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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 17, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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SUPERIOR TELECOM INC.
SUPERIOR TRUST I
(Exact name of registrant as specified in its charter)
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DELAWARE 58-2248978
(State or other jurisdiction of 51-0386384
incorporation or organization) (I.R.S. Employer Identification No.)
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1790 BROADWAY
NEW YORK, NEW YORK 10019
(212) 757-3333
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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STEWART H. WAHRSAGER, ESQ.
GENERAL COUNSEL
SUPERIOR TELECOM INC.
1790 BROADWAY
NEW YORK, NEW YORK 10019
(212) 757-3333
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPY TO:
RONALD R. PAPA, ESQ.
PROSKAUER ROSE LLP
1585 BROADWAY
NEW YORK, NEW YORK 10036-8299
(212) 969-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT HAS BEEN DECLARED EFFECTIVE.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest investment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ______
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SHARES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING
REGISTERED REGISTERED PER UNIT (1) PRICE (1)(2)
<S> <C> <C> <C>
8 1/2% Trust Convertible Preferred Securities of Superior
Trust I................................................. 1,473,352 $47.00 $69,247,544
8 1/2% Convertible Subordinated Debentures due 2014 of
Superior TeleCom Inc.................................... (3) (3) (3)
Common Stock, par value $.01 per share, of Superior
TeleCom Inc............................................. 1,644,408 (4) (4)
Guarantee of Superior TeleCom Inc......................... (5) (5) (5)
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AMOUNT OF
TITLE OF SHARES TO BE REGISTRATION
REGISTERED FEE
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8 1/2% Trust Convertible Preferred Securities of Superior
Trust I................................................. $19,251
8 1/2% Convertible Subordinated Debentures due 2014 of
Superior TeleCom Inc.................................... --
Common Stock, par value $.01 per share, of Superior
TeleCom Inc............................................. --
Guarantee of Superior TeleCom Inc......................... --
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, as amended (the
"Securities Act").
(2) Exclusive of accrued interest and distributions, if any.
(3) Up to $73,667,600 in aggregate principal amount of 8 1/2% Convertible
Subordinated Debentures due 2014 (the "Debentures") of Superior TeleCom
Inc., a Delaware corporation ("Superior"), issued to Superior Trust I, a
Delaware statutory business trust (the "Trust"), in connection with the
issuance by the Trust of 8 1/2% Trust Convertible Preferred Securities (the
"Trust Preferred Securities"). The Debentures may be distributed, under
certain circumstances, to holders of Trust Preferred Securities for no
additional consideration.
(4) The Trust Preferred Securities are convertible into shares of common stock,
par value $.01 per share, of Superior ("Superior Common Stock") after
September 30, 1999. Each Trust Preferred Security is initially convertible
into 1.1161 shares of Superior Common Stock, subject to adjustment under
certain circumstances. This Registration Statement includes such additional
shares of Superior Common Stock as may be issuable pursuant to such
adjustments. The shares of Superior Common Stock issued upon conversion of
the Trust Preferred Securities will be issued for no additional
consideration. The provisions of Rule 416 under the Securities Act shall
apply to this Registration Statement and the number of shares of Superior
Common Stock registered by this Registration Statement automatically shall
increase or decrease as a result of any future stock split, stock dividend,
reverse stock split, reclassification, recapitalization or other similar
transaction.
(5) Includes the obligations of Superior under the Guarantee Agreement, dated as
of March 31, 1999 (the "Guarantee"), between Superior and American Stock
Transfer & Trust Company, as Guarantee Trustee, and certain back-up
undertakings under (i) the Indenture, dated as of March 31, 1999, between
Superior and American Stock Transfer & Trust Company, as Indenture Trustee,
pursuant to which the Debentures were issued and (ii) the Amended and
Restated Declaration of Trust, dated as of March 31, 1999, among Superior,
American Stock Transfer & Trust Company, as Property Trustee, Wilmington
Trust Company, as Delaware Trustee, and the Administrative Trustees named
therein, including Superior's obligation to pay costs, expenses, debts and
liabilities of the Trust (other than with respect to the Trust Preferred
Securities and common securities of the Trust), which in the aggregate
provide a full and unconditional guarantee of amounts due on the Trust
Preferred Securities. The Guarantee is not traded separately.
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THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION, DATED AUGUST 17, 1999
PROSPECTUS
SUPERIOR TRUST I
1,473,352 8 1/2% TRUST CONVERTIBLE PREFERRED SECURITIES
(LIQUIDATION PREFERENCE $50 PER TRUST PREFERRED SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED BY
SUPERIOR TELECOM INC.
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The selling securityholders listed on page 11 of this prospectus are
offering up to 1,473,352 8 1/2% trust convertible preferred securities of
Superior Trust I that they received in connection with the merger of Essex
International Inc. with a subsidiary of Superior TeleCom Inc. The merger was
consummated on March 31, 1999. In connection with the merger, we agreed with the
selling securityholders that we would use our best efforts to effect this
registration after the closing of the merger and to keep it in effect until
April 30, 2000.
Each trust preferred security will be convertible into 1.1161 shares of
common stock of Superior after September 30, 1999. This conversion rate is
subject to adjustment, as described in this prospectus. You should also be aware
that:
- Superior can exchange the trust preferred securities for debt with similar
terms whenever it wants;
- this debt is subordinate to all of Superior's current and future senior
secured debt; and
- the payment of distributions on the trust preferred securities can be
deferred by Superior.
We will not receive any proceeds from the sale of trust preferred securities
by the selling securityholders. We will not be paying any underwriting discounts
or commissions in this offering.
The trust preferred securities are traded on the New York Stock Exchange
under the symbol "SUT PrA." On August 13, 1999, the last reported sale price of
the trust preferred securities on the New York Stock Exchange was $47.50 per
trust preferred security.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 5.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
August , 1999
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TABLE OF CONTENTS
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PAGE
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ABOUT SUPERIOR TELECOM INC. ............................................................................... 3
ABOUT THE TRUST PREFERRED SECURITIES....................................................................... 3
FORWARD-LOOKING STATEMENTS................................................................................. 4
RISK FACTORS............................................................................................... 5
RATIOS OF COMBINED FIXED CHARGES AND PREFERENCE DIVIDENDS TO EARNINGS...................................... 11
USE OF PROCEEDS............................................................................................ 11
SELLING SECURITYHOLDERS.................................................................................... 11
DESCRIPTION OF THE TRUST PREFERRED SECURITIES.............................................................. 13
DESCRIPTION OF THE GUARANTEE AGREEMENT..................................................................... 23
DESCRIPTION OF THE DEBENTURES.............................................................................. 26
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE DEBENTURES AND THE GUARANTEE AGREEMENT.............. 34
MATERIAL FEDERAL INCOME TAX CONSEQUENCES................................................................... 35
LEGAL MATTERS.............................................................................................. 41
EXPERTS.................................................................................................... 41
WHERE YOU CAN FIND MORE INFORMATION........................................................................ 42
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................................................ 42
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ABOUT SUPERIOR TELECOM INC.
Superior TeleCom Inc. is the largest wire and cable manufacturer in the
United States and the third largest in the world. Superior manufactures a broad
portfolio of wire and cable products with primary applications in the
communications, original equipment manufacturer and electrical markets. Superior
is a leading manufacturer and supplier of communications wire and cable products
to telephone companies, distributors and system integrators; magnet wire and
insulation materials for motors, transformers and electrical controls, as well
as automotive and specialty wiring assemblies for automobiles and trucks; and
building and industrial wire for applications in commercial and residential
construction and industrial facilities.
Superior was incorporated under the laws of the State of Delaware on July
17, 1996. Its principal executive offices are located at 1790 Broadway, New
York, New York 10019 and its telephone number is (212) 757-3333.
ABOUT THE TRUST PREFERRED SECURITIES
The trust preferred securities are preferred securities issued by Superior
Trust I, a trust formed by Superior. The trust preferred securities:
- bear a dividend at an annual rate of $4.25 per share, payment of which may
be deferred by Superior;
- are convertible at the holder's option into common stock of Superior after
September 30, 1999 at an initial conversion rate of 1.1161 shares of
Superior common stock for each trust preferred security, subject to
adjustment as described in this prospectus;
- are redeemable at Superior's option beginning on April 1, 2003, or during
the year beginning on April 1, 2002 depending on the price of Superior's
common stock;
- are exchangeable at Superior's option at any time for a like amount of
convertible subordinated debentures of Superior having payment terms
substantially identical to those of the trust preferred securities; and
- are subordinate to all current and future senior secured debt of Superior.
At the same time that the trust issued the trust preferred securities,
Superior issued debt, represented by 8 1/2% convertible subordinated debentures,
to the trust. These debentures have "back-to-back" terms with the trust
preferred securities, which means that Superior is required to make interest and
other payments on the debt to the trust at the same time, and in the same
amounts, as distributions and other payments by the trust are due on the trust
preferred securities. If Superior does not pay interest or other amounts due on
the debentures, the trust will not be able to pay distributions or other amounts
due on the trust preferred securities. Superior, in a guarantee agreement, has
guaranteed the trust's obligations to make these payments, but only to the
extent Superior makes payments on the debt. The risks associated with this
structure are described under "Risk Factors" beginning on page 5.
For more information about the trust preferred securities, see "Description
of the Trust Preferred Securities" beginning on page 13.
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FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. These statements relate
to future events or the future financial performance of Superior. In some cases,
you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these terms and other
comparable terminology. These statements only reflect management's expectations
and estimates. Actual events or results may differ materially. In evaluating
these statements, you should specifically consider various factors, including
the risks outlined on pages 5 to 10 under "Risk Factors." These factors may
cause our actual results to differ materially from any forward-looking
statements. We are not undertaking any obligations to update any forward-looking
statements contained in this prospectus to reflect any future events or
developments.
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RISK FACTORS
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS SET FORTH BELOW, IN ADDITION
TO THE OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS, BEFORE MAKING AN INVESTMENT DECISION.
RISKS RELATING TO SUPERIOR
IF WE CANNOT SUCCESSFULLY INTEGRATE THE RECENTLY ACQUIRED ESSEX
INTERNATIONAL INC., OUR BUSINESS COULD BE ADVERSELY AFFECTED. To combine the
recently acquired Essex International Inc. with Superior, we will need to
integrate and coordinate the management and administrative functions, product
offerings and sales, marketing and research and development efforts of each
company. If we cannot successfully integrate the companies' operations, our
business and the results of operations of the combined businesses could be
adversely affected.
Combining Superior and Essex will present a number of challenges, including
the management of businesses with different customer bases and different
approaches to manufacturing, sales and service, and the integration of a number
of geographically separated research and development and other facilities. In
addition, because our management will be occupied with integrating the
companies' operations, this may temporarily distract management from the
companies' day-to-day businesses. We thus cannot assure you that the companies
will be smoothly and successfully integrated.
OUR SUBSTANTIAL DEBT OBLIGATIONS COULD DETRIMENTALLY AFFECT OUR BUSINESS AND
THE ABILITY OF INVESTORS TO RECEIVE PAYMENTS ON THE TRUST PREFERRED SECURITIES.
In connection with our acquisition of approximately 81% of the outstanding
common stock of Essex on November 27, 1998, we increased our debt level to about
$1.4 billion through borrowings under new credit facilities. Our substantial
indebtedness could have material and adverse consequences to holders of trust
preferred securities and to us, including the following:
- A significant portion of our cash flow from operations must be dedicated
to repaying debt and may not be available for other purposes, such as
ensuring that payments are made on the trust preferred securities;
- Our ability to obtain additional debt financing in the future for working
capital, capital expenditures or acquisitions will be limited;
- We may be more indebted than our competitors and this may place us at a
competitive disadvantage by increasing the relative cost of future
borrowings;
- Our level of indebtedness will limit our flexibility in reacting to
adverse economic conditions; and
- Certain of our borrowings are, or in the future may be, at variable
interest rates that may make us vulnerable to interest rate increases.
Subject to the restrictions set forth in our credit agreements, we expect to
continue to incur indebtedness from time to time in the ordinary course of
business and for different purposes, such as acquisitions and business
expansion. Also, the terms of the trust preferred securities do not limit the
amount of additional debt that we may issue or incur.
If we cannot generate sufficient cash flow from operations to repay our debt
obligations or if our business deteriorates substantially, then we may need to
refinance our debt, raise additional capital or take other actions such as
reducing our capital expenditures. We cannot assure you that any of these
actions could be completed on terms satisfactory to us or that they would be
permitted by the terms of any future credit arrangements.
THE LOSS OF, OR ADVERSE CONDITIONS AFFECTING, OUR SIGNIFICANT CUSTOMERS
COULD ADVERSELY AFFECT OUR BUSINESS. Our communications outside plant wire and
cable business is dependent on the regional Bell
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operating companies and the two major independent telephone companies.
Therefore, our results of operations and financial condition could be materially
and adversely affected by adverse conditions affecting any of the industries in
which these customers are engaged or by the loss of any of these customers.
On a pro forma basis for the year ended December 31, 1998, including a full
year impact from the acquisition of Essex, the regional Bell operating companies
and the two major independent telephone companies accounted for 74% of our
communications outside plant wire and cable net sales. During the eight months
ended December 31, 1998, sales to three of these customers, Sprint Corporation,
Bell Atlantic and GTE Corporation, accounted for 13.9%, 12.9% and 10.5%,
respectively, of our consolidated net sales. As a result of announced industry
consolidations, it is expected that the number of regional Bell operating
companies will be reduced. Continued consolidation among the regional Bell
operating companies could alter these customers' purchasing patterns and affect
the pricing in the communications wire and cable business.
THE INTRODUCTION OF NEW PRODUCTS AND ALTERNATIVE TECHNOLOGIES MAY REDUCE THE
MARKET FOR OUR PRODUCTS. Companies are introducing fiber optic products and
other alternative technologies for use in the local loop. This may reduce the
demand and market for our copper wire and cable products and adversely affect
our business.
The commercial development of fiber optics has had, and is expected to
continue to have, an effect on the copper communications wire and cable
business. Fiber optic technology has had a major impact on certain components of
the telecommunications network where its use is cost-effective, particularly in
trunk lines and the long-distance network. To a lesser degree, fiber optic cable
has been used in certain high-density feeder applications between telephone
central offices or remote locations and major distribution points. This has
reduced the total market for certain products that we manufacture.
Our communications outside plant wire and cable business is concentrated in
the local loop portion of the telecommunications network where copper wire has
remained the most widely used medium for transmission. Telephone companies are
evaluating, and in isolated cases installing on a test basis, alternative
technologies, including coaxial and fiber optic cable for providing video
entertainment or other new services. Because the telecommunications industry is
undergoing rapid and intense technological change, we cannot predict the impact
that these developments may have on the total demand for copper wire and cable
in the local loop. A decline in the level of purchases of copper communications
wire and cable by the regional Bell operating companies and other independent
telephone companies could have an adverse effect on the copper communications
wire and cable industry and on our business. Wireless technologies such as
microwave, satellite and cellular transmission, along with other,
newly-developed technologies, could also have an adverse impact on the market
for our copper communications wire and cable products in the future.
WE MAY NOT BE ABLE TO EXPAND OUR MANUFACTURING FACILITIES, WHICH ARE
CURRENTLY OPERATING AT HIGH UTILIZATION RATES, TO MEET THE DEMANDS OF OUR
CUSTOMERS. We are currently operating our manufacturing facilities at high
utilization rates and need to invest in additional manufacturing equipment to
meet growing customer demand. Failure to have new equipment operational in a
timely manner or shut-downs of existing capacity due to breakdowns or other
reasons could adversely affect our results of operations and financial
condition. In addition, our credit facilities limit the amount of capital
expenditures we can make, which may affect our ability to expand capacity in our
businesses.
INCREASED COMPETITION MAY REDUCE PRICES FOR OUR BUILDING WIRE AND MAGNET
WIRE PRODUCTS, THUS DECREASING OUR PROFITABILITY. Competition in our building
wire and magnet wire businesses may reduce the prices for our products, which
could adversely affect our profitability and operating results.
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With respect to our building wire business, there has been in the past, and
we expect that there will be in the future, considerable earnings and revenue
volatility. This volatility could adversely affect our results of operations and
financial condition. Also, we believe that increased capacity in the building
wire segment of the United States wire and cable industry may reduce prices for
our building wire products.
We believe that over the next two years certain of our competitors plan to
bring into operation additional capacity in the magnet wire business. Since
demand for magnet wire is not expected to keep pace with this expanded capacity,
this added supply could increase competition and lead to reduced prices for our
magnet wire products.
OUR BUSINESSES ARE SENSITIVE TO FLUCTUATIONS IN BUSINESS CYCLES, WHICH COULD
AFFECT DEMAND FOR OUR PRODUCTS. We supply certain products primarily to
customers in industries that are particularly sensitive to fluctuations in the
general business cycles of the United States and world economies. Demand for
these products varies with these fluctuations; significant fluctuations could
thus adversely affect our businesses.
Demand for copper communications wire and cable depends on several types of
business cycles, including:
(1) the rate at which new access lines are installed in homes and
businesses;
(2) the level of infrastructure spending for items such as road-widenings
and bridges, which generally necessitates replacement of existing
utilities, including telephone cable;
(3) the level of general maintenance spending by telephone companies; and
(4) the level of new home construction.
Demand for building wire depends, in part, on the cyclical nature of new
construction and building renovation. Demand for magnet wire depends, in part,
on the cyclical nature of light vehicle sales and consumer product and appliance
purchases.
VOLATILITY IN THE PRICE AND SUPPLY OF COPPER COULD ADVERSELY AFFECT OUR
BUSINESSES. Our profitability and operating results could be adversely affected
by sudden increases in the price of copper or our inability to obtain sufficient
quantities of necessary raw materials. The principal raw materials used in the
manufacture of wire and cable products are copper, aluminum, bronze, steel and
plastics, such as polyethylene and polyvinyl chloride. The cost of copper, the
most significant raw material we use in our wire and cable businesses, has been
subject to considerable volatility over the years. Volatility in the price of
copper will in turn lead to significant fluctuations in our net sales. Sharp
increases in the price of copper can reduce demand and thus overall
profitability if customers decide to defer their purchases of copper wire and
cable products or seek to purchase substitute products until copper prices
decline. Although we attempt to reflect copper price changes in the sale price
of our products, there is no assurance that we can do so. In addition,
particular plastics have, at times, been difficult to obtain.
RISKS RELATING TO THE TRUST PREFERRED SECURITIES
INVESTORS MAY NOT RECEIVE PAYMENTS ON THE TRUST PREFERRED SECURITIES IF
SUPERIOR DOES NOT RECEIVE DISTRIBUTIONS FROM ITS SUBSIDIARIES. If Superior's
subsidiaries are unable to make cash distributions to Superior, Superior may be
unable to pay the trust interest and other amounts owed on the debt that it
issued to the trust. If Superior cannot make these payments on this debt, the
trust will be unable to pay distributions and other amounts due on the trust
preferred securities. In this case, holders of trust preferred securities would
not be able to rely on Superior's guarantee agreement.
Superior is a holding company whose principal assets are its investments in
its subsidiaries. Therefore, Superior's ability to meet its financial
obligations, including its obligations under the
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debentures and the guarantee agreement, depends on the flow of cash to Superior
from its subsidiaries in the form of dividends and other distributions. Certain
covenants in Superior's bank credit facilities limit the ability of Superior's
subsidiaries to pay dividends to Superior. The ability of these subsidiaries to
make distributions to Superior may also be restricted by law or by new loan or
other agreements that they may enter into in the future.
IF SUPERIOR OR ITS SUBSIDIARIES ARE LIQUIDATED, THEIR CREDITORS WILL
GENERALLY BE PAID BEFORE HOLDERS OF TRUST PREFERRED SECURITIES. Superior's
obligations under the debentures and the guarantee agreement are:
(a) unsecured;
(b) behind, in terms of the right to payment, all current and future senior
secured indebtedness of Superior; and
(c) effectively behind, in terms of the right to payment, all obligations of
Superior's subsidiaries.
These factors may impair Superior's ability to make interest and other
payments on the debentures and, in turn, the trust's ability to make
distribution and other payments to holders of the trust preferred securities.
Because the debentures and the guarantee agreement are obligations of
Superior and not of its subsidiaries, Superior's obligations under these
instruments will be effectively behind, in terms of the right to payment, all
obligations of Superior's subsidiaries. The effect is that creditors of
Superior's subsidiaries would be entitled to a claim on the assets of these
subsidiaries before any claims by Superior. In the event of a liquidation or
reorganization of any of Superior's subsidiaries, creditors of the subsidiary
are likely to be paid in full before Superior receives any distribution. Even if
Superior itself is recognized as a creditor of the subsidiary, Superior's claims
would still be behind, in terms of the right to payment, any security interest
in the assets of the subsidiary and to any indebtedness of the subsidiary that
is senior to that held by Superior.
As of June 30, 1999, Superior had outstanding $1.4 billion of indebtedness
to which payment on the trust preferred securities is behind. The terms of the
trust preferred securities do not limit the amount of senior indebtedness or
other indebtedness that Superior or its subsidiaries may incur.
DEFERRAL OF DISTRIBUTIONS ON THE TRUST PREFERRED SECURITIES WOULD RESULT IN
ADVERSE TAX CONSEQUENCES TO HOLDERS OF TRUST PREFERRED SECURITIES. Superior may,
at its option and at any time, cause the trust to defer payment of cash
distributions on the trust preferred securities for a specified period. Even
though holders of trust preferred securities would not receive distributions
from the trust during this deferral period, they would be taxed as though they
did receive this income. Holders would be required to include this income, in
the form of original issue discount, in gross income for United States federal
income tax purposes before they actually receive the cash distributions from the
trust.
All accrued but unpaid distributions will increase a holder's basis in the
trust preferred securities. If a holder sells trust preferred securities during
a deferral period, his, her or its increased tax basis will decrease the amount
of any capital gain, or increase the amount of any capital loss, that he, she or
it may have otherwise realized on the sale. A capital loss cannot be offset
against ordinary income for United States federal income tax purposes, except in
limited circumstances and to a limited extent.
Superior would elect to defer distributions if it does not, for any reason,
have the financial resources to make the required payments, including as a
result of the risk factors described above.
CONVERSIONS AND SALES OF THE TRUST PREFERRED SECURITIES WOULD ALSO RESULT IN
ADVERSE TAX CONSEQUENCES TO HOLDERS OF TRUST PREFERRED SECURITIES. Holders of
trust preferred securities would also face adverse tax consequences upon the
conversion or sale of trust preferred securities, whether or not during a
deferral period.
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If a holder elects to convert trust preferred securities into Superior
common stock, he, she or it will either:
- not receive distributions to the date of conversion; or
- have to forfeit any distributions he, she or it does receive, unless his,
her or its trust preferred securities have been called for redemption.
However, the holder would be taxed as though he, she or it received these
distributions. Also, the conversion rate would not take into account the unpaid
distributions.
If a holder disposes of trust preferred securities between record dates for
payments of distributions, he, she or it will nevertheless be required, for
United States federal income tax purposes, to include accrued but unpaid
interest on the debentures through the date of disposition in income as ordinary
income. The holder must also add that amount to his, her or its adjusted tax
basis in the trust preferred securities. To the extent the selling price is less
than that adjusted tax basis, the holder will recognize a capital loss. A
capital loss, except in limited circumstances and to a limited extent, cannot be
applied to offset ordinary income for United States federal income tax purposes.
For more information regarding the tax consequences of the trust preferred
securities, please refer to "Material Federal Income Tax Consequences" on page
35 of this prospectus.
BECAUSE SUPERIOR MAY EXCHANGE TRUST PREFERRED SECURITIES FOR DEBENTURES AT
ANY TIME, YOU ARE ALSO MAKING AN INVESTMENT DECISION ABOUT THE DEBENTURES.
Superior may dissolve the trust at any time and cause the debentures to be
distributed to holders of trust preferred securities. Therefore, you are not
only making an investment decision about the trust preferred securities, but
also about the debentures, and you should carefully review all the information
about the debentures in this prospectus. Also, if it becomes likely that the
trust will be required to register as an "investment company" or that Superior
or the trust will suffer adverse tax consequences relating to the trust
preferred securities, the trust preferred securities will or may be exchanged,
in whole or in part, for the debentures.
SUPERIOR'S GUARANTEE AGREEMENT DOES NOT FULLY PROTECT THE RIGHT TO RECEIVE
PAYMENT ON THE TRUST PREFERRED SECURITIES. If Superior does not make interest
and other payments on the debentures, then the holders of trust preferred
securities will not receive distributions and other payments on the trust
preferred securities. This is because the trust will not have the funds with
which to make those payments and Superior's guarantee agreement will not apply.
Superior, in the guarantee agreement, will guarantee that the following
payments will be made:
(1) accumulated and unpaid distributions on the trust preferred securities;
(2) the redemption price of trust preferred securities called for
redemption; and
(3) if debentures are not distributed to holders of trust preferred
securities, amounts that may be payable upon the dissolution or
liquidation of the trust.
However, Superior will guarantee these payments only if, and to the extent, the
trust has funds on hand to make these payments. Therefore, if Superior does not
pay interest and other amounts owed on the debentures when due, the trust will
not have funds with which to make these payments and the guarantee agreement
will not apply.
HOLDERS OF TRUST PREFERRED SECURITIES HAVE LIMITED VOTING RIGHTS TO PROTECT
THEIR INTERESTS. Superior and the trust may act in ways that promote their
interests, possibly at the expense of the rights of holders of trust preferred
securities. Holders have limited ability to control this.
Holders of trust preferred securities have limited voting rights to direct
the activities of the trustees of the trust and no voting rights with respect to
the activities of Superior. They also may not appoint or remove any of the
trustees of the trust. Only Superior or certain of the other trustees may
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<PAGE>
do this. Superior and the trustees of the trust can also act without the consent
of the holders to ensure that the trust will be classified for United States
federal income tax purposes as a grantor trust, even if this action adversely
affects the interests of holders of trust preferred securities.
POSSIBLE TAX LAW CHANGES COULD RESULT IN DISTRIBUTION OF THE DEBENTURES TO
HOLDERS OF TRUST PREFERRED SECURITIES. The United States Congress has introduced
legislation in the past that, if enacted, would have denied an interest
deduction to issuers for instruments such as the debentures that were issued
after the date the legislation was proposed. We cannot assure you that
legislation will not ultimately be enacted, possibly with retroactive effect, or
that there will not be other developments that would adversely affect the tax
treatment of the debentures and that could consequently result in the exchange
of the trust preferred securities for debentures. No such legislation is pending
now, however.
IT MAY BE DIFFICULT TO SELL TRUST PREFERRED SECURITIES AND HOLDERS MAY NOT
RECEIVE AN ACCEPTABLE PRICE FOR THEM. It may not be easy to sell the trust
preferred securities, and the securities may trade below their $50 liquidation
amount, for the following reasons:
- there is no assurance that an active trading market for the trust
preferred securities can be sustained.
- if Superior elects to defer interest payments in the future, this may
affect the market price of the trust preferred securities. In addition,
Superior's right to defer interest payments may cause the trading price of
the trust preferred securities to be more volatile than the trading prices
of other securities, the distributions on which may not be deferred.
- the trust preferred securities may trade at a price that does not fully
reflect the value of accrued and unpaid interest on the underlying
debentures.
10
<PAGE>
RATIOS OF COMBINED FIXED CHARGES AND
PREFERENCE DIVIDENDS TO EARNINGS
The following are the consolidated ratios of combined fixed charges and
preference dividends to earnings for Superior for the transitional eight-month
period ended December 31, 1998 and for each of the years in the four fiscal
years ended April 30, 1998.
<TABLE>
<CAPTION>
YEAR ENDED APRIL 30,
------------------------------------------
<S> <C> <C> <C> <C> <C>
EIGHT MONTHS ENDED
DECEMBER 31, 1998 1998 1997 1996 1995
--------------------- --------- --------- --------- ---------
Ratio of combined fixed charges and preference dividends to
earnings:
Superior--historical....................................... 3.15x 8.88x 4.59x 1.84x 2.58x
Superior--pro forma........................................ 1.21x 1.74x
</TABLE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the trust preferred
securities offered hereby.
SELLING SECURITYHOLDERS
The following table sets forth certain information as of the date of this
prospectus with respect to the selling securityholders. This information is
based upon information provided by the selling securityholders. Beneficial
ownership after the offering will depend on the number of trust preferred
securities sold by the selling securityholders.
Robert D. Lindsay was a director of Essex International Inc. prior to its
merger with a subsidiary of Superior on March 31, 1999. Mr. Lindsay resigned as
a director effective March 30, 1999. Collectively, the selling securityholders
were deemed to be the beneficial owners of an aggregate of 13,254,187 shares of
common stock, or approximately 47.7% of the outstanding shares, of Essex prior
to its acquisition by Superior.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES OWNED NUMBER OF
PRIOR TO THE SECURITIES
NAME OF SECURITYHOLDER OFFERING OFFERED
- -------------------------------------------------------------------------- ------------------- ----------------
<S> <C> <C>
Bessemer Holdings, L.P. 1,258,007 1,258,007
Nebris Corporation 67,513 67,513
Old Hundred Corporation 37,815 37,815
Bessec Holdings, L.P. 25,603 25,603
Ward W. Woods 23,963 23,963
Woods 1994 Family Partnership, L.P. 18,038 18,038
Lindsay 1994 Family Partnership, L.P. 17,614 17,614
Robert D. Lindsay 12,832 12,832
Craighall Corporation 7,121 7,121
The Woods Foundation 2,501 2,501
North Hailey Corporation 1,524 1,524
Demarest Corporation 821 821
---------- ----------------
Total 1,473,352 1,473,352
</TABLE>
The sale of trust preferred securities by the selling securityholders may be
effected from time to time in transactions, which may include block transactions
by or for the account of the selling securityholders, on the New York Stock
Exchange, in negotiated transactions or a combination of such methods of sale or
otherwise. Sales may be made at fixed prices which may be changed, at market
prices prevailing at the time of sale or at negotiated prices.
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<PAGE>
The selling securityholders may effect such transactions by selling their
trust preferred securities directly to purchasers, through broker-dealers acting
as agents for the selling securityholders, or to broker-dealers who may purchase
trust preferred securities as principals and thereafter sell the trust preferred
securities from time to time on the New York Stock Exchange, in negotiated
transactions or otherwise. Such broker-dealers, if any, may receive compensation
in the form of discounts, concessions or commissions from the selling
securityholders and/or the purchasers for whom such broker-dealers may act as
agents or to whom they may sell as principals or both, which compensation as to
a particular broker-dealer may be in excess of customary commissions.
The selling securityholders and broker-dealers, if any, acting in connection
with such sale may be deemed to be "underwriters" within the meaning of Section
2(11) of the Securities Act of 1933 and any commission received by them and any
profit on the resale of the trust preferred securities may be deemed to be
underwriting discounts and commissions under the Securities Act of 1933.
The trust preferred securities were issued to the selling securityholders in
connection with the merger of Essex with a subsidiary of Superior. We agreed to
register these trust preferred securities under the Securities Act of 1933 and
to pay the costs and expenses relating to this registration, excluding brokerage
fees or underwriting discounts and fees. We also agreed to indemnify the selling
securityholders against certain liabilities under the Securities Act of 1933.
12
<PAGE>
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The following summary of the material terms of the trust preferred
securities and the Amended and Restated Declaration of Trust pursuant to which
the trust preferred securities were issued does not purport to be complete and
is qualified in its entirety by reference to the trust preferred securities and
the declaration, and the Delaware Business Trust Act and the Trust Indenture Act
of 1939, as amended, which are incorporated by reference in the declaration.
Copies of the declaration and the indenture pursuant to which the convertible
subordinated debentures were issued can be obtained upon written request to
Superior. See "Where You Can Find More Information" on page 42.
GENERAL
The declaration of trust authorized the trust to issue 3,332,254 trust
preferred securities and 103,059 trust common securities, all of which are
issued and outstanding. The trust issued these trust securities in exchange for
the issuance by Superior of its 8 1/2% convertible subordinated debentures to
the trust. Holders of trust preferred securities receive distributions and
payments upon redemption and, if an event of default under the declaration has
occurred and is continuing, liquidation before the holder of the trust common
securities.
All of the trust common securities are owned by Superior. Legal title to the
debentures is held by a trustee known as the property trustee for the benefit of
the holders of the trust securities. The declaration does not permit the trust
to issue any securities other than the trust preferred securities and the trust
common securities, to incur any indebtedness or to mortgage or pledge its
assets. The payment of distributions out of money held by the trust, and
payments upon redemption of the trust preferred securities or liquidation of the
trust, are guaranteed by Superior under the guarantee agreement described under
"Description of the Guarantee Agreement." The guarantee agreement is held by a
trustee known as the guarantee trustee for the benefit of the holders of the
trust preferred securities. The guarantee agreement does not cover payment of
distributions when the trust does not have sufficient available funds to pay the
distributions. The remedy of a holder of trust preferred securities in that
event is described under "--Declaration Events of Default; Enforcement of
Certain Rights by Holders of Trust Preferred Securities."
DISTRIBUTIONS
Distributions on the trust securities are payable at the annual rate of
8 1/2% of the liquidation preference of $50 per trust security, or $4.25 per
annum. Distributions accumulate, without interest, from March 31, 1999, or the
most recent date to which distributions have been paid in full. Distributions
are payable quarterly in arrears on June 15, September 15, December 15 and March
15 of each year to the holders of record of the trust securities on the
applicable record date, when, as and if available for payment, except as
described in the immediately following paragraphs. The amount of distributions
payable for any period is computed on the basis of a 360-day year of twelve
30-day months.
Payment of distributions may be deferred. So long as Superior is not then
experiencing specified events of bankruptcy, insolvency or reorganization,
Superior has the right under the indenture to defer payment of interest on the
debentures, at any time or from time to time, for a period not exceeding 20
consecutive quarters. Payment of interest may not be deferred, however, beyond
the stated maturity of the debentures. If interest payments on the debentures
are deferred, the trust will defer payment of quarterly distributions on the
trust securities. Distributions to which holders of trust securities would
otherwise be entitled during this deferral period will continue to accumulate,
and additional interest will accrue thereon, at the rate of 8 1/2% per annum.
See "Description of the Debentures--Option to Defer Interest Payments" and
"Material Federal Income Tax Consequences--Interest Income and Original Issue
Discount." If distributions are deferred, distributions and accrued interest
thereon will be paid to the holders of record of trust securities as they appear
on the books and records of the trust on the record date next following the
termination of the deferral period.
