by taking some Ministerial Action, the Trust or
the Debenture Issuer will pursue such Ministerial Action in lieu of redemption.
On and after the date fixed by the Regular Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will be deemed to be not outstanding, (ii) the Clearing Agency or its nominee,
as the record Holder of the Convertible
<PAGE>
6
Preferred Securities, will receive a registered certificate or certificates
representing the Debentures to be delivered upon such distribution, and (iii)
any certificates representing Securities, except for certificates representing
Convertible Preferred Securities held by the Clearing Agency or its nominee (or
any successor Clearing Agency or its nominee), will be deemed to represent
Debentures having an aggregate principal amount equal to the aggregate initial
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest (including Compound Interest) equal to
accumulated and unpaid Distributions on, such Convertible Preferred Securities
until such certificates are presented to the Debenture Issuer or its agent for
transfer or reissuance.
(d) (i) The Debenture Issuer shall redeem the Debentures, in whole, at
100% of the Special Redemption Price, for cash if any of the following events
with respect to the U.S. Steel Group occur (such events, collectively, the "U.S.
----
Steel Group Special Events"):
- --------------------------
(A) (1) USX exchanges all of the outstanding shares of Steel
Stock for all of the outstanding shares of common stock of the U.S.
Steel Group Subsidiary (as provided in Section 2(b)(iii) of Division I
of the Certificate of Incorporation (the "Steel Group Subsidiary
----------------------
Exchange") or (2) in the event of a Disposition of all or
--------
substantially all of the properties and assets of the U.S. Steel
Group, USX either pays a dividend on the Steel Stock in, or redeems a
number of shares of Steel Stock for, an amount equal to the Net
Proceeds (as defined in the Certificate of Incorporation) of such
Disposition (as provided in Section 2(b)(i)(A) or Section 2(b)(i)(B),
respectively, of Division I of the Certificate of Incorporation) (the
"Steel Group Disposition Dividend" or the "Steel Group Disposition
-------------------------------- -----------------------
Redemption", respectively); or
----------
(B) USX pays a dividend on, or USX or any of its Subsidiaries
consummates a tender offer or exchange offer for, shares of Steel
Stock and the aggregate amount of such dividend or the consideration
paid in such tender offer or exchange offer is an amount equal to all
or substantially all of the properties and assets of the U.S. Steel
Group (the "Steel Group Special Dividend" or the "Steel Group Tender
---------------------------- ------------------
or Exchange Offer", respectively); provided that the calculation of
-----------------
all or substantially all of the properties and assets of the U.S.
Steel Group shall be made without giving effect to any money borrowed
by USX or any of its Subsidiaries in connection with such dividend or
tender offer or exchange offer, as the case may be.
Following such redemption, Securities with an aggregate initial liquidation
amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust on a Pro Rata basis, at a
redemption price equal to 100% of the liquidation amount to be redeemed,
plus accumulated but unpaid Distributions thereon to but excluding such
redemption date. The redemption date of Debentures by the Debenture Issuer
and the Securities by the Trust pursuant to this Section 4(d)(i) shall be,
if the applicable U.S. Steel Group Special Event is (I) the Steel Group
Subsidiary Exchange, the date of such exchange, (II) the Steel Group
Disposition Dividend or the Steel Group Special Dividend, the date such
dividend is paid, (III) the Steel Group
<PAGE>
7
Disposition Redemption, the date of such redemption or (IV) the Steel Group
Tender or Exchange Offer, the date such tender offer or exchange offer is
consummated. Notwithstanding anything to the contrary contained in this
Section 4(d)(i), any redemption pursuant to this Section 4(d)(i) shall be
conditioned upon the actual exchange of Steel Stock for shares of common
stock of the U.S. Steel Group Subsidiary, payment of the Steel Group
Disposition Dividend or the amount due as a result of the Steel Group
Disposition Redemption (in each case in the required kind of capital stock,
cash, securities and/or other property), payment of the Steel Group Special
Dividend or the consummation of the Steel Group Tender or Exchange Offer,
as the case may be.
(ii) The Debentures shall be redeemed by the Debenture Issuer, in
whole, for cash, at the Special Redemption Price if following the
Disposition of all or substantially all of the properties and assets of the
U.S. Steel Group, USX exchanges all of the outstanding shares of Steel
Stock for USX---Marathon Group Common Stock, par value $1.00 per share, of
USX ("Marathon Stock") (as provided in Section 2(b)(i)(C) of Division I of
--------------
the Certificate of Incorporation) and, at any time subsequent to such
exchange, any of the following events with respect to the Marathon Group
occur (such events, collectively, the "Marathon Group Special Events"):
-----------------------------
(A) USX exchanges all of the outstanding shares of Marathon
Stock for all of the outstanding shares of common stock of the
Marathon Group Subsidiary (as provided in Section 2(a)(i) of Division
I of the Certificate of Incorporation) (the "Marathon Group Subsidiary
-------------------------
Exchange"); or
--------
(B) USX pays a dividend on, or USX or any of its Subsidiaries
consummates a tender offer or exchange offer for, shares of Marathon
Stock and the aggregate amount of such dividend or the consideration
paid in such tender offer or exchange offer is an amount equal to all
or substantially all of the properties and assets of the Marathon
Group (the "Marathon Group Special Dividend" or the "Marathon Group
------------------------------- --------------
Tender or Exchange Offer", respectively); provided that the
------------------------
calculation of all or substantially all of the properties and assets
of the Marathon Group shall be made without giving effect to any money
borrowed by USX or any of its Subsidiaries in connection with such
dividend or tender offer or exchange offer, as the case may be;
provided, further, that, at the time of the payment of such dividend
on, or the consummation of such tender or exchange offer for, Marathon
Stock, there is another class of common stock, other than Marathon
Stock, of USX then outstanding.