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<PAGE>
Superior has no current intention to exercise its right to defer payments of
interest on the debentures. Superior would elect to defer payments of interest
if it does not, for any reason, have the financial resources to make these
payments.
Distributions on the trust securities must be paid on the dates payable to
the extent the trust has funds on hand and available for the payment of
distributions. The funds of the trust available for distribution to holders of
the trust securities will be limited to payments actually received by the trust
under the debentures. If Superior does not make interest payments on the
debentures, the property trustee will not have funds available to pay
distributions on the trust securities. The guarantee agreement will not apply in
this case.
Distributions on the trust securities are payable to the holders as they
appear on the register of the trust on the relevant record dates, which is the
fifteenth day preceding the relevant distribution payment date.
CONVERSION RIGHTS
Holders of trust securities will have the right, at their option, to convert
any or all of their trust securities into shares of Superior common stock at any
time after September 30, 1999, but not later than the close of business on the
date that is 10 days preceding any date fixed for redemption, if there is no
default in payment of the redemption price. If there is a default in payment of
the redemption price, then the right to convert will continue until the
redemption price is paid. Payments deferred by Superior during an interest
deferral period will not constitute a default for this purpose. The initial
conversion rate is 1.1161 shares of Superior common stock for each trust
security, subject to adjustment as described under "--Conversion Rate
Adjustments" below.
The rights of a record holder of trust securities to receive any accrued and
unpaid distributions upon conversion are as follows:
- If a record holder converts on or after a distribution payment date and on
or before the next record date, the holder will not receive distributions
to the date of conversion, but will only receive distributions to the
distribution payment date.
- If a record holder converts after a record date and before the
corresponding distribution payment date, the holder will be entitled to
receive distributions on the distribution payment date even if Superior
defaults in making that payment. However, when the holder surrenders trust
securities for conversion during this period, he, she or it must pay to
the agent coordinating the conversion an amount equal to the distributions
that he, she or it will receive on the distribution payment date. The
effect of this is that the holder will be giving up the amount of the
distribution. But if the holder's trust securities have been called for
redemption during this period, then he, she or it will not have to make
this payment.
- A record holder will not receive accrued and unpaid distributions if the
holder converts during an interest deferral period.
Additionally, no adjustment will be made for dividends on the Superior
common stock issued on conversion.
If a holder of trust securities wishes to exercise this conversion right,
the holder must surrender his, her or its certificates representing the trust
securities to be converted, together with an irrevocable conversion notice, to
the agent coordinating the conversion, which will immediately convert the trust
securities into Superior common stock at the conversion rate then in effect.
Holders may obtain copies of the required form of conversion notice from the
agent coordinating the conversion.
Shares of Superior common stock issued upon conversion of trust securities
will be validly issued, fully paid and non-assessable. Holders of trust
securities will not receive fractional shares of Superior
14
<PAGE>
common stock as a result of conversion, but instead will receive cash for any
fractional interest in an amount equal to the product of:
(A) the closing price of a share of Superior common stock on the last
trading day before the date of conversion; and
(B) such fraction of a share of Superior common stock.
CONVERSION RATE ADJUSTMENTS
As provided in the indenture, the conversion rate for the trust securities
is subject to adjustment from time to time under the following circumstances,
including, without duplication, in cases in which Superior:
A. pays a dividend or makes a distribution on the Superior common stock in
shares of its capital stock;
B. subdivides the outstanding Superior common stock into a greater number
of shares;
C. combines the shares of outstanding Superior common stock into a smaller
number of shares; or
D. issues by reclassification of the Superior common stock any shares of its
capital stock.
In each of the above cases, the conversion rate will be adjusted so that a
holder surrendering trust securities for conversion after the applicable event
will be entitled to receive, to the extent permitted by law, the number and kind
of shares of Superior capital stock that the holder would have received had his,
her or its trust securities been converted immediately before the record date
for the event. If no record date for the event has been set, then the effective
date for the event will be used.
The conversion rate will also be subject to appropriate adjustment if either
of the following events occurs:
1. Superior issues rights or warrants to all holders of Superior common
stock entitling them to purchase Superior common stock at a price per
share less than the average daily closing prices of the Superior common
stock on the 30 consecutive business days beginning 45 business days
before the record date for the determination of stockholders entitled to
receive such rights or warrants; or
2. Superior distributes to all holders of Superior common stock evidences
of its indebtedness or assets, including securities, but excluding:
(x) any warrants or subscription rights referred to in clause 1. above;
(y) any ordinary dividend paid in cash out of the retained earnings of
Superior; and
(z) any dividend or distribution referred to in clause A. above.
The indenture provides that no change in the conversion rate will actually
be made until the cumulative effect of all adjustments since the date of the
last change in the conversion rate would change the conversion rate by more than
1%. However, once the cumulative effect would result in such a change, the
conversion rate will actually be changed to reflect all adjustments not
previously made.
The indenture also provides that holders of trust securities will be
afforded the following specified rights upon
(A) any consolidation or merger of Superior with any other corporation,
(B) any sale or transfer of all or substantially all of Superior's assets,
or
(C) any share exchange,
in each case, in which all of the outstanding shares of Superior common stock
are converted into other securities, cash or other property. If any of these
events occurs, each holder of trust securities will be
15
<PAGE>
given the right to convert such trust securities into the kind and amount of
securities, cash and other property receivable by a holder of the number of
shares of Superior common stock into which such trust securities could have been
converted immediately before the effective date of the applicable event. If, in
connection with any of these events, each holder of shares of Superior common
stock is entitled to elect to receive either securities, cash or other property
upon completion of the transaction, each holder of trust securities will be
provided with the same right. Superior will not effect any of these transactions
unless each holder of trust securities receives these rights, which similarly
apply to successive consolidations, mergers, sales, transfers or share
exchanges.
SPECIAL EVENT EXCHANGE
After the occurrence and during the continuation of a Special Event, all
outstanding trust securities will be exchanged for debentures having a principal
amount equal to the aggregate liquidation preference of the trust securities to
be exchanged and the trust will be dissolved. However, in the case of a Tax
Event, Superior may direct that less than all, or none, of the trust securities
be exchanged. Superior may do this if and for so long as Superior elects to pay
any additional sums such that the net amount of distributions received by the
holders of trust securities that are not exchanged is not reduced as a result of
the Tax Event, and so long as Superior has not revoked this election or failed
to pay these additional sums.
A "Special Event" means a Tax Event or an Investment Company Event.
A "Tax Event" means the receipt by the property trustee of an opinion of
counsel to the effect that, as a result of any amendment to, or change in, the
law or as a result of any administrative pronouncement or judicial decision,
there is more than an insubstantial risk that:
- the trust is, or will be within 90 days, subject to United States federal
income tax on income received or accrued on the debentures;
- interest paid by Superior on the debentures is not, or within 90 days will
not be, deductible by Superior when paid, in whole or in part, for United
States federal income tax purposes; or
- the trust is, or will be within 90 days, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the property trustee of an
opinion of counsel to the effect that, as a result of a change in law or
regulation, there is more than an insubstantial risk that the trust is, or will
be, considered an "investment company" that is required to be registered under
the Investment Company Act of 1940.
Superior has agreed in the guarantee agreement that if and so long as
(a) the trust holds all the debentures,
(b) a Tax Event has occurred and is continuing, and
(c) Superior has elected, and has not revoked its election, to pay
additional sums in respect of the trust securities,
Superior will pay to the trust the additional sums.
Distributions paid on the trust securities include any additional sums paid
as a result of a Tax Event.
OPTIONAL REDEMPTION
Except as provided below, under "--Mandatory Redemption" or under
"--Redemption Upon Change of Control," the trust securities are not redeemable
by the trust before March 31, 2003. At any time on and after that date, Superior
may redeem debentures at its option. The proceeds from this redemption, to the
extent actually received by the property trustee, will be applied to redeem
trust securities having an aggregate liquidation preference equal to the
aggregate principal amount of the
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<PAGE>
debentures redeemed by Superior. If a holder's trust securities are redeemed
during the twelve-month period beginning on April 1 of the year specified below,
the holder will be entitled to receive the following cash redemption prices per
trust security, plus an amount in cash equal to all accumulated and unpaid
distributions, if any, to the date fixed for redemption:
<TABLE>
<CAPTION>
REDEMPTION PRICE
PER TRUST
YEAR SECURITY
- ---------------------------------------------------------------------------- ----------------
<S> <C>
2003 $ 52.550
2004 $ 52.125
2005 $ 51.700
2006 $ 51.275
2007 $ 50.850
2008 $ 50.425
and thereafter.............................................................. $ 50.000
</TABLE>
During the one-year period commencing on March 31, 2002, Superior, at its
option, may redeem at any time all, or from time to time a portion, of the trust
securities, upon any contemporaneous redemption of debentures, at a cash
redemption price of $52.975, plus accrued and unpaid distributions, if any, to
the date fixed for redemption. Superior may do this only if the product of
(a) the average closing price of a share of Superior common stock, for any
10 consecutive trading days preceding the date of the call for
redemption, multiplied by
(b) the then effective conversion rate,
equals or exceeds $65.00 per share of Superior common stock.
The trust may not redeem less than all of the trust securities at any time
outstanding until all accrued and unpaid distributions on all trust preferred
securities then outstanding have been paid in full. If fewer than all the
outstanding trust preferred securities are to be redeemed, the trust preferred
securities to be redeemed will be selected pro rata, by lot or by any other
method as the property trustee deems fair and appropriate.
MANDATORY REDEMPTION
Upon repayment at maturity or as a result of the acceleration of the
debentures upon the occurrence of an event of default under the indenture, the
debentures will be subject to mandatory redemption, in whole, but not in part,
by Superior. The proceeds from this mandatory redemption will be applied to
redeem trust securities having an aggregate liquidation preference equal to the
aggregate principal amount of debentures so repaid or redeemed. The cash
redemption price of the trust securities will equal the liquidation preference
of the trust securities, plus an amount in cash equal to all accumulated and
unpaid distributions on the trust securities, if any, to the date of redemption.
In the case of acceleration of the debentures, the trust securities will be
redeemed only when repayment of the debentures has actually been received by the
trust. Unless earlier redeemed, the stated maturity of the debentures, and thus
of the trust securities, will be March 30, 2014.
REDEMPTION UPON CHANGE OF CONTROL
In the event of a Change of Control, as defined below, the trust will, to
the extent of funds legally available and subject to the prior payment in full
of all other obligations of the trust and Superior that are then due or become
due as a result of the Change of Control, offer to redeem all of the trust
preferred securities at a purchase price in cash equal to $50.50 per trust
preferred security, plus accrued and unpaid distributions to the date of
redemption. On or after the date fixed for redemption, a holder of trust
preferred securities may elect to accept the offer by surrendering his, her or
its certificates to the agent coordinating the redemption, at which time the
holder will be entitled to receive payment of the redemption price.
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<PAGE>
"Change of Control" means the occurrence of any of the following events:
A. any person or group, other than The Alpine Group, Inc., Superior's
majority stockholder, or its affiliates, becomes the beneficial owner of
more than 50% of the outstanding Superior common stock;
B. As a result of any consolidation or merger, or any transfer, lease or
other disposition of all or substantially all of Superior's assets, the
outstanding Superior common stock is converted into or exchanged for
cash, securities or other property. However, it is not a Change of
Control if:
(1) the outstanding Superior common stock is not converted or exchanged
at all, except to the extent necessary to reflect a change in the
jurisdiction of incorporation of Superior, or is converted into or
exchanged for voting stock of the surviving or transferee
corporation; and
(2) immediately after the transaction, the condition described in clause
A. above has not occurred with respect to the surviving or transferee
corporation;
C. during any consecutive two-year period, individuals who at the beginning
of that period constituted the Superior board of directors, together with
any new directors whose election by the Superior board or whose
nomination for election by the stockholders of Superior was approved by:
(x) a vote of at least a majority of the directors then still in office
who were either directors at the beginning of that period or whose
election or nomination for election was previously so approved; or
(y) Alpine or its affiliates
cease for any reason to constitute a majority of the Superior board then
in office; or
D. Superior is liquidated or dissolved or adopts a plan of liquidation or
dissolution.
REDEMPTION PROCEDURES
The trust will redeem trust securities on each date fixed for redemption at
the applicable redemption price with the proceeds it receives from Superior's
contemporaneous redemption of debentures at the same redemption price.
Redemption of trust securities will be made and the redemption price will be
payable on each redemption date only to the extent that the trust has received
those proceeds and has them on hand and available for payment of the redemption
price. If the trust does not have sufficient funds, then any funds it does have
will be applied to redeem trust securities pro rata, by lot or in any other
manner as the property trustee determines.
PRIORITY OF TRUST PREFERRED SECURITIES
On any distribution payment date, holders of trust preferred securities are
entitled to receive payment in full in cash of all accumulated and unpaid
distributions then due on the trust preferred securities before any distribution
is made on the trust common securities. In addition, no redemption, repurchase,
exchange or conversion of the trust common securities may be effected at any
time that trust preferred securities are outstanding.
DISTRIBUTION OF DEBENTURES UPON DISSOLUTION
Under the declaration of trust, the trust will automatically dissolve upon
expiration of its stated term in 2014 and will dissolve on the first to occur of
any of the following events:
A. specified events of bankruptcy, dissolution or liquidation of Superior;
B. the occurrence of a Special Event, except in the case of a Tax Event
following which Superior has elected to pay any additional sums such that
the net amount of distributions received by
18
<PAGE>
holders of trust securities not exchanged for debentures is not reduced
as a result of the Tax Event and Superior has not revoked this election
or failed to make these payments;
C. the redemption, conversion or exchange of all of the trust securities;
D. the entry by a court of competent jurisdiction of an order for the
dissolution of the trust; and
E. receipt by the property trustee of written notice from Superior, which
may be given at any time and in Superior's sole discretion, of Superior's
intention to dissolve the trust and distribute the debentures in exchange
for the trust securities. Superior thus has the right to dissolve the
trust at any time and cause the debentures to be distributed to the
holders of trust securities.
Upon the dissolution of the trust, the trust will be liquidated. After
satisfaction of liabilities to creditors of the trust as provided by applicable
law, each holder of trust securities will receive an aggregate principal amount
of debentures equal to the aggregate liquidation preference of his, her or its
trust securities.
The property trustee may determine that a distribution of the debentures as
provided above is not practicable. In that case, on the date of dissolution of
the trust, each holder of trust securities will be entitled to receive out of
the assets of the trust available for distribution, after satisfaction of
liabilities to creditors of the trust as provided by applicable law, an amount
equal to the liquidation preference of $50 per trust security, plus accrued and
unpaid distributions to the liquidation date. If this liquidation distribution
can be paid only in part because the trust has insufficient assets legally
available to pay it in full, then each holder of trust securities will receive
amounts payable on the trust securities on a pro rata basis, based on
liquidation preference. If an event of default under the declaration has
occurred and is continuing, holders of trust preferred securities will receive
the liquidation distribution before Superior, the holder of the trust common
securities; otherwise, holders of trust preferred securities will receive the
liquidation distribution on a pro rata basis with Superior.
DECLARATION EVENTS OF DEFAULT; ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST
PREFERRED SECURITIES
An event of default under the indenture constitutes an event of default
under the declaration with respect to the trust preferred securities. Any waiver
of an event of default under the indenture will thus constitute a waiver of the
corresponding declaration event of default.
If an event of default has occurred and is continuing, the property trustee,
as the sole holder of the debentures, has the right under the indenture to
declare the principal of, premium, if any, and interest on the debentures to be
immediately due and payable. In this event, the property trustee, when and to
the extent it receives these payments on the debentures, will make corresponding
payments on the trust securities. Accordingly, to receive payment in the case of
an event of default, holders of trust preferred securities may rely on the
enforcement against Superior by the property trustee of its rights as holder of
the debentures. Holders are not entitled to accelerate the maturity of the trust
preferred securities.
Nevertheless, until any event of default has been cured, waived or otherwise
eliminated, the holders of a majority in aggregate liquidation preference of the
trust preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the property
trustee or to direct the exercise of any trust or power conferred upon the
property trustee under the declaration. This includes the right to direct the
property trustee to exercise the remedies available to it as a holder of the
debentures. Also, if the property trustee fails to enforce its rights as holder
of the debentures after a request from any holder of trust preferred securities,
then that holder may proceed to enforce those rights directly against Superior.
In addition, if an event of default has occurred and is continuing because
Superior failed to pay any amounts due on the debentures, any holder of trust
preferred securities may bring a legal proceeding directly against Superior to
recover amounts owed to that holder on the trust preferred securities, without
waiting for the property trustee
19
<PAGE>
to do so. Otherwise, holders of trust preferred securities will not be able to
exercise directly against Superior any remedy available to the property trustee
unless the property trustee first fails to do so.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below, in the indenture and under "Description of the
Guarantee Agreement-- Amendments and Assignment" and as otherwise required by
law or by the rules of any stock exchange on which the trust preferred
securities are listed or admitted for trading, holders of trust preferred
securities have no voting rights.
The declaration of trust may be amended from time to time by Superior and
the trustees, without the consent of the holders of the trust preferred
securities:
A. to cure any ambiguity or inconsistencies, as long as the amendment does
not materially adversely affect the interests of any holder of trust
securities;
B. to ensure that the trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any trust
securities are outstanding;
C. to ensure that the trust will not be required to register as an
"investment company" under the Investment Company Act of 1940; or
D. to qualify or maintain the qualification of the declaration under the
Trust Indenture Act of 1939.
Otherwise, holders of trust preferred securities have the following rights with
respect to amendments of the declaration:
- Superior and the trustees may amend the declaration with
(1) consent of the holders of a majority, based upon liquidation
preference, of the outstanding trust preferred securities and trust
common securities, acting as a single class, and
(2) receipt by the trustees of an opinion of counsel to the effect that
the amendment, or the exercise of any power granted to the trustees
in accordance with the amendment, will not affect the trust's status
as a grantor trust for United States federal income tax purposes or
the trust's exemption from the status of an "investment company."
- Without the consent of each holder of trust securities, the declaration
may not be amended to
(A) change the amount or timing of any distribution on the trust
securities or otherwise adversely affect the amount of any
distribution required to be made on the trust securities or
(B) restrict the right of a holder of trust preferred securities to
institute suit to enforce the payment of distributions.
- The holders of a majority in aggregate liquidation preference of the then
outstanding trust preferred securities must approve any proposed amendment
of the declaration that provides for, or proposal by the trustees to
effect, the dissolution, winding-up or termination of the trust other than
under the terms of the declaration.
As stated above, subject to the terms of the declaration, the holders of a
majority in aggregate liquidation preference of the trust preferred securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the property trustee or to direct the exercise of
any trust or power conferred upon the property trustee under the declaration.
This includes the right to direct the property trustee to exercise the remedies
available to it as a holder of the debentures. So long as any debentures are
held by the property trustee, the trustees may not, without,
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in each case, obtaining the prior approval of the holders of a majority in
aggregate liquidation preference of all outstanding trust preferred securities:
A. direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture or executing any
trust or power conferred on the indenture trustee with respect to the
debentures;
B. waive any past default that is waivable by the holders of not less than
a majority in principal amount of the outstanding debentures under the
indenture;
C. exercise any right to rescind or annul a declaration making the
principal of all the debentures due and payable; or
D. consent to any amendment, modification or termination of the indenture or
the debentures where such consent is required. In this case, if no event
of default has occurred and is continuing, the holders of all outstanding
trust securities, voting together as a single class, must consent.
However, if a consent under the indenture would require the consent of each
holder of debentures, the property trustee must obtain the prior written consent
of each holder of the trust preferred securities. The trustees may not revoke
any action previously authorized or approved by a vote of the holders of the
trust preferred securities except by subsequent vote of the holders of the trust
preferred securities.
Holders of trust preferred securities may take or give any required vote,
consent, approval or direction at a meeting convened for that purpose or by
written consent. Holders of record will receive notice of any meeting at which
holders of trust preferred securities are entitled to vote or of any matter upon
which action by written consent has been taken. Holders of record of a majority
of the outstanding trust preferred securities, based upon liquidation
preference, present in person or by proxy, constitute a quorum at any meeting.
An affirmative vote by the holders of record of a majority of the outstanding
trust preferred securities, based upon liquidation preference, constitutes the
action of the holders. Holders of trust preferred securities are entitled to one
vote for each $50 of liquidation preference represented by their trust preferred
securities. No annual meeting of holders of trust preferred securities is
required to be held.
Holders of the trust preferred securities have no rights to appoint or
remove the trustees, who may be appointed or removed either by the
administrative trustees or by Superior, as holder of all the trust common
securities.
ADDITIONAL VOTING RIGHTS
If:
(A) Distributions on the trust preferred securities are in arrears and
unpaid for six or more quarters, whether or not consecutive;
(B) Superior fails to pay all amounts due on the debentures upon their
stated maturity; or
(C) Superior fails to redeem all of the trust preferred securities that the
holders elect to tender in the event of a Change of Control,
then the holders of the then outstanding trust preferred securities, voting
separately and as a class, will have the power to designate two additional
members of Superior's board of directors, and Superior will cause them to be
elected to its board. Each of the events described in clause (A), (B) or (C) is
a "voting rights triggering event." A voting rights triggering event will not be
deemed to have occurred if at the time of the event there are less than 300,000
trust preferred securities then outstanding.
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These voting rights will continue until such time as:
(1) in the case of the non-payment of distributions, all distributions in
arrears on the trust preferred securities are paid in full in cash;
(2) in all other cases, any failure, breach or default giving rise to the
voting rights triggering event is remedied or waived by the holders of a
majority of the trust preferred securities then outstanding; or
(3) at any time there are fewer than 300,000 trust preferred securities
outstanding.
At that time, the term of any directors elected as provided above will
terminate.
Any vacancy occurring in the office of a director designated by the holders
of trust preferred securities may be filled by the remaining director designated
by the holders of trust preferred securities unless and until the holders of
trust preferred securities designate a director to fill the vacancy. Superior
will cause that director to be elected to its board of directors.
At any time after the holders of the trust preferred securities have the
power to designate directors on the Superior board, or if any vacancies exist in
the offices of directors designated by the holders, any trustee may, and upon
the written request of the holders of record of at least 25% of the trust
preferred securities then outstanding must, call a special meeting of the
holders of trust preferred securities for the purpose of designating directors.
If this meeting is not called by any trustee within 20 days after personal
service to the trustee, then the holders of record of at least 25% of the
outstanding trust preferred securities may designate in writing one of their
members to call the meeting at the expense of the trust and to give the required
notice of the meeting.
PAYMENT OF AMOUNTS DUE ON TRUST PREFERRED SECURITIES
Payments in respect of the trust preferred securities are made by check
mailed to the holder's address as it appears on the books of the trust.
PROPERTY TRUSTEE; TRANSFER AGENT, REGISTRAR AND PAYING, CONVERSION AND EXCHANGE
AGENT
The property trustee acts as transfer agent, registrar and paying,
conversion and exchange agent for the trust preferred securities. American Stock
Transfer & Trust Company, the transfer agent for the Superior common stock, is
the property trustee, and also serves as indenture trustee and guarantee
trustee.
Registration of transfers or exchanges of trust preferred securities will be
effected without charge by or on behalf of the trust, but may require payment of
any tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The trust is not required to register or cause to be
registered the transfer or exchange of any trust preferred securities after the
trust preferred securities have been called for redemption.
The property trustee is under no obligation to exercise any of the rights or
powers vested in it by the declaration at the request or direction of any holder
of trust preferred securities, unless the holder offers to the property trustee
security and indemnity, reasonably satisfactory to the property trustee, against
the costs, expenses and liabilities that might be incurred by it in compliance
with the request or direction, including any reasonable advances that may be
requested by the property trustee.
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DESCRIPTION OF THE GUARANTEE AGREEMENT
The guarantee agreement was executed and delivered by Superior at the same
time that the trust issued the trust preferred securities. American Stock
Transfer & Trust Company is the guarantee trustee under the guarantee agreement.
The guarantee trustee holds the guarantee agreement for the benefit of the
holders of trust preferred securities. The following summary of the material
terms of the guarantee agreement does not purport to be complete and is
qualified in its entirety by reference to the guarantee agreement. You can
obtain a copy of the guarantee agreement by making a written request to
Superior. See "Where You Can Find More Information" on page 42.
GENERAL
Under the guarantee agreement, Superior has irrevocably agreed to pay to the
holders of trust preferred securities, subject to repayment of its other debts
with a senior claim, the following payments as and when they become due, to the
extent the trust has not made these payments and without duplicating any amounts
previously paid by the trust:
A. accumulated and unpaid distributions on the trust preferred securities,
but only if and to the extent that the trust has funds on hand and
available to pay those distributions;
B. the redemption price of any trust preferred securities called for
redemption, but only if and to the extent that the trust has funds on
hand and available to pay the redemption price; and
C. upon any dissolution, winding-up or liquidation of the trust in which
the debentures are not distributed to holders of trust preferred
securities, the lesser of:
1. the amount of the cash liquidation distribution, but only if and to
the extent that the trust has funds on hand and available to pay that
amount; and
2. the amount of assets of the trust remaining available for
distribution to holders of trust preferred securities.
Superior may make these payments directly to the holders of trust preferred
securities or may cause the trust to make these payments to the holders.
Superior will make these payments regardless of any defense, right of set-off or
counterclaim that the trust may have or assert, other than the defense of
payment.
The guarantee agreement is an irrevocable guarantee, subject to repayment of
other debts with a senior claim, of the trust's obligations to pay to holders of
trust preferred securities distributions and payments on redemption or
liquidation. However, the guarantee agreement applies only if and to the extent
that the trust has funds on hand and available to make these payments. For
example, if Superior does not make interest payments on the debentures held by
the trust, the trust will not have funds available to make distribution payments
on the trust preferred securities. In that case, the guarantee agreement will
not apply and holders of trust preferred securities will not receive any
payments under the guarantee agreement.
STATUS OF THE GUARANTEE AGREEMENT
The guarantee agreement is an unsecured obligation of Superior. The
guarantee agreement:
(a) ranks behind in right of payment to all current and future senior
secured indebtedness of Superior; and
(b) ranks PARI PASSU with any guarantee now or hereafter entered into by
Superior in respect of any preferred stock of Superior's affiliates that
is senior to the Superior common stock.
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The guarantee agreement does not limit the amount of additional indebtedness
that Superior or any of its subsidiaries may incur.
The guarantee agreement is a guarantee of payment and not of collection. In
other words, the guaranteed party may institute a legal proceeding directly
against Superior to enforce its rights under the guarantee agreement without
first instituting a legal proceeding against any other person or entity. The
guarantee agreement will only be discharged when the above guarantee payments
are paid in full or the debentures are distributed to holders of trust preferred
securities as provided in the declaration of trust.
AMENDMENTS AND ASSIGNMENT
The guarantee agreement may not be amended without the prior approval of the
holders of a majority in aggregate liquidation preference of the outstanding
trust preferred securities. Changes that do not materially adversely affect the
rights of holders of trust preferred securities do not require a vote. The
manner of obtaining any required approval is set forth under "Description of the
Trust Preferred Securities--Voting Rights; Amendment of the Declaration." All
guarantees and agreements contained in the guarantee agreement will bind any
successors, assigns, receivers, trustees and representatives of Superior.
CERTAIN COVENANTS OF SUPERIOR
Superior has agreed that, as long as trust preferred securities are
outstanding:
1. Superior will not convert debentures into Superior common stock unless
pursuant to a valid notice of conversion to the agent coordinating the
conversion;
2. Superior will maintain directly or indirectly 100% ownership of the
trust common securities. However, the indenture permits another entity to
succeed to this ownership upon a merger, consolidation, sale of assets or
other transaction if the successor entity assumes all of Superior's
obligations;
3. Superior will not voluntarily dissolve, wind-up, liquidate or terminate
the trust, except in accordance with the terms of the declaration;
4. Superior will ensure that, if all outstanding trust preferred securities
are converted, there will be enough shares of Superior common stock
available for issuance;
5. Superior will use its reasonable best efforts to cause the trust to
remain classified as a grantor trust and not as an association taxable as
a corporation for United States federal income tax purposes; and
6. Superior will deliver shares of Superior common stock as promptly as
practicable after any conversion of trust preferred securities into
Superior common stock.
GUARANTEE EVENTS OF DEFAULT
If Superior fails to perform any of its payment or other obligations under
the guarantee agreement, that will be an event of default, unless the payment is
prohibited by the subordination provisions in the guarantee agreement. If an
event of default occurs, any holder of trust preferred securities may proceed
directly against Superior to obtain payment under the guarantee agreement
without first proceeding against the trust, the guarantee trustee or any other
person or entity. Or, holders may let the guarantee trustee seek to enforce
their right to payment. The holders of a majority in aggregate liquidation
preference of the trust preferred securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
guarantee trustee or to direct the exercise of any trust or power conferred upon
the guarantee trustee. If any holder chooses to
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let the guarantee trustee enforce his, her or its rights and the guarantee
trustee fails to do so, the holder can still institute a legal proceeding
directly against Superior to obtain payment under the guarantee agreement
without first proceeding against the trust, the guarantee trustee or any other
person or entity.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee is under no obligation to exercise any of the rights
or powers vested in it by the guarantee agreement at the request or direction of
any holder of trust preferred securities, unless the holder provides to the
guarantee trustee security and indemnity, reasonably satisfactory to the
guarantee trustee, against the costs, expenses and liabilities that might be
incurred by it in complying with the request or direction, including any
reasonable advances that may be requested by the guarantee trustee.
TERMINATION OF THE GUARANTEE AGREEMENT
The guarantee agreement will terminate and be of no further force and effect
upon:
A. full payment of the redemption price of all trust preferred securities;
B. the distribution of debentures to the holders of all of the outstanding
trust preferred securities;
C. full payment of any amounts payable upon dissolution or liquidation of
the trust; or
D. the distribution of Superior common stock to holders upon conversion of
all trust preferred securities then outstanding.
Nevertheless, the guarantee agreement will continue to be effective or will
be reinstated, as the case may be, if at any time any holder must restore
payment of any sums paid to it with respect to his, her or its trust preferred
securities.
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DESCRIPTION OF THE DEBENTURES
The 8 1/2% convertible subordinated debentures were issued contemporaneously
with the trust securities under an indenture between Superior and American Stock
Transfer & Trust Company, as indenture trustee. The terms of these debentures
include those stated in the indenture and those made a part of the indenture by
reference to the Trust Indenture Act of 1939. The following summary of the
material terms and provisions of the debentures and the indenture does not
purport to be complete and is qualified in its entirety by reference to the
indenture.
The trust may be dissolved and the debentures may be distributed to holders
of trust preferred securities at any time. Therefore, you should read this
section carefully.
GENERAL
The debentures are limited in aggregate principal amount to $171,765,650,
which is the sum of the aggregate liquidation preference of the trust preferred
securities and the trust common securities. The debentures are issued in
denominations of $50 and in integral multiples of $50. The debentures are held
initially by the property trustee in trust for the benefit of the holders of the
trust securities, until the liquidation or dissolution, if any, of the trust.
The debentures are unsecured debt under the indenture, and are behind in
right of payment to all current and future senior secured indebtedness of
Superior. The indenture does not limit Superior's ability to incur or issue any
additional secured or unsecured debt.
The entire principal amount of the debentures matures, and becomes due and
payable, together with any accrued and unpaid interest thereon, on March 30,
2014.
INTEREST
Interest on the debentures is payable at the annual rate of 8 1/2%. Interest
on the debentures accumulates from March 31, 1999, or the most recent date to
which interest has been paid in full or duly provided for. Interest is payable
quarterly, in arrears, on June 15, September 15, December 15 and March 15 of
each year until the principal of the debentures is paid, duly provided for or
made available for payment. The amount of interest payable for any period is
computed on the basis of a 360-day year of twelve 30-day months. Payment of
interest is subject to deferral as set forth below.
Interest will be paid to the persons in whose names the debentures are
registered on the relevant record dates, which is the close of business on the
fifteenth day preceding an interest payment date. Interest payable on the
maturity of the debentures will be paid to the person to whom principal is paid.
If Superior defaults in a payment of interest on the debentures, it will pay
the defaulted amounts, plus, to the extent permitted by law, default interest on
the defaulted amounts at the rate of 8 1/2% per annum, to the persons in whose
names the debentures are registered on a subsequent special record date fixed by
Superior. However, this default interest will only accrue with respect to any
interest payment period, or part thereof, occurring after the liquidation of the
trust. The term "interest" as used in this prospectus includes:
(a) quarterly interest payments;
(b) default interest;
(c) any additional interest that accrues during an interest deferral period;
and
(d) additional sums payable as a result of a Tax Event, as applicable.
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OPTION TO DEFER INTEREST PAYMENTS
So long as Superior is not then experiencing specified events of bankruptcy,
insolvency or reorganization, Superior has the right under the indenture to
defer payment of interest on the debentures, at any time or from time to time,
for a period not exceeding 20 consecutive quarters. Payment of interest may not
be deferred, however, beyond the stated maturity of the debentures. During any
interest deferral period, no interest will be due and payable to the holders of
debentures, but interest will continue to accrue, and additional interest will
accrue thereon, at the rate of 8 1/2% per annum. Holders will be required to
accrue interest income, as original issue discount, for United States federal
income tax purposes, even though they do not receive any interest payments
during a deferral period. See "Material Federal Income Tax
Consequences--Interest Income and Original Issue Discount." At the end of any
deferral period, Superior must pay to the holders all amounts then accrued and
unpaid.
During any interest deferral period, Superior may not, and may not permit
any of its subsidiaries to:
A. declare or pay, or set apart for payment, any dividends or other
distributions on any shares of Superior's capital stock;
B. redeem, purchase, acquire or make a liquidation payment with respect to
any shares of Superior's capital stock; or
C. make any payment of principal of, premium, if any, or interest on or
repay, repurchase or redeem any debt securities, including guarantees of
indebtedness, issued by Superior that rank PARI PASSU with or junior to
the debentures.
However, the following actions are permitted during a deferral period:
1. dividend, redemption, liquidation, interest, principal or guarantee
payments by Superior where the payment is made with securities that rank
pari passu with or junior to the securities on which the applicable
payment is being made;
2. payments by Superior under the guarantee agreement;
3. payments by Superior under the senior subordinated credit agreement
entered into in connection with the acquisition of Essex and any
refinancings of that agreement;
4. purchases of Superior common stock related to the issuance of Superior
common stock under any of Superior's benefit plans for its directors,
officers or employees;
5. reclassifications of Superior's capital stock or exchanges or
conversions of one series or class of Superior's capital stock for
another series or class of Superior's capital stock; and
6. purchases of fractional interests in shares of Superior's capital stock
pursuant to the conversion or exchange provisions of the capital stock or
the security being converted or exchanged.
Prior to the termination of any interest deferral period, Superior may
further extend the deferral period, as long as the deferral period, as extended,
does not exceed 20 consecutive quarters or extend beyond the stated maturity of
the debentures. Upon the termination of any deferral period and the payment of
all amounts then accrued and unpaid, Superior may elect to begin a new deferral
period, subject to the above requirements.
Superior has no current intention to exercise its right to defer payments of
interest on the debentures. Superior would elect to defer payments of interest
if it does not for any reason have the financial resources to make these
payments.
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MANDATORY REDEMPTION
Upon repayment at maturity or as a result of acceleration of the debentures
upon the occurrence of an event of default under the indenture, Superior will be
required to redeem the debentures, in whole, but not in part, at a redemption
price equal to 100% of their principal amount, plus any accrued and unpaid
interest thereon. The debentures are not subject to the operation of any
purchase, retirement or sinking fund or, except as set forth above or as a
result of acceleration, any other provision for mandatory prepayment.
OPTIONAL REDEMPTION
Except as provided below, under "--Mandatory Redemption" or under
"--Redemption Upon Change of Control," Superior may not redeem the debentures
prior to March 31, 2003. On or after that date, Superior may, at its option,
redeem at any time all, or from time to time a portion, of the debentures.
Holders of debentures redeemed during the twelve-month period beginning on April
1 of the year specified below will receive the following cash redemption prices,
plus accrued and unpaid interest to the date fixed for redemption:
<TABLE>
<CAPTION>
PERCENTAGE OF
PRINCIPAL AMOUNT
OF DEBENTURES
AT STATED
YEAR MATURITY
- --------------------------------------------------------------------------- -----------------
<S> <C>
2003....................................................................... 105.10%
2004....................................................................... 104.25%
2005....................................................................... 103.40%
2006....................................................................... 102.55%
2007....................................................................... 101.70%
2008....................................................................... 100.85%
and thereafter............................................................. 100.00%
</TABLE>
During the one-year period commencing on March 31, 2002, Superior, at its
option, may redeem at any time all, or from time to time a portion, of the
debentures at a cash redemption price of 105.95% of principal amount at stated
maturity, plus accrued and unpaid interest to the redemption date. Superior may
do this only if the product of
(A) the average closing price of a share of Superior common stock, for any
10 consecutive trading days preceding the date of the call for
redemption, multiplied by
(B) the conversion rate then in effect,
equals or exceeds $65.00 per share of Superior common stock.
As long as the trust holds the debentures, the trust will use the proceeds
of any redemption to redeem trust securities. Superior may not redeem less than
all of the debentures at any time outstanding until all accrued but unpaid
interest on all debentures then outstanding has been paid. See "Description of
the Trust Preferred Securities--Optional Redemption."
REDEMPTION UPON CHANGE OF CONTROL
The rights of holders of debentures to elect to have debentures redeemed
upon a Change of Control of Superior occurring after the liquidation date of the
trust, and the procedures for this redemption, are as described in the first
paragraph under "Description of the Trust Preferred Securities--Redemption Upon
Change of Control."
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CONVERSION OF THE DEBENTURES
A holder of debentures may, at his, her or its option, convert debentures,
in whole or in part, into shares of Superior common stock at any time after
September 30, 1999, but not later than the close of business on the date that is
10 days preceding any date fixed for redemption, if there is no default in
payment of the redemption price. The initial conversion rate is 22.3225 shares
of Superior common stock for each $1,000 of principal amount at stated maturity
of the debentures. This conversion rate is subject to the adjustments described
under "Description of the Trust Preferred Securities--Conversion Rate
Adjustments."
The rights of a record holder of debentures to receive any accrued and
unpaid interest upon conversion are as follows:
- If a record holder converts on or after an interest payment date and on or
before the next record date, the holder will not receive interest to the
date of conversion, but will only receive interest to the interest payment
date.
- If a record holder converts after a record date and before the
corresponding interest payment date, the holder will be entitled to
receive interest on the interest payment date even if Superior defaults in
making that payment. However, when the holder surrenders debentures for
conversion during this period, he, she or it must pay to the agent
coordinating the conversion an amount equal to the interest that he, she
or it will receive on the interest payment date. The effect of this is
that the holder will be giving up the amount of the interest. But if the
holder's debentures have been called for redemption during this period,
then he, she or it will not have to make this payment.
- A record holder will not receive accrued and unpaid interest if the holder
converts during an interest deferral period.
Additionally, no adjustment will be made for dividends on the Superior common
stock issued on conversion.
As long as the trust holds the debentures, the trust has agreed that it will
not convert the debentures held by it except upon conversion of trust preferred
securities.
After the liquidation or dissolution of the trust, a holder of debentures
may convert all or a portion of the debentures into Superior common stock by
delivering to the agent coordinating the conversion an irrevocable notice of
conversion, together with the actual debentures to be converted. A cash payment
will be made in lieu of fractional shares.
MODIFICATION OF INDENTURE
The indenture may not be amended, modified, supplemented, or any provision
therein waived, in a manner that affects the rights of holders of the debentures
without the written consent of the holders of at least a majority in aggregate
principal amount of the outstanding debentures. However, without the consent of
each holder of debentures affected, an amendment, supplement or waiver may not:
- except with respect to any interest deferral period, extend the stated
maturity of the principal of, or any installment of interest on, the
debentures;
- reduce the principal amount of debentures or the rate of interest thereon
or reduce any premium payable upon the redemption of the debentures;
- change the place of payment where, or the coin or currency in which, any
debenture or interest thereon is payable;
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- materially and adversely affect any right to convert or exchange any
debenture, including increasing the conversion price of any debenture;
- reduce the amount of debentures whose holders must consent to an
amendment, modification, waiver or supplement of the indenture or the
debentures;
- modify the subordination provisions of the indenture in a manner
materially adverse to the holders of the debentures; or
- modify the provisions of the indenture relating to:
(a) the amendment or modification of the indenture;
(b) waiver of past events of default; or
(c) the right of the holders to receive payments on the debentures and to
institute suit therefor.
However, so long as any trust preferred securities remain outstanding,
(a) no amendment, modification or supplement of the indenture that
materially adversely affects the holders of the trust preferred
securities may be entered into,
(b) no termination of the indenture may occur, and
(c) no waiver under the indenture will be effective
without the prior consent of the holders of at least a majority of the aggregate
liquidation preference of the trust preferred securities then outstanding,
unless and until all principal of, premium, if any, and interest on the
debentures has been paid in full. In addition, where a consent under the
indenture requires the consent of each holder of debentures affected, the
property trustee may not give that consent without the prior consent of each
holder of trust preferred securities.
DEBENTURE EVENTS OF DEFAULT; ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST
PREFERRED SECURITIES
The indenture provides that if any one of the following events has occurred
and is continuing, it is an event of default with respect to the debentures:
A. failure to pay any interest on the debentures when it becomes due and
payable and the failure continues for 30 days. However, if the payment of
interest has been deferred or is prohibited under the terms of the
indenture, no event of default will result;
B. failure to pay any principal of, or premium, if any, on, the debentures
when due and payable, unless the payment is prohibited under the terms of
the indenture;
C. failure by Superior to observe or perform in any material respect any of
its other covenants or agreements contained in the debentures or in the
indenture. To be an event of default, the failure must continue for a
period of 60 days after written notice has been given:
(1) to Superior by the indenture trustee; or
(2) to Superior and the indenture trustee by holders of at least a
majority in aggregate principal amount of the outstanding debentures
or the holders of at least a majority in aggregate liquidation
preference of the outstanding trust preferred securities;
D. the dissolution, winding-up or termination of the trust, except:
(x) in connection with the distribution of debentures or the making of a
full cash liquidation distribution to the holders of trust
securities;
(y) upon a merger, consolidation or amalgamation of the trust permitted
by the declaration of trust; or
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(z) in any other manner permitted under the declaration;
E. specific events of bankruptcy, insolvency or reorganization of Superior.
The holders of a majority in principal amount of the outstanding debentures
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the indenture trustee or exercising any trust or
power conferred on the indenture trustee. If an event of default has occurred
and is continuing, then the indenture trustee or the holders of not less than a
majority in aggregate principal amount of the outstanding debentures may declare
the aggregate principal amount of all the outstanding debentures to be
immediately due and payable. If the indenture trustee or the holders of the
debentures fail to make this declaration, the holders of at least a majority in
aggregate liquidation preference of the trust preferred securities then
outstanding will have this right. Upon the making of this declaration, the
principal amount of, premium, if any, and accrued and unpaid interest on all the
debentures then outstanding will become immediately due and payable. However,
the payment of principal, premium and interest will remain subordinated to the
payment of any senior secured indebtedness of Superior.
The holders of a majority in principal amount of the outstanding debentures
may cancel declarations of acceleration or waive events of default. Holders of a
majority in aggregate liquidation preference of the outstanding trust preferred
securities may take this action if the holders of the debentures fail to do so.
If an event of default has occurred and is continuing because Superior
failed to make any principal, premium or interest payments on the debentures,
any holder of trust preferred securities may proceed directly against Superior
to obtain amounts owed to him, her or it on the trust preferred securities,
without waiting for any trustee to take action.
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The indenture provides that Superior will not, in a single transaction or
series of related transactions, consolidate with or merge into any other person
or entity, or sell, transfer, lease or otherwise dispose of all or substantially
all of its properties and assets to any person or entity, or adopt a plan of
liquidation, unless:
A. Either:
1. Superior is the survivor of the merger or consolidation; or
2. the surviving or transferee entity is organized and existing under
the laws of the United States of America or any state or the District
of Columbia and expressly assumes all of Superior's obligations under
the debentures and the indenture;
B. immediately after giving effect to the transaction, no event of default
has occurred and is continuing; and
C. the transaction is permitted under the declaration of trust and the
guarantee agreement and does not result in any breach or violation of the
declaration or the guarantee agreement.
The general provisions of the indenture do not afford holders of the
debentures protection in the event of a highly leveraged or other transaction
involving Superior that may adversely affect holders of the debentures.
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SATISFACTION AND DISCHARGE
The indenture provides that when all debentures not previously delivered to
the indenture trustee for cancellation:
1. have become due and payable;
2. (a) will become due and payable at their stated maturity within one
year or are to be called for redemption within one year under
irrevocable arrangements satisfactory to the indenture trustee; and
(b) Superior has irrevocably deposited with the indenture trustee
sufficient funds, in trust, to pay the principal of, premium, if any,
and interest on all the outstanding debentures to the date of the
deposit or to their stated maturity, as the case may be; or
3. have been redeemed or tendered for conversion;
then the indenture will cease to be of further effect, except as to:
(x) surviving rights of transfer, substitution and exchange of
debentures;
(y) rights of holders to receive payment of principal of, premium, if
any, and interest on the debentures; and
(z) the rights of the indenture trustee under the indenture.
At that time, Superior will be deemed to have satisfied and discharged the
indenture.
PRIORITY OF PAYMENT
Superior has agreed, and each holder of debentures, by its acceptance of the
debentures, likewise agrees, that all obligations represented by the debentures,
including the payment of principal of, premium, if any, and interest on the
debentures, are expressly made subordinate in right of payment to the prior
payment and satisfaction in full in cash of all existing and future senior
secured indebtedness of Superior.
In the event of:
A. any insolvency or bankruptcy case or proceeding, or any related
receivership, liquidation, reorganization or other similar case or
proceeding, relating to Superior, its creditors or its assets, whether
voluntary or involuntary; or
B. any total or partial liquidation, dissolution or other winding-up of
Superior, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy; or
C. any general assignment for the benefit of creditors or any other
marshaling of assets or liabilities of Superior, then:
1. the holders of senior secured indebtedness of Superior will be
entitled to receive payment and satisfaction in full in cash of all
amounts due on this debt before the holders of the debentures are
entitled to receive or retain any payment or distribution on the
debentures;
2. if the indenture trustee or the holder of any debenture has received
any payment or distribution on the debentures before all of
Superior's senior secured indebtedness is paid and satisfied in full
in cash, then the indenture trustee or the holder must hold the
payment or distribution in trust for the benefit of the holders of
the senior secured indebtedness. Any amounts so held must be
immediately paid over or delivered to the
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liquidating trustee or agent or other person making payment or
distribution of Superior's assets for application to the payment of
all senior secured indebtedness remaining unpaid.
Unless the above provisions apply, after an event of default under
Superior's senior secured indebtedness has occurred, Superior may not make any
payment or distribution in respect of the debentures, and neither the indenture
trustee nor any holder of any debenture may take or receive any such payment
from Superior or any subsidiary of Superior. This prohibition will continue
until the applicable event of default is cured, waived or ceases to exist and
any related acceleration of the senior secured indebtedness has been rescinded.
At that time, Superior will resume making any required payments on the
debentures, including any missed payments. If the indenture trustee or the
holder of any debenture has received any prohibited payment, then the payment
must be paid over to the representatives of the holders of the senior secured
indebtedness, in trust, for distribution to the holders of this debt. If no
amounts are then due in respect of the senior secured indebtedness, the
prohibited payment must be promptly returned to Superior, or otherwise
distributed as a court of competent jurisdiction may direct.
The indenture places no limitation on the amount of additional senior
secured indebtedness that Superior may incur.
PAYMENT AND PAYING AGENT
Principal of, premium, if any, and any interest on the debentures is
payable, the transfer of the debentures is registerable, and the debentures are
exchangeable for a like aggregate principal amount of debentures of a different
authorized denomination at the corporate trust office of the indenture trustee
or at the office of the agent coordinating the transfer designated by Superior.
At the option of Superior, payment of interest may be made:
(a) by check mailed to the address of the person as it appears in the
securities register; or
(b) by wire transfer of immediately available funds, provided that proper
transfer instructions have been received by the relevant record date.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The indenture trustee will be under no obligation to exercise any of the
rights or powers vested in it by the indenture at the request or direction of
any holder of debentures, unless the holder has offered to the indenture trustee
security and/or indemnity reasonably satisfactory to the indenture trustee
against the costs, expenses and liabilities that might be incurred by it in
compliance with the request or direction.
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RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES,
THE DEBENTURES AND THE GUARANTEE AGREEMENT
FULL AND UNCONDITIONAL GUARANTEE
Superior has fully, irrevocably and unconditionally guaranteed payments of
distributions and other amounts due on the trust preferred securities. The
guarantee agreement by itself does not provide a full and unconditional
guarantee because it applies only if and to the extent the trust has funds on
hand and available for these payments. But taken together, Superior's
obligations under the debentures, the indenture, the declaration of trust and
the guarantee agreement provide, in the aggregate, a full, irrevocable and
unconditional guarantee, subject to repayment of Superior's other debts with a
senior claim, of these payments. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
trust's obligations under the trust preferred securities. The guarantee provided
by all these documents is considered full and unconditional because:
- Superior is unconditionally obligated under the indenture to make interest
and other payments on the debentures at the same times and in the same
amounts as distributions and other payments due on the trust preferred
securities;
- if Superior defaults in making these payments, holders of trust preferred
securities will be able to proceed directly against Superior to enforce
Superior's obligations; and
- collectively, these documents ensure payment of the full amount of the
trust's obligations under the trust preferred securities, absent any
default by Superior.
However, if and to the extent that Superior defaults and does not make
interest or other payments on the debentures, the trust will not pay
distributions or other amounts due on the trust preferred securities. The
guarantee agreement does not cover payment of distributions on the trust
preferred securities when the trust does not have sufficient funds to pay the
distributions. In that case, holders of trust preferred securities would either
rely on the enforcement against Superior by the property trustee of its rights
as holder of the debentures or bring a legal proceeding directly against
Superior to recover any amounts owed on the trust preferred securities, without
waiting for the property trustee to do so. See "Description of the Trust
Preferred Securities--Declaration Events of Default; Enforcement of Certain
Rights by Holders of Trust Preferred Securities."
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
debentures, these payments will be sufficient to cover distributions and other
payments on the trust preferred securities, primarily because:
(1) the aggregate principal amount of the debentures is equal to the sum of
the aggregate liquidation preference of the trust preferred securities
and the trust common securities;
(2) the interest rate and interest and other payment dates for the
debentures match the distribution rate and distribution and other payment
dates for the trust securities;
(3) Superior will pay for any and all costs, expenses and liabilities of the
trust except the trust's obligations to holders of the trust securities;
and
(4) the trust will not engage in any activity that is not consistent with
the limited purposes of the trust.
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Superior has the right to set-off any payment it is otherwise required to
make under the indenture with and to the extent Superior has previously made, or
is simultaneously making, a payment under the guarantee agreement.
LIMITED PURPOSE OF ISSUER
The trust preferred securities represent a beneficial interest in the assets
of the trust. The trust exists for the sole purpose of issuing the trust
preferred securities and the trust common securities in exchange for Superior's
issuance of the debentures to the trust. A principal difference between the
rights of a holder of trust preferred securities and a holder of debentures is
that a holder of debentures is entitled to receive from Superior the principal
amount of, and interest accrued on, the debentures. However, a holder of trust
preferred securities is entitled to receive distributions from the trust, or
from Superior under the guarantee agreement, only if and to the extent the trust
has funds on hand available for the payment of the distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up, liquidation or
termination of the trust involving the liquidation of the debentures, the
holders of the trust preferred securities will be entitled to receive, after
satisfaction of liabilities to creditors of the trust as provided by applicable
law, out of the assets of the trust, a cash liquidation distribution. See
"Description of the Trust Preferred Securities--Distribution of Debentures Upon
Dissolution." Upon any voluntary or involuntary liquidation or bankruptcy of
Superior, the property trustee, as holder of the debentures, would be a
subordinated creditor of Superior. The property trustee would be subordinated in
right of payment to all senior secured indebtedness of Superior, but would be
entitled to receive payment in full of principal and interest before any
stockholders of Superior receive payments or distributions. Since Superior is
the guarantor under the guarantee agreement and has agreed to pay all costs,
expenses and liabilities of the trust, the positions of a holder of trust
preferred securities and a holder of debentures relative to other creditors and
to stockholders of Superior in the event of a liquidation or bankruptcy of
Superior would be substantially the same.
MATERIAL FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Proskauer Rose LLP, counsel to Superior and Superior Trust
I, the following are the material United States federal income tax consequences
of the ownership, disposition and conversion of the trust preferred securities.
This summary is for general information purposes only and does not consider all
aspects of federal income taxation that may be relevant to a holder of trust
preferred securities because of the holder's particular circumstances.
This discussion is generally limited to the United States federal income tax
consequences to persons that will hold the trust preferred securities as capital
assets within the meaning of Section 1221 of the Internal Revenue Code of 1986,
as amended.
This summary does not deal with the United States federal income tax
consequences to persons subject to special treatment under the Internal Revenue
Code such as
- banks,
- thrifts,
- real estate investment trusts,
- regulated investment companies,
- insurance companies,
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- dealers in securities or currencies,
- tax-exempt investors,
- persons that will hold the trust preferred securities as a position in a
"straddle," or as part of a "synthetic security" or "hedge," "conversion
transaction" or other integrated investment,
- persons that have a "functional currency" other than the United States
dollar, and
- investors in pass-through entities, such as partnerships.
Further, it does not include any description of any alternative minimum tax
consequences or the consequences arising under United States federal gift and
estate taxes or the tax laws of any state, local or foreign government that may
be applicable to a holder of trust preferred securities. The material United
States federal income tax consequences to individuals who are not citizens or
residents of the United States and to foreign corporations are discussed
separately below. See "--Alien Holders."
This summary is based on the Internal Revenue Code, final and proposed
Treasury regulations thereunder and administrative and judicial interpretations
thereof, as of today. All of these are subject to change, possibly with
retroactive effect.
YOU ARE ADVISED TO CONSULT YOUR TAX ADVISOR AS TO THE UNITED STATES FEDERAL
INCOME TAX CONSEQUENCES OF THE OWNERSHIP, DISPOSITION AND CONVERSION OF TRUST
PREFERRED SECURITIES BECAUSE OF YOUR PARTICULAR CIRCUMSTANCES, AS WELL AS THE
EFFECT OF ANY STATE, LOCAL, FOREIGN OR OTHER TAX LAWS AND OF POTENTIAL CHANGES
IN APPLICABLE TAX LAWS.
CLASSIFICATION OF THE DEBENTURES
In the opinion of Proskauer Rose LLP, counsel to Superior and Superior Trust
I, assuming full compliance with the indenture under which Superior issued its
8 1/2% convertible subordinated debentures, the debentures are classified for
United States federal income tax purposes as indebtedness of Superior under
current law. By acceptance of trust preferred securities, each holder agrees to
treat the debentures for such purposes as indebtedness and the trust preferred
securities as evidence of an undivided ownership interest in the debentures. We
cannot give you any assurance, however, that the classification of the
debentures as indebtedness will not be challenged by the Internal Revenue
Service or, if challenged, that such a challenge will not be successful. See
"--Possible Tax Law Changes." The remainder of this discussion assumes that the
debentures are classified as indebtedness of Superior for United States federal
income tax purposes.
CLASSIFICATION OF THE TRUST
In the opinion of Proskauer Rose LLP, counsel to Superior and the trust,
under current law and assuming full compliance with the terms of the declaration
of trust under which the trust issued the trust preferred securities, the trust
is classified as a grantor trust for United States federal income tax purposes.
Accordingly, for United States federal income tax purposes, a holder of trust
preferred securities will generally be considered the owner of an undivided
interest in the debentures. Holders are therefore required to include in their
gross income their pro rata share of interest income, including original issue
discount, with respect to those debentures. See "--Interest Income and Original
Issue Discount."
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the indenture, so long as no event of default relating to specified
events of bankruptcy, insolvency or reorganization of Superior has occurred and
is continuing, Superior has the option to defer the payment of interest on the
debentures at any time or from time to time for a period not exceeding 20
consecutive quarters. Superior believes, and takes the position, that its option
to extend
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the interest period causes the debentures to be subject to the original issue
discount rules for United States federal income tax purposes. Proskauer Rose LLP
believes that the occurrence of an interest deferral is not "remote" within the
meaning of the applicable Treasury regulations, and that this position is
therefore correct. However, there is no authority directly on point and the IRS
could take a contrary position. If the likelihood of this occurrence were
remote, the original issue discount rules would not apply unless the trust
preferred securities initially traded at a discount to their liquidation amount,
as discussed below, or unless and until an interest deferral occurred.
Because the debentures are subject to the original issue discount rules, all
of a holder's taxable interest income with respect to the debentures must be
accounted for as original issue discount on a constant yield method regardless
of the holder's method of accounting. In addition, actual distributions of
interest will not be reported as taxable income. A holder's tax basis for the
trust preferred securities, which generally equals the cost of the trust
preferred securities to the holder, will be increased by the amounts of original
issue discount accrued into income and will be decreased by cash distributions
of interest. The amount of original issue discount that will be recognized in
any quarterly interest payment period will approximately equal the amount of
income that accrues on the debentures in that quarter at the stated interest
rate. Should the original issue discount rules not apply, stated interest will
be includible in a holder's gross income in accordance with the holder's regular
method of accounting.
Because the fair market value of trust preferred securities on the date they
were issued, as measured by the mean between the highest and lowest trading
prices on the New York Stock Exchange, was less than their $50 liquidation
amount, the debentures will be deemed to have been issued with additional
original issue discount equal to that difference, in the amount of $12.50 per
unit. This original issue discount will be includible in your taxable income on
a constant yield basis over the term of the debentures.
If Superior exercises its option to defer a payment of interest, holders
will be required to continue to include original issue discount in gross income
even though the trust will not make any actual cash payments during the interest
deferral period.
If a holder disposes of trust preferred securities before the record date
for payment of a distribution or during an interest deferral period, that holder
will include interest (original issue discount) in gross income but will not
receive any cash from the trust. The same is true if a holder converts trust
preferred securities into Superior common stock prior to the payment of a
distribution, except if the conversion occurs after a call for redemption that
occurs after the record date for that payment.
Because income on the trust preferred securities constitutes original issue
discount, or if the original issue discount rules do not apply, interest, rather
than dividends, corporate holders of the trust preferred securities are not
entitled to a dividends-received deduction with respect to any income recognized
with respect to the trust preferred securities.
MARKET DISCOUNT, ACQUISITION PREMIUM AND AMORTIZABLE BOND PREMIUM
A purchaser of trust preferred securities at a price less than their
adjusted issue price, which equals the original issue price of $50 per trust
preferred security plus any accrued original issue discount, acquires the trust
preferred securities with "market discount" unless the difference is less than a
specified DE MINIMIS amount. Such a purchaser will be required to treat any gain
on the sale, exchange, redemption or other disposition of all or part of the
trust preferred securities as ordinary income to the extent of accrued, but not
previously taxed, market discount. Market discount generally will accrue ratably
during the period from the date of purchase of the trust preferred securities to
the maturity date of the debentures, unless the holder irrevocably elects to
include in income such market discount on the basis of a constant interest rate.
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A holder who has acquired trust preferred securities at a market discount
generally will be required to defer any deductions of interest expense
attributable to any indebtedness incurred or continued to purchase or carry the
trust preferred securities, to the extent such interest expense exceeds the
related interest income. Any such deferred interest expense generally will be
allowable as a deduction in the year in which the related market discount income
is recognized. As an alternative to the inclusion of market discount in income
upon disposition of all or a portion of the trust preferred securities or the
related debentures, a holder may make an election, which may not be revoked
without the IRS's consent, to include market discount in income as it accrues on
all market discount instruments acquired by the holder during or after the
taxable year for which the election is made. In that case, the preceding
deferral rule for interest expense will not apply.
A purchaser of trust preferred securities at a price in excess of the
adjusted issue price acquires the trust preferred securities with "acquisition
premium." To the extent the purchase price is at least equal to the aggregate
amount payable on the trust preferred securities, other than qualified stated
interest, the purchaser will not be required to include in income any original
issue discount. If the purchase price is less than these amounts, but in excess
of the adjusted issue price, the purchaser will reduce the original issue
discount the purchaser would otherwise include in income by an amount
corresponding to the ratio of
(1) the excess of the purchase price over the adjusted issue price as of the
purchase date to
(2) the excess of the aggregate amount payable on the trust preferred
securities, other than qualified stated interest, after the purchase
date, over the adjusted issue price.
To the extent that a purchaser purchases trust preferred securities for an
amount in excess of the aggregate amount payable on the trust preferred
securities after the purchase date, other than qualified stated interest, the
excess is "amortizable bond premium." A purchaser may elect to amortize bond
premium over the remaining term of the trust preferred securities on a constant
yield method. If such an election is made, the amount of bond premium allocable
to any accrual period is offset against the interest allocable to the accrual
period and any excess may be deducted, subject to limitations. An election to
amortize bond premium applies to all taxable debt instruments held at the
beginning of the first taxable year to which the election applies and thereafter
acquired by the purchaser and may be revoked only with the consent of the IRS.
REDEMPTION OF TRUST PREFERRED SECURITIES FOR DEBENTURES UPON LIQUIDATION OF THE
TRUST
Under certain circumstances, the debentures may be distributed to holders in
exchange for the trust preferred securities. Under current law, this
distribution will be treated, for United States federal income tax purposes, as
a nontaxable event. A holder will receive an aggregate tax basis in the
debentures distributed equal to the holder's aggregate tax basis in his, her or
its trust preferred securities. The holding period in the debentures received
would include the period during which the holder held the trust preferred
securities. If, however, the exchange is caused by a Tax Event and the trust is
treated as an association taxable as a corporation, the distribution would
likely constitute a taxable event to both holders and the trust. In this case, a
holder would recognize gain or loss as if he, she or it had exchanged trust
preferred securities for the debentures. A holder will include interest income
on a debenture received from the trust in the manner described above under
"--Interest Income and Original Issue Discount."
SALES OF TRUST PREFERRED SECURITIES
A holder who sells trust preferred securities will be considered to have
disposed of all or part of his, her or its pro rata share of the debentures. The
holder will recognize gain or loss equal to the difference between the amount
realized on the sale of the trust preferred securities and his, her or its
adjusted tax basis in the trust preferred securities. The holder's tax basis in
a trust preferred security
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will be increased by the amount of any original issue discount that is included
in the holder's income, and will be decreased by the amount of any payments,
including stated interest, made by Superior on the debentures. In general,
subject to the rules concerning market discount discussed above, any gain or
loss will be a capital gain or loss and will be a long-term capital gain or loss
if the trust preferred securities were held for more than one year at the time
of sale. The 20% maximum tax rate on long-term capital gains would apply to
capital assets held by an individual for more than one year.
The trust preferred securities may trade at a price that does not accurately
reflect accrued but unpaid interest with respect to the underlying debentures.
If a holder disposes of trust preferred securities between the record dates for
payments of distributions, he, she or it will be required to include in income
as ordinary income any accrued but unpaid interest (original issue discount) on
the debentures to the day before the date of disposition. The holder must also
add that amount to the holder's adjusted tax basis in his, her or its pro rata
share of the underlying debentures deemed disposed of. To the extent the selling
price is less than the adjusted tax basis, the holder will recognize a capital
loss. Subject to certain limited exceptions and to a limited extent, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes.
CONVERSION OF TRUST PREFERRED SECURITIES INTO SUPERIOR COMMON STOCK
A holder will not recognize income, gain or loss upon the conversion of the
trust preferred securities into Superior common stock. A holder will, however,
recognize gain upon the receipt of cash in lieu of a fractional share of
Superior common stock generally equal to the amount of cash received less the
holder's tax basis in such fractional share. The holder's tax basis in Superior
common stock received upon conversion should generally be equal to his, her or
its tax basis in the trust preferred securities exchanged, less the basis
allocated to any fractional share for which cash is received. The holding period
in the Superior common stock received upon conversion should generally begin on
the date the holder acquired the trust preferred securities. Any accrued market
discount with respect to the trust preferred securities is carried forward to
the Superior common stock received upon conversion and, to the extent of gain
recognized on a subsequent taxable disposition of the Superior common stock,
will be treated as ordinary income.
ADJUSTMENT OF CONVERSION PRICE
Section 305 of the Internal Revenue Code treats as a distribution taxable as
a dividend, to the extent of the issuing corporation's current or accumulated
earnings and profits, certain actual or constructive distributions of stock with
respect to stock or convertible securities. Under the Treasury regulations, an
adjustment in the conversion price of the debentures may, under certain
circumstances, be treated as a constructive dividend. A holder of trust
preferred securities would be required to include the amount of any such
constructive dividend in gross income but would not receive any cash. In
addition, the holder's tax basis in the trust preferred securities would be
increased by the amount of any such constructive dividend.
INFORMATION REPORTING AND BACKUP WITHHOLDING
In general, information reporting to the IRS with respect to certain holders
will apply to original issue discount accruing on, and payments of principal and
proceeds from the sale of, the trust preferred securities or the debentures, if
distributed to and held directly by holders, as well as distributions with
respect to and proceeds from the sale of Superior common stock received on
conversion of trust preferred securities.
A holder may be subject to backup withholding at a rate of 31% with respect
to payments on, and proceeds from the sale of, the trust preferred securities or
the debentures, if they are distributed to and
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held directly by holders, as well as on and from the sale of any Superior common
stock received on conversion, unless the holder:
(a) is a corporation or comes within certain other exempt categories and,
when required, demonstrates that status; or
(b) provides a correct taxpayer identification number, certifies no loss of
exemption from backup withholding and otherwise complies with the
applicable requirements of the backup withholding rules.
Holders should consult with their tax advisors as to their qualification for
exemption from backup withholding and the procedure for obtaining such
exemption.
Backup withholding is not an additional tax. Any amount withheld as backup
withholding would be refunded or credited against a holder's United States
federal income tax liability, provided that the required information is provided
to the IRS.
ALIEN HOLDERS
For purposes of this discussion, an "alien holder" is any individual,
corporation, partnership, estate or trust that is, as to the United States, a
non-resident alien individual or a foreign corporation, partnership, estate or
trust.
Under present United States federal income tax law:
(1) Payments by the trust or any of its paying agents to any holder of trust
preferred securities that is an alien holder will not be subject to
United States federal income or withholding tax, provided that:
(a) the beneficial owner of the trust preferred security does not
actually or constructively own 10% or more of the total combined
voting power of all classes of stock of Superior entitled to vote;
(b) the beneficial owner of the trust preferred security is not a
controlled foreign corporation that is related to Superior through
stock ownership;
(c) either:
(A) the beneficial owner of the trust preferred security certifies to
the trust or its agent, under penalties of perjury, that he, she
or it is not a United States holder and provides his, her or its
name and address; or
(B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary
course of its trade or business and holds the trust preferred
security certifies to the trust or its agent under penalties of
perjury that such statement has been received by it from the
beneficial owner or by an intermediary financial institution and
furnishes the trust or its agent with a copy thereof; and
(d) such payments are not effectively connected with the conduct by the
alien holder of a trade or business in the United States; and
(2) An alien holder of a trust preferred security will not be subject to
United States federal income or withholding tax on any gain realized upon
the sale or other disposition of such trust preferred security unless:
(a) the alien holder is an individual who is present in the United States
for 183 days or more in the taxable year of disposition, and certain
other conditions apply; or
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(b) the gain is effectively connected with the conduct by the alien
holder of a trade or business in the United States.
Under recently finalized Treasury regulations, the certification requirement
referred to in (1) (c) above may also be satisfied with other documentary
evidence for payments made after December 31, 1999 with respect to an offshore
account or through certain foreign intermediaries.
POSSIBLE TAX LAW CHANGES
Legislation has been introduced in the United States Congress in the past
that, if enacted, would have denied an interest deduction to issuers of
instruments such as the debentures that were issued after the date such
legislation was proposed. No such legislation is currently pending. We cannot
assure you, however, that similar legislation will not ultimately be enacted
into law, possibly with retroactive effect, or that there will not be other
developments that would adversely affect the tax treatment of the debentures.
Such developments could result in the occurrence of a Tax Event, possibly
leading to the distribution of the debentures to the holders of the trust
preferred securities in exchange for the trust preferred securities. See
"Description of the Trust Preferred Securities--Special Event Exchange."