Following such redemption, Securities with an aggregate initial liquidation
amount equal to the aggregate principal amount of the Debentures so
redeemed shall be redeemed by the Trust at a redemption price equal to 100%
of the liquidation amount to be redeemed on a Pro Rata basis, plus
accumulated but unpaid Distributions thereon to but excluding such
redemption date. The redemption date of Debentures by the Debenture Issuer
and the Securities by the Trust pursuant to this Section 4(d)(ii) shall
<PAGE>
8
be, if the applicable Marathon Group Special Event is (I) the Marathon
Group Subsidiary Exchange, the date of such exchange, (II) the Marathon
Group Special Dividend, the date such dividend is paid or (III) the
Marathon Group Tender or Exchange Offer, the date such tender offer or
exchange offer is consummated. Notwithstanding anything to the contrary
contained in this Section 4(d)(ii), any redemption pursuant to this Section
4(d)(ii) shall be conditioned upon the actual exchange of Marathon Stock
for shares of common stock of the Marathon Group Subsidiary, payment of the
Marathon Group Special Dividend or the consummation of the Marathon Group
Tender or Exchange Offer, as the case may be.
(e) The Trust may not redeem any of the outstanding Convertible
Preferred Securities unless all accumulated and unpaid Distributions have been
paid on all of the outstanding Convertible Preferred Securities for all
quarterly Distribution periods terminating on or before the date of redemption.
Prior to giving a notice of redemption resulting from a U.S. Steel Group Special
Event or a Marathon Group Special Event, the Debenture Issuer shall pay all
accrued and unpaid interest on the Convertible Debentures through the interest
payment date next preceding the date of such notice. Substantially
simultaneously, the Trust shall pay all accumulated and unpaid Distributions on
the outstanding Convertible Preferred Securities through the Distribution
payment date next preceding the date of such notice.
(f) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its
reasonable efforts to have the Debentures listed on the NYSE or listed or quoted
on any national securities exchange, or with another organization on which the
Convertible Preferred Securities were listed or quoted immediately prior to the
distribution of the Debentures, if any.
(g) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
------------------------------
(other than as a result of a redemption pursuant to Section 4(d)) will be given
by the Trust by mail to each Holder of Securities to be redeemed or exchanged
not fewer than 30 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 Debentures. In the event the Trust shall redeem Securities
pursuant to Section 4(d), notice of such redemption shall be given by the Trust,
(x) if such redemption is a result of the Steel Group Tender or Exchange Offer
or the Marathon Group Tender or Exchange Offer, on the date of the public
announcement of such tender offer or exchange offer by USX or any of its
Subsidiaries, but in any event not less than 30 days prior to such redemption,
and on the date of the public announcement of any extension thereof, (y) if such
redemption is a result of the Steel Group Disposition Dividend or the Steel
Group Disposition Redemption, on a date not less than 45 days prior to the date
selected by the Board of Directors for the payment of such dividend or such
redemption and (z) otherwise, on a date at least 30 days but not more than 60
days prior to the date fixed by the Board for the redemption of Debentures, in
each case to each Holder.
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this Section 4(g), a
Redemption/Distribution
<PAGE>
9
Notice shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, or by such other means suitable to assure
delivery of such written notice, to Holders of Securities. Each
Redemption/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/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. Any notice
which was mailed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state, as appropriate: (A) the redemption date;
(B) the number of Securities to be redeemed, including CUSIP numbers, and, if
fewer than all the Securities held by such Holder are to be redeemed, the number
of such Securities to be redeemed from such Holder; (C) the redemption price to
be paid in respect of the redemption; (D) the then current Conversion Price and,
if any event then known to the Trust will result in an adjustment to the
conversion price on or prior to the redemption date, such adjusted conversion
price and the date of such adjustment; (E) if such redemption of Securities is
the result of a U.S. Steel Group Special Event or a Marathon Group Special
Event, that such redemption is conditioned upon the occurrence of the applicable
U.S. Steel Group Special Event or Marathon Group Special Event and if that U.S.
Steel Group Special Event is the Steel Group Disposition Dividend or the Steel
Group Disposition Redemption, the last date on which the Securities may be
converted into shares of Steel Stock; (F) that distributions on the Securities
to be redeemed shall cease to accumulate on the Redemption Date, provided that
if such redemption of Securities is the result of a U.S. Steel Group Special
Event or a Marathon Group Special Event, the conditions to such redemption shall
have been satisfied; and (G) a place to present Securities for redemption.