Superior is aware of at least one case, involving Enron Corporation, now
pending before the United States Tax Court where the IRS initially sought to
disallow the deduction for interest expense on securities that are similar to,
although different in a number of respects from, the debentures. Such securities
were issued in 1993 and 1994 to partnerships that, in turn, issued "monthly
income preferred securities." In a stipulation filed in the Tax Court, the IRS
conceded that Enron was entitled to deduct its interest expense on the
securities.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the trust
preferred securities have been passed upon for the trust by Morris, Nichols,
Arsht & Tunnell, special Delaware counsel to the trust. The validity of the
debentures, the Superior common stock issuable upon conversion thereof and the
guarantee agreement, and certain legal matters relating thereto, have been
passed upon for Superior by Proskauer Rose LLP, New York, New York.
Proskauer Rose LLP, New York, New York, counsel to Superior and the trust,
has passed upon for Superior and the trust the material federal income tax
consequences relating to the trust preferred securities and the debentures.
EXPERTS
The consolidated financial statements of Superior TeleCom Inc. and
subsidiaries incorporated by reference in this prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
41
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission a registration
statement on Form S-3 under the Securities Act of 1933 relating to the 8 1/2%
trust convertible preferred securities of Superior Trust I, the 8 1/2%
convertible subordinated debentures of Superior and the shares of common stock
of Superior issuable upon conversion of the trust preferred securities and the
debentures. This prospectus constitutes a part of the registration statement but
does not contain all of the information set forth in the registration statement
and its exhibits. For further information, we refer you to the registration
statement and its exhibits.
Superior files annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy these documents at the following locations of the Securities and Exchange
Commission:
<TABLE>
<S> <C> <C>
Securities and Exchange Securities and Exchange Securities and Exchange
Commission Commission Commission
Judiciary Plaza, Room 1024 Seven World Trade Center, Citicorp Center
450 Fifth Street, N.W. Suite 1300 500 West Madison Street
Washington, D.C. 20549 New York, New York 10048 Suite 1400
Chicago, Illinois 60661
</TABLE>
You can request copies of these documents by contacting the Securities and
Exchange Commission and paying a fee for the copying cost. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further information on
the public reference rooms. Superior's filings also are available to the public
on the Securities and Exchange Commission's web site at http://www.sec.gov and
may be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" the information contained in documents that Superior files with it,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus. Information in this prospectus supersedes
information incorporated by reference that Superior filed with the Securities
and Exchange Commission prior to the date of this prospectus, while information
that Superior files later with the Securities and Exchange Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and any future filings Superior will make with the
Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934:
1. Superior's Annual Report on Form 10-K for the eighth-month transitional
period ended December 31, 1998;
2. Superior's Quarterly Reports on Form 10-Q for the quarterly periods
ended March 31, 1999 and June 30, 1999; and
3. The description of Superior common stock contained in Superior's
registration statement on Form 8-A filed on October 2, 1996, including
any amendment or report filed with the Securities and Exchange Commission
for purposes of updating this description.
You may request a copy of these filings, at no cost, by writing or
telephoning us at:
Superior TeleCom Inc.
1601 Wall Street
Fort Wayne, Indiana 46802
(219) 461-4000
Attention: Melanie Hall
42
<PAGE>
We have not authorized anyone to give any information or make any
representation that is different from, or in addition to, that contained in this
prospectus or in any of the materials that we have incorporated by reference
into this prospectus. Therefore, if anyone does give you information of this
sort, you should not rely on it. If you are in a jurisdiction where offers to
sell, or solicitations of offers to purchase, the securities offered by this
prospectus are unlawful, or if you are a person to whom it is unlawful to direct
these types of activities, then the offer presented in this prospectus does not
extend to you. The information contained in this prospectus speaks only as of
the date of this prospectus, unless the information specifically indicates that
another date applies.
43
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
An estimate of the fees and expenses of issuance and distribution (other
than discounts and commissions) of the Trust Preferred Securities offered hereby
(all of which will be paid by Superior) is as follows:
<TABLE>
<S> <C>
SEC registration fee............................................. $ 19,251
Legal fees and expenses.......................................... 5,000
Accounting fees and expenses..................................... 5,000
---------
Total.......................................................... $ 29,251
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's board of directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Superior's Certificate of
Incorporation and Bylaws provide for indemnification of its directors, officers,
employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. Superior has also purchased and maintains insurance for
its officers, directors, employees or agents against liabilities that an
officer, a director, an employee or an agent may incur in his or her capacity as
such.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of October 21, 1998, by and among Superior TeleCom Inc., SUT
Acquisition Corp. and Essex International Inc. (incorporated herein by reference to Appendix A-1 to
the Joint Proxy Statement/Prospectus filed as part of the Registration Statement on Form S-4
(Registration No. 333-68889) of Superior TeleCom Inc. and Superior Trust I, as filed with the
Securities and Exchange Commission on December 14, 1998 (as amended, the "Form S-4")).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of February 24, 1999, by and among Superior
TeleCom Inc., SUT Acquisition Corp. and Essex International Inc. (incorporated herein by reference to
Appendix A-2 to the Joint Proxy Statement/Prospectus filed as part of the Form S-4).
4.1 Certificate of Incorporation of Superior TeleCom Inc. (incorporated herein by reference to Exhibit
3.2 to the Registration Statement on Form S-1 (Registration No. 333-09933) of Superior TeleCom Inc.,
as filed with the Securities and Exchange Commission on August 9, 1996 (as amended, the "Form S-1")).
4.2 Certificate of Amendment, dated July 12, 1996, to the Certificate of Incorporation of Superior
TeleCom Inc. (incorporated herein by reference to Exhibit 3.2 to the Form S-1).
4.3 Certificate of Amendment, dated August 6, 1996, to the Certificate of Incorporation of Superior
TeleCom Inc. (incorporated herein by reference to Exhibit 3.3 to the Form S-1).
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.4* Certificate of Amendment, dated March 31, 1999, to the Certificate of Incorporation of Superior
TeleCom Inc.
4.5 Bylaws of Superior TeleCom Inc. (incorporated herein by reference to Exhibit 3.4 to the Form S-1).
4.6* Amended and Restated Declaration of Trust of Superior Trust I, dated as of March 31, 1999, among
Superior TeleCom Inc., American Stock Transfer & Trust Company, as Property Trustee, Wilmington Trust
Company, as Delaware Trustee, and the Administrative Trustees named therein.
4.7* Indenture for the 8 1/2% Convertible Subordinated Debentures Due 2014, dated as of March 31, 1999,
between Superior TeleCom Inc. and American Stock Transfer & Trust Company, as Indenture Trustee.
4.8* Preferred Securities Guarantee Agreement, dated as of March 31, 1999, between Superior TeleCom Inc.
and American Stock Transfer & Trust Company, as Guarantee Trustee.
5.1* Opinion of Proskauer Rose LLP, counsel to Superior TeleCom Inc., as to the legality of the 8 1/2%
Convertible Subordinated Debentures, the Superior Common Stock and the Preferred Securities Guarantee
Agreement being registered hereby.
5.2* Opinion of Morris, Nichols, Arsht & Tunnell, special counsel to Superior Trust I, as to the legality
of the 8 1/2% Trust Convertible Preferred Securities being registered hereby.
8.1* Opinion of Proskauer Rose LLP, counsel to Superior TeleCom Inc. and Superior Trust I, as to the
federal tax consequences relating to the 8 1/2% Trust Convertible Preferred Securities and the 8 1/2%
Convertible Subordinated Debentures.
12.1* Statement of ratios of combined fixed charges and preference dividends to earnings (included on page
11 of this Registration Statement).
23.1* Consent of Proskauer Rose LLP with respect to the legality of the 8 1/2% Convertible Subordinated
Debentures, the Superior Common Stock and the Preferred Securities Guarantee Agreement being
registered hereby (contained in Exhibit 5.1).
23.2* Consent of Morris, Nichols, Arsht & Tunnell with respect to the legality of the 8 1/2% Trust
Convertible Preferred Securities being registered hereby (contained in Exhibit 5.2).
23.3* Consent of Arthur Andersen LLP, independent public accountants, with respect to the financial
statements of Superior TeleCom Inc.
24.1* Power of Attorney (included on signature page).
99.1* Registration Rights Agreement, dated as of March 17, 1999, among Superior TeleCom Inc., Superior
Trust I and the individuals and entities named in Schedule I thereto.
</TABLE>
- ------------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
II-2
<PAGE>
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section do
not apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial BONA
FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrants of expenses incurred
or paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned registrants hereby undertake that for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on August 17, 1999.
SUPERIOR TELECOM INC.
By: /s/ STEVEN S. ELBAUM
-----------------------------------------
Name: Steven S. Elbaum
Title: Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints, jointly and severally, Steven S. Elbaum, David
S. Aldridge and Stewart Wahrsager, or any of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, to act, without the other, for him and in his name, place and
stead, in any and all capacities, to sign this Registration Statement on Form
S-3 of Superior TeleCom Inc. and Superior Trust I, and any or all amendments to
said Registration Statement (including post-effective amendments and
registration statements filed pursuant to Rule 462 and otherwise), and to file
the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
Chairman of the Board and
/s/ STEVEN S. ELBAUM Chief Executive Officer
- ------------------------------ (principal executive August 17, 1999
Steven S. Elbaum officer)
Chief Financial Officer
/s/ DAVID S. ALDRIDGE (principal financial
- ------------------------------ officer and principal August 17, 1999
David S. Aldridge accounting officer)
/s/ EUGENE P. CONNELL Director
- ------------------------------ August 17, 1999
Eugene P. Connell
/s/ ROBERT J. LEVENSON Director
- ------------------------------ August 17, 1999
Robert J. Levenson
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
/s/ CHARLES Y. C. TSE Director
- ------------------------------ August 17, 1999
Charles Y. C. Tse
/s/ BRAGI F. SCHUT Director
- ------------------------------ August 17, 1999
Bragi F. Schut
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on August 17, 1999.
SUPERIOR TRUST I
By: /s/ STEWART H. WAHRSAGER
-----------------------------------------
Name: Stewart H. Wahrsager
Title: Administrative Trustee
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
2.1 Agreement and Plan of Merger, dated as of October 21, 1998, by and among Superior
TeleCom Inc., SUT Acquisition Corp. and Essex International Inc. (incorporated
herein by reference to Appendix A-1 to the Joint Proxy Statement/Prospectus filed as
part of the Registration Statement on Form S-4 (Registration No. 333-68889) of
Superior TeleCom Inc. and Superior Trust I, as filed with the Securities and
Exchange Commission on December 14, 1998 (as amended, the "Form S-4")).
2.2 Amendment No. 1 to Agreement and Plan of Merger, dated as of February 24, 1999, by
and among Superior TeleCom Inc., SUT Acquisition Corp. and Essex International Inc.
(incorporated herein by reference to Appendix A-2 to the Joint Proxy
Statement/Prospectus filed as part of the Form S-4).
4.1 Certificate of Incorporation of Superior TeleCom Inc. (incorporated herein by
reference to Exhibit 3.2 to the Registration Statement on Form S-1 (Registration No.
333-09933) of Superior TeleCom Inc., as filed with the Securities and Exchange
Commission on August 9, 1996 (as amended, the "Form S-1")).
4.2 Certificate of Amendment, dated July 12, 1996, to the Certificate of Incorporation
of Superior TeleCom Inc. (incorporated herein by reference to Exhibit 3.2 to the
Form S-1).
4.3 Certificate of Amendment, dated August 6, 1996, to the Certificate of Incorporation
of Superior TeleCom Inc. (incorporated herein by reference to Exhibit 3.3 to the
Form S-1).
4.4* Certificate of Amendment, dated March 31, 1999, to the Certificate of Incorporation
of Superior TeleCom Inc.
4.5 Bylaws of Superior TeleCom Inc. (incorporated herein by reference to Exhibit 3.4 to
the Form S-1).
4.6* Amended and Restated Declaration of Trust of Superior Trust I, dated as of March 31,
1999, among Superior TeleCom Inc., American Stock Transfer & Trust Company, as
Property Trustee, Wilmington Trust Company, as Delaware Trustee, and the
Administrative Trustees named therein.
4.7* Indenture for the 8 1/2% Convertible Subordinated Debentures Due 2014, dated as of
March 31, 1999, between Superior TeleCom Inc. and American Stock Transfer & Trust
Company, as Indenture Trustee.
4.8* Preferred Securities Guarantee Agreement, dated as of March 31, 1999, between
Superior TeleCom Inc. and American Stock Transfer & Trust Company, as Guarantee
Trustee.
5.1* Opinion of Proskauer Rose LLP, counsel to Superior TeleCom Inc., as to the legality
of the 8 1/2% Convertible Subordinated Debentures, the Superior Common Stock and the
Preferred Securities Guarantee Agreement being registered hereby.
5.2* Opinion of Morris, Nichols, Arsht & Tunnell, special counsel to Superior Trust I, as
to the legality of the 8 1/2% Trust Convertible Preferred Securities being
registered hereby.
8.1* Opinion of Proskauer Rose LLP, counsel to Superior TeleCom Inc. and Superior Trust
I, as to the federal tax consequences relating to the 8 1/2% Trust Convertible
Preferred Securities and the 8 1/2% Convertible Subordinated Debentures.
12.1* Statement of ratios of combined fixed charges and preference dividends to earnings
(included on page 11 of this Registration Statement).
23.1* Consent of Proskauer Rose LLP with respect to the legality of the 8 1/2% Convertible
Subordinated Debentures, the Superior Common Stock and the Preferred Securities
Guarantee Agreement being registered hereby (contained in Exhibit 5.1).
23.2* Consent of Morris, Nichols, Arsht & Tunnell with respect to the legality of the
8 1/2% Trust Convertible Preferred Securities being registered hereby (contained in
Exhibit 5.2).
23.3* Consent of Arthur Andersen LLP, independent public accountants, with respect to the
financial statements of Superior TeleCom Inc.
24.1* Power of Attorney (included on signature page).
99.1* Registration Rights Agreement, dated as of March 17, 1999, among Superior TeleCom
Inc., Superior Trust I and the individuals and entities named in Schedule I thereto.
</TABLE>
- ------------------------
* Filed herewith.
<PAGE>
Exhibit 4.4
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SUPERIOR TELECOM INC.
The undersigned corporation, in order to amend its Certificate of
Incorporation, hereby certifies as follows:
FIRST: The name of the corporation is:
Superior TeleCom Inc.
SECOND: The corporation hereby amends its Certificate of Incorporation
as follows:
Section I of Article FOURTH of the Certificate of Incorporation is
hereby amended to read, in its entirety, as follows:
FOURTH: CAPITALIZATION
SECTION I. AUTHORIZED CAPITAL. The total number of shares of stock
which the Corporation shall have authority to issue is 40,000,000 shares,
consisting of 35,000,000 shares of Common Stock, par value $.01 per share
("Common Stock"), and 5,000,000 shares of Preferred Stock, par value $.01 per
share ("Preferred Stock").
THIRD: The written amendment effected herein has been duly adopted and
approved in accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this certificate and
affirms that the statements made herein are true under the penalties of perjury
this 31st day of March, 1999.
SUPERIOR TELECOM INC.
By: /s/ Debra F. Minott
-----------------------------------
Name: Debra F. Minott
Title: Senior Vice President and
General Counsel
<PAGE>
EXHIBIT 4.6
AMENDED AND RESTATED DECLARATION OF TRUST
AMONG
SUPERIOR TELECOM INC.
AS DEPOSITOR,
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS PROPERTY TRUSTEE,
WILMINGTON TRUST COMPANY
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF MARCH 31, 1999
SUPERIOR TRUST I
<PAGE>
SUPERIOR TRUST I*
Certain Sections of this Declaration relating to Sections 310 through 318
of the Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
TRUST INDENTURE DECLARATION
ACT SECTION SECTION
- --------------- -----------
<S> <C> <C>
Section 310 (a) (1)..................................................................................8.7
(a) (2)..................................................................................8.7
(a) (4)...........................................................................2.6(a)(ii)
(b) ............................................................................8.8
Section 311 (a) ...........................................................................8.12
(b) ...........................................................................8.12
Section 312 (a) ............................................................................5.7
(b) ............................................................................5.7
(c) ............................................................................5.7
Section 313 (a) ........................................................................8.13(a)
(c) ...........................................................................10.8
(d) ........................................................................8.13(c)
(a) (4)..............................................................................8.13(b)
(b) ........................................................................8.13(b)
Section 314 (a) ...........................................................................8.14
(b) .................................................................Not Applicable
(c) (1).................................................................................8.15
(c) (2).................................................................................8.15
(c) (3).......................................................................Not Applicable
(d) .................................................................Not Applicable
(e) ......................................................................1.1, 8.15
Section 315 (a) .................................................................8.1(a), 8.3(a)
(b) ......................................................................8.2, 10.8
(c) .........................................................................8.1(a)
(d) .......................................................................8.1, 8.3
(e) .................................................................Not Applicable
Section 316 (a) .................................................................Not Applicable
(a) (1)(A)....................................................................Not Applicable
(a) (1)(B)....................................................................Not Applicable
(a) (2).......................................................................Not Applicable
(b) .................................................................Not Applicable
(c) ............................................................................6.7
Section 317 (a) (1).......................................................................Not Applicable
(b) ............................................................................5.9
Section 318 (a) ..........................................................................10.10
</TABLE>
- --------
* Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Declaration.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1
DEFINED TERMS....................................................................................... 2
Section 1.1. DEFINITIONS..................................................................... 2
ARTICLE 2
ESTABLISHMENT OF THE TRUST........................................................................... 13
Section 2.1. NAME............................................................................. 13
Section 2.2. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS...................... 13
Section 2.3. ORGANIZATIONAL EXPENSES.......................................................... 13
Section 2.4. SUBSCRIPTION AND PURCHASE OF DEBENTURES;
ISSUANCE OF TRUST SECURITIES..................................................... 13
Section 2.5. DECLARATION OF TRUST; INTENT CLAUSE.............................................. 14
Section 2.6. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS................................. 14
Section 2.7. ASSETS OF TRUST.................................................................. 18
Section 2.8. TITLE TO TRUST PROPERTY.......................................................... 18
ARTICLE 3
PROPERTY ACCOUNT..................................................................................... 19
Section 3.1. PROPERTY ACCOUNT................................................................. 19
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION...................................................... 19
Section 4.1. DISTRIBUTIONS.................................................................... 19
Section 4.2. REDEMPTION....................................................................... 20
Section 4.3. CONVERSION....................................................................... 23
Section 4.4. SPECIAL EVENT EXCHANGE........................................................... 25
Section 4.5. NO SINKING FUND; REDEMPTION UPON CHANGE OF CONTROL............................... 26
Section 4.6. SUBORDINATION OF COMMON SECURITIES............................................... 27
Section 4.7. PAYMENT PROCEDURES............................................................... 28
Section 4.8. TAX RETURNS AND REPORTS.......................................................... 28
Section 4.9. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST...................................... 28
Section 4.10. PAYMENTS UNDER INDENTURE......................................................... 28
ARTICLE 5
TRUST SECURITIES CERTIFICATES........................................................................ 29
Section 5.1. INITIAL OWNERSHIP................................................................ 29
Section 5.2. THE TRUST SECURITIES CERTIFICATES................................................ 29
Section 5.3. DELIVERY OF TRUST SECURITIES CERTIFICATES........................................ 29
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 5.4. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES;
RESTRICTIONS ON TRANSFER......................................................... 30
Section 5.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES CERTIFICATES............... 31
Section 5.6. PERSONS DEEMED SECURITYHOLDERS................................................... 31
Section 5.7. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES........................... 31
Section 5.8. MAINTENANCE OF OFFICE OR AGENCY.................................................. 32
Section 5.9. APPOINTMENT OF PAYING AGENT...................................................... 32
Section 5.10. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR...................................... 32
Section 5.11. RIGHTS OF SECURITYHOLDERS........................................................ 33
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING;
AMENDMENT OF THE DECLARATION......................................................................... 33
Section 6.1. LIMITATIONS ON VOTING RIGHTS..................................................... 33
Section 6.2. ADDITIONAL VOTING RIGHTS......................................................... 36
Section 6.3. NOTICE OF MEETINGS............................................................... 37
Section 6.4. MEETINGS OF HOLDERS OF PREFERRED SECURITIES...................................... 37
Section 6.5. VOTING RIGHTS.................................................................... 38
Section 6.6. PROXIES, ETC..................................................................... 38
Section 6.7. SECURITYHOLDER ACTION BY WRITTEN CONSENT......................................... 38
Section 6.8. RECORD DATE FOR VOTING AND OTHER PURPOSES; DISCRETION OF PROPERTY
TRUSTEE RELATING TO MEETINGS OF HOLDERS.......................................... 38
Section 6.9. ACTS OF SECURITYHOLDERS.......................................................... 39
Section 6.10. INSPECTION OF RECORDS............................................................ 40
ARTICLE 7
REPRESENTATIONS AND WARRANTIES....................................................................... 40
Section 7.1. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND THE
DELAWARE TRUSTEE................................................................. 40
Section 7.2. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR...................................... 42
ARTICLE 8
THE TRUSTEES......................................................................................... 42
Section 8.1. CERTAIN DUTIES AND RESPONSIBILITIES.............................................. 42
Section 8.2. NOTICE OF DEFAULTS............................................................... 44
Section 8.3. CERTAIN RIGHTS OF PROPERTY TRUSTEE............................................... 46
Section 8.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES........................... 48
Section 8.5. MAY HOLD SECURITIES.............................................................. 49
Section 8.6. COMPENSATION; INDEMNITY; FEES.................................................... 49
Section 8.7. PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES............................... 50
Section 8.8. DISQUALIFICATION: CONFLICTING INTEREST........................................... 50
Section 8.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR................................ 50
Section 8.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR........................................... 52
Section 8.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS...................... 53
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
Section 8.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST..................... 53
Section 8.13. REPORTS BY PROPERTY TRUSTEE...................................................... 53
Section 8.14. REPORTS TO THE PROPERTY TRUSTEE.................................................. 54
Section 8.15. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT................................. 54
Section 8.16. NUMBER OF TRUSTEES............................................................... 54
Section 8.17. DELEGATION OF POWER.............................................................. 55
ARTICLE 9
DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER..................................................... 55
Section 9.1. DISSOLUTION UPON EXPIRATION DATE................................................. 55
Section 9.2. EARLY DISSOLUTION................................................................ 55
Section 9.3. TERMINATION...................................................................... 56
Section 9.4. LIQUIDATION...................................................................... 56
Section 9.5. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
THE TRUST........................................................................ 57
ARTICLE 10
MISCELLANEOUS PROVISIONS............................................................................. 58
Section 10.1. LIMITATION OF RIGHTS OF SECURITYHOLDERS.......................................... 58
Section 10.2. AMENDMENT........................................................................ 59
Section 10.3. SEPARABILITY..................................................................... 59
Section 10.4. GOVERNING LAW.................................................................... 59
Section 10.5. PAYMENTS DUE ON NON-BUSINESS DAY................................................. 60
Section 10.6. SUCCESSORS....................................................................... 60
Section 10.7. HEADINGS......................................................................... 60
Section 10.8. REPORTS, NOTICES AND DEMANDS..................................................... 60
Section 10.9. AGREEMENT NOT TO PETITION........................................................ 60
Section 10.10. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT........................... 61
Section 10.11. ACCEPTANCE OF TERMS OF DECLARATION, GUARANTEE
AND INDENTURE.................................................................... 61
Section 10.12. COUNTERPARTS..................................................................... 62
EXHIBIT A..................................................................................................... A-1
EXHIBIT B..................................................................................................... B-1
EXHIBIT C..................................................................................................... C-1
ASSIGNMENT.................................................................................................... C-3
EXHIBIT D..................................................................................................... D-1
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST, dated as of March 31, 1999,
among (i) Superior TeleCom Inc., a Delaware corporation (including any
successors or assigns, the "DEPOSITOR"), (ii) American Stock Transfer & Trust
Company, a New York corporation, as property trustee (in such capacity, the
"PROPERTY TRUSTEE"), (iii) Wilmington Trust Company, a Delaware banking
corporation, as Delaware trustee (in such capacity, the "DELAWARE TRUSTEE"),
(iv) Steven S. Elbaum, an individual, David S. Aldridge, an individual, and
Stewart H. Wahrsager, an individual, each of whose address is c/o Superior
TeleCom Inc., 1790 Broadway, New York, New York 10019 (each, an "ADMINISTRATIVE
TRUSTEE," and, collectively, the "ADMINISTRATIVE TRUSTEES," and, collectively
with the Property Trustee and the Delaware Trustee, the "TRUSTEES"), and (v) the
several Holders as hereinafter defined.
W I T N E S S E T H:
WHEREAS, the Depositor has entered into an Agreement and Plan of
Merger, dated as of October 21, 1998 (the "MERGER AGREEMENT"), with SUT
Acquisition Corp., a Delaware corporation and a subsidiary of Depositor
("PURCHASER"), and Essex International Inc., a Delaware corporation ("ESSEX"),
pursuant to which (i) Purchaser commenced, on October 28, 1998, a tender offer
to acquire up to 22,562,135 of the issued and outstanding shares of common
stock, par value $0.01 per share ("ESSEX COMMON STOCK"), of Essex for $32.00 per
share, net to the seller in cash, and (ii) following completion of the tender
offer, Purchaser will be merged with and into Essex, which will continue as the
surviving corporation, and the remaining outstanding shares of Essex Common
Stock will be converted into the right to receive the Preferred Securities (as
defined herein) issued hereby;
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust, under the Delaware Business Trust
Act, by entering into a Declaration of Trust, dated as of December 9, 1998 (the
"ORIGINAL DECLARATION"), and by executing and filing with the Secretary of State
of the State of Delaware a Certificate of Trust, filed on December 9, 1998 and
attached hereto as Exhibit A (the "CERTIFICATE OF TRUST"), the primary purpose
of which is to issue such Preferred Securities;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Declaration in its entirety to provide for, among other things, the
issuance of the Preferred Securities and the Common Securities by the Trust to
the Depositor (and the subsequent delivery of such Preferred Securities by the
Depositor to holders of Essex Common Stock in accordance with the Merger
Agreement) in consideration for the acquisition by the Trust from the Depositor
of all of the right, title and interest in and to the Debentures (as such terms
are defined herein);
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
other parties hereto and for the benefit of
<PAGE>
the Holders of the Preferred Securities, hereby amends and restates the Original
Declaration in its entirety and agrees as follows:
ARTICLE 1
DEFINED TERMS
Section 1.1. Definitions. For all purposes of this Declaration, except
as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Declaration;
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Declaration as a whole and not to any particular
Article, Section or other subdivision;
(e) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and the term "generally accepted accounting principles," with respect to any
computation required or permitted hereunder, shall mean such accounting
principles which are generally accepted at the date or time of such computation;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(h) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each case as
amended from time to time.
"ACT" has the meaning specified in Section 6.8.
"ADDITIONAL AMOUNT" means, with respect to the Trust Securities, the
amount of Additional Interest (as defined in the Indenture) paid and identified
as such to the Property Trustee or other holders of the Debentures by the
Depositor on the Debentures.
"ADDITIONAL SUMS" means, with respect to the Trust Securities, the
amount of Additional Sums (as defined in the Indenture) paid and identified as
such, to the Property Trustee or other holders of the Debentures, by the
Depositor on the Debentures.
2
<PAGE>
"ADMINISTRATIVE TRUSTEE" means each of Steven S. Elbaum, David S.
Aldridge and Stewart H. Wahrsager, each solely in his capacity as Administrative
Trustee of the Trust heretofore formed and continued hereby and not in his
individual capacity, or such Administrative Trustee's successor in interest in
such capacity, or any successor in interest in such capacity, or any successor
administrative trustee appointed as herein provided.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Depositor shall not be deemed to include the Trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; provided, however,
that beneficial ownership of 10% or more of the Voting Stock of an entity will
be deemed to be control; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"BANKRUPTCY EVENT" means, with respect to any Person:
(a) the entry by a court of competent jurisdiction of (i) a decree or
order for relief in respect of such Person in an involuntary case or proceeding
under United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal, state or foreign bankruptcy, insolvency or other
similar law or (ii) a decree or order adjudging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of, or in respect of, such Person under
any United States bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state or foreign bankruptcy, insolvency or similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of such Person or of any substantial part of such
Person's property or assets, or ordering the winding-up or liquidation of the
affairs of such Person, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
180 consecutive days; or
(b) (i) the commencement by such Person of a voluntary case or
proceeding under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable federal, state or foreign bankruptcy, insolvency or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent; or (ii) the consent by such Person to the entry of a
decree or order for relief in respect of such Person in an involuntary case or
proceeding under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable federal, state or foreign bankruptcy, insolvency or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against such Person; or (iii) the filing by such Person of a petition
or answer or consent seeking reorganization or relief under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal, state or foreign bankruptcy, insolvency or other similar law; or (iv)
the consent by such Person to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of such Person or any substantial part of such
Person's
3
<PAGE>
property or assets, or the making by such Person of an assignment for the
benefit of creditors; or (v) the taking of corporate action by such Person in
furtherance of any such actions.
"BANKRUPTCY LAWS" has the meaning specified in Section 10.9.
"BOARD OF DIRECTORS" means either the board of directors of the
Depositor or any committee of that board duly authorized to act hereunder.
"BOARD RESOLUTION" means a copy of the resolution certified by the
Secretary of the Depositor to have been duly adopted by the Board of Directors,
or such committee of the Board of Directors or officers of the Depositor to
which authority to act on behalf of the Board of Directors has been delegated,
and to be in full force and effect on the date of such certification, and
delivered to the Property Trustee.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate Trust
Office or the corporate trust office of the Indenture Trustee is closed for
business.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"CERTIFICATE OF TRUST" has the meaning specified in the preamble to
this Declaration.
"CHANGE IN 1940 ACT LAW" has the meaning specified in the definition of
Investment Company Event.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than The Alpine Group, Inc., a Delaware
corporation, or its Affiliates (the "PERMITTED HOLDERS"), becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 50% of the total voting power represented
by the outstanding Capital Stock of the Depositor pursuant to which the holders
thereof have the general voting power under ordinary circumstances to elect at
least a majority of the Board of Directors (irrespective of whether or not at
the time the stock of any other class shall or might have voting power by reason
of the happening of any contingency) ("VOTING STOCK");
(b) the Depositor consolidates with, or merges with or into, another
entity or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any person or entity, or any entity
consolidates with, or merges with or into, the Depositor, in any such event
4
<PAGE>
pursuant to a transaction in which the outstanding Voting Stock of the Depositor
is converted into or exchanged for cash, securities or other property, other
than any such transaction where (I) the outstanding Voting Stock of the
Depositor is not converted or exchanged at all (except to the extent necessary
to reflect a change in the jurisdiction of incorporation of the Depositor) or is
converted into or exchanged for Voting Stock of the surviving or transferee
corporation and (II) immediately after such transaction, the condition described
in (A) above has not occurred with respect to the outstanding Voting Stock of
the surviving or transferee corporation;
(c) during any consecutive two-year period, individuals who at the
beginning of such period constituted the Board of Directors (together with any
new directors whose election by the Board of Directors or whose nomination for
election by the stockholders of the Depositor was approved by (x) a vote of at
least a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved (as described in this clause (x) or in the following
clause (y)) or (y) the Permitted Holders) cease for any reason to constitute a
majority of the Board of Directors then in office; or
(d) the Depositor is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
"CHANGE OF CONTROL OFFER" has the meaning specified in Section 4.5.
"CHANGE OF CONTROL PURCHASE DATE" has the meaning specified in
Section 4.5.
"CHANGE OF CONTROL REDEMPTION PRICE" has the meaning specified in
Section 4.5.
"CLOSING DATE" means the date of execution and delivery of this
Declaration.
"CLOSING PRICE", with respect to the Common Stock of the Depositor,
means for each day the last reported sales price, regular way or, in case no
sale takes place on such day, the average of the closing bid and asked prices
regular way on such day, in either case as reported on The New York Stock
Exchange Composite Tape, or, if the Common Stock is not listed or admitted to
trading on the NYSE, on the principal national securities exchange on which the
Common Stock is listed or admitted to trading, or, if not listed or admitted to
trading on any national securities exchange, on the Nasdaq National Market, or,
if not admitted for quotation on the Nasdaq National Market, the average of the
high bid and low asked prices on such day as recorded by The Nasdaq Stock
Market, or, if The Nasdaq Stock Market shall not have reported any bid and asked
prices for the Common Stock on such day, the average of the bid and asked prices
for such day as furnished by any NYSE member firm selected from time to time by
the Depositor for such purpose, or, if no such bid and asked prices can be
obtained from any such firm, the fair market value of the Common Stock on such
day as determined in good faith by the Board of Directors. Such determination by
the Board of Directors shall be conclusive.
5
<PAGE>
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"COMMON SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit B.
"COMMON SECURITY" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount with respect to the assets of the
Trust of $50 and having the rights provided therefor in this Declaration,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"COMMON STOCK" means common stock, par value $0.01 per share, of the
Depositor or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Depositor and which are not
subject to redemption by the Depositor.
"CONVERSION AGENT" has the meaning specified in Section 4.3.
"CONVERSION DATE" has the meaning specified in Section 4.3.
"CONVERSION RATE" has the meaning specified in Section 4.3.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Property Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at 40
Wall Street, New York, New York 10005.
"DEBENTURE EVENT OF DEFAULT" means an "Event of Default" as defined in
the Indenture.
"DEBENTURE REDEMPTION DATE" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption thereof under the
Indenture.
"DEBENTURES" means $171,765,650 aggregate principal amount of the
Depositor's 8 1/2% Convertible Subordinated Debentures due 2014 issued or to be
issued pursuant to the Indenture.
"DECLARATION" means this Amended and Restated Declaration of Trust, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for all
purposes of this Declaration, any such modification, amendment or supplement,
the provisions of the Trust Indenture Act that are deemed to be a part of and
govern this Declaration and any such modification, amendment or supplement,
respectively.
6
<PAGE>
"DELAWARE BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss.ss. 3801, et seq., as may be amended from time to
time.
"DELAWARE TRUSTEE" means the Person identified as the "Delaware
Trustee" in the preamble to this Declaration solely in its capacity as Delaware
Trustee of the Trust heretofore formed and continued hereby and not in its
individual capacity, or its successor in interest in such capacity, or any
successor Delaware trustee appointed as herein provided.
"DEPOSITOR" has the meaning specified in the preamble to this
Declaration.
"DIRECT ACTION" has the meaning specified in Section 6.9.
"DISTRIBUTION DATE" has the meaning specified in Section 4.1(a).
"DISTRIBUTIONS" means amounts payable in respect of the Trust
Securities as provided in Section 4.1. Distributions include, but are not
limited to, Additional Sums and Additional Amounts.
"EARLY DISSOLUTION EVENT" has the meaning specified in Section 9.2.
"ESSEX" has the meaning specified in the preamble to this Declaration.
"ESSEX COMMON STOCK" has the meaning specified in the preamble to this
Declaration.
"EVENT OF DEFAULT" means the occurrence of a Debenture Event of
Default.
"EXCHANGE ACT" means the Securities Exchange Act f 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXCHANGE NOTICE" has the meaning specified in Section 4.4(b).
"EXPIRATION DATE" has the meaning specified in Section 9.1.
"GUARANTEE" means the Guarantee Agreement executed and delivered by the
Depositor and American Stock Transfer & Trust Company, a New York corporation,
as guarantee trustee, contemporaneously with the execution and delivery of this
Declaration, for the benefit of the Holders of the Preferred Securities, as
amended from time to time.
"HOLDER" or "SECURITYHOLDER" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register, such Person
being a beneficial owner within the meaning of the Delaware Business Trust Act.
7
<PAGE>
"INDENTURE" means the Indenture, dated as of March 31, 1999, between
the Depositor and the Indenture Trustee, relating to the Debentures, as amended
or supplemented from time to time.
"INDENTURE TRUSTEE" means American Stock Transfer & Trust Company, a
New York corporation, as trustee under the Indenture, until a successor
Indenture Trustee shall have become such pursuant to the applicable provisions
of the Indenture, and thereafter "Indenture Trustee" shall mean such successor
trustee and shall include each Person who is then an Indenture Trustee hereunder
if at any time there is more than one such Person.
"INVESTMENT COMPANY EVENT" means the receipt by the Property Trustee,
on behalf of the Trust, of an Opinion of Counsel, rendered by a law firm having
a recognized national tax and securities practice (which opinion shall not have
been rescinded by such law firm), to the effect that, as a result of the
occurrence of a change in law or regulation or a change in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority (a "Change in 1940 Act Law"), there is more than
an insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the 1940 Act, which Change in
1940 Act Law becomes effective on or after the date hereof.
"LIEN" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"LIQUIDATION AMOUNT" means an amount with respect to the assets of the
Trust equal to $50 per Trust Security.
"LIQUIDATION DATE" means each date on which Debentures or cash are to
be distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 9.4.
"LIQUIDATION DISTRIBUTION" has the meaning specified in Section 9.4(d).
"MERGER AGREEMENT" has the meaning specified in the preamble to this
Declaration.
"1940 ACT" means the Investment Company Act of 1940, as amended, and
the rules and regulations promulgated thereunder.
"NOTICE OF CONVERSION" means the notice given by a Holder of Trust
Securities to the Conversion Agent directing the Conversion Agent to exchange
such Holder's Trust Securities for Debentures and to convert such Debentures
into Common Stock on behalf of such Holder.
Such notice is substantially in the form set forth in Exhibit D.
"NYSE" means the New York Stock Exchange.
8
<PAGE>
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer or the Secretary of the Depositor, and delivered to the
Property Trustee. The officer signing an Officer's Certificate given pursuant to
Section 8.15 shall be the principal executive, financial or accounting officer
of the Depositor. Any Officer's 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 Officer's 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 Officer's Certificate;
(c) a statement that each 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.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, and who may be an
employee of any thereof, and who shall be reasonably acceptable to the Property
Trustee. Any Opinion of Counsel delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(a) a statement that each individual signing the Opinion of Counsel 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 individual in rendering the Opinion of Counsel;
(c) a statement that each individual has made such examination or
investigation as is necessary to enable such individual to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
"OPTIONAL REDEMPTION PRICE" means, except as set forth below, with
respect to the Trust Securities, the following cash redemption prices per share,
plus an amount per share in cash equal to all accumulated and unpaid
Distributions on such share, if any, pro rata to the date fixed for redemption
if redeemed during the twelve-month period beginning April 1 of the year
specified below:
9
<PAGE>
<TABLE>
<CAPTION>
YEAR REDEMPTION PRICE
- ---- ----------------
<S> <C>
2003...................................................... $52.550
2004...................................................... $52.125
2005...................................................... $51.700
2006...................................................... $51.275
2007...................................................... $50.850
2008...................................................... $50.425
and thereafter............................................ $50.000
</TABLE>
In the event of a redemption of Trust Securities as a result of an
optional redemption of Debentures pursuant to Section 11.7(b) of the Indenture,
the Optional Redemption Price shall be $52.975 per share, plus an amount per
share in cash equal to all accumulated and unpaid Distributions on such share,
if any, pro rata to the date fixed for redemption, provided that the product of
(i) the average Closing Price of a share of Common Stock, for any 10 consecutive
trading days preceding the date of such call for redemption, multiplied by
(ii) the Conversion Rate, shall have equaled or exceeded $65.00 per share.
"ORIGINAL DECLARATION" has the meaning specified in the recitals to
this Declaration.
"OUTSTANDING" when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Declaration, except:
(a) Trust Securities theretofore canceled by the Securities Registrar
or delivered to the Securities Registrar for cancellation or tendered for
conversion;
(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Trust Securities; provided that, if such
Trust Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Declaration; and
(c) Trust Securities which have been paid or in exchange for or in lieu
of which other Trust Securities have been executed and delivered pursuant to
Section 5.5, unless proof satisfactory to the Property Trustee is presented that
any Trust Securities are held by Holders in whose hands such Trust Securities
are valid, binding and legal obligations of the Trust.
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Trust Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, any Trust
Securities owned by the Depositor, any Trustee or any Affiliate of the Depositor
or any Trustee shall be disregarded and deemed not to be Outstanding, except
that (a) in determining whether any Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Trust Securities that such Trustee actually knows to be so owned shall be
so disregarded and (b) the foregoing shall not apply at any time when all of the
Outstanding Trust Securities are owned by
10
<PAGE>
the Depositor, one or more of the Trustees and/or any such Affiliate. Trust
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Securities
Registrar the pledgee's right so to act with respect to such Trust Securities
and that the pledgee is not the Depositor or any Affiliate of the Depositor.
"PAYING AGENT" means any paying agent or co-paying agent appointed
pursuant to Section 5.9.
"PERMITTED HOLDERS" has the meaning specified in the definition of
Change of Control.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, limited liability company, association, joint stock company,
unincorporated organization or government or any agency or political subdivision
thereof or other entity.
"PREFERRED SECURITIES CERTIFICATE" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit C.
"PREFERRED SECURITY" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount with respect to the assets of
the Trust of $50 and having the rights provided therefor in this Declaration,
including the right to receive Distributions and a Liquidation Distribution as
provided herein.
"PROPERTY ACCOUNT" means a segregated, non-interest bearing corporate
trust account maintained by the Property Trustee with Chase Manhattan Bank (or
any successor appointed by the Property Trustee) in its trust department for the
benefit of the Holders of the Trust Securities in which all amounts paid in
respect of the Debentures will be held and from which the Property Trustee shall
make payments to the Securityholders in accordance with Section 4.1.
"PROPERTY TRUSTEE" means the Person identified as the "Property
Trustee" in the preamble to this Declaration solely in its capacity as Property
Trustee of the Trust heretofore formed and continued hereby and not in its
individual capacity, or its successor in interest in such capacity, or any
successor property trustee appointed as herein provided.
"PURCHASER" has the meaning specified in the preamble to this
Declaration.
"REDEMPTION DATE" means, with respect to any Trust Security to be
redeemed, each Debenture Redemption Date.
"REDEMPTION PRICE" means, with respect to any Trust Security, $50 per
Trust Security, plus accumulated and unpaid Distributions to the date of
redemption.
"RELEVANT RECORD DATE" has the meaning specified in Section 4.1(d).
11
<PAGE>
"RESPONSIBLE OFFICER" means any officer within the Corporate Trust
Office of the Property Trustee with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate trust
matter, any other officer of the Property Trustee to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings specified in Section 5.4.
"SPECIAL EVENT" means a Tax Event or an Investment Company Event.
"SUCCESSOR PROPERTY TRUSTEE" has the meaning specified in Section 8.9.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning specified in Section 8.9.
"SUCCESSOR SECURITIES" has the meaning specified in Section 9.5.
"TAX EVENT" means the receipt by the Property Trustee, on behalf of the
Trust, of an Opinion of Counsel, rendered by a law firm having a national tax
and securities practice (which opinion shall not have been rescinded by such law
firm), to the effect that, as a result of any amendment to, or change (including
any announced prospective change) in, the laws (or any regulations thereunder)
of the United States or any political subdivision or taxing authority thereof or
therein affecting taxation, or as a result of any official administrative
pronouncement or judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or such pronouncement or
decision is announced on or after the date hereof, there is more than an
insubstantial risk in each case after the date hereof that (i) the Trust is, or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income received or accrued on the Debentures,
(ii) interest paid by the Depositor on the Debentures is not, or within 90 days
of the date thereof will not be, deductible by the Depositor when paid, in whole
or in part, for United States federal income tax purposes, or (iii) the Trust
is, or will be within 90 days of the date thereof, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"TRUST" means the Delaware business trust heretofore formed and
continued hereby and identified on the cover page of this Declaration.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
"TRUST PROPERTY" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing to be held by the Property Trustee pursuant to the terms of this
Declaration for the benefit of the Securityholders.
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"TRUST SECURITY" means any one of the Common Securities or the
Preferred Securities.
"TRUST SECURITIES CERTIFICATE" means any one of the Common Securities
Certificate or the Preferred Securities Certificates.
"TRUSTEES" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"VOTING RIGHTS TRIGGERING EVENT" has the meaning specified in Section
6.2(a).
"VOTING STOCK" has the meaning specified in the definition of Change of
Control.
ARTICLE 2
ESTABLISHMENT OF THE TRUST
Section 2.1. NAME. The Trust heretofore formed and continued hereby
shall be known as "SUPERIOR TRUST I", as such name may be modified from time to
time by the Administrative Trustees following written notice to the Holders of
Trust Securities and the other Trustees, in which name the Trustees may conduct
the business of the Trust, make and execute contracts and other instruments on
behalf of the Trust and sue and be sued.
Section 2.2. OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF
BUSINESS. The address of the Delaware Trustee in the State of Delaware is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, or such
other address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Securityholders and the Depositor. The principal executive
office of the Trust is c/o Superior TeleCom Inc., 1790 Broadway, New York, New
York 10019.
Section 2.3. ORGANIZATIONAL EXPENSES. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of any
Trustee, promptly reimburse such Trustee for any such expenses paid by such
Trustee; provided, however, that such expenses paid by any Trustee shall have
been paid in accordance with the limitations enumerated in Section 2.5 hereof.
The Depositor shall make no claim upon the Trust Property for the payment of
such expenses.
Section 2.4. SUBSCRIPTION AND PURCHASE OF DEBENTURES; ISSUANCE OF TRUST
SECURITIES. Contemporaneously with the execution and delivery of this
Declaration, the Administrative Trustees, on behalf of the Trust, shall
subscribe for and purchase from the Depositor the Debentures, registered in the
name of the Property Trustee (in its capacity as such), having an aggregate
principal amount equal to $171,765,650, and in satisfaction of the purchase
price thereof, an Administrative Trustee, on behalf of the Trust, shall execute
in accordance with
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Section 5.2 and deliver to the Depositor (i) Preferred Securities Certificates,
to be issued and delivered to holders of the outstanding shares of Essex Common
Stock in accordance with the procedures described in Section 2.07 of the Merger
Agreement, in an aggregate amount of 3,332,254 Preferred Securities having an
aggregate Liquidation Amount of $166,612,700 and (ii) a Common Securities
Certificate, registered in the name of the Depositor, in an amount of 103,059
Common Securities having an aggregate Liquidation Amount of $5,152,950.
Section 2.5. DECLARATION OF TRUST; INTENT CLAUSE. The exclusive
purposes and functions of the Trust are (a) to issue the Trust Securities in
consideration for the Debentures, (b) to distribute the Trust's income as
provided in this Declaration and (c) to engage in only those other activities
necessary or incidental thereto, including, without limitation, those activities
specified in Sections 2.6(a), 2.6(c), 8.1 and 8.3. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, mortgage or
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. It is the intent of the parties
hereto that the Trust qualify as a grantor trust for United States federal
income tax purposes. Securityholders, by their receipt of Trust Securities in
accordance with the terms of the Merger Agreement, agree to treat the Trust as
such in all tax and accounting filings. Any ambiguity in this Agreement shall be
interpreted in a manner consistent with such classification. The Depositor
hereby appoints the Trustees as trustees of the Trust, to have all the rights,
powers and duties to the extent set forth herein, and the Trustees hereby accept
such appointment. The Property Trustee hereby declares that it will hold the
Trust Property in trust upon and subject to the conditions set forth herein for
the benefit of the Trust and the Securityholders. The Administrative Trustees
shall have all rights, powers and duties set forth herein and in accordance with
applicable law with respect to accomplishing the purposes of the Trust. The
Delaware Trustee shall not be entitled to exercise any powers of, nor shall the
Delaware Trustee have any of the duties and responsibilities of, the Property
Trustee or the Administrative Trustees set forth herein. The Delaware Trustee
shall be a Trustee of the Trust for the sole and limited purpose of fulfilling
the requirements of Section 3807 of the Delaware Business Trust Act. In the
event the Delaware Trustee shall at any time be required to take any action or
perform any duty under this Declaration, the Delaware Trustee shall be entitled
to the benefits of Sections 8.1 and 8.3. No implied covenants or obligations
shall be read into this Declaration against the Delaware Trustee.
Section 2.6. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS. (a) The
Trustees shall conduct the affairs of the Trust in accordance with the terms of
this Declaration. Subject to the limitations set forth in Section 2.5 and
paragraph (b) of this Section 2.6, and in accordance with the following
provisions (i) and (ii), the Property Trustee and the Administrative Trustees
shall have the exclusive power and authority, and are hereby authorized and
directed to, cause the Trust to engage in the following activities:
(i) As among the Trustees, each Administrative Trustee shall have
the power and authority and is hereby authorized and directed to act
on behalf of the Trust with respect to the following matters:
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(A) to execute, deliver and issue the Trust Securities;
provided, however, that the Trust may issue no more than one
series of Preferred Securities and no more than one series of
Common Securities; and, provided, further, that there shall be no
interests in the Trust other than the Trust Securities; and,
provided, further, that the issuance of Trust Securities shall be
limited to the issuance of both Preferred Securities and Common
Securities on or promptly after the Closing Date, subject to the
issuance of Trust Securities pursuant to Section 5.5 and
Successor Securities pursuant to Section 9.5;
(B) to acquire the Debentures as provided herein; provided,
however, that the Administrative Trustees shall cause legal title
to the Debentures to be held of record in the name of the
Property Trustee for the benefit of the Securityholders;
(C) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, any agreement or
instrument (including, without limitation, such certificates and
cross-receipts as may be necessary in connection with the
issuance of the Trust Securities and the purchase of the
Debentures) as such Administrative Trustee deems necessary or
incidental to the purposes and function of the Trust;
(D) to assist in the qualification of this Declaration as a
trust indenture under the Trust Indenture Act, and to cause the
Trust to take any action deemed in such Administrative Trustee's
discretion to be necessary, advisable or convenient to comply
with the Trust's obligations under the Trust Indenture Act;
(E) to appoint a Paying Agent, Conversion Agent,
authenticating agent and a Securities Registrar in accordance
with this Declaration;
(F) to the extent provided in this Declaration, to wind up
the affairs of and liquidate the Trust and prepare, execute and
file the certificate of cancellation with the Secretary of State
of the State of Delaware;
(G) to execute on behalf of the Trust (either acting alone
or together with any other Administrative Trustees) any documents
that the Administrative Trustees have the power to execute
pursuant to this Declaration; and
(H) to take any action incidental to the foregoing as the
Administrative Trustees may from time to time determine in their
discretion is necessary, advisable or convenient to give effect
to the terms of this Declaration, including, but not limited to:
(i) causing the Trust not to be deemed to be an
"investment company" required to be registered under the
1940 Act;
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(ii) causing the Trust not to be classified for United
States federal income tax purposes as a corporation; and
(iii) cooperating with the Depositor to ensure that the
Debentures will be treated as indebtedness of the Depositor
for United States federal income tax purposes; provided that
such action does not adversely affect in any material
respect the interests of Securityholders, except as
otherwise provided in Section 10.2(a).
(ii) As among the Trustees, the Property Trustee shall have the
power and authority and is hereby authorized and directed to act on
behalf of the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) to authenticate Preferred Securities delivered to it for
authentication by or on behalf of an Administrative Trustee;
(C) the receipt of and taking title to the Debentures;
(D) the collection in the Property Account of interest,
principal and any other payments made in respect of the
Debentures;
(E) the distribution from the Trust Property of amounts owed
to the Securityholders in respect of the Trust Securities
pursuant to this Declaration;
(F) the exercise of all of the rights, powers and privileges
of a holder of the Debentures;
(G) the sending of notices of default, other notices and
other information regarding the Trust Securities and the
Debentures to the Securityholders in accordance with this
Declaration;
(H) the distribution of the Trust Property in accordance
with the terms of this Declaration;
(I) to the extent provided in this Declaration, the winding
up of the affairs of and liquidation of the Trust and the
preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(J) the taking of any action incidental to the foregoing
(including executing any certificate or acknowledgment of the
Property Trustee's receipt of the Debentures) as the Property
Trustee may from time to time determine is necessary or advisable
to give effect to the terms of this Declaration and protect and
conserve the Trust Property for the
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benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder);
(K) subject to this Section 2.6(a)(ii), the Property Trustee
shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in Section
2.6(a)(i);
(L) to act as Paying Agent, Conversion Agent and/or
Securities Registrar to the extent appointed as such hereunder;
and
(M) to appoint an authenticating agent in accordance with
this Declaration.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trust shall not, the Trustees shall not and the
Administrative Trustees shall cause the Trust not to (i) invest any proceeds
received by the Trust from holding the Debentures (rather, the Trustees shall
distribute all such proceeds to the Securityholders pursuant to the terms of
this Declaration and the Trust Securities), acquire any investments or engage in
any activities not authorized by this Declaration, (ii) sell, assign, transfer,
exchange, mortgage, pledge, set-off or otherwise dispose of any of the Trust
Property or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that, to such Trustee's actual knowledge,
would cause the Trust to fail or cease to qualify as a "grantor trust" for
United States federal income tax purposes, (iv) make any loans or incur any
indebtedness for borrowed money or issue any other debt, (v) take or consent to
any action that would result in the placement of a Lien on any of the Trust
Property, (vi) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Trust Securities in any way whatsoever except
as permitted by the terms of this Declaration, or (vii) issue any securities or
other evidences of beneficial ownership of, or beneficial interest in, the Trust
other than the Trust Securities. The Administrative Trustees shall defend all
claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interests of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issue of the Preferred Securities, the
Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following actions (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Declaration are hereby ratified and confirmed in all respects):
(i) to cause the Trust to file, at the expense of the Depositor,
with the Commission and to execute on behalf of the Trust a
registration statement on the appropriate form in relation to the
Preferred Securities, including any amendments thereto;
(ii) to determine the states and foreign jurisdictions in which
to take appropriate action to qualify or register for sale all or part
of the Preferred Securities and to do any and all such acts, other
than actions which must be taken by or on behalf of the
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Trust, and advise the Trustees of actions which they must take on
behalf of the Trust, and prepare for execution and filing any
documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to
comply with the applicable laws of any such states and foreign
jurisdictions;
(iii) to the extent the Administrative Trustees deem necessary,
to prepare for filing by the Trust with the Commission and to execute
on behalf of the Trust a registration statement on Form 8-A relating
to the registration of the Preferred Securities under Section 12(b) or
12(g) of the Exchange Act, including any amendments thereto (it being
understood that neither the Trust nor the Depositor has any obligation
under the Indenture, the Merger Agreement or the Declaration to
register any Trust Securities under the Exchange Act);
(iv) to cause the Trust to enter into, and execute, deliver and
perform on behalf of the Trust, any agreements as may be necessary or
incidental to the purposes and functions of the Trust; and
(v) any other actions necessary or incidental to carry out any of
the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under the 1940 Act or be taxed as a
corporation for United States federal income tax purposes and so that the
Debentures will be treated as indebtedness of the Depositor for United States
federal income tax purposes. In this connection, the Depositor and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the Certificate of Trust or this Declaration, that each of the
Depositor and the Administrative Trustees determines in their discretion to be
necessary or desirable for such purposes, so long as such action does not
adversely affect in any material respect the interests of the Holders of the
Preferred Securities, except as otherwise provided in Section 10.2(a).
Section 2.7. ASSETS OF TRUST. The assets of the Trust shall consist of
only the Trust Property.
Section 2.8. TITLE TO TRUST PROPERTY. Legal title to all Trust Property
shall be vested at all times in the Property Trustee (in its capacity as such)
and shall be held and administered by the Property Trustee for the benefit of
the Trust and the Securityholders in accordance with this Declaration. The
Securityholders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
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ARTICLE 3
PROPERTY ACCOUNT
Section 3.1. PROPERTY ACCOUNT. (a) On or prior to the Closing Date, the
Property Trustee shall establish the Property Account. The Property Trustee and
any agent of the Property Trustee shall have exclusive control and sole right of
withdrawal with respect to the Property Account for the purpose of making
deposits in and withdrawals from the Property Account in accordance with this
Declaration. All monies and other property deposited or held from time to time
in the Property Account shall be held by the Property Trustee in the Property
Account for the exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments provided
for herein.
(b) The Property Trustee shall deposit in the Property Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Property Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE 4
DISTRIBUTIONS; REDEMPTION; EXCHANGE; CONVERSION
Section 4.1. DISTRIBUTIONS. (a) Distributions on the Trust Securities
will accumulate, without interest, from March 31, 1999, or the most recent
Distribution Date to which Distributions have been paid in full, and, except in
the event that the Depositor exercises its right to defer the payment of amounts
due under the Debentures pursuant to the Indenture, shall be payable quarterly
in arrears on March 15, June 15, September 15 and December 15 of each year,
commencing on June 15, 1999 (which dates correspond to the interest payment
dates on the Debentures), to the holders of record of the Trust Securities on
the Relevant Record Date, when, as and if available for payment by the Property
Trustee, as further described in paragraph (c) of this Section 4.1. In the event
any date on which Distributions are payable on the Trust Securities is not a
Business Day, the payment of such Distributions payable on such date shall be
made on the next succeeding day that is a Business Day and without any
additional Distributions 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 the relevant Distribution payment date (each
date on which Distributions are payable in accordance with this Section 4.1(a),
a "DISTRIBUTION DATE"). The right of any Holder to receive payment of a
Distribution on any Distribution Date shall be subject to the provisions of
Section 2.07(c) of the Merger Agreement.
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and the Distributions on the Trust Securities shall be
payable at the rate of 8 1/2% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any period shall be computed
on the basis of a 360-day year of twelve 30-day months. For periods
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less than three months, Distributions shall reflect interest on Debentures
computed on the basis of the actual number of elapsed days in such period based
on 30-day months. The amount of Distributions payable for any period shall
include any accrued and unpaid Additional Sums and Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Property Account and shall be payable on each Distribution Date
only to the extent that the Trust has funds actually received by the Property
Trustee and then on hand and available in the Property Account for the payment
of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date or Redemption Date, if applicable, shall be payable to the
Holders thereof as they appear on the Securities Register for the Trust
Securities on the relevant record date, which shall be the date which is the
fifteenth day (whether or not a Business Day) next preceding such Distribution
Date or Redemption Date (the "RELEVANT RECORD DATE"). Subject to Section 4.6
hereof, all Distributions shall be made pro rata.
Section 4.2. REDEMPTION. (a) Upon an optional redemption (as provided
for in the Indenture) of Debentures, the proceeds from such redemption to the
extent actually received by the Property Trustee shall be applied to redeem
Trust Securities having an aggregate Liquidation Amount equal to the aggregate
principal amount of the Debentures so redeemed by the Depositor, including
pursuant to Section 4.4, at the Optional Redemption Price, and upon a mandatory
redemption (as set forth in the Indenture) of Debentures, the proceeds from such
redemption shall be applied to redeem Trust Securities, pro rata, having an
aggregate Liquidation Amount equal to the aggregate principal amount of the
Debentures so redeemed by the Depositor, at the Redemption Price. The Trust
shall not redeem less than all of the Trust Securities at any time Outstanding
until all accrued and unpaid Distributions upon all Preferred Securities then
Outstanding shall have been paid.
(b) Notice of any redemption of Trust Securities shall be prepared by
or on behalf of the Administrative Trustees and delivered to the Property
Trustee, and shall then be given by the Property Trustee by first-class mail,
postage prepaid, mailed to the Depositor and each Holder of Trust Securities to
be redeemed not less than 30 nor more than 60 days prior to the Redemption Date,
at such Holder's address as it appears in the Securities Register. All notices
of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or the Optional Redemption Price, as
the case may be;
(iii) the applicable CUSIP number;
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(iv) if less than all of the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount
of the particular Trust Securities to be redeemed in accordance with
Section 4.2(e);
(v) that a Holder of Trust Securities who desires to convert such
Trust Securities called for redemption must satisfy the requirements
for conversion contained in Section 4.3 below, (B) the Conversion Rate
and (C) that the right of Holders of Trust Securities being redeemed
to exercise their conversion right shall terminate as to such Trust
Securities at the close of business on the date that is 10 days prior
to the Redemption Date (provided that no default in the payment of the
Redemption Price or the Optional Redemption Price, as the case may be,
shall have occurred and be continuing);
(vi) that on the Redemption Date the Redemption Price or the
Optional Redemption Price, as the case may be, will become due and
payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accrue on and after said date; and
(vii) the place or places where such Trust Securities are to be
surrendered for payment of the Redemption Price or the Optional
Redemption Price, as the case may be.
(c) Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the Holder of Trust Securities
receives such notice; and failure to give such notice by mail, or any defect in
such notice, to the Holders of any Trust Securities designated for redemption
shall not affect the validity of the proceedings for the redemption of any other
Trust Securities.
(d) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price or the Optional Redemption Price, as the case
may be, with the proceeds from the contemporaneous redemption of Debentures.
Redemption of the Trust Securities shall be made and the Redemption Price or the
Optional Redemption Price, as the case may be, shall be payable on each
Redemption Date only to the extent that the Trust has funds actually received by
the Property Trustee and then on hand and available in the Property Account for
the payment of such Redemption Price or the Optional Redemption Price, as the
case may be, and if the Trust does not have sufficient funds, then such funds
shall be applied to redeem such Trust Securities as the Property Trustee may
select, pro rata, by lot or in such other manner as the Property Trustee
determines.
(e) If the Property Trustee gives a notice of redemption in respect of
any Trust Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, subject to Section 4.2(d), the Property Trustee shall irrevocably deposit
with the Paying Agent funds sufficient to pay the applicable Redemption Price or
Optional Redemption Price, as the case may be, on such Trust Securities and will
give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price or the Optional Redemption Price, as the case may be, to the
Holders thereof upon surrender of their Trust Securities Certificates. On or
after the Redemption Date, each Holder of Trust Securities called for redemption
shall surrender the Trust Securities Certificate
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(or Certificates) evidencing such Trust Securities to the Paying Agent at the
place designated in the notice of redemption and shall thereupon be entitled to
receive payment of the Redemption Price or the Optional Redemption Price, as the
case may be. If fewer than all the Trust Securities represented by any such
surrendered Trust Securities Certificate (or Certificates) are redeemed, a new
Trust Securities Certificate shall be issued representing the unredeemed Trust
Securities. If, on the Redemption Date, funds necessary for the redemption shall
be available therefor and shall have been irrevocably deposited as provided
above, then, notwithstanding that the Trust Securities Certificates evidencing
Trust Securities so called for redemption shall not have been surrendered, the
Distributions with respect to the Trust Securities so called shall cease to
accrue after the Redemption Date, the Trust Securities shall no longer be deemed
Outstanding, the Holders thereof shall cease to be Securityholders, and all
rights whatsoever with respect to the Trust Securities so called for redemption
(except the right of the Holders to receive the Redemption Price or the Optional
Redemption Price, as the case may be, without interest, upon surrender of their
Trust Securities Certificates therefor) shall terminate. Any monies deposited
with the Paying Agent pursuant to this paragraph and unclaimed at the end of one
year from the Redemption Date shall, to the extent permitted by law, be returned
to the Trust, after which the Holders of Trust Securities so called for
redemption shall look only to the Trust for the payment thereof. In the event
that any date fixed for redemption of Trust Securities is not a Business Day,
then payment of the Redemption Price or the Optional Redemption Price, as the
case may be, payable on such date shall be made on the next succeeding day which
is a Business Day (without interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next 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.
(f) If less than all the Outstanding Preferred Securities are to be
redeemed on a Redemption Date, then the particular Preferred Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Property Trustee from the Outstanding Preferred Securities not previously
called for redemption, pro rata, by lot or by such other method as the Property
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions (equal to $50 or an integral multiple of $50 in
excess thereof) of the Liquidation Amount of the Preferred Securities. The
Property Trustee shall promptly notify the Securities Registrar and the
Conversion Agent (unless the Property Trustee is then serving as the Securities
Registrar and Conversion Agent) in writing of the Preferred Securities selected
for partial redemption and, in the case of any Preferred Securities selected for
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Declaration, unless the context otherwise requires, all provisions relating
to the redemption of Trust Securities shall relate, in the case of any Trust
Securities redeemed or to be redeemed only in part, to the portion of the
Liquidation Amount of Trust Securities which has been or is to be redeemed. In
the event of any redemption in part, the Trust shall not be required to
(i) issue, or register the transfer of or exchange of, any Preferred Security
during a period beginning at the opening of business 15 days before any
selection of the Preferred Securities to be redeemed and ending at the close of
business on the earliest date in which the relevant notice of redemption is
deemed to have been given to all Holders of Preferred Securities to be so
redeemed pursuant to Section 10.8 or (ii) register the transfer of or exchange
of any Preferred Securities so selected for
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redemption, in whole or in part, except for the unredeemed portion of any
Preferred Securities being redeemed in part.
(g) This Section 4.2 does not apply to any redemption of the Debentures
pursuant to Section 11.9 of the Indenture, which redemption is the subject of
Section 4.5.
Section 4.3. CONVERSION. The Holders of Trust Securities, subject to
this Section 4.3, shall have the right at any time after six months following
the first date of original issuance of the Trust Securities, but not later than
the close of business on the date which is 10 days preceding the date fixed for
redemption thereof in any notice of redemption given pursuant to the provisions
of Section 4.2(b) hereof if there is no default in payment of the Redemption
Price or Optional Redemption Price, as the case may be, at their option, to
cause the Conversion Agent to convert any or all of their Trust Securities, on
behalf of the converting Holders, into shares of Common Stock in the manner
described herein on and subject to the following terms and conditions:
(a) The Trust Securities will be convertible into fully paid and
nonassessable shares of Common Stock (and, if applicable, other securities, cash
or property) pursuant to the Holder's direction to the Conversion Agent to
exchange such Trust Securities for a portion of the Debentures equal in
principal amount to the aggregate Liquidation Amount of the Trust Securities to
be converted, and to immediately convert such amount of Debentures into that
number of fully paid and nonassessable shares of Common Stock (calculated to the
nearest 1/100th of a share) as shall be equal to the Conversion Rate in effect
at the time of conversion. Trust Securities may initially be converted into full
shares of Common Stock at the rate of 1.1161 shares of Common Stock for each
Trust Security, subject to the adjustments set forth in Sections 13.3 and 13.4
of the Indenture (the "CONVERSION RATE").
(b) In order to convert Trust Securities into Common Stock, the Holder
of such Trust Securities shall submit to the Conversion Agent an irrevocable
Notice of Conversion (in substantially the form of Exhibit D hereto) to convert
Trust Securities on behalf of such Holder, together with Trust Securities
Certificates representing Trust Securities to be converted, duly endorsed in
blank or accompanied by proper instruments of transfer. The Notice of Conversion
shall (i) set forth the number of Trust Securities to be converted and the name
or names, if other than the Holder, in which the shares of Common Stock should
be issued and (ii) direct the Conversion Agent (a) to exchange such Trust
Securities for a portion of the Debentures equal in principal amount to the
aggregate Liquidation Amount of the Trust Securities to be converted (at the
Conversion Rate) and (b) to immediately convert such Debentures, on behalf of
such Holder, into Common Stock and, if applicable, other securities, cash or
property (at the Conversion Rate). The Conversion Agent shall notify the
Property Trustee of the Holder's election to exchange Trust Securities for a
portion of the Debentures held by the Property Trustee and the Property Trustee
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in accordance with this
Section 4.3. The Conversion Agent shall thereupon notify the Depositor of the
Holder's election to convert such Debentures into shares of Common Stock.
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(c) Except as described herein or in the Indenture, no payment or
adjustment is to be made on conversion for accrued and unpaid Distributions on
the Trust Securities, including as a result of the Depositor's exercise of its
right to defer payment of amounts due under the Debentures pursuant to the
Indenture or otherwise, or for dividends on the Common Stock issued on
conversion. The Holder of record of Trust Securities on a Relevant Record Date
with respect to the payment of a Distribution on the Trust Securities will be
entitled to receive the Distribution on such Trust Securities on the
corresponding Distribution Date notwithstanding the conversion of such Trust
Securities after such Relevant Record Date or any default by the Trust in the
payment of the Distribution on that Distribution Date. Notwithstanding the
foregoing, Trust Securities surrendered for conversion during the period from
the close of business on any Relevant Record Date for the payment of a
Distribution on the Trust Securities to the opening of business on the
corresponding Distribution Date (except Trust Securities called for redemption
on a Redemption Date during such period) must be accompanied by payment by the
Holder of record on the Relevant Record Date of an amount equal to the
Distribution payable on such Distribution Date. The Distribution with respect to
Trust Securities called for redemption on a Redemption Date during the period
from the close of business on a Relevant Record Date with respect to the payment
of a Distribution on the Trust Securities to the opening of business on the
corresponding Distribution Date will be payable on that Distribution Date to the
Holder of record of such Trust Securities on such Relevant Record Date
notwithstanding the conversion of the Trust Securities after the Relevant Record
Date and prior to the Distribution Date, and the Holder of record of such Trust
Securities on such Relevant Record Date need not include a payment of such
Distribution amount upon surrender of such Trust Securities for conversion.