(h) If USX intends:
(i) to effect a U.S. Steel Group Special Event or a Marathon
Group Special Event; or
(ii) exchange shares of Steel Stock for Marathon Stock or USX-
Delhi Group Common Stock, par value $1.00 per share, of USX ("Delhi Stock")
-----------
following a Disposition of all or substantially all of the properties and
assets of the U.S. Steel Group,
then the Trust shall cause to be mailed to each Holder of Securities, not less
than 45 days prior to the Steel Group Disposition Dividend or the Steel Group
Disposition Redemption and not less than 30 days prior to any other U.S. Steel
Group Special Event, any Marathon Group Special Event or any such exchange of
Steel Stock for shares of Marathon Stock or Delhi Stock, a notice stating, as
applicable, (A) the record date for any dividend that is a U.S. Steel Group
Special Event or a Marathon Group Special Event, (B) the date on which any
redemption or exchange that is a U.S. Steel Group Special Event, a Marathon
Group Special Event or an exchange of Steel Stock for shares of Marathon Stock
or Delhi Stock is expected to become effective, and the date as of which it is
expected that holders of record of Steel Stock or Marathon Stock shall be
entitled to exchange their shares of Steel Stock or Marathon Stock,
respectively, for securities or other property deliverable upon such redemption
or
<PAGE>
10
exchange or (C) the date on which the Steel Group Tender or Exchange Offer or
the Marathon Group Tender or Exchange Offer commenced, the consideration offered
and the other material terms thereof (or the material terms of any amendment
thereto). In addition, from and after any exchange of Steel Stock for Delhi
Stock, effected in accordance with Section 2(b)(i) of Division I of the
Certificate of Incorporation, the Trust shall give similar notice of USX's
intention to exchange Delhi Stock for shares of the Delhi Group Subsidiary, if
Steel Stock has been exchanged therefor, or to pay a dividend on, or redeem
shares of, Delhi Stock following the Disposition of all or substantially all of
the properties and assets of the Delhi Group. Failure to give or receive any
such notice or any defect therein shall not affect the legality or validity of
the related transaction. In the event of any conflict between the notice
provisions of this Section 4(h) and those of Section 4(i), the notice provisions
of this Section 4(h) shall govern.
(i) Subject to the provisions of Section 4(h), if:
(i) USX takes any action that would require an adjustment of the
Conversion Price pursuant to Section 5; or
(ii) there shall be any consolidation or merger to which USX is
a party and for which approval of any stockholders of USX is required;
(iii) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of USX; or
(iv) USX or any of its subsidiaries shall commence a tender
offer or exchange offer for all or a portion of the outstanding shares of
Steel Stock (or shall amend any such tender or exchange offer),
then the Trust shall mail to each Holder of Securities, as promptly as possible,
but at least 15 days prior to the earliest applicable date hereinafter
specified, a notice stating, as applicable, (A) the proposed record date for a
dividend or distribution or the proposed effective date of a consolidation,
merger, sale, transfer, liquidation, dissolution or winding up, (B) the date as
of which it is expected that holders of Steel Stock of record shall be entitled
to exchange their shares of Steel Stock for securities or other property, if
any, deliverable upon such consolidation, merger, sale, transfer, liquidation,
dissolution or winding up or (C) the date on which such tender or exchange offer
is scheduled to expire unless extended, the consideration offered and the other
material terms thereof (or the material terms of any amendment thereto).
Failure to give or receive such notice or any defect therein shall not affect
the legality or validity of the related transaction.
(j) In the event that fewer than all the outstanding Securities are
to be redeemed, the Convertible Preferred 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 Clearing Agency or its nominee, the
distribution of the proceeds of such redemption will be made to
<PAGE>
11
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such Clearing
Agency or nominee.
(k) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable, subject to any conditions to such redemption specified in this
Section 4), then (i) while the Convertible Preferred Securities are in book-
entry form, with respect to the Convertible Preferred Securities, by 12:00 noon,
New York City time, on the redemption date, provided that the Debenture Issuer
has paid the Institutional Trustee funds sufficient to pay the applicable
redemption price, the Institutional Trustee will deposit irrevocably with the
Clearing Agency or its nominee funds sufficient to pay the applicable redemption
price and accumulated but unpaid Distributions thereon with respect to the
Convertible Preferred Securities and will give the Clearing Agency irrevocable
instructions and authority to pay such amounts to the Holders of the Convertible
Preferred Securities, and (ii) with respect to Convertible Preferred Securities
issued in definitive form and Common Securities, provided that the Debenture
Issuer has paid the Institutional Trustee a sufficient amount of cash in
connection with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant redemption price and accumulated but
unpaid Distributions thereon to the Holders of such Securities by check mailed
to the address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall have
been given and funds deposited as required, if applicable, then, subject to any
conditions to such redemption specified in this Section 4, except if the
redemption is the result of a U.S. Steel Group Special Event or a Marathon Group
Special Event and the conditions to such redemption shall not have been
satisfied, immediately prior to the close of business on the required date of
such deposit, distributions will cease to accrue on the Securities so called for
redemption and 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 and accumulated but unpaid Distributions thereon, 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 redemption price and accumulated but
unpaid Distributions thereon payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) 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. In the event that payment of the redemption price
and accumulated but unpaid Distributions thereon in respect of any Securities is
improperly withheld or refused and not paid either by the Institutional Trustee
or, if paid to the Institutional Trustee, by the Sponsor as guarantor pursuant
to the relevant Securities Guarantee, Distributions on such Securities will
continue to accumulate at the Coupon Rate from the original redemption date to
the actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
redemption price and the accumulated but unpaid Distributions thereon.
<PAGE>
12
(l) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Convertible Preferred
Securities, the Clearing Agency or its nominee if the Global Certificates have
been issued or, if Definitive Convertible Preferred Security Certificates have
been issued, to the Holder thereof, and (B) in respect of the Common Securities
to the Holder thereof.
(m) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor 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 otherwise.
5. Conversion Rights.
-----------------
The Holder of Securities shall have the right at any time and prior to
the close of business (New York time) on March 31, 2037 (or earlier as described
in Section 5(b)), at their option, to cause the Conversion Agent to convert
Securities in whole or in part (but only in whole Securities), on behalf of the
converting Holders, into shares of Steel Stock in the manner described herein on
and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of Steel Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held by the Trust on the basis of $1 in
liquidation amount of a Security per $1 in principal amount of Debentures, and
immediately convert such amount of Debentures into that number of fully paid and
nonassessable shares of Steel Stock obtained by dividing the principal amount of
such Debentures to be converted by the conversion price of the Debentures. The
initial conversion price of the Debentures is $46.25 per share of Steel Stock
(equivalent to a conversion ratio of 1.081 shares of Steel Stock for each
Security). The conversion price and the securities into which the Securities
are convertible are subject to certain adjustments set forth in Article VII of
the Supplemental Indenture. Any Holder of Securities may only convert whole
Securities and the Trust shall not be obligated to issue any fractional
Securities.
(b) The right to convert Securities shall terminate prior to the close
of business (i) on March 31, 2037 (unless the stated maturity of the Debentures
is shortened following a Tax Event, as provided in Section 4(c), in which case
the advanced maturity date) or (ii) in the case of Securities called for
redemption, on the related redemption date, unless (A) the Institutional Trustee
shall default in making payment of any moneys payable upon such redemption under
Section 4 or (B) if the redemption of shares of this Security is the result of a
U.S. Steel Group Special Event or a Marathon Group Special Event, the conditions
to such redemption shall not have been satisfied; provided, that if USX has
given notice of a redemption pursuant to Section 4(d)(i) which is conditioned on
the occurrence of the Steel Group Disposition Dividend or the Steel Group
Disposition Redemption, the right to convert Securities shall terminate on the
31st day prior to the date selected by the Board for such dividend or
redemption.
<PAGE>
13
(c) In order to convert Securities into Steel Stock, the Holder shall
deliver 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 Steel Stock should be issued and (ii) direct the Conversion
Agent (A) to exchange such Securities for a portion of the Debentures held by
the Trust and (B) to immediately convert such Debentures on behalf of such
Holder, into Steel Stock (at the conversion rate specified in Section 5(a)).
The Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debentures held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify USX of the Holder's
election to convert such Debentures into shares of Steel Stock at the conversion
price specified in Section 5(a). Except as provided in Section 2(d), neither
the Trust nor the Sponsor will make, or be required to make, any payment,
allowance or adjustment upon any conversion on account of any accumulated and
unpaid Distributions accumulated on the Securities (including any Additional
Amounts accumulated thereon) surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Steel Stock issued upon such
conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day on which a Conversion Request 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 Steel Stock
---------------
issuable upon conversion of the Debentures shall be treated for all purposes as
the record holder or holders of such Steel Stock at such time. As promptly as
practicable on or after the Conversion Date, USX shall issue and deliver at the
office of the Conversion Agent a certificate or certificates for the number of
full shares of Steel 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, unless otherwise directed by the Holder in the
notice of conversion and the Conversion Agent shall distribute such certificate
or certificates and cash payments, if any, to such Person or Persons.
(d) Each Holder of a Security by his acceptance thereof appoints the
Institutional Trustee as "Conversion Agent" for the purpose of effecting the
----------------
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, 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 Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Steel Stock
and thereupon to deliver such shares of Steel Stock in accordance with the
provisions of this Section and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(e) No fractional shares or scrip representing fractions of shares of
Steel Stock or any other common stock of USX shall be issued upon conversion of
any Securities.
<PAGE>
14
Instead of any fractional interest in a share of Steel Stock or such other
common stock that would otherwise be deliverable upon the conversion of any
Securities, USX shall pay to the holder of such share an amount in cash based
upon the Closing Price of Steel Stock or such other common stock on the Trading
Day immediately preceding the date of conversion. If more than one Security
shall be surrendered for conversion at one time by the same holder, the number
of full shares of Steel Stock or such other common stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
Securities so surrendered.
(f) USX shall at all times reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued shares of
Steel Stock (and/or, if the Debentures are then convertible into other common
stock of USX, such other common stock, or its issued shares of Steel Stock or
such other common stock, as the case may be, held in its treasury, or both), for
the purpose of effecting conversion of the Debentures, the full number of shares
of Steel Stock or such other common stock as shall from time to time be
issuable upon the conversion of all the Debentures then outstanding and not
theretofore converted. Any shares of Steel Stock or other shares of common
stock of USX issued upon conversion of the Debentures shall be duly authorized,
validly issued and fully paid and nonassessable. The Trust shall deliver the
shares of Steel Stock or shares of such other common stock received upon
conversion of the Debentures to the converting Holder free and clear of all
liens, charges, security interests and encumbrances, except for United States
withholding taxes. Each of USX and the Trust shall endeavor to list the shares
of Steel Stock or other common stock of USX required to be delivered upon
conversion of the Debentures and the Securities, prior to such delivery, upon
each national securities exchange, if any, upon which the outstanding Steel
Stock or such other common stock is listed at the time of such delivery. Prior
to the delivery of any securities that USX shall be obligated to deliver upon
conversion of the Debentures and the Securities, USX shall endeavor to comply
with all federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to the
delivery thereof by, any governmental authority. For purposes of this Section
4(f), the number of shares of Steel Stock or such other shares of common stock
that shall be deliverable upon the conversion of all outstanding Securities
shall be computed as if at the time of computation all such outstanding
Securities were held by a single Holder.