Holders of record of Trust Securities on a Relevant Record Date with respect to
the payment of a Distribution on the Trust Securities who convert their Trust
Securities on or after the corresponding Distribution Date will receive the
Distribution payable by the Trust on that date and need not include payment in
the amount of the Distribution upon surrender of such Trust Securities for
conversion.
(d) Trust Securities shall be deemed to have been converted upon the
surrender of Trust Securities Certificates representing such Trust Securities
(the "CONVERSION DATE"). On the Conversion Date, the Person or Persons
converting shall be deemed to be the holder or holders of record of the Common
Stock issuable upon conversion of the Debentures, and all rights with respect to
the Trust Securities surrendered shall forthwith terminate except the right to
receive the Common Stock or other securities, cash or other property as provided
herein or in the Indenture (including the provisions of Section 4.3(c)). As
promptly as practicable on or after the Conversion Date, the Depositor shall
issue and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any fraction of
any share to the Person or Persons entitled to receive the same in accordance
with Section 4.3(f), and the Conversion Agent shall distribute such certificate
or certificates to such Person or Persons.
(e) Each Holder of a Trust Security by its acceptance thereof initially
appoints the Property Trustee as conversion agent (the "CONVERSION AGENT") for
the purpose of effecting the conversion of Trust Securities in accordance with
this Section 4.3. In effecting the conversion described in this Section 4.3, the
Conversion Agent shall be acting as agent of the
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Holders of Trust Securities directing it to effect such conversion. The
Conversion Agent is hereby authorized (i) to exchange Trust Securities from time
to time for Debentures held by the Trust in connection with the conversion of
such Trust Securities in accordance with this Section 4.3 and (ii) to convert
all or a portion of the Debentures into Common Stock and thereupon to deliver
such shares of Common Stock in accordance with the provisions of this Section
4.3 and to deliver to the Property Trustee any new Debenture or Debentures for
any resulting unconverted principal amount delivered to the Conversion Agent by
the Indenture Trustee.
(f) No fractional shares of Common Stock will be issued as a result of
conversion, but, in lieu thereof, such fractional interest will be paid in cash
by the Depositor to the Conversion Agent in an amount equal to the product of
(i) the Closing Price of a share of Common Stock on the last trading day before
the Conversion Date and (ii) such fraction of a share, and the Conversion Agent
will in turn make such payment to the Holder or Holders of Trust Securities so
converted.
(g) Nothing in this Section 4.3 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities or as set
forth in this Declaration or otherwise require the Property Trustee or the Trust
to pay any amounts on account of such withholdings, except that such amounts
will not be withheld if Securityholders satisfy the Property Trustee in its sole
discretion that no taxes are due.
(h) The provisions of this Declaration, including Sections 8.1, 8.3 and
8.6, shall apply to the Property Trustee also in its capacity as Conversion
Agent.
Section 4.4. SPECIAL EVENT EXCHANGE. (a) If a Special Event shall occur
and be continuing, the Administrative Trustees shall direct the Conversion Agent
to exchange all Outstanding Trust Securities for Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Trust Securities to be
exchanged and to dissolve the Trust; provided, however, that, in the case of a
Tax Event, the Depositor shall have the right to direct that less than all, or
none, as appropriate, of the Trust Securities be so exchanged if and for so long
as the Depositor shall have elected to pay any Additional Sums such that the net
amount received by Holders of Trust Securities not so exchanged in respect of
Distributions is not reduced as a result of such Tax Event, and shall not have
revoked any such election or failed to make such payments.
(b) Notice of any exchange pursuant to this Section 4.4 (an "EXCHANGE
NOTICE") of the Trust Securities, which Exchange Notice shall be irrevocable,
will be given by the Property Trustee by first-class mail, postage prepaid, to
the Depositor and to each record Holder of Trust Securities to be exchanged not
fewer than 30 nor more than 60 days prior to the date fixed for exchange
thereof. For purposes of the calculation of the date of exchange and the dates
on which notices are given pursuant to this paragraph (b), an Exchange Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to each Holder. Each Exchange Notice shall be
addressed to each Holder of Trust Securities at the address of such Holder
appearing in the Securities Register. Each Exchange Notice shall state: (A) the
exchange date; (B) the aggregate Liquidation Amount of the Trust Securities to
be
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exchanged and the aggregate principal amount of the Debentures to be
exchanged therefor; (C) that on the exchange date the Trust Securities to be so
exchanged shall be exchanged for Debentures and that Distributions on the Trust
Securities so exchanged will cease to accumulate on and after said date; and (D)
the identity of the Conversion Agent, if any, and the place or places where each
Trust Securities Certificate to be exchanged is to be surrendered in exchange
for Debentures. No defect in the Exchange Notice or in the mailing thereof with
respect to any Trust Security shall affect the validity of the exchange
proceedings for any other Trust Security.
(c) In the event that fewer than all the Outstanding Preferred
Securities are to be exchanged, then, on the exchange date, the particular
Preferred Securities to be exchanged will be selected by the Property Trustee
from the Outstanding Preferred Securities not previously called for redemption
or exchange on a pro rata basis (based on Liquidation Amounts). Any Preferred
Securities Certificate that is to be exchanged only in part shall be surrendered
with due endorsement or by a written instrument of transfer fully executed by
the Holder thereof (or its attorney duly authorized in writing) and the
Administrative Trustees shall prepare and the Property Trustee shall
authenticate and deliver to such Holder, without service charge, a new Preferred
Securities Certificate or Certificates in aggregate stated Liquidation Amount
equal to, and in exchange for, the unexchanged portion of the Preferred
Securities Certificate so surrendered. The Common Securities shall be exchanged
in a similar manner.
(d) In the event of an exchange pursuant to this Section 4.4, on the
date fixed for any such exchange, (i) the Preferred Securities Certificates
representing the Preferred Securities to be so exchanged will be deemed to
represent Debentures having a principal amount equal to the aggregate stated
Liquidation Amount of such Preferred Securities until such certificates are
presented to the Conversion Agent for exchange for definitive certificates
representing Debentures and (ii) all rights of the Holders of the Preferred
Securities so exchanged will cease, except for the right of such Holders to
receive Debentures. The Common Securities shall be exchanged in a similar
manner.
(e) Each Holder, by becoming a party to this Declaration pursuant to
Section 10.11 of this Declaration, will be deemed to have agreed to be bound by
these exchange provisions in regard to the exchange of Trust Securities for
Debentures pursuant to the terms described above.
(f) Nothing in this Section 4.4 shall limit the requirement of the
Trust to withhold taxes pursuant to the terms of the Trust Securities or as set
forth in this Declaration or otherwise require the Property Trustee or the Trust
to pay any amounts on account of such withholdings.
Section 4.5. NO SINKING FUND; REDEMPTION UPON CHANGE OF CONTROL.
(a) Subject to Section 4.5(b), the Preferred Securities shall not be
subject to the operation of a purchase, retirement or sinking fund.
(b) If the Trust is the record holder of the Debentures, then, in the
event of a Change of Control, the Trust will, to the extent of funds legally
available therefor and subject to the prior payment in full of all other
obligations of the Trust and the Depositor that are then due or become
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due as a result of such Change of Control (or similar event), make an offer to
redeem (the "CHANGE OF CONTROL OFFER") all of the then Outstanding Preferred
Securities at a purchase price in cash equal to 101% of the Liquidation Amount
thereof, plus accrued and unpaid Distributions, to the date of redemption.
Notice of the Change of Control Offer shall be prepared by or on behalf of the
Administrative Trustees and delivered to the Property Trustee, and shall be
given by the Property Trustee within 30 days following the occurrence of any
Change of Control, by first-class mail, postage prepaid, to the Holders of
record of the Preferred Securities, addressed to such Holders at their last
address as shown on the Securities Register. Such notice shall state: (i) that a
Change of Control has occurred and that the Holders of the Preferred Securities
have the right to require the Trust to redeem all or a portion of their
Preferred Securities at a purchase price in cash equal to 101% of the
Liquidation Amount thereof, plus accrued and unpaid Distributions (the "CHANGE
OF CONTROL REDEMPTION PRICE") to the date of purchase (the "CHANGE OF CONTROL
PURCHASE DATE"), which shall be a Business Day, specified in such notice, that
is not earlier than 30 days or later than 60 days from the date such notice is
mailed; (ii) the then effective Conversion Rate; (iii) that payment will be made
upon presentation and surrender of the Preferred Securities Certificates; (iv)
that accrued but unpaid Distributions to the Change of Control Purchase Date
will be paid; (v) that on and after the Change of Control Purchase Date,
Distributions will cease to accrue on such Preferred Securities so redeemed; and
(vi) such other information as is specified in Section 4.2(b).
(c) Any notice of a Change of Control Offer which is mailed as herein
provided shall be conclusively presumed to have been duly given, whether or not
a Holder of Preferred Securities receives such notice. On or after the date
fixed for redemption as stated in such notice of a Change of Control Offer, each
Holder of Preferred Securities electing to accept such Change of Control Offer
shall surrender the Preferred Securities Certificate (or Certificates)
evidencing such Preferred Securities to the Paying Agent at the place designated
in such notice and shall thereupon be entitled to receive payment of the Change
of Control Redemption Price. If the Holder elects to have redeemed fewer than
all the Preferred Securities represented by any such surrendered Preferred
Securities Certificate (or Certificates), a new Preferred Securities Certificate
shall be issued representing the unredeemed Preferred Securities.
(d) The Preferred Securities redeemed on each Change of Control
Purchase Date shall be redeemed at the Change of Control Redemption Price with
the proceeds from the contemporaneous redemption of Debentures, as provided in
Section 11.9(d) of the Indenture, which proceeds shall be deposited with the
Paying Agent by the Property Trustee promptly upon their receipt. Redemption of
Preferred Securities shall be made and the Change of Control Redemption Price
shall be payable on each Change of Control Purchase Date only to the extent that
the Trust has funds actually received by the Property Trustee and then on hand
and available in the Property Account for the payment of such Change of Control
Redemption Price, and if the Trust does not have sufficient funds, then such
funds shall be applied to redeem such Preferred Securities as the Property
Trustee may select, pro rata, by lot or in such other manner as the Property
Trustee determines.
Section 4.6. SUBORDINATION OF COMMON SECURITIES. On any Distribution
Date, no payment of any Distribution on any Common Security shall be made unless
payment in full in
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cash of all accumulated and unpaid Distributions on all Outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto shall
have been made or provided for, and all funds immediately available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on Preferred Securities then due and payable. No redemption,
repurchase, exchange or conversion of the Common Securities shall be effected at
any time that Preferred Securities are Outstanding.
Section 4.7. PAYMENT PROCEDURES. Payments in respect of the Preferred
Securities shall be made by check mailed to the address of the Person entitled
thereto at such address as shall appear on the Securities Register. Payments, if
any, in respect of the Common Securities shall be made in such manner as shall
be mutually agreed between the Property Trustee and the Holder of the Common
Securities.
Section 4.8. TAX RETURNS AND REPORTS. The Administrative Trustees shall
prepare (or cause to be prepared), at the Depositor's expense, and file all
United States federal, state and local tax and information returns and reports
required to be filed by or in respect of the Trust. In this regard, the
Administrative Trustees shall (a) prepare and file (or cause to be prepared or
filed) Form 1041 or the appropriate Internal Revenue Service form required to be
filed in respect of the Trust in each taxable year of the Trust and (b) prepare
and furnish (or cause to be prepared and furnished) to each Holder a Form 1099
or the appropriate Internal Revenue Service form required to be furnished to
such Holder or the information required to be provided on such form. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns, reports and schedules promptly after such
filing or furnishing. The Administrative Trustees and the Property Trustee shall
comply with United States federal withholding and backup withholding tax laws
and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
Section 4.9. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST. Upon receipt
under the Debentures of Additional Sums, the Property Trustee, upon receipt of
written notice from the Depositor or the Administrative Trustees, shall promptly
pay from such Additional Sums any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
Section 4.10. PAYMENTS UNDER INDENTURE. Any amount payable hereunder to
any Holder of Preferred Securities shall be reduced by the amount of any
corresponding payment such Holder has directly received pursuant to Section 5.8
of the Indenture in accordance with the terms of Section 6.8 hereof.
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ARTICLE 5
TRUST SECURITIES CERTIFICATES
Section 5.1. INITIAL OWNERSHIP. Upon the formation of the Trust and
until the issuance of the Trust Securities, and at any time during which no
Trust Securities are Outstanding, the Depositor shall be the sole beneficial
owner of the Trust.
Section 5.2. THE TRUST SECURITIES CERTIFICATES. The Preferred
Securities Certificates shall be issued in minimum denominations of $50
Liquidation Amount and integral multiples of $50 in excess thereof, and the
Common Securities Certificate shall be issued in an aggregate Liquidation Amount
of $5,152,950. The Depositor directs that the Preferred Securities Certificates
shall not be registered in the name of the Depositor, but that such Preferred
Securities Certificates shall be issued and delivered to holders of the
outstanding shares of Essex Common Stock in accordance with the procedures
described in Section 2.07 of the Merger Agreement. The Preferred Securities
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of at least one Administrative Trustee and shall be authenticated by
the Property Trustee. The Common Securities Certificate shall be executed on
behalf of the Trust by manual signature of at least one Administrative Trustee.
Trust Securities Certificates bearing the manual or facsimile signatures of
individuals who were, at the time such signatures were affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the benefit
of this Declaration, notwithstanding the fact that such individuals or any of
them shall have ceased to be so authorized prior to the delivery of such Trust
Securities Certificates or did not hold such offices at the date of delivery of
such Trust Securities Certificates. A transferee of a Trust Securities
Certificate shall become a Securityholder, and shall be entitled to the rights
and subject to the obligations of a Securityholder hereunder, upon due
registration of such Trust Securities Certificate in such transferee's name
pursuant to Section 5.4.
Section 5.3. DELIVERY OF TRUST SECURITIES CERTIFICATES. Promptly after
the Closing Date, the Administrative Trustees shall cause the Trust Securities
Certificates, bearing the facsimile signature of one of the Administrative
Trustees, to be delivered to the Property Trustee for original issue.
A Preferred Security Certificate shall not be valid until placement of
the appropriate authorized denomination thereon and authentication by the manual
signature of an authorized signatory of the Property Trustee and shall be dated
as of the date of such authentication. The signature shall be conclusive
evidence that the Trust Security Certificate has been authenticated under this
Declaration. The Property Trustee shall authenticate the Trust Security
Certificates for original issue at such times and in accordance with the
provisions of Section 2.07(b) of the Agreement and Plan of Merger, dated as of
October 21, 1998, among the Depositor, SUT Acquisition Corp. and Essex
International Inc., as amended.
The Property Trustee may appoint an authenticating agent acceptable to
the Administrative Trustees to authenticate Preferred Security Certificates. An
authenticating agent may authenticate Preferred Security Certificates whenever
the Property Trustee may do so. Each
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reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Depositor or an Affiliate with respect to the
authentication of Preferred Securities.
Section 5.4. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED
SECURITIES; RESTRICTIONS ON TRANSFER. The Securities Registrar shall keep or
cause to be kept, at the office or agency maintained pursuant to Section 5.8, a
register in which, subject to such reasonable regulations as it may prescribe,
the Securities Registrar shall provide for the registration of Preferred
Securities Certificates and Common Securities Certificates (subject to Section
5.10 in the case of the Common Securities Certificates) and registration of
transfers and exchanges of Preferred Securities Certificates as herein provided
(such register is herein sometimes referred to as the "SECURITIES REGISTER").
The Property Trustee shall be the initial Securities Registrar. The provisions
of this Declaration, including Sections 8.1, 8.3 and 8.6, shall apply to the
Property Trustee in its role as Securities Registrar.
Upon surrender for registration of transfer of any Preferred Security
at an office or agency of the Securities Registrar designated pursuant to
Section 5.8 for such purpose, an Administrative Trustee shall execute, and the
Property Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Preferred Securities of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, and subject to the other provisions of
this Section 5.4, Preferred Securities may be exchanged for other Preferred
Securities of any authorized denomination and of a like Liquidation Amount upon
surrender of the Preferred Securities to be exchanged at any such office or
agency of the Securities Registrar. Whenever any Preferred Securities are so
surrendered for exchange, an Administrative Trustee shall execute, and the
Property Trustee shall authenticate and deliver, the Preferred Securities which
the Holder making the exchange is entitled to receive.
All Preferred Securities issued upon any registration of transfer or
exchange of Preferred Securities shall be entitled to the same benefits under
this Declaration as the Preferred Securities surrendered upon such transfer or
exchange.
Every Preferred Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Depositor and the Securities
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates, other than exchanges pursuant to Sections 4.2(d) and
4.4.
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Section 5.5. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES. If (a) any mutilated Trust Securities Certificate shall be
surrendered to the Securities Registrar or if the Securities Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Trust Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a protected
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available to the Property Trustee for
authentication in the case of the Preferred Securities Certificates and
delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Trust Securities Certificate, and the Property Trustee shall
authenticate, a new Trust Securities Certificate of like denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section 5.5, the Securities Registrar may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith. Any duplicative Trust Securities Certificate issued
pursuant to this Section 5.5 shall constitute conclusive evidence of an
undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
The provisions of this Section 5.5 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 Trust Securities.
Section 5.6. PERSONS DEEMED SECURITYHOLDERS. The Property Trustee and
the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever, and neither the Property
Trustee nor the Securities Registrar shall be bound by any notice to the
contrary.
Section 5.7. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
The Administrative Trustees or the Depositor shall furnish or cause to be
furnished (unless the Property Trustee is acting as Securities Registrar with
respect to the Trust Securities under the Declaration) a list, in such form as
the Property Trustee may reasonably require, of the names and addresses of the
Securityholders as of the most recent record date (a) to the Property Trustee,
quarterly at least five Business Days before each Distribution Date, and (b) to
the Property Trustee, promptly after receipt by the Depositor of a request
therefor from the Property Trustee in order to enable the Property Trustee to
discharge its obligations under this Declaration, in each case to the extent
such information is in the possession or control of the Administrative Trustees
or the Depositor and is not identical to a previously supplied list or has not
otherwise been received by the Property Trustee in its capacity as Securities
Registrar. The rights of Securityholders to communicate with other
Securityholders with respect to their rights under this Declaration or under the
Trust Securities, and the corresponding rights of the Property Trustee, shall be
as provided in the Trust Indenture Act, except to the extent Section 3819 of the
Delaware Business Trust Act would require greater access to such information, in
which case the latter shall apply. Each Holder, by receiving and holding a Trust
Securities Certificate, shall be deemed to have agreed not to hold the
Depositor, the Property Trustee or the Administrative Trustees
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accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 5.8. MAINTENANCE OF OFFICE OR AGENCY. The Securities Registrar
shall maintain an office or offices or agency or agencies where Preferred
Securities Certificates may be surrendered for registration of transfer,
exchange or conversion and where notices and demands to or upon the Trustees in
respect of the Trust Securities Certificates may be served. The Securities
Registrar initially designates 40 Wall Street, New York, New York 10005 as its
principal corporate trust office for such purposes. The Securities Registrar
shall give prompt written notice to the Depositor and to the Securityholders of
any change in the location of the Securities Register or any office or agency
maintained by the Securities Registrar.
Section 5.9. APPOINTMENT OF PAYING AGENT. The Trust shall maintain an
office or agency (the "PAYING AGENT") where the Trust Securities may be
presented for payment. The Paying Agent shall make Distributions to
Securityholders from the Property Account and shall report the amounts of such
Distributions to the Property Trustee and the Administrative Trustees. Any
Paying Agent shall have the revocable power to withdraw funds from the Property
Account for the purpose of making the Distributions referred to above. The
Administrative Trustees may revoke such power and remove the Paying Agent if
such Trustees determine in their sole discretion that the Paying Agent shall
have failed to perform its obligations under this Declaration in any material
respect. The Paying Agent shall initially be the Property Trustee and any
co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Depositor. Any Person acting as Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Depositor. In the event that the Property Trustee shall
no longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor, which is acceptable to the Property Trustee and the Depositor, to act
as Paying Agent (which shall be a bank or trust company). Each successor Paying
Agent or any additional Paying Agent shall agree with the Trustees that, as
Paying Agent, such successor Paying Agent or additional Paying Agent will hold
all sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
each Securityholder. The Paying Agent shall return all unclaimed funds to the
Property Trustee, and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee. The provisions
of this Declaration, including Sections 8.1, 8.3 and 8.6, shall apply to the
Property Trustee also in its role as Paying Agent, for so long as the Property
Trustee shall act as Paying Agent and, to the extent applicable, to any other
paying agent appointed hereunder. Any reference in this Declaration to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 5.10. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR. On the
Closing Date, the Depositor shall acquire and retain beneficial and record
ownership of the Common Securities. Except in connection with mergers or
consolidations provided for in Section 8.1 of the Indenture, any attempted
transfer of the Common Securities shall be void. The Administrative Trustees
shall cause a single Common Securities Certificate representing the Common
Securities to be issued to the Depositor containing a legend stating: "THIS
COMMON SECURITY HAS NOT
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BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO SECTION 8.1
OF THE INDENTURE, DATED AS OF MARCH 31, 1999, BETWEEN SUPERIOR TELECOM INC. AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS INDENTURE TRUSTEE."
Section 5.11. RIGHTS OF SECURITYHOLDERS. The legal title to the Trust
Property is vested exclusively in the Property Trustee (in its capacity as such)
in accordance with Section 2.8, and the Securityholders shall not have any right
or title therein other than the undivided beneficial interest in the assets of
the Trust conferred by their Trust Securities, and they shall have no right to
call for any partition or division of property, profits or rights of the Trust
except as described below. The Trust Securities shall be personal property
giving only the rights specifically set forth therein and in this Declaration.
The Trust Securities shall have no preemptive or similar rights to subscribe for
additional Trust Securities and, when issued and delivered to Securityholders,
will be validly issued, fully paid and non-assessable beneficial interests in
the assets of the Trust. The Holders of the Trust Securities, in their
capacities as such, 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.
ARTICLE 6
ACT OF SECURITYHOLDERS; MEETINGS; VOTING;
AMENDMENT OF THE DECLARATION
Section 6.1. LIMITATIONS ON VOTING RIGHTS. (a) Except as provided in
this Section 6.1 and Sections 8.9 and 10.2, in the Indenture, in the Guarantee
and as otherwise required by law or by the rules of any stock exchange on which
the Preferred Securities are listed or admitted for trading, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) (i) The Declaration may be amended from time to time by the
Depositor and the Trustees, without the consent of the Holders of the Preferred
Securities, (i) to cure any ambiguity, correct or supplement any provisions in
the Declaration that may be inconsistent with any other provisions, or to make
any other provisions with respect to matters or questions arising under the
Declaration consistent with the other provisions of the Declaration, (ii) to
modify, eliminate or add to any provision of the Declaration to such extent as
shall be necessary to ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust will not be required to
register as an "investment company" under the 1940 Act or (iii) to qualify or
maintain the qualification of the Declaration under the Trust Indenture Act;
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of
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any Holder of Trust Securities, and any amendments of the Declaration shall
become effective when notice thereof is given to the Holders of Trust
Securities.
(ii) The Declaration may be amended by the Depositor and the Trustees
with (A) the consent of Holders representing not less than a majority
(based upon Liquidation Amounts) of the Outstanding Trust Securities,
acting as a single class, and (B) receipt by the Trustees of an Opinion of
Counsel having a national tax and securities practice (which opinion shall
not have been rescinded) to the effect that such amendment or the exercise
of any power granted to the Trustees in accordance with such amendment will
not affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from the status of an
"investment company" under the 1940 Act; provided, however, that without
the consent of each Holder of Trust Securities, the Declaration may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified
date or (ii) restrict the right of a Holder of Preferred Securities to
institute suit for the enforcement of any such payment on or after such
date; provided, further, that the voting rights of the Holders of the
Common Securities may not be amended without the consent of Holders of a
majority in Liquidation Amount of the Common Securities.
(iii) Subject to Section 8.2 hereof: (A) if an Event of Default with
respect to the Preferred Securities has occurred and been subsequently
cured, waived or otherwise eliminated, the provisions of Section
6.1(b)(iii)(2) hereof shall apply; and (B) during (x) the period commencing
on the date of the occurrence of an Event of Default with respect to the
Preferred Securities and ending on the date when such Event of Default is
cured, waived or otherwise eliminated, or (y) any period not described in
either the preceding sentence or the preceding clause (x), the provisions
of this Section 6.1(b)(iii)(1) shall apply.
(1) The Holders of a majority in aggregate Liquidation Amount of
the Preferred Securities will have the right to direct the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration,
including the right to direct the Property Trustee to exercise the
remedies available to it as a holder of the Debentures, but excluding
the right to direct the Property Trustee to consent to an amendment,
modification or termination of the Indenture (which shall be as
provided below); provided that (x) such direction shall not be in
conflict with any rule of law or with this Declaration; (y) the
Property Trustee may take any other action deemed proper by the
Property Trustee which is not inconsistent with such direction; and
(z) subject to the provisions of Section 8.1, the Property Trustee
shall have the right to decline to follow such direction if the
Property Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Property Trustee, determine that the
proceeding so directed would be unjustly prejudicial to the Holders
not joining in any such direction or would involve the Property
Trustee in personal liability. So long as any Debentures are held by
the Property Trustee, the Administrative Trustees and the Property
Trustee shall not (A) direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee or
executing any trust or
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power conferred on the Indenture Trustee with respect to such
Debentures, (B) waive any past default that is waivable under Section
5.13 of the Indenture, (C) exercise any right to rescind or annul a
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, without, in each case, obtaining the prior approval of the
Holders of a majority in aggregate Liquidation Amount of all
Outstanding Preferred Securities (except in the case of clause (D),
which consent, in the event that no Event of Default shall occur and
be continuing, shall be of the Holders of all Outstanding Trust
Securities, voting together as a single class); provided, however,
that where the Indenture expressly provides that a consent thereunder
would require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee
without the prior written consent of each Holder of Preferred
Securities. The Administrative Trustees and the Property Trustee shall
not revoke any action previously authorized or approved by a vote of
the Holders of the Preferred Securities except by a subsequent vote of
the Holders of the Preferred Securities. The Property Trustee shall
notify each Holder of the Preferred Securities of any notice of
default received from the Indenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the
Holders of the Preferred Securities, prior to taking any of the
foregoing actions, the Administrative Trustees and the Property
Trustee shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will
not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
(2) The Holders of a majority in aggregate Liquidation Amount of
the Common Securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Property Trustee or to direct the exercise of any trust or power
conferred upon the Property Trustee under the Declaration, including
the right to direct the Property Trustee to exercise the remedies
available to it as a holder of the Debentures, but excluding the right
to direct the Property Trustee to consent to an amendment,
modification or termination of the Indenture (which shall be as
provided below); provided that (x) such direction shall not be in
conflict with any rule of law or with this Declaration; (y) the
Property Trustee may take any other action deemed proper by the
Property Trustee which is not inconsistent with such direction; and
(z) subject to the provisions of Section 8.1, the Property Trustee
shall have the right to decline to follow such direction if the
Property Trustee in good faith shall, by a Responsible Officer or
Responsible Officers of the Property Trustee, determine that the
proceeding so directed would be unjustly prejudicial to the Holders
not joining in any such direction or would involve the Property
Trustee in personal liability. So long as any Debentures are held by
the Property Trustee, the Administrative Trustees and the Property
Trustee shall not (A) direct the time, method and place of conducting
any proceeding for any remedy available to the Indenture Trustee, or
executing any trust or power conferred on the Indenture Trustee with
respect to such Debentures, (B) waive any past default that is
waivable under Section 5.13 of the Indenture, (C) exercise any right
to rescind or annul a 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
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the Debentures where such consent shall be required, without, in each
case, obtaining the prior approval of the Holders of a majority in
aggregate Liquidation Amount of all Common Securities (except in the
case of clause (D), which consent, in the event that no Event of
Default shall occur and be continuing, shall be of the Holders of all
Outstanding Trust Securities, voting together as a single class);
provided, however, that where the Indenture expressly provides that a
consent thereunder would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior written consent of each Holder of
Common Securities. The Administrative Trustees and the Property
Trustee shall not revoke any action previously authorized or approved
by a vote of the Holders of the Common Securities, except by a
subsequent vote of the Holders of the Common Securities. The Property
Trustee shall notify all Holders of record of the Common Securities of
any notice of default received from the Indenture Trustee with respect
to the Debentures. In addition to obtaining the foregoing approvals of
the Holders of the Common Securities, prior to taking any of the
foregoing actions, the Administrative Trustees and the Property
Trustee shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will
not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such action.
(c) If any proposed amendment of the Declaration provides for, or the
Administrative Trustees and the Property Trustee otherwise propose to effect,
the dissolution, winding-up or termination of the Trust, other than pursuant to
the terms of this Declaration, then the Holders of Outstanding Preferred
Securities, as a 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 the Holders of a majority in aggregate Liquidation Amount of the Outstanding
Preferred Securities.
Section 6.2. ADDITIONAL VOTING RIGHTS. (a) If (i) Distributions on the
Preferred Securities are in arrears and unpaid for six or more quarters (whether
or not consecutive); (ii) the Depositor fails to pay all amounts due on the
Debentures upon Maturity (as defined in the Indenture); or (iii) the Depositor
fails, pursuant to Section 4.5(b), to redeem all of the Preferred Securities
which the Holders thereof elect to tender pursuant to a Change of Control Offer,
then the number of directors constituting the Board of Directors will be
increased by two, the Holders of the then Outstanding Preferred Securities,
voting separately and as a class, shall have the right and power to designate
such two additional directors, and the Depositor shall cause such two additional
directors to be elected to the Board of Directors. Each such event described in
clause (i), (ii) or (iii) is a "VOTING RIGHTS TRIGGERING EVENT." A Voting Rights
Triggering Event shall not be deemed to have occurred if at the time of such
event there are less than 300,000 Preferred Securities then Outstanding.
(b) The voting rights set forth in Section 6.2(a) will continue until
such time as (x) in the case of a default in the payment of Distributions, all
Distributions in arrears on the Preferred Securities are paid in full in cash,
(y) in all other cases, any failure, breach or default giving rise to such
Voting Rights Triggering Event is remedied or waived by the Holders of a
majority of the Preferred Securities then Outstanding or (z) at any time there
are fewer than 300,000 Preferred Securities Outstanding, at which time the term
of any directors elected pursuant to the
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provisions of Section 6.2(a) shall terminate and the number of directors
constituting the Board of Directors shall be decreased by two (until the
occurrence of any subsequent Voting Rights Triggering Event).
(c) Any vacancy occurring in the office of a director designated by the
Holders of Preferred Securities may be filled by the remaining director
designated by the Holders of Preferred Securities unless and until the Holders
of Preferred Securities shall designate a director to fill such vacancy, which
director the Depositor shall cause to be elected to the Board of Directors.
Section 6.3. NOTICE OF MEETINGS. Notice of all meetings of the Holders
of the Preferred Securities, stating the time, place and purpose of the meeting,
shall be given by the Administrative Trustees pursuant to Section 10.8 to each
such Holder of record, at its registered address, at least 15 days and not more
than 90 days before the meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Declaration or the rules of any
stock exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of the
Holders. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
Section 6.4. MEETINGS OF HOLDERS OF PREFERRED SECURITIES. No annual
meeting of Holders of Preferred Securities is required to be held. The
Administrative Trustees or the Property Trustee may, at any time, call a meeting
of the Holders of Preferred Securities to consider and act on any matters as to
which such Holders are entitled to act under the terms of this Declaration or
the rules of any stock exchange on which the Preferred Securities are listed or
admitted for trading.
At any time after voting power to designate directors shall have become
vested and be continuing in the Holders of Preferred Securities pursuant to
Section 6.2(a), or if vacancies shall exist in the offices of directors
designated by such Holders, the Administrative Trustees or the Property Trustee
may, and upon the written request of the Holders of record of at least 25% of
the Preferred Securities then Outstanding addressed to such Trustee(s) shall,
call a special meeting of the Holders of Preferred Securities for the purpose of
designating such directors. If such meeting shall not be called by the
Administrative Trustees or the Property Trustee within 20 days after personal
service to such Trustee(s) at his or its address contained herein, then the
Holders of record of at least 25% of the Outstanding Preferred Securities may
designate in writing one of their members to call such meeting at the expense of
the Trust, and such meeting may be called by the Person so designated upon the
notice required by Section 6.3. Any Holder of Preferred Securities so designated
shall have, and the Trust shall provide, access to the lists of Securityholders,
subject to Section 6.9.
Holders of record of a majority of the Outstanding Preferred Securities
(based upon their Liquidation Amount), present in person or by proxy, shall
constitute a quorum at any meeting of Securityholders.
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If a quorum is present at a meeting, an affirmative vote by the Holders
of record of a majority of the Outstanding Preferred Securities (based upon
their Liquidation Amount) shall constitute the action of such Securityholders,
unless otherwise provided.
Section 6.5. VOTING RIGHTS. Securityholders shall be entitled to one
vote for each $50 of Liquidation Amount represented by their Trust Securities in
respect of any matter as to which such Securityholders are entitled to vote.
Section 6.6. PROXIES, ETC. At any meeting of Securityholders, any
Securityholders entitled to vote thereat may vote by proxy, provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several Persons, any
one of them may vote at any meeting in person or by proxy in respect of such
Trust Securities, but if more than one of them shall be present at such meeting
in person or by proxy, and such joint owners or their proxies so present
disagree as to any vote to be cast, such vote shall not be received in respect
of such Trust Securities. A proxy purporting to be executed by or on behalf of a
Securityholder shall be deemed valid unless challenged at or prior to its
exercise, and the burden of proving invalidity shall rest on the challenger. No
proxy shall be valid more than three years after its date of execution. Every
proxy shall be revocable at the pleasure of the Holder(s) executing it at any
time prior to its use by filing with the Administrative Trustees a written
revocation or a duly executed proxy bearing a later date or by attending the
meeting and voting in person. 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 were stockholders of a Delaware corporation.
Section 6.7. SECURITYHOLDER ACTION BY WRITTEN CONSENT. Any action which
may be taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding more than a majority of all Outstanding Trust Securities
(based upon their Liquidation Amount) entitled to vote in respect of such action
(or such larger proportion thereof as shall be required by any express provision
of this Declaration) shall consent to the action in writing. Prompt notice of
the taking of action without a meeting shall be given to the Holders entitled to
vote who have not consented in writing.