(g) USX will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Steel Stock or other common stock of the
Company or other securities or property on conversion on conversion of
Debentures and the delivery, by the Trust, of the shares of Steel Stock or other
securities or property upon conversion of the Securities. USX shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Steel Stock or other
securities or property 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.
<PAGE>
15
(h) Nothing in the preceding Paragraph (g) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or set forth in this Annex I to the Declaration or to the Declaration
itself or otherwise require the Institutional Trustee or the Trust to pay any
amounts on account of such withholdings.
(i) Notwithstanding the foregoing, no holder of Common Securities may
convert such number of Common Securities which, after giving effect to such
conversion, would result in the holders of Common Securities in the aggregate
holding less then 3% of the capital of the Trust.
6. Voting Rights -- Convertible Preferred Securities.
-------------------------------------------------
(a) Except as provided under Sections 6(b) and 8 and as otherwise
required by law and the Declaration, the Holders of the Convertible Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in 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 Institutional
Trustee, or direct the exercise of any trust or power conferred upon the
Institutional Trustee under the Declaration, including the right to direct the
Institutional Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture with respect to the Debentures, (ii) waive any
past default and its consequences that is waivable under Section 6.1 of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable; provided, however,
that if an Indenture Event of Default has occurred and is continuing, then the
Holders of 25% of the aggregate liquidation amount of the Convertible Preferred
Securities may direct the Institutional Trustee to declare the principal of and
interest on the Debentures due and payable; provided, further, that, where a
consent or action under the Indenture would require the consent or act of
holders of more than a majority (a "Super Majority") in aggregate principal
--------------
amount of Debentures, the Institutional Trustee may only give such consent or
take such action at the written direction of the Holders of at least the same
Super Majority percentage in liquidation amount of the Convertible Preferred
Securities as is required under the Indenture of aggregate principal amount of
the Debentures outstanding. The Institutional 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 Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action in accordance with the directions of the Holders of
the Convertible Preferred Securities under this paragraph unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes. If an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay interest or principal on the Debentures
on the date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a holder of Convertible Preferred
Securities may directly institute a proceeding for
<PAGE>
16
enforcement of payment to such Holder of the principal of or interest on
Debentures having a principal amount equal to the aggregate liquidation amount
of the Convertible Preferred Securities of such holder (a "Direct Action") on or
-------------
after the respective due date specified in the Debentures. In connection with
such Direct Action, the rights of the holders of the Common Securities will be
subrogated to the rights of such Holder of Convertible Preferred Securities to
the extent of any payment made by the Debenture Issuer to such Holder of
Convertible Preferred Securities in such Direct Action. 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 holder of the
Debentures.
Any 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 or pursuant to 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
Convertible Preferred 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 upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Convertible Preferred
Securities will be required for the Trust to redeem, exchange and/or cancel
Convertible Preferred Securities or to distribute Debentures, each in accordance
with the Declaration and the terms of the Securities.
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 Sponsor or any
Affiliate of the Sponsor shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding.
7. Voting Rights -- Common Securities.
----------------------------------
(a) Except as provided under Sections 7(b), (c) and 8 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the 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 2.6 of the Declaration and only after any
Event of Default with respect to the Convertible Preferred Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this
<PAGE>
17
first paragraph of Section 7(c), the Holders of a Majority in liquidation amount
of the Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, including (i) directing the time
method, place of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred on the Debenture
Trustee with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section 6.1 of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided that, where a consent or
action under the Indenture would require the consent or act of the holders of a
Super Majority in aggregate principal amount of the Debentures, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the same Super Majority percentage
in liquidation amount of the Common Securities as is required under the
Indenture of aggregate principal amount of the Debentures outstanding. Pursuant
to this Section 7(c), the Institutional 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 Institutional Trustee or the
Debenture Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph unless the Institutional Trustee has obtained an
opinion of 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. If the Institutional Trustee fails to enforce
its rights under the Declaration, any Holder of Common Securities may institute
a legal proceeding directly against any Person to enforce the Institutional
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be given
at a separate meeting of Holders of Common Securities convened for such purpose,
at a meeting of all of the Holders of Securities or pursuant to written consent.
The Regular Trustees will cause a notice of any meeting at which Holders of
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
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 upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
Debentures in accordance with the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise
<PAGE>
18
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 8.1 of the Declaration, then
the Holders of outstanding Securities voting together as a single 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 at least a Majority in liquidation amount of the
Securities affected thereby; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only the Convertible
Preferred Securities or only the 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
liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee, as the
holder of the Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture or the Debentures, the
Institutional 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 liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of a Super Majority in aggregate principal amount of
the Debentures, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the same Super Majority percentage in
liquidation amount of the Securities as is required under the Indenture of
aggregate principal amount of the Debentures outstanding; provided, further,
that the Institutional Trustee shall not take any action in accordance with the
directions of the Holders of the Securities under this Section 7(b) unless the
Institutional Trustee has obtained an opinion of 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.
9. Pro Rata.
--------
A reference in these terms of the Securities to any distribution or
treatment as being "Pro Rata" shall mean pro rata to each Holder of Securities
according to the aggregate initial liquidation amount of the Securities held by
the relevant Holder in relation to the aggregate initial liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
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 initial liquidation amount of
Convertible Preferred Securities held by such Holder relative to the aggregate
initial 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 Common Securities pro rata
according to the aggregate initial liquidation amount of Common Securities held
by such Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
<PAGE>
19
10. Ranking.
-------
The Convertible Preferred Securities rank pari passu, and payment
thereon shall be made Pro Rata with, the Common Securities, except that where an
Event of Default occurs and is continuing, the rights of Holders of the 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 Securities Guarantee and Indenture
------------------------------------------------
Each Holder of Convertible Preferred Securities and Common Securities,
by the acceptance thereof, agrees to the provisions of the Securities 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. Definitions.