Section 6.8. RECORD DATE FOR VOTING AND OTHER PURPOSES; DISCRETION OF
PROPERTY TRUSTEE RELATING TO MEETINGS OF HOLDERS. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Declaration, or for the purpose of any other action, the Property
Trustee on behalf of the Trust may from time to time fix a date, not more than
90 days prior to the date of any meeting of Securityholders or the payment of
Distributions or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes. Unless the Delaware Business Trust Act, this Declaration, the Trust
Indenture Act
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or the listing rules of any stock exchange on which the Preferred
Securities are then listed or trading otherwise provides, the Property Trustee,
in its sole discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders, waiver of such
notice, action by consent without a meeting, the establishment of a record date,
voting in person or by proxy or any other matter with respect to the exercise of
any such right to vote.
Section 6.9. ACTS OF SECURITYHOLDERS. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Declaration to be given, made or taken by Securityholders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Securityholders in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments is or are delivered to an
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "ACT" of
the Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Declaration and (subject to Section 8.1)
conclusive in favor of the Trustees, if made in the manner provided in this
Section 6.8.
The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the 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 any Trustee receiving the same deems sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security 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 Trustees or
the Trust in reliance thereon, whether or not notation of such action is made
upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents, each of which may do so pursuant to
such appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding
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nature of any request, demand, authorization, direction, consent, waiver or
other Act of such Securityholder or Trustee under this Article 6, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
Upon the occurrence and continuation of an Event of Default, the
Holders of Preferred Securities shall rely on the enforcement by the Property
Trustee of its rights as holder of the Debentures against the Depositor. If the
Property Trustee fails to enforce its rights as holder of the Debentures after a
request therefor by a Holder of Preferred Securities, such Holder may proceed to
enforce such rights directly against the Depositor, subject to the terms of
Article 5 of the Indenture. Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Depositor 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 Preferred Securities shall
have the right to institute a proceeding directly against the Depositor for
enforcement of payment to such Holder of the principal amount of or interest on
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Preferred Securities of such Holder on the respective due date specified
in the Debentures (a "Direct Action"). In connection with any such Direct
Action, the rights of the Depositor will be subrogated to the rights of any
Holder of the Preferred Securities to the extent of any payment made by the
Depositor to such Holder of Preferred Securities as a result of such Direct
Action.
If the Guarantee Trustee (as defined in the Guarantee) fails to enforce
the Guarantee, any Holder of the Preferred Securities may institute a legal
proceeding directly against the Depositor under the Guarantee to enforce its
rights under the Guarantee without first instituting a legal proceeding against
the Guarantee Trustee, the Trust or any other Person. In addition, any Holder of
Preferred Securities shall have the right, which is absolute and unconditional,
to proceed directly against the Depositor to obtain payments under the
Guarantee, without first waiting to determine if the Guarantee Trustee has
enforced the Guarantee or instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other Person.
Section 6.10. INSPECTION OF RECORDS. Upon reasonable notice to the
Administrative Trustees and the Property Trustee, the records of the Trust shall
be open to inspection by Securityholders during normal business hours for any
purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
Section 7.1. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE AND
THE DELAWARE TRUSTEE. The Property Trustee and the Delaware Trustee, each
severally on behalf of and as to itself, hereby represents and warrants for the
benefit of the Depositor and the Securityholders that (each such representation
and warranty made by the Property Trustee and the Delaware Trustee being made
only with respect to itself):
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(a) the Property Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York;
(b) the Delaware Trustee is a banking corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(c) each of the Property Trustee and the Delaware Trustee has full
corporate power, authority and legal right to execute, deliver and perform its
obligations under this Declaration and has taken all necessary action to
authorize the execution, delivery and performance by it of this Declaration;
(d) this Declaration has been duly authorized, executed and delivered
by each of the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of the Property Trustee and the Delaware
Trustee, enforceable against each in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles;
(e) the execution, delivery and performance by each of the Property
Trustee and the Delaware Trustee of this Declaration have been duly authorized
by all necessary corporate or other action on the part of the Property Trustee
and the Delaware Trustee and do not require any approval of stockholders of the
Property Trustee or the Delaware Trustee, and such execution delivery and
performance will not (i) violate either of the Property Trustee's or the
Delaware Trustee's charter or by-laws, (ii) violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or result
in the creation or imposition of any Lien on any properties included in the
Trust Property pursuant to the provisions of, any indenture, mortgage, credit
agreement, license or other agreement or instrument which is not related to the
transactions contemplated by this Declaration and to which the Property Trustee
or the Delaware Trustee is a party or by which it is bound, or (ii) violate any
law, governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking or trust powers of the
Property Trustee or the Delaware Trustee (as appropriate in context), or any
order, judgment or decree applicable to the Property Trustee or the Delaware
Trustee;
(f) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Declaration nor the consummation of any
of the transactions by the Property Trustee or the Delaware Trustee (as
appropriate in context) contemplated herein requires the consent or approval of,
the giving of notice to, the registration with or the taking of any other action
with respect to, any Delaware or United States federal governmental authority or
agency under the laws of the United States or the State of Delaware governing
the banking or trust powers of the Property Trustee or the Delaware Trustee, as
the case may be;
(g) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
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Trust or would question the right, power and authority of the Property Trustee
or the Delaware Trustee, as the case may be, to enter into or perform its
obligations as one of the Trustees under this Declaration.
Section 7.2. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR. The Depositor
hereby represents and warrants for the benefit of the Securityholders that:
(a) the Trust Securities Certificates to be issued on behalf of the
Trust have been duly authorized and will be duly and validly executed, issued
and delivered by the Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Declaration, and, subject to the terms
of the Merger Agreement, the Securityholders will be, as of the Closing Date,
entitled to the benefits of this Declaration; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Property Trustee or the Delaware
Trustee, as the case may be, of this Declaration.
ARTICLE 8
THE TRUSTEES
Section 8.1. CERTAIN DUTIES AND RESPONSIBILITIES. (a) The duties and
responsibilities of the Trustees shall be as provided by this Declaration and,
in the case of the Property Trustee, by the Trust Indenture Act. The Property
Trustee, before the occurrence of any Event of Default and after the curing or
waiving of all Events of Default that may have occurred, shall undertake to
perform only such duties and obligations as are specifically set forth in this
Declaration and the Trust Indenture Act, and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has occurred (and has not been cured or waived pursuant to Section 8.2) of which
a Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such rights and powers vested in it by this Declaration
and the Trust Indenture Act, and use the same degree of care and skill in its
exercise, as a prudent individual would exercise or use under the circumstances
in the conduct of his or her own affairs. Notwithstanding the foregoing, no
provision of this Declaration shall require the Trustees to expend or risk their
own funds or otherwise incur any financial liability in the performance of any
of their duties hereunder, or in the exercise of any of their rights or powers,
if they shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to them. Whether or not herein expressly so provided, every provision of this
Declaration relating to the conduct or affecting the liability of or affording
protection to the Trustees shall be subject to the provisions of this Section
8.1. Nothing in this Declaration shall be construed to release the
Administrative Trustees from liability for their own grossly negligent action,
their own grossly negligent failure to act or their own willful misconduct. To
the extent that, at law or in equity, an Administrative Trustee has duties
(including fiduciary duties) and liabilities relating to the Trust or to the
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Securityholders, such Administrative Trustee shall not be liable to the Trust or
to any Securityholder for such Administrative Trustee's 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 the Administrative
Trustees otherwise existing at law or in equity, are agreed by the Depositor and
the Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) Subject to any Direct Action by Holders of Preferred Securities,
all payments made by the Property Trustee or a Paying Agent in respect of the
Trust Securities shall be made only from the revenue and proceeds from the Trust
Property and only to the extent that there shall be sufficient revenue or
proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. Each Securityholder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 8.1(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Declaration or, in the case of the Property Trustee, in the Trust Indenture
Act.
(c) No provision of this Declaration shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) this subsection shall not be construed to limit the
effectiveness of Subsection (a) of this Section 8.1;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of a majority of the
aggregate Liquidation Amount of the Trust Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or exercising any trust or power
conferred upon the Property Trustee under this Declaration; and
(iv) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with
their respective duties under this Declaration, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
(d) The Property Trustee's sole duty with respect to the custody,
safekeeping and physical preservation of the Debentures and the Property Account
shall be to deal with such
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property as fiduciary assets, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and the Trust
Indenture Act.
(e) The Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Depositor, and money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account maintained by
the Property Trustee pursuant to Section 3.l and except to the extent otherwise
required by law.
Section 8.2. NOTICE OF DEFAULTS. (a) Within 30 days after a Responsible
Officer shall obtain actual knowledge of the occurrence of any Event of Default,
the Property Trustee shall transmit, in the manner and to the extent provided in
Section 10.8, notice of such Event of Default to the Holders of Preferred
Securities, the Administrative Trustees and the Depositor, unless such
Responsible Officer shall have actual knowledge that such Event of Default shall
have been cured or waived, provided that, except for a default in the payment of
principal of (or premium, if any) or interest (including Additional Sums and
Additional Amounts, if applicable) on any of the Debentures, the Property
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) Within ten days after the receipt of written notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such exercise
to the Securityholders, unless such exercise shall have been revoked.
(c) The Holders of a majority of the aggregate Liquidation Amount of
Outstanding Preferred Securities may, by vote, on behalf of the Holders of all
of the Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Debenture Event of Default:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "SUPER MAJORITY")
to be waived under the Indenture, the Event of Default under the
Declaration may only be waived by the vote of the Holders of the same
proportion in aggregate Liquidation Amount of the Preferred Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The provisions of Sections 6.1(b) and 8.2(d) and this Section 8.2(c)
shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded
from this Declaration and the Preferred Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Preferred Securities arising therefrom
shall be
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deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Preferred Securities of an Event of Default with
respect to the 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.
(d) The Holders of a majority in aggregate 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 Debenture
Event of Default:
(i) not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 8.2(d), the
Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common Securities are deemed
to have waived such Event of Default under the Declaration as provided
below in this Section 8.2(d), the Event of Default under the
Declaration may only be waived by the vote of the Holders of the same
proportion in aggregate Liquidation Amount of the Common Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding;
provided, further, that each Holder of Common Securities will be deemed to have
waived any such 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 Preferred Securities have been cured, waived or otherwise eliminated. In
such a case, the Property Trustee will be deemed to be acting solely on behalf
of the Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee in accordance with
the terms of the Preferred Securities to act on their behalf. The provisions of
Section 6.1(b) and 8.2(c) and this Section 8.2(d) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Preferred Securities, as permitted by the Trust Indenture Act. Subject to the
foregoing provisions of this Section 8.2(d), upon such waiver, any such 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 for every
purpose of this Declaration, but no such waiver shall extend to any subsequent
or other default or Event of Default with respect to the Common Securities or
impair any right consequent thereon.
(e) A waiver of an Event of Default under the Indenture by the Property
Trustee at the direction of the Holders of the Preferred Securities constitutes
a waiver of the corresponding Event of Default under this Declaration. The
foregoing provisions of this Section 8.2(e) shall be
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in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Preferred Securities, as permitted by the Trust Indenture
Act.
Section 8.3. CERTAIN RIGHTS OF PROPERTY TRUSTEE. Subject to the
provisions of Section 8.1:
(a) the Property Trustee may conclusively rely and shall be protected
in acting or refraining from acting in good faith upon any resolution, Opinion
of Counsel, certificate, written representation or instruction of a Holder or
transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, 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;
(b) if, (i) in performing its duties under this Declaration the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions in this Declaration the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Declaration, then, except as to any matter as to which the
Holders of Preferred Securities are specifically entitled to vote under the
terms of this Declaration, the Property Trustee shall deliver a notice to the
Depositor requesting written instructions of the Depositor as to the course of
action to be taken and the Property Trustee shall take such action, or refrain
from taking such action, as the Property Trustee shall be instructed in writing
to take, or to refrain from taking, by the Depositor and shall have no liability
whatsoever for such action or inaction except for its own bad faith, negligence
or willful misconduct; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days after it has
delivered such notice, or such shorter period of time set forth in such notice
(which to the extent practicable shall not be less than two Business Days), it
may, but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Declaration as it shall deem advisable and in the best
interests of the Securityholders, in which event the Property Trustee shall have
no liability except for its own bad faith, negligence or willful misconduct;
(c) if a Responsible Officer of the Property Trustee has obtained
actual knowledge that an Event of Default has occurred and is continuing and (i)
in performing its duties under this Declaration the Property Trustee is required
to decide between alternative courses of action or (ii) in construing any of the
provisions in this Declaration the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (iii) the Property
Trustee is unsure of the application of any provision of this Declaration, then,
except as to any matter as to which the Holders of Preferred Securities are
specifically entitled to vote under the terms of this Declaration, the Property
Trustee may deliver a notice to the Holders of Preferred Securities requesting
written instructions of such Holders as to the course of action to be taken and
the Property Trustee shall take such action, or refrain from taking such action,
as the Property Trustee shall be instructed in writing to take, or to refrain
from taking, by a majority in interest of the Outstanding Preferred Securities
and shall have no liability whatsoever for such action or inaction; provided,
however, that if the Property Trustee does not receive such
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instructions of the Holders of Preferred Securities within ten Business Days
after it has delivered such notice, or such shorter period of time set forth in
such notice (which to the extent practicable shall not be less than two Business
Days), it may, but shall be under no duty to, take or refrain from taking such
action not inconsistent with this Declaration as it shall deem advisable and in
the best interests of such Holders, in which event the Property Trustee shall
have no liability except for its own bad faith, negligence or willful
misconduct;
(d) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced by an
Officer's Certificate and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(e) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be established before undertaking,
suffering or omitting any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith on
its part, request and rely upon an Officer's Certificate and an Opinion of
Counsel which, upon receipt of such request, shall be promptly delivered by the
Depositor or the Administrative Trustees;
(f) the Property Trustee shall have no duty to accomplish any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
re-recording, re-filing or re-registration thereof;
(g) the Property Trustee may consult with counsel and other experts of
its selection (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees) and the advice or opinion of
such counsel and experts or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in accordance with
such advice or opinion; and the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Declaration from
any court of competent jurisdiction;
(h) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the request or
direction of any of the Securityholders pursuant to this Declaration, unless
such Securityholders shall have offered to the Property Trustee security and
indemnity, reasonably satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses and the expenses of
the Property Trustee's agents, nominees or custodians) and liabilities which
might be incurred by it in compliance with such request or direction, including
such reasonable advances as may be requested by the Property Trustee;
(i) the Property Trustee shall not be bound to make an investigation
into the facts or matters stated in any resolutions, certificate, statement,
instrument, opinion, report, notice, request, consent, direction, order,
approval, bond, debenture, note or other evidence of indebtedness or other paper
or document, unless specifically requested and directed in writing to do so by
Holders of record of 25% or more of the Preferred Securities (based upon their
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aggregate Liquidation Amount), but the Property Trustee may in its discretion
make such further inquiry or investigation into such facts or matters as it may
see fit;
(j) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents, custodians, nominees or attorneys or an Affiliate, provided that the
Property Trustee shall be responsible for its own negligence with respect to the
selection of any agent or attorney appointed by it hereunder but shall not be
responsible for any misconduct or negligence on the part of such Person;
(k) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders 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 Property 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 accordance with such instructions;
(l) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Declaration; and
(m) the Property Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith, without negligence or
willful misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Declaration.
No provision of this Declaration shall be deemed to impose any duty or
obligation on the Property Trustee to perform any act or acts, or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 8.4. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates shall not
be taken as the statements of the Trustees, and the Trustees do not assume any
responsibility for their correctness. The Trustees shall not be accountable for
the use or application by the Depositor of the proceeds of the Debentures. The
Trustees make no representations as to the value or condition of the Trust
Property or any part thereof. The Trustees make no representations as to the
validity or sufficiency of this Declaration or the Trust Securities.
Section 8.5. MAY HOLD SECURITIES. Except as provided in the definition
of the term"OUTSTANDING" in Article 1, any Trustee or any other agent of any
Trustee or the Trust, in its individual or any other capacity, may become the
owner or pledgee of Trust Securities and,
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subject to Section 8.8 and 8.12, may otherwise deal with the Trust with the same
rights it would have if it were not a Trustee or such other agent.
Section 8.6. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay each of the Trustees from time to time such compensation for
all services rendered by such Trustee hereunder as the Depositor and such
Trustee may agree upon in writing from time to time (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse each
Trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by such Trustee in accordance with any provision of this
Declaration (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith;
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Trustee, (ii) any Affiliate of any Trustee, (iii) any
officer, director, shareholder, employee, representative or agent of any
Trustee, and (iv) any employee or agent of the Trust or its Affiliates (each
referred to herein as an "INDEMNIFIED PERSON") from and against any loss,
damage, liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation, dissolution or termination of the Trust or 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 authority conferred on such Indemnified Person by this Declaration,
except that no Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim to the extent incurred by such Indemnified Person
by reason of its own negligence or willful misconduct with respect to such acts
or omissions;
(d) to the fullest extent permitted by applicable law, to advance, from
time to time, prior to the final disposition of any claim, demand, action, suit
or proceeding for which indemnification is authorized pursuant to subsection (c)
above, any expenses (including reasonable legal fees) incurred by an Indemnified
Person in defending such claim, demand, action, suit or proceeding upon receipt
by the Depositor of an undertaking by or on behalf of the Indemnified Person to
repay such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in subsection (c) above. This
indemnification shall survive the termination of this Declaration.
(e) no Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6; and
(f) The obligations to indemnify and hold harmless, to advance expenses
and to provide reimbursement and pay compensation as set forth in this Section
8.6 shall survive the
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resignation or removal of the Property Trustee or the Delaware Trustee and the
satisfaction and discharge of this Declaration.
Section 8.7. PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES. (a)
There shall at all times be a Property Trustee, which is a corporation organized
and doing business under the laws of the United States of America or of any
State, Territory or the District of Columbia, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal, state, territorial or District of Columbia authority with respect to
the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $10,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 8.7,
the combined capital and surplus of such person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section 8.7, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative 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 persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
Section 8.8. DISQUALIFICATION: CONFLICTING INTEREST. The Property
Trustee shall be subject to the provisions of Section 310(b) of the Trust
Indenture Act. Nothing herein shall prevent the Property Trustee from filing
with the Commission the application referred to in the second to last paragraph
of Section 310(b) of the Trust Indenture Act. The Indenture and the Guarantee
shall be deemed to be specifically described in this Declaration for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
Section 8.9. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a)
Subject to Sections 8.9(b) and 8.9(c), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Depositor; and
(ii) after the issuance of any Securities, (1) if the Property
Trustee or the Delaware Trustee, by the Administrative Trustees and
(2) if an Administrative Trustee,
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by vote of the Holders of a majority in Liquidation Amount of the
Common Securities voting as a class.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as a Property Trustee under Section 8.7 (a "SUCCESSOR PROPERTY TRUSTEE")
has been appointed and has accepted such appointment by instrument executed by
such Successor Property Trustee and delivered to the Trust, the Depositor and
the removed Property Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be removed in
accordance with Section 8.9(a) until a successor possessing the qualifications
to act as Delaware Trustee under Section 8.7 (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 Depositor and
the removed Delaware Trustee.
(d) A Trustee appointed to office shall hold office until his, her or
its successor shall have been appointed or until his, her or its death, removal,
resignation, dissolution or liquidation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Depositor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(1) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Depositor and the resigning Property Trustee;
or
(2) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders of the Trust 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 Depositor and the resigning Delaware Trustee.
(e) The Administrative Trustees shall use their best efforts to
promptly appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with Section 8.9(d).
(f) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
8.9 within 60 days after delivery
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pursuant to this Section 8.9 of an instrument of resignation or removal, the
Property Trustee or Delaware Trustee resigning or being removed, as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(h) The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Trustee and
the address of its Corporate Trust Office if it is the Property Trustee.
(i) Notwithstanding the foregoing or any other provision of this
Declaration, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence or
incapacity may be filled by (a) the unanimous act of the remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies the
eligibility requirement for Administrative Trustees or the Delaware Trustee, as
the case may be, set forth in Section 8.7).
(j) The indemnity provided to a Trustee under Section 8.6 shall survive
any Trustee's resignation or removal.
Section 8.10. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. In case of the
appointment hereunder of a successor Trustee, such successor Trustee so
appointed shall execute, acknowledge and deliver to the Trust and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Depositor or the successor Trustee, such retiring
Trustee shall, upon payment of all amounts due to it under this Declaration,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and, if the Property Trustee
is the resigning Trustee, it shall duly assign, transfer and deliver to the
successor Trustee all property and money held by such retiring Property Trustee
hereunder.
In case of the appointment hereunder of a successor Trustee, the
retiring Trustee and each successor Trustee shall execute and deliver an
amendment hereto wherein each successor Trustee shall accept such appointment
and which (a) 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 retiring Trustee and (b) shall add to
or change any of the provisions of this Declaration as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one relevant Trustee, it being understood that nothing herein
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or in such amendment shall constitute such relevant Trustees co-trustees, and
upon the execution and delivery of such amendment the resignation or removal of
the retiring 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 retiring
Trustee; but, on request of the Trust or any successor Trustee, such retiring
Trustee shall, upon payment of all amounts due to it under this Declaration,
duly assign, transfer and deliver to such successor Trustee all Trust Property,
all proceeds thereof and money held by such retiring Trustee hereunder.
Upon request of any such successor Trustee, the Trust shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in the
first or second preceding paragraph, as the case may be.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 8.11. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Property Trustee, or the Delaware
Trustee or any Administrative Trustee that is not a natural person, 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 such Trustee
shall be a party, or any corporation succeeding to all or substantially all the
corporate trust business of such Trustee, shall be the successor of such Trustee
hereunder, provided that 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.
Section 8.12. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR
TRUST. If and when the Property Trustee shall be or become a creditor of the
Depositor or the Trust (or any other obligor upon the Debentures or the Trust
Securities), the Property Trustee shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or the Trust (or any
such other obligor).
Section 8.13. REPORTS BY PROPERTY TRUSTEE. (a) To the extent required
by the Trust Indenture Act, within 60 days after May 15 of each year commencing
with May 15, 1999 the Property Trustee shall transmit to all Securityholders in
accordance with Section 10.8 and to the Depositor, a brief report dated as of
such December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu
thereof, if to the best of its knowledge it has continued to
be eligible under said Section, a written statement to such
effect;
(ii) a statement that the Property Trustee has
complied with all of its obligations under this Declaration
during the twelve-month period (or, in the case of the initial
report, the period since the Closing Date) ending with such
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December 31 or, if the Property Trustee has not complied in
any material respects with such obligations, a description of
such noncompliance; and
(iii) any change in the property and funds in its
possession as Property Trustee since the date of its last
report and any action taken by the Property Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Trust Securities.
(b) In addition, the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this
Declaration as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of such reports required by Section 8.13(b) shall, at the
time of such transmissions to Holders, be filed by the Property Trustee with
each national securities exchange or self-regulatory organization upon which the
Trust Securities are listed, with the Commission and with the Depositor.
Section 8.14. REPORTS TO THE PROPERTY TRUSTEE. The Depositor and the
Administrative Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314 of
the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act; and such compliance
certificate shall be delivered on or before 120 days after the end of each
calendar year.
Section 8.15. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c) (1) of
the Trust Indenture Act shall be given in the form of an Officer's Certificate.
Section 8.16. NUMBER OF TRUSTEES. (a) The number of Trustees shall be
five, provided that the Holder of all of the Common Securities by written
instrument may increase or decrease the number of Administrative Trustees. The
Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.16(a), or if the
number of Trustees is increased pursuant to Section 8.16(a), a vacancy shall
occur.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, such vacancy shall be filled by the appointment of an
Administrative Trustee in accordance with Section 8.9. The Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this
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Declaration), shall have all the powers granted to the Administrative Trustees
and shall discharge all the duties imposed upon the Administrative Trustees by
this Declaration.
Section 8.17. DELEGATION OF POWER. (a) Any Administrative Trustee may,
by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 2.6(a), including any registration
statement or amendment thereof filed with the Commission, or making any other
governmental filing.
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative 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.
ARTICLE 9
DISSOLUTION, LIQUIDATION, TERMINATION AND MERGER
Section 9.1. DISSOLUTION UPON EXPIRATION DATE. Unless earlier
dissolved, the Trust shall automatically dissolve on March 30, 2014 (the
"EXPIRATION DATE").
Section 9.2. EARLY DISSOLUTION. The first to occur of any of the
following events is an "EARLY DISSOLUTION EVENT":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the occurrence of a Special Event except in the case of a Tax Event
following which the Depositor has elected to pay any Additional Sums (in
accordance with Section 4.4) such that the net amount received by Holders of
Trust Securities not exchanged for Debentures in respect of Distributions is not
reduced as a result of such Tax Event and the Depositor has not revoked any such
election or failed to make such payments;
(c) the redemption, conversion or exchange of all of the Trust
Securities;
(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction; and
(e) receipt by the Property Trustee of written notice from the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) of its intention to dissolve the Trust and
distribute the Debentures in exchange for the Trust Securities.
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Section 9.3. TERMINATION. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the following: (a) the distribution
by the Property Trustee to Securityholders upon the liquidation of the Trust
pursuant to Section 9.4, or upon the redemption of all of the Trust Securities
pursuant to Section 4.2, of all amounts required to be distributed hereunder
upon the final payment of the Trust Securities; (b) the payment of all expenses
owed by the Trust; and (c) the discharge of all administrative duties of the
Administrative Trustees, including the performance of any tax reporting
obligations with respect to the Trust or the Securityholders.
Section 9.4. LIQUIDATION. (a) If an Early Dissolution Event specified
in clause (a), (b), (d) or (e) of Section 9.2 occurs or upon the Expiration
Date, the Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be possible by
distributing, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, to each Securityholder an aggregate principal amount of Debentures
equal to the aggregate Liquidation Amount of Trust Securities held by such
Holder, subject to Section 9.4(d). Notice of liquidation shall be prepared by or
on behalf of the Administrative Trustees and given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Liquidation Date to each Holder of Trust Securities at such
Holder's address as it appears in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that, from and after the Liquidation Date,
the Trust Securities will no longer be deemed to be
Outstanding and any Trust Securities Certificates not
surrendered for exchange will be deemed to represent an
aggregate principal amount of Debentures equal to the
aggregate Liquidation Amount of Trust Securities held by such
Holder; and
(iii) provide such information with respect to the
mechanics by which Holders may exchange Trust Securities
Certificates for Debentures, or, if Section 9.4(d) applies,
receive a Liquidation Distribution, as the Administrative
Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(b) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(b) or 9.4(d) applies, from and after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding and (ii) any Trust Securities Certificates will be deemed to
represent an aggregate principal amount of Debentures equal to the aggregate
Liquidation Amount of Trust Securities held by such Holders, and bearing
56
<PAGE>
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on such Trust Securities to the Liquidation Date.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practicable, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up and terminated, by the Property Trustee after paying or
making reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders, after paying or making reasonable
provision to pay all claims and obligations of the Trust in accordance with
Section 3808(e) of the Business Trust Act, an amount equal to the Liquidation
Amount per Trust Security plus accrued and unpaid Distributions thereon to the
Liquidation Date (such amount being the "LIQUIDATION DISTRIBUTION"). If, upon
any such dissolution, the Liquidation Distribution can be paid only in part
because the Trust has insufficient assets legally available to pay in full the
aggregate Liquidation Distribution, then, subject to the next succeeding
sentence, the amounts payable by the Trust on the Trust Securities shall be paid
on a pro rata basis (based upon Liquidation Amounts). The Holders of the Common
Securities will be entitled to receive Liquidation Distributions upon any such
dissolution pro rata (determined as aforesaid) with Holders of Preferred
Securities, except that, if an Event of Default has occurred and is continuing,
the Preferred Securities shall have priority over the Common Securities.
(e) As soon as is practicable after the occurrence of an Early
Dissolution Event or the Expiration Date and upon completion of the winding up
of the Trust, the Trustees (each of whom is authorized to take such action)
shall terminate the Trust by filing a certificate of cancellation with the
Secretary of State of the State of Delaware.
Section 9.5. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF
THE TRUST. The Trust may not merge with or into, consolidate, amalgamate, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any corporation or other Person, except as described below.
The Trust may, at the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Property Trustee, the
Delaware Trustee or the Holders of the Trust Securities, merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state; provided, however, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Trust Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"SUCCESSOR SECURITIES"), so long as the Successor Securities rank the same as
the Preferred Securities rank in priority with respect to Distributions and
payments upon liquidation, redemption and otherwise, (ii) the Depositor
expressly appoints a trustee of such successor entity possessing the same powers
and duties as the Property Trustee as the holder of the Debentures, (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national
57
<PAGE>
securities exchange or other organization on which the Preferred Securities are
then listed, if any, (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect (other than with respect to
any dilution of the holders' interest in the new entity), (vi) such successor
entity has a purpose identical to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the Trust (which may be counsel
to the Depositor) having a national tax and securities law practice (which
opinion shall not have been rescinded) to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Preferred Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of the holders' interest in the
new entity) and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an "investment company" under the 1940
Act, and (viii) the Depositor or any permitted successor or assignee owns all of
the Common Securities of such successor entity and guarantees the obligations of
such successor entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the Trust shall not,
except with the consent of holders of 100% in aggregate Liquidation Amount of
the Preferred Securities, consolidate, amalgamate, merge with or into, be
replaced by or convey, transfer or lease its properties and assets substantially
as an entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer or lease would for
United States federal income tax purposes cause (i) the holders of the Preferred
Securities to recognize gain or loss or (ii) the Trust or the successor entity
to be classified as an association taxable as a corporation.
ARTICLE 10
MISCELLANEOUS PROVISIONS
Section 10.1. LIMITATION OF RIGHTS OF SECURITYHOLDERS. The death or
incapacity of any person having an interest, beneficial or otherwise, in Trust
Securities shall not operate to terminate this Declaration, nor entitle the
legal representatives or heirs of such person or any Securityholder for such
person to claim an accounting, take any action or bring any proceeding in any
court for a partition or winding-up of the arrangements contemplated hereby, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Section 10.2. AMENDMENT. (a) Notwithstanding anything in this
Declaration to the contrary, without the consent of the Depositor, this
Declaration may not be amended in a manner which imposes any additional
obligation on the Depositor.
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(b) In the event that any amendment to this Declaration is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(c) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Declaration, including to this
Section 10.2(c), which affects its own rights, power, duties, obligations or
immunities under this Declaration, without its prior written consent, and any
such amendment or purported amendment, including to this Section 10.2(c), shall
be void and ineffective without such prior written consent, which consent may be
withheld in its sole discretion. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officer's Certificate stating that any
amendment to this Declaration is in compliance with this Declaration.
Section 10.3. SEPARABILITY. In case any provision in this Declaration
or in the Trust Securities Certificates shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section 10.4. 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 CONFLICTS 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, TO THE FULLEST EXTENT PERMITTED BY LAW, THERE SHALL NOT BE APPLICABLE TO
THE PARTIES HEREUNDER OR THIS DECLARATION ANY PROVISION OF THE LAWS (COMMON OR
STATUTORY) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR
REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF, (A) THE FILING WITH
ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF
TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR
TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR
OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION,
HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS
PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE
ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) 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 (G) 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 AUTHORITY AND POWERS OF THE
TRUSTEES HEREUNDER AS SET FORTH OR REFERENCED IN THIS DECLARATION. SECTION 3540
OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO THE TRUST.
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Section 10.5. PAYMENTS DUE ON NON-BUSINESS DAY. If the date fixed for
any payment on any Trust Security shall be a day which is not a Business Day,
then such payment need not be made on such date but may be made on the next
succeeding day which is a Business Day (except as otherwise provided herein),
with the same force and effect as though made on the date fixed for such
payment, and no interest shall accrue thereon for the period after such date.
Section 10.6. SUCCESSORS. This Declaration shall be binding upon and
shall inure to the benefit of any successor to the Depositor, the Trust or the
relevant Trustee, including any successor by operation of law. Except in
connection with a consolidation, merger or sale involving the Depositor that is
permitted under Article 8 of the Indenture and pursuant to which the assignee
agrees in writing to perform the Depositor's obligations hereunder, the
Depositor shall not assign its obligations hereunder.
Section 10.7. HEADINGS. The Article and Section headings are for
convenience only and shall not affect the construction of this Declaration
Section 10.8. REPORTS, NOTICES AND DEMANDS. Any report, notice, demand
or other communications which by any provision of this Declaration is required
or permitted to be given or served to or upon any Securityholder or the
Depositor may be given or served in writing by deposit thereof, first-class
postage prepaid, in the United States mail, hand delivery or facsimile
transmission, in each case, addressed, (a) in the case of a Holder of Preferred
Securities, and (b) in the case of the Holder of the Common Securities, to such
Holder as such Holder's name and address may appear on the Securities Register.
Such notice, demand or other communication to or upon a Securityholder shall be
deemed to have been sufficiently given or made, for all purposes, upon hand
delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of
this Declaration is required or permitted to be given or served to or upon the
Trust, the Property Trustee, the Delaware Trustee or the Administrative Trustees
shall be given in writing addressed (until another address is published by the
Trust) as follows: (a) with respect to the Property Trustee, to 40 Wall Street,
New York, New York 10005, (b) with respect to the Delaware Trustee, to Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001, with a
copy of any such notice to the Property Trustee at its address above, and (c)
with respect to the Administrative Trustees, to them at the address for notices
to the Depositor, marked "Attention: General Counsel." Such notice, demand or
other communication to or upon the Trust or the Property Trustee shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
Section 10.9. AGREEMENT NOT TO PETITION. Each of the Trustees and the
Depositor agrees for the benefit of the Securityholders that, until at least one
year and one day after the Trust has been terminated in accordance with Article
9, it shall not file, or join in the filing of, a petition against the Trust
under any bankruptcy, insolvency, reorganization or other similar law
(including, without limitation, the United States Bankruptcy Code)
(collectively, "BANKRUPTCY LAWS") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Law. In the event the
Depositor takes action in violation of this
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Section 10.9, the Property Trustee agrees, for the benefit of Securityholders,
that, at the expense of the Depositor, it shall file an answer with the
bankruptcy court or otherwise properly contest the filing of such petition by
the Depositor against the Trust or the commencement of such action and raise the
defense that the Depositor has agreed in writing not to take such action and
should be stopped and precluded therefrom and such other defenses, if any, as
counsel for the Trustee or the Trust may assert. The provisions of this Section
10.9 shall survive the termination of this Declaration.