-----------
The following terms shall have the following meanings:
"Board of Directors" or "Board" means, at any time, the duly elected
------------------ -----
or acting board of directors (or duly authorized committee thereof) of USX
at such time.
"Certificate of Incorporation" means USX's Restated Certificate of
----------------------------
Incorporation, as amended, supplemented or otherwise modified from time to
time.
"Closing Price" of shares of any class of common stock of USX for any
-------------
day means the last reported sales price, regular way on such day, or, if no
reported sale takes place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in either case as reported
on the NYSE Composite Tape or, if such common stock is not listed or
admitted to trading on the NYSE, 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, on
the NASDAQ Stock Market or, if such common stock is not quoted on the
NASDAQ Stock Market, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by NASDAQ or, if
closing bid and asked prices for such common stock on such day shall not
have been reported through NASDAQ, the average of the closing bid and asked
prices on such day as furnished by any NYSE member firm regularly making a
market in such common stock selected for such purpose by the Board of
Directors.
<PAGE>
20
"Conversion Price" means the conversion price per share of Steel Stock
----------------
and/or other shares of common stock of USX into which Debentures are
convertible, as such Conversion Price may be adjusted pursuant to Section
5.
"Investment Company Event" means that the Regular Trustees shall have
------------------------
received an opinion of independent counsel experienced in such matters (a
"Change in 1940 Act Opinion") to the effect that, as a result of the
---------------------------
occurrence of a change in law or regulation or a written change in
interpretation or application of law or regulations by any legislative
body, court, governmental agency or regulatory authority on or after
, 1997, there is more than an insubstantial risk that the Trust
is or will be considered an "investment company" which is required to be
------------------
registered under the Investment Company Act of 1940, as amended.
"Marathon Group Subsidiary" has the meaning set forth in the
-------------------------
Certificate of Incorporation.
"NASDAQ" means the National Association of Securities Dealers, Inc.
------
Automated Quotations System or any successor thereto.
"NYSE" means the New York Stock Exchange, Inc. or any successor
----
thereto.
"Subsidiary" means a corporation more than 50% of the outstanding
----------
voting stock of which is owned, directly or indirectly, by USX or by one or
more other Subsidiaries. For the purposes of this definition, "voting
stock" means stock which ordinarily has voting power for the election of
directors, whether at all times or only so long as no senior class of stock
has such voting power by reason of any contingency.
"substantially all of the properties and assets of the U.S. Steel
----------------------------------------------------------------
Group" and "substantially all of the properties and assets of the Marathon
----- --------------------------------------------------------------
Group" means a portion of such properties and assets that represents at
-----
least 80% of either of the then-current market value of, or the aggregate
revenues for the immediately preceding twelve fiscal quarterly periods of
USX derived from, the properties and assets of the U.S. Steel Group or the
Marathon Group, respectively, as of such date (excluding the properties and
assets of any person, entity or group in which USX, directly or indirectly,
owns less than a majority interest).
"Tax Event" means that the Regular Trustees shall have received an
---------
opinion of independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that on or after May 16, 1997, as
------------------------
a result of (a) any amendment to, clarification of, or change (including
any announced proposed change) in the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority
thereof or therein affecting taxation, (b) any official administrative
pronouncement, ruling, regulatory procedure, notice or announcement,
including any notice or announcement of intent to adopt such procedures or
regulations (an
<PAGE>
21
"Administrative Action") or judicial decision or (c) any amendment to,
---------------------
clarification of, or change in the official position or the interpretation
of such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative
body, court, governmental authority or regulatory body, irrespective of the
manner in which such amendment, clarification or change is made known,
which amendment, clarification, or change is effective or such
pronouncement or decision is announced, in each case, on or after, May 16,
1997, there is the creation by such change in tax law of more than an
insubstantial risk that (i) the Trust is, or, within 90 days of the date
thereof, will be subject to United States federal income tax with respect
to interest accrued or received on the Debentures, (ii) the Trust is, or,
within 90 days of the date thereof, will be subject to more than a de
minimis amount of taxes, duties or other governmental charges, or (iii)
interest payable in cash by the Debenture Issuer to the Trust on the
Debentures, other than interest attributable to the Common Securities, is
not, or within 90 days of the date thereof will not be, deductible, in
whole or in part, by the Debenture Issuer for United States federal income
tax purposes; provided, however, that such an opinion shall not be deemed
to be a "Dissolution Tax Opinion" if the occurrence of any of the events
-----------------------
described in (a), (b) or (c) above requires the Debenture Issuer for United
States federal income tax purposes to defer taking a deduction for any
original issue discount ("OID") that accrues with respect to the Debentures
---
until the interest payment related to such OID is paid by the Debenture
Issuer in cash, provided the occurrence of any of the events describe in
(a), (b) or (c) above does not create more than an insubstantial risk that
the Debenture Issuer will be prevented from taking a deduction for OID
accruing with respect to the Debentures as of a date that is no later than
the date the interest payment related to such OID is actually paid by the
Debenture Issuer in cash.
"Trading Day" means, with respect to any class of common stock of USX,
-----------
any day on which such common stock is traded on the NYSE, or if such common
stock is not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which such common stock is listed or
admitted, or if not listed or admitted to trading on any national
securities exchange, on NASDAQ Stock Market, or if such common stock is not
quoted on NASDAQ Stock Market, in the applicable securities market in which
such common stock is traded.
"U.S. Steel Group Subsidiary" has the meaning set forth in the
---------------------------
Certificate of Incorporation.
14. Miscellaneous.
-------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Securities
Guarantee and the Indenture to a Holder without charge on written request to the
Sponsor at its principal place of business.
<PAGE>
EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
FORM OF FACE OF SECURITY CERTIFICATE
IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT THE FOLLOWING: This Convertible Preferred Security is a Global
Certificate within the meaning of the Declaration hereinafter referred to and is
registered in the name of the Clearing Agency or a nominee of the Clearing
Agency. This Convertible Preferred Security is exchangeable for Convertible
Preferred Securities registered in the name of a person other than the Clearing
Agency or its nominee only in the circumstances described in the Declaration and
no transfer of this Convertible Preferred Security (other than a transfer of
this Convertible Preferred Security as a whole by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee of the Clearing Agency) may be registered
except in such circumstances.
IF THE CLEARING AGENCY IS THE DEPOSITORY TRUST COMPANY, INSERT THE
FOLLOWING: Unless this Convertible Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York) to the Trust or its agent for registration of transfer, exchange
or payment, and any Convertible Preferred Security issued is registered in the
name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.
Certificate Number. Number of Convertible
Preferred Securities
CUSIP NO.
CERTIFICATE EVIDENCING 6.75%
CONVERTIBLE QUARTERLY INCOME PREFERRED SECURITIES
OF
USX CAPITAL TRUST I
6.75% Convertible Quarterly Income Preferred Securities
(liquidation amount $50 per
Convertible Quarterly Income Preferred Security)
USX 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
<PAGE>
beneficial ownership interests in the assets of the Trust designated the 6.75%
Trust Convertible Quarterly Income Preferred Securities (initial liquidation
amount $50.00 per Trust 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 May 16, 1997, 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 to the Declaration. 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 Securities Guarantee
to the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Securities Guarantee and the Indenture to a Holder without
charge upon written request to the Trust at its principal place of business.
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
Debentures as indebtedness and the Convertible Preferred Securities as evidence
of indirect beneficial ownership in the Debentures.
These Convertible Preferred Securities shall not be entitled to any
benefit under the Declaration, be valid or become obligatory for any purpose,
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Institutional Trustee.
The provisions of these Convertible Preferred Securities are continued
on the reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Trust has caused this certificate to be
executed.
USX CAPITAL TRUST I
By:
Name:
Regular Trustee
A-2
<PAGE>
FORM OF CERTIFICATE OF AUTHENTICATION
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
INSTITUTIONAL TRUSTEE NAME, or [ ], as Authentication Agent
Institutional Trustee
By:________________________ By:___________________________
Authorized Signatory Authorized Signatory
A-1
<PAGE>
FORM OF REVERSE OF SECURITY
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of 6.75% (the "Coupon Rate") of the initial
-----------
liquidation amount per Convertible Preferred Security, such rate being the rate
of interest payable on the Debentures held by the Institutional Trustee.
Distributions not paid on the regularly scheduled payment date therefor will
bear interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
-------------
such cash distributions and any such interest payable unless otherwise stated.
A Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee 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 30-day months and,
for periods of less than a month, the actual number of days elapsed per 30-day
month.
Except as otherwise described below, distributions on the Preferred
Securities shall be cumulative, shall accumulate from and including March 31,
1997 and shall be payable on the last calendar day of March, June, September and
December of each year, commencing June 30, 1997, which payment dates shall
correspond to the interest payment dates on the Debentures, when, as and if
funds are available for payment, to Holders at the close of business on the
regular record date for such distribution, which regular record date shall be,
while these Convertible Preferred Securities are represented by a Global
Certificate, the close of business on the Business Day next preceding such
distribution payment date, unless otherwise provided in the Declaration or
unless a different regular record date is established or provided for the
corresponding interest payment date on the Debentures. The Debenture Issuer has
the right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period (each
an "Extension Period") not exceeding 20 consecutive quarterly interest payment
----------------
periods during which Extension Period no interest is due and payable on the
Debentures; provided that no Extension Period shall last beyond the date of the
maturity of the Debentures. As a consequence of such deferral, Distributions
will also be deferred. To the extent permitted by applicable law, during such
Extension Period deferred quarterly Distributions will continue to accumulate
with interest thereon at the Coupon Rate compounded quarterly for each quarter
of the Extension Period. Before the termination of any such Extension Period,
the Debenture Issuer 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. At the end of the Extension Period, Payments of
accumulated Distributions shall be payable to Holders of Convertible Preferred
Securities on the first record date after the termination of such Extension
Period. Upon the termination of any such Extension Period and the payment of
all amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the requirements set forth in the Indenture. Upon repayment of the
Debentures in whole or in part, whether at maturity or upon redemption, the
proceeds from such repayment or payment shall be substantially simultaneously
applied to redeem the Securities as provided in the Declaration.
A-1
<PAGE>
The Convertible Preferred Securities shall be exchangeable at the
option of the Debenture Issuer in certain events as set forth in the Declaration
and in the Supplemental Indenture.
The Convertible Preferred Securities shall be convertible into shares
of Steel Stock or other shares of common stock of the Debenture Issuer at the
holder's direction to the Conversion Agent as set forth in the Declaration.
A-2
<PAGE>
CONVERSION REQUEST
To: The Bank of New York, as Conversion Agent of USX Capital Trust I
The undersigned Holder of these Convertible Preferred Securities
hereby irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into USX--U.S. Steel Group Common
Stock of USX Corporation (the "Steel Stock"), or any other class of common stock
-----------
of USX, as permitted by the Restated Certificate of Incorporation of USX, in
accordance with the terms of the Amended and Restated Declaration of Trust of
USX Capital Trust I, dated as of May 16, 1997 (as amended from time to time, 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) on behalf of
the undersigned to (i) exchange such Convertible Preferred Securities for a
portion of the 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 (ii)
immediately convert such Debentures, into Steel Stock pursuant to the terms of
the Indenture (as defined in the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares of Steel Stock, or other class of common stock of USX, 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
in whole /__/ Preferred Securities
in part /__/ to converted:
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Steel Stock, or other class of
common stock of USX, are to be issued, along with the address or addresses of
such person or persons
Signature (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 Conversion Agent, 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 Conversion
---------------------------
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A-3
<PAGE>
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:
Signature:
(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 and Exchange Act of 1934, as amended.
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
FORM OF FACE OF SECURITY CERTIFICATE
Certificate Number Number of Common Securities
CERTIFICATE EVIDENCING 6.75% COMMON SECURITIES
OF
USX CAPITAL TRUST I
6.75% Common Securities
(liquidation amount $50 per Common Security)
USX 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
ownership beneficial interests in the assets of the Trust designated the 6.75%
Common Securities (liquidation amount $50 per Common Security) (the "Common
------
Securities"). The 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 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 May 16, 1997, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
-----------
Securities as set forth in Annex I to the Declaration. 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 Securities Guarantee to the extent
provided therein. The Sponsor will provide a copy of the Declaration, the
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
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 Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
The provisions of these Common Securities are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
A-1
<PAGE>
IN WITNESS WHEREOF, the Trust has caused this certificate to be
executed.
USX CAPITAL TRUST I
By:_________________________
Name:
Regular Trustee
A-2
<PAGE>
FORM OF REVERSE OF SECURITY
Distributions payable on each Common Security will be fixed at a rate
per annum of 6.75% (the "Coupon Rate") of the initial liquidation amount per
-----------
Common Security, such rate being the rate of interest payable on the Debentures
held by the Institutional Trustee. Distributions not paid on the regularly
scheduled payment date therefor will bear interest thereon compounded quarterly
at the Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
- --------------
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee 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 30-day months and, for periods of less than a month,
the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities shall be cumulative, shall accumulate from March 31, 1997 and shall
be payable quarterly (subject to deferral as set forth in the Declaration and
the Indenture) in arrears, on the last calendar day of March, June, September
and December of each year, commencing June 30, 1997, which payment dates shall
correspond to the interest payment dates on the Debentures, when, as and if
funds are available for payment, to Holders at the close of business on the
regular record date for such distribution, which regular record date shall be,
while these Common Securities are represented by a Global Certificate, the close
of business on the Business Day next preceding such distribution payment date,
unless otherwise provided in the Declaration or unless a different regular
record date is established or provided for the corresponding interest payment
date on the Debentures. The Debenture Issuer has the right under the Indenture
to defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period (each an "Extension Period") not
----------------
exceeding 20 consecutive quarterly interest payment periods during which
Extension Period no interest is due and payable on the Debentures, provided that
no Extension Period shall last beyond the date of the maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. To the extent permitted by applicable law, during such Extension
Period deferred quarterly Distributions will continue to accumulate with
interest thereon at the Coupon Rate compounded quarterly for each quarter of the
Extension Period. Before the termination of any such Extension Period, the
Debenture Issuer 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. At the end of the Extension Period, Payments of accumulated
Distributions shall be payable to Holders of Common Securities on the first
record date after the termination of such Extension Period. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
requirements set forth in the Indenture.
A-3
<PAGE>
Upon repayment of the Debentures, in whole or in part, whether at
maturity or upon redemption, the proceeds from such repayment or payment shall
be substantially simultaneously applied to redeem the Securities as provided in
the Declaration.
The Common Securities shall be convertible into shares of Common Stock
at the holder's direction to the Conversion Agent as set forth in the
Declaration.
The Common Securities shall be exchangeable at the option of the
Debenture Issuer in certain events as set forth in the Declaration and in the
Supplemental Indenture.
A-4
<PAGE>
CONVERSION REQUEST
To: The Bank of New York, as Conversion Agent of USX Capital Trust I
The undersigned Holder of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Steel Stock of USX Corporation (the "Steel Stock"), or any
-----------
other class of common stock of USX as permitted by the Restated Certificate of
Incorporation of USX, in accordance with the terms of the Amended and Restated
Declaration of Trust of USX Capital Trust I, dated as of May 16, 1997 (as
amended from time to time, the "Declaration"). Pursuant to the aforementioned
-----------
exercise of the option to convert these Common Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
on behalf of the undersigned to (i) exchange such Common Securities for a
portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in the terms of the Common
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures, into Steel Stock pursuant to the terms of the Indenture (as
defined in the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares of Steel Stock 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: ________, in whole /__/ in part /__/
Number of Common Securities to be converted:
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Steel Stock are to be
issued, along with the address or addresses of such person or persons
Signature (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 Conversion Agent, 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 Conversion Agent in addition to, or in substitution
for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.)
A-5
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
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 Common Security
Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this 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.)
A-1