Section 10.10. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(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 Property Trustee shall be the only Trustee which is the trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Declaration by any of
the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Declaration modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Declaration as so modified or
excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
(e) The Indenture and the Guarantee Agreement shall be deemed to be
specifically described in this Declaration for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
Section 10.11. ACCEPTANCE OF TERMS OF DECLARATION, GUARANTEE AND
INDENTURE. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST
THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS DECLARATION AND
THEIR AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE GUARANTEE
AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST, SUCH
SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS DECLARATION
SHALL BE BINDING, OPERATIVE AND EFFECTIVE ON THE TRUST AND SUCH SECURITYHOLDER
AND SUCH OTHERS.
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Section 10.12. 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 and the Depositor to one of
such counterpart signature pages. All of such counterpart signature pages shall
be read as though one, and they shall have the same force and effect as though
all of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the parties hereto have caused this Declaration to
be duly executed as of the day and year first above written.
SUPERIOR TELECOM INC.,
as Depositor
By: /s/ Steven S. Elbaum
------------------------------------
Name:
Title:
AMERICAN STOCK TRANSFER & TRUST COMPANY, not
in its individual capacity but solely as
Property Trustee
By: /s/ Herbert J. Lemmer
------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely
as Delaware Trustee
By: /s/ Emmett R. Harmon
------------------------------------
Name:
Title:
/s/ Steven S. Elbaum
----------------------------------------
Steven S. Elbaum, not in his individual
capacity but solely as Administrative
Trustee
/s/ David S. Aldridge
----------------------------------------
David S. Aldridge. not in his individual
capacity but solely as Administrative
Trustee
/s/ Stewart H. Wahrsager
----------------------------------------
Stewart H. Wahrsager, not in his individual
capacity but solely as Administrative
Trustee
63
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
SUPERIOR TRUST I
A-1
<PAGE>
EXHIBIT B
THIS COMMON SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO
SECTION 8.1 OF THE INDENTURE, DATED AS OF MARCH 31, 1999,
BETWEEN SUPERIOR TELECOM INC. AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS INDENTURE TRUSTEE.
Certificate Number Number of Common Securities
[ ] [ ]
Certificate Evidencing Common Securities
of
Superior Trust I
8 1/2% Trust Convertible Common Securities
(Liquidation Amount $50 per Common Security)
Superior Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that Superior TeleCom Inc.
(the "Holder") is the registered owner of [ ] 8 1/2% Trust Convertible Common
Securities of the Trust representing undivided beneficial interests in the
assets of the Trust (the "Common Securities"). In accordance with Section 5.10
of the Declaration (as defined below), the Common Securities are not
transferable (except in connection with mergers, acquisitions, consolidations or
other transactions provided for in Section 8.1 of the Indenture (as defined in
the Amended and Restated Declaration of Trust dated as of March 31, 1999, as the
same may be amended from time to time (the "Declaration")) and the pledge of the
Common Securities by the Depositor to secure indebtedness) and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Declaration, including the designation of the terms of
the Common Securities as set forth therein. The Trust will furnish a copy of the
Declaration to the Holder without charge upon written request to the Trust at
its principal place of business or registered office.
As set forth in the Declaration, where an Event of Default has occurred
and is continuing, the rights of Holders of Common Securities to payment in
respect of Distributions and payments upon liquidation, redemption or otherwise
are subordinated to the rights of payment of Holders of the Preferred
Securities.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
B-1
<PAGE>
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
B-2
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this 31st day of March, 1999.
SUPERIOR TRUST I
By:
---------------------------------
Name:
As Administrative Trustee
B-3
<PAGE>
EXHIBIT C
Certificate Number Number of Preferred Securities
CUSIP NO.
Certificate Evidencing Preferred Securities
of
Superior Trust I
8 1/2% Trust Convertible Preferred Securities
(Liquidation Amount $50 per Preferred Security)
Superior 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 _____________ preferred securities of
the Trust representing an undivided beneficial interest in the assets of the
Trust and designated the Superior Trust I 8 1/2% Trust Convertible Preferred
Securities (Liquidation Amount $50 per Preferred Security) (the "Preferred
Securities"). The 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 as provided in Section
5.4 of the Declaration (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities are set forth in, and this certificate and the Preferred Securities
represented hereby are issued and shall in all respects be subject to, the terms
and provisions of, the Amended and Restated Declaration of Trust, dated as of
March 31, 1999, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of Preferred Securities
as set forth therein. The Holder is entitled to the benefits of the Guarantee
Agreement entered into by Superior TeleCom Inc., a Delaware corporation, and
American Stock Transfer & Trust Company, as Guarantee Trustee, dated as of March
31, 1999 (the "Guarantee"), to the extent provided therein. The Trust will
furnish a copy of the Declaration and the Guarantee to the Holder without charge
upon written request to the Trust at its principal place of business or
registered office.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
C-1
<PAGE>
WITNESS the facsimile signature of one of the Administrative Trustees
of the Trust.
SUPERIOR TRUST I
By:
---------------------------------
Name:
As Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Property Trustee
By:
---------------------------------
Authorized Signatory
C-2
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Preferred Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this 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
Preferred Security Certificate)
C-3
<PAGE>
EXHIBIT D
IRREVOCABLE NOTICE OF CONVERSION
(pursuant to Section 4.3)
To: American Stock Transfer & Trust Company
as Property Trustee of
Superior Trust I
and Conversion Agent
The undersigned owner of these Preferred Securities hereby irrevocably
exercises the option to convert these Preferred Securities, or the portion below
designated, into Common Stock, par value $0.01 per share, of SUPERIOR TELECOM
INC. (the "Superior Common Stock") in accordance with the terms of the Amended
and Restated Declaration of Trust of Superior Trust I, dated as of March 31,
1999 (the "Declaration"), among Superior TeleCom Inc., as Depositor, the
Trustees of the Trust named therein and the Holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Preferred Securities, the undersigned hereby directs the Conversion Agent
to (i) exchange such Preferred Securities for a portion of the Debentures held
by the Trust (at the conversion rate specified in the terms of the Preferred
Securities set forth in the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned into Superior Common Stock (at the
conversion rate specified in the terms of the Preferred Securities set forth in
the Declaration). Unless otherwise defined herein, capitalized terms used in
this Notice shall have the respective meanings assigned to such terms in the
Declaration.
The undersigned does also hereby direct the Conversion Agent that the
shares of Superior Common 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 of Superior Common Stock 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.
D-1
<PAGE>
Date:
--------------------------
in whole in part
-------- -------
Number of Preferred 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 Superior Common Stock are to be issued,
along with the address or addresses of such
person or persons
-------------------------
-------------------------
-------------------------
-------------------------
Signature (for conversion only)
Please Print or Type Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
-------------------------
-------------------------
-------------------------
Signature Guarantee:*
- ----------------------
* (Signature must be guaranteed by an institution which is a member of
the following recognized Signature Guaranty Programs: (i) The
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York
Stock Exchange Medallion Program (MSP); (iii) The Stock Exchange
Medallion Program (SEMP); or (iv) such other guarantee programs
acceptable to the Trustee.)
D-2
<PAGE>
EXHIBIT 4.7
SUPERIOR TELECOM INC.
to
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Indenture Trustee
INDENTURE
Dated as of March 31, 1999
8 1/2% CONVERTIBLE SUBORDINATED DEBENTURES
DUE 2014
<PAGE>
RECONCILIATION AND TIE
This reconciliation and tie is between the Trust Indenture Act of
1939, as amended (including cross-references to provisions of Section 310 to and
including 317 which, pursuant to Section 318(c) of the Trust Indenture Act of
1939, as amended by the Trust Reform Act of 1990, are a part of and govern the
Indenture whether or not physically contained therein), and the Indenture, dated
as of March 31, 1999.
<PAGE>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
(Section) 310(a)(1), (2) and (5).............................6.9
(a)(3)............................................Not Applicable
(a)(4)............................................Not Applicable
(b)..........................................................6.8
(c)...............................................Not Applicable
(Section) 311(a)............................................6.13
(b).........................................................6.13
(b)(2)....................................................7.3(a)
(c)...............................................Not Applicable
(Section) 312(a).............................................7.1
(b).......................................................7.2(b)
(c).......................................................7.2 c)
(Section) 313 (a).................................7.3(a); 7.3(b)
(b).......................................................7.3(a)
(c).......................................................7.3(a)
(d).......................................................7.3(c)
(Section) 314(a)(1), (2), (3) and (4)........................7.4
(b)...............................................Not Applicable
(c) (1)......................................................1.2
(c) (2)......................................................1.2
(c) (3)...........................................Not Applicable
(d)...............................................Not Applicable
(e)..........................................................1.2
(f)...............................................Not Applicable
(Section) 315(a)..........................................6.1(a)
(b)..........................................................6.2
(c).......................................................6.1(b)
(d).......................................................6.1(c)
(d) (1)...................................................6.1(a)
(d) (2)...............................................6.l(c)(ii)
(e).........................................................5.14
(Section) 316 (a)...........................................5.12
(a)(1)(A)...................................................5.13
(a)(1)(B)...................................................5.13
(a)(2)............................................Not Applicable
(b)..........................................................5.8
(c).......................................................1.4(f)
(Section) 317(a)(1)..........................................5.3
(a)(2).......................................................5.4
(b).........................................................10.3
(Section) 318(a).............................................1.7
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-i-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ............................................. 2
SECTION 1.1 DEFINITIONS .................................................................... 2
SECTION 1.2 COMPLIANCE CERTIFICATE AND OPINIONS ............................................ 13
SECTION 1.3 FORMS OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE .............................. 13
SECTION 1.4 ACTS OF HOLDERS ................................................................ 14
SECTION 1.5 NOTICES, ETC. TO INDENTURE TRUSTEE AND COMPANY ................................. 15
SECTION 1.6 NOTICE TO HOLDERS; WAIVER ...................................................... 15
SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT; CONFLICTING INTERESTS ....................... 16
SECTION 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS ....................................... 16
SECTION 1.9 SUCCESSORS AND ASSIGNS ......................................................... 16
SECTION 1.10 SEPARABILITY CLAUSE ............................................................ 16
SECTION 1.11 BENEFITS OF INDENTURE .......................................................... 16
SECTION 1.12 GOVERNING LAW .................................................................. 16
SECTION 1.13 NON-BUSINESS DAYS .............................................................. 16
SECTION 1.14 NO RECOURSE AGAINST OTHERS ..................................................... 16
SECTION 1.15 DUPLICATE ORIGINALS ............................................................ 17
ARTICLE 2.
DEBENTURE FORM ...................................................................................... 17
SECTION 2.1 FORMS GENERALLY ................................................................ 17
SECTION 2.2 FORM OF FACE OF DEBENTURE ...................................................... 17
SECTION 2.3 FORM OF REVERSE OF DEBENTURE ................................................... 18
SECTION 2.4 FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION ...................... 24
SECTION 2.5 INITIAL ISSUANCE TO PROPERTY TRUSTEE ........................................... 25
ARTICLE 3.
THE DEBENTURES ...................................................................................... 25
SECTION 3.1 TITLE AND AMOUNT OF DEBENTURES ................................................. 25
SECTION 3.2 DENOMINATIONS .................................................................. 25
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING ................................. 25
SECTION 3.4 TEMPORARY DEBENTURES ........................................................... 26
SECTION 3.5 REGISTRATION, TRANSFER AND EXCHANGE ............................................ 26
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES ............................... 27
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED ................................. 28
SECTION 3.8 PERSONS DEEMED OWNERS .......................................................... 29
SECTION 3.9 CANCELLATION ................................................................... 29
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
SECTION 3.10 COMPUTATION OF INTEREST ........................................................ 29
SECTION 3.11 DEFERRALS OF INTEREST PAYMENT DATES ............................................ 29
SECTION 3.12 RIGHT OF SET-OFF ............................................................... 30
SECTION 3.13 AGREED TAX TREATMENT ........................................................... 30
SECTION 3.14 CUSIP NUMBERS .................................................................. 31
SECTION 3.15 DISTRIBUTION OF DEBENTURES ..................................................... 31
ARTICLE 4.
SATISFACTION AND DISCHARGE .......................................................................... 31
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE ........................................ 31
SECTION 4.2 APPLICATION OF TRUST MONEY ..................................................... 32
ARTICLE 5.
REMEDIES ............................................................................................ 33
SECTION 5.1 EVENTS OF DEFAULT .............................................................. 33
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT ............................. 34
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY INDENTURE TRUSTEE ...... 35
SECTION 5.4 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM ..................................... 36
SECTION 5.5 INDENTURE TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF DEBENTURES ........... 36
SECTION 5.6 APPLICATION OF MONEY COLLECTED ................................................. 37
SECTION 5.7 LIMITATION ON SUITS ............................................................ 37
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST ...... 38
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES ............................................. 38
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE ................................................. 39
SECTION 5.11 DELAY OR OMISSION NOT WAIVER ................................................... 39
SECTION 5.12 CONTROL BY HOLDERS ............................................................. 39
SECTION 5.13 WAIVER OF PAST DEFAULTS ........................................................ 39
SECTION 5.14 UNDERTAKING FOR COSTS .......................................................... 40
ARTICLE 6.
THE INDENTURE TRUSTEE ............................................................................... 40
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES ............................................ 40
SECTION 6.2 NOTICE OF DEFAULTS ............................................................. 41
SECTION 6.3 CERTAIN RIGHTS OF INDENTURE TRUSTEE ............................................ 42
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES ......................... 43
SECTION 6.5 MAY HOLD DEBENTURES ............................................................ 43
SECTION 6.6 MONEY HELD IN TRUST ............................................................ 43
SECTION 6.7 COMPENSATION AND REIMBURSEMENT ................................................. 43
SECTION 6.8 DISQUALIFICATION; CONFLICTING INTERESTS ........................................ 44
SECTION 6.9 CORPORATE INDENTURE TRUSTEE REQUIRED; ELIGIBILITY .............................. 44
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR .............................. 45
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR ......................................... 46
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS .................... 47
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY .............................. 47
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT ............................................ 47
ARTICLE 7.
HOLDERS LISTS AND REPORTS BY INDENTURE TRUSTEE AND COMPANY .......................................... 49
SECTION 7.1 COMPANY TO FURNISH NAMES AND ADDRESSES OF HOLDERS .............................. 49
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS ......................... 49
SECTION 7.3 REPORTS BY INDENTURE TRUSTEE ................................................... 50
SECTION 7.4 REPORTS BY COMPANY ............................................................. 50
ARTICLE 8.
CONSOLIDATION, MERGER, CONTINUANCE, CONVEYANCE, TRANSFER OR LEASE ................................... 51
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS ........................... 51
SECTION 8.2 SUCCESSOR PERSON SUBSTITUTED ................................................... 51
ARTICLE 9.
SUPPLEMENTAL INDENTURES ............................................................................. 52
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS ............................. 52
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS ................................ 53
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES ........................................... 54
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES .............................................. 54
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT ............................................ 54
SECTION 9.6 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES ............................. 54
ARTICLE 10.
COVENANTS ........................................................................................... 55
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST ..................................... 55
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY ................................................ 55
SECTION 10.3 MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST ............................... 55
SECTION 10.4 EXISTENCE ...................................................................... 57
SECTION 10.5 ADDITIONAL SUMS ................................................................ 57
SECTION 10.6 ADDITIONAL COVENANTS ........................................................... 57
</TABLE>
-iii-
<PAGE>
<TABLE>
<S> <C>
ARTICLE 11.
REDEMPTION OR EXCHANGE OF DEBENTURES ................................................................ 58
SECTION 11.1 ELECTION TO REDEEM; NOTICE TO INDENTURE TRUSTEE ................................ 58
SECTION 11.2 SELECTION OF DEBENTURES TO BE REDEEMED ......................................... 58
SECTION 11.3 NOTICE OF REDEMPTION ........................................................... 58
SECTION 11.4 DEPOSIT OF REDEMPTION PRICE .................................................... 59
SECTION 11.5 DEBENTURES PAYABLE ON REDEMPTION DATE .......................................... 59
SECTION 11.6 DEBENTURES REDEEMED IN PART .................................................... 60
SECTION 11.7 OPTIONAL REDEMPTION ............................................................ 60
SECTION 11.8 EXCHANGE OF TRUST SECURITIES FOR DEBENTURES .................................... 61
SECTION 11.9 NO SINKING FUND; REDEMPTION UPON CHANGE OF CONTROL ............................. 62
ARTICLE 12.
SUBORDINATION OF DEBENTURES ......................................................................... 63
SECTION 12.1 DEBENTURES SUBORDINATE TO SENIOR DEBT .......................................... 63
SECTION 12.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. ................................ 63
SECTION 12.3 SUSPENSION OF PAYMENT WHEN SENIOR DEBT IN DEFAULT .............................. 64
SECTION 12.4 INDENTURE TRUSTEE'S RELATION TO SENIOR DEBT .................................... 65
SECTION 12.5 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT ................................ 65
SECTION 12.6 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS .................................... 66
SECTION 12.7 INDENTURE TRUSTEE TO EFFECTUATE SUBORDINATION .................................. 66
SECTION 12.8 NO WAIVER OF SUBORDINATION PROVISIONS .......................................... 67
SECTION 12.9 NOTICE TO INDENTURE TRUSTEE .................................................... 67
SECTION 12.10 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT ................. 68
SECTION 12.11 RIGHTS OF INDENTURE TRUSTEE AS A HOLDER OF SENIOR DEBT;
PRESERVATION OF INDENTURE TRUSTEE'S RIGHTS ................................. 68
SECTION 12.12 ARTICLE APPLICABLE TO PAYING AGENTS ........................................... 68
ARTICLE 13.
CONVERSION OF DEBENTURES ............................................................................ 68
SECTION 13.1 CONVERSION RIGHTS .............................................................. 68
SECTION 13.2 CONVERSION PROCEDURES .......................................................... 69
SECTION 13.3 CONVERSION PRICE ADJUSTMENTS ................................................... 72
SECTION 13.4 FUNDAMENTAL CHANGE ............................................................. 74
SECTION 13.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE ...................................... 74
SECTION 13.6 PRIOR NOTICE OF CERTAIN EVENTS ................................................. 75
SECTION 13.7 CIRCUMSTANCES NOT REQUIRING CONVERSION RATE ADJUSTMENT ......................... 75
SECTION 13.8 INDENTURE TRUSTEE'S DISCLAIMER ................................................. 75
</TABLE>
-iv-
<PAGE>
THIS INDENTURE, dated as of March 31, 1999 between SUPERIOR TELECOM
INC., a Delaware corporation (hereinafter called the "Company") having its
principal office at 1790 Broadway, New York, New York 10019, and American Stock
Transfer & Trust Company, a New York corporation, as Indenture Trustee
(hereinafter called the "Indenture Trustee").
RECITALS OF THE COMPANY
WHEREAS, The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its 8 1/2% Convertible
Subordinated Debentures due 2014 (hereinafter called the "Debentures") as
hereinafter provided in consideration for the issuance by Superior Trust I, a
Delaware statutory business trust (the "Trust"), of preferred undivided
beneficial interests in the assets of the Trust (the "Preferred Securities") and
common undivided beneficial interests in the assets of the Trust (the "Common
Securities"), and to provide the terms and conditions upon which the Debentures
are to be authenticated, issued and delivered.
WHEREAS, all things necessary to make the Debentures, when executed by
the Company, authenticated and delivered by the Indenture Trustee hereunder and
duly issued by the Company, the valid obligations of the Company, and to make
this Indenture a valid agreement of the Company, in accordance with their and
its respective terms, have been done.
NOW THEREFORE:
In consideration of the agreements and obligations set forth herein
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, each party, for the benefit of the other party
hereto, and for the benefit of the Holders of the Debentures, agrees as follows:
ARTICLE 1.
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) 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;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles," with
respect to any computation required or permitted hereunder, shall mean such
accounting principles which are generally accepted at the date or time of such
computation;
<PAGE>
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision;
(e) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or Section, as the case may be, of
this Indenture;
(f) "or" is not exclusive;
(g) provisions apply to successive events and transactions; and
(h) each reference herein to a rule or form of the Commission shall
mean such rule or form and any rule or form successor thereto, in each case as
amended from time to time.
"ACT", when used with respect to any Holder, has the meaning specified
in Section 1.4.
"ADDITIONAL INTEREST" means the interest, if any, that shall accrue on
any interest on the Debentures that is (i) in arrears for more than one interest
payment period or (ii) not paid during any Extension Period, which in either
case (to the extent permitted by law) shall accrue at the stated rate per annum
specified or determined as specified in such Debenture; provided, however, that
with respect to the foregoing clause (i), Additional Interest shall accrue only
for such interest payment periods, or any part thereof, occurring from and after
the Liquidation Date.
"ADDITIONAL SUMS" has the meaning specified in Section 10.5.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Company shall not be deemed to include the Trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; provided, however,
that beneficial ownership of 10% or more of the Voting Stock of an entity will
be deemed to be control. The terms "controlling" and "controlled" have meanings
correlative to "control."
"AUTHENTICATING AGENT" means any Person authorized by the Indenture
Trustee pursuant to Section 6.14 to act on behalf of the Indenture Trustee to
authenticate Debentures.
"BOARD OF DIRECTORS" means either the board of directors of the
Company or any committee thereof duly authorized to act hereunder.
"BOARD RESOLUTION" means a copy of the resolution certified by the
Secretary of the Company to have been duly adopted by the Board of Directors, or
such committee of the Board of Directors or officers of the Company to which
authority to act on behalf of the Board of Directors has been delegated, and to
be in full force and effect on the date of such certification, and delivered to
the Indenture Trustee.
2
<PAGE>
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banking institutions in the City of New York are authorized or required
by law or executive order to remain closed or a day on which the Corporate Trust
Office of the Indenture Trustee, or the corporate trust office of the Property
Trustee under the Declaration, is closed for business.
"CAPITAL LEASE OBLIGATION" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with generally accepted accounting principles.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
"CHANGE IN 1940 ACT LAW" has the meaning specified in the definition
of Investment Company Event.
"CHANGE OF CONTROL" means the occurrence of any of the following
events:
(A) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than The Alpine Group,
Inc., a Delaware corporation, or its Affiliates (the "PERMITTED
HOLDERS"), becomes the "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act), directly or indirectly, of more
than 50% of the total voting power represented by the outstanding
Capital Stock of the Company pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect at
least a majority of the Board of Directors (irrespective of whether or
not at the time the stock of any other class shall or might have
voting power by reason of the happening of any contingency) ("VOTING
STOCK");
(B) the Company consolidates with, or merges with or into,
another entity or conveys, transfers, leases or otherwise disposes of
all or substantially all of its assets to any person or entity, or any
entity consolidates with, or merges with or into, the Company, in any
such event pursuant to a transaction in which the outstanding Voting
Stock of the Company is converted into or exchanged for cash,
securities or other property, other than any such transaction where
(I) the outstanding Voting Stock of the Company is not converted or
exchanged at all (except to the extent necessary to reflect a change
in the jurisdiction of incorporation of the Company) or is converted
into or exchanged for Voting Stock of the surviving or transferee
corporation and (II) immediately after such transaction, the condition
described in (A) above has not occurred with respect to the
outstanding Voting Stock of the surviving or transferee corporation;
(C) during any consecutive two-year period, individuals who at
the beginning of such period constituted the Board of Directors
(together with any new directors whose election by the Board of
Directors or whose nomination for election by the stockholders
3
<PAGE>
of the Company was approved by (x) a vote of at least a majority of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election
was previously so approved (as described in this clause (x) or in the
following clause (y)) or (y) the Permitted Holders) cease for any
reason to constitute a majority of the Board of Directors then in
office; or
(D) the Company is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
"CHANGE OF CONTROL OFFER" has the meaning specified in Section 11.9.
"CHANGE OF CONTROL PURCHASE DATE" has the meaning specified in
Section 11.9.
"CHANGE OF CONTROL REDEMPTION PRICE" has the meaning specified in
Section 11.9.
"CLOSING PRICE", with respect to the Common Stock of the Company,
means for each day the last reported sales price, regular way or, in case no
sale takes place on such day, the average of the closing bid and asked prices
regular way on such day, in either case as reported on The New York Stock
Exchange Composite Tape, or, if the Common Stock is not listed or admitted to
trading on the New York Stock Exchange, on the principal national securities
exchange on which the Common Stock is listed or admitted to trading, or, if not
listed or admitted to trading on any national securities exchange, on the Nasdaq
National Market, or, if not admitted for quotation on the Nasdaq National
Market, the average of the high bid and low asked prices on such day as recorded
by The Nasdaq Stock Market, or, if The Nasdaq Stock Market shall not have
reported any bid and asked prices for the Common Stock on such day, the average
of the bid and asked prices for such day as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for such purpose,
or, if no such bid and asked prices can be obtained from any such firm, the fair
market value of the Common Stock on such day as determined in good faith by the
Board of Directors. Such determination by the Board of Directors shall be
conclusive.
"COMMISSION" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"COMMODITY AGREEMENT" means any commodity purchase agreement,
commodity swap agreement or other similar agreement of any Person designed to
protect such Person or any of its Subsidiaries against fluctuations in commodity
values.
"COMMON SECURITIES" has the meaning specified in the first recital of
this Indenture.
4
<PAGE>
"COMMON STOCK" means common stock, par value $0.01 per share, of the
Company or shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to redemption
by the Company.
"COMPANY" means the Person named as the "Company" in the introductory
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" and "Company Order" means, respectively, the written
request or order signed in the name of the Company by its Chairman of the Board,
its President, any Vice President, its Treasurer, its Controller or its
Secretary, and delivered to the Indenture Trustee.
"CONVERSION AGENT" has the meaning specified in Section 13.2(a).
"CONVERSION DATE" has the meaning specified in Section 13.2(c).
"CONVERSION RATE" has the meaning specified in Section 13.1.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Indenture Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date hereof is located at 40
Wall Street, New York, New York 10005.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement of any Person designed
to protect such Person or any of its Subsidiaries against fluctuations in
currency values.
"CURRENT MARKET PRICE" has the meaning specified in Section 13.3.
"DEBENTURES" or "DEBENTURE" means any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.
"DEBT" means, with respect to any Person, without duplication, (i) all
liabilities, contingent or otherwise, of such Person (a) for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
Person or only to a portion thereof), (b) evidenced by bonds, notes, debentures,
drafts accepted or similar instruments or letters of credit or representing the
balance deferred and unpaid of the purchase price of any property or (c) for the
payment of money relating to a Capital Lease Obligation; (ii) obligations under
reimbursement agreements of such Person with respect to letters of credit; (iii)
obligations of such Person with respect to Interest Rate Agreements, Currency
Agreements or Commodity Agreements; (iv) all liabilities of others of the kind
described in the preceding clauses (i), (ii) or (iii) that (a) such Person has
guaranteed, (b) have been incurred by a partnership in which it is a general
partner (to
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the extent such Person is liable, contingently or otherwise therefor) or (c) are
otherwise its legal liability (other than endorsements for collection in the
ordinary course of business); and (v) all obligations of others secured by a
Lien to which any of the properties or assets (including, without limitation,
leasehold interests and any other tangible or intangible property rights) of
such Person are subject, whether or not the obligations secured thereby shall
have been assumed by such Person or shall otherwise be such Person's legal
liability.
"DECLARATION" means the Declaration of Trust for the Trust pursuant to
which the Preferred Securities and Common Securities were issued, substantially
in the form attached hereto as Annex A, as amended from time to time.
"DEFAULT" means any event that after notice or passage of time, or
both, would be an Event of Default.
"DIRECT ACTION" has the meaning specified in Section 5.8.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXTENSION PERIOD" has the meaning specified in Section 3.11.
"GUARANTEE" means the Guarantee Agreement executed and delivered by
the Company and American Stock Transfer & Trust Company, a New York corporation,
as guarantee trustee, for the benefit of the holders of the Preferred
Securities, substantially in the form attached hereto as Annex B, as amended
from time to time.
"HOLDER" means a Person in whose name a Debenture is registered in the
Securities Register.
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"INDENTURE TRUSTEE" means the Person named as the "Indenture Trustee"
in the introductory paragraph of this instrument until a successor Indenture
Trustee shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Indenture Trustee" shall mean such successor
Indenture Trustee, and shall include each Person who is then an Indenture
Trustee hereunder if at any time there is more than one such Person.
"INTEREST PAYMENT DATE" means as to the Debentures the Stated Maturity
of an installment of interest on such Debentures.
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"INTEREST RATE AGREEMENT" means any swap agreement, interest rate cap
or collar agreement or other similar agreement or arrangement of any Person
designed to protect such Person or any of its Subsidiaries against fluctuations
in interest rates.
"INVESTMENT COMPANY EVENT" means, in respect of the Trust, the receipt
by the Property Trustee, on behalf of the Trust, of an Opinion of Counsel,
rendered by a law firm having a recognized national tax and securities practice
(which opinion shall not have been rescinded by such law firm), to the effect
that, as a result of the occurrence of a change in law or regulation or a change
in interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" that is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the date hereof.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"LIQUIDATION DATE" means each date on which Debentures are to be
distributed to holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 9.4 of the Declaration.
"MATURITY" when used with respect to the Debentures, means the date on
which the principal of the Debentures becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"1940 ACT" means the Investment Company Act of 1940, as amended and
the rules promulgated thereunder.
"NON-PAYMENT EVENT OF DEFAULT" means any event (other than a Payment
Default) the occurrence of which entitles one or more Persons (whether or not
dependent upon the giving of notice, the lapse of time or both or any other
condition) to accelerate the maturity of any Senior Debt.
"NOTICE OF CONVERSION" means the notice given by a holder of Trust
Securities to the Conversion Agent directing the Conversion Agent to exchange
such holder's Trust Securities for Debentures and to convert such Debentures
into Common Stock on behalf of such holder, or the notice given by a Holder of
Debentures to the Conversion Agent directing the Conversion Agent to convert
such Holder's Debentures into Common Stock, as the case may be.
"NOTICE OF DEFAULT" has the meaning specified in Section 5.2.
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"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer, any Vice
President, the Chief Financial Officer or the Secretary of the Company, and
delivered to the Indenture Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be
counsel for the Company, the Trust, or the Indenture Trustee, and who also may
be an employee thereof, and who shall be reasonably acceptable to the Indenture
Trustee.
"OUTSTANDING" means, as of the date of determination, all Debentures
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures theretofore canceled by the Indenture Trustee or
delivered to the Indenture Trustee for cancellation or tendered for
conversion;
(ii) Debentures for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent (other than the Company or any Affiliate
of the Company) for the Holders of such Debentures; provided, however,
that, if such Debentures are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture; and
(iii) Debentures in substitution for or in lieu of which other
Debentures have been authenticated and delivered or which have been
paid pursuant to Section 3.6, or which have been converted into Common
Stock pursuant to Section 13.1, unless proof satisfactory to the
Indenture Trustee is presented that any Debentures are held by Holders
in whose hands such Debentures are valid, binding and legal
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Debentures have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Debentures owned
by the Company or any other obligor upon the Debentures or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Debentures which the Indenture Trustee actually
knows to be so owned shall be so disregarded. Debentures so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Indenture Trustee the pledgee's right so
to act with respect to such Debentures and that the pledgee is not the Company
or any other obligor upon the Debentures or any Affiliate of the Company or such
other obligor.
"PAYING AGENT" means the Indenture Trustee or any Person authorized by
the Company to pay the principal of (premium, if any) or interest on any
Debentures on behalf of the Company.
"PAYMENT DEFAULT" means any default, whether or not dependent upon the
giving of notice, the lapse of time or both, or any other condition to such
default becoming an Event of
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Default, in the payment of principal of (or premium, if any) or interest on or
any other amount payable in connection with Senior Debt.
"PERMITTED HOLDERS" has the meaning specified in the definition of
Change of Control.
"PERSON" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or other entity.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 3.6 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture.
"PREFERRED SECURITIES" has the meaning specified in the first recital
of this Indenture.
"PROPERTY TRUSTEE" means, in respect of the Trust, the Person
identified as the "Property Trustee" in the Declaration, solely in its capacity
as Property Trustee of the Trust under the Declaration and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.
"REDEMPTION DATE", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGULAR RECORD DATE" means for the interest payable on any Interest
Payment Date the fifteenth day next preceding such Interest Payment Date.
"REPRESENTATIVE" means any representative or agent acting as such on
behalf of the holders of Senior Debt.
"RESPONSIBLE OFFICER" when used with respect to the Indenture Trustee
means any officer of the Indenture Trustee within the Corporate Trust Office of
the Indenture Trustee with direct responsibility for the administration of this
Indenture and also means, with respect to a particular corporate trust matter,
any other officer of the Indenture Trustee to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"SECURITIES REGISTER" and "SECURITIES REGISTRAR" have the respective
meanings specified in Section 3.5.
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"SENIOR DEBT" means all monetary obligations (including with respect
to the principal, premium, if any, interest (including interest accruing
subsequent to the filing of a petition in bankruptcy or insolvency at the rate
specified in the document relating to such Senior Debt, whether or not such
interest is an allowed claim permitted to be enforced against the Company under
applicable law), fees, penalties, expenses, indemnities, damages or other
liabilities) (i) under the Senior Secured Credit Agreement (including any
Commodity Agreement, Currency Agreement or Interest Rate Agreement in respect of
monetary obligations under the Senior Secured Credit Agreement) and (ii) on any
other indebtedness or other obligations of the Company, whether outstanding on
the date hereof or hereafter created, incurred or assumed; provided that the
indebtedness or other obligations under clause (ii) above shall constitute
Senior Debt only to the extent such indebtedness or other obligations are
secured by interests in property or assets and the chief financial officer of
the Company delivers a certificate to the Indenture Trustee at the time of the
incurrence of such indebtedness or other obligations stating that, after due
inquiry, such indebtedness or other obligations are secured by interests in
property or assets which have, and such officer has no reason to believe that
such property or assets will not continue to have, a fair market value that
equals or exceeds the principal amount of such indebtedness or other
obligations, giving due regard to the type and amount of any other indebtedness
secured by such property or assets (such certificate constituting conclusive
evidence, binding for all purposes, that such indebtedness or other obligations
are secured).
"SENIOR SECURED CREDIT AGREEMENT" means the Amended and Restated
Credit Agreement, dated as of November 27, 1998, among Superior/Essex Corp.,
Essex Group, Inc., the guarantors named therein (including, without limitation,
the Company), the lenders party thereto in their capacities as lenders
thereunder, Bankers Trust Company, as administrative agent, Merrill Lynch & Co.,
as documentation agent, and Fleet National Bank, as syndication agent, together
with the related documents thereto (including, without limitation, any guarantee
agreements and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or adding subsidiaries
as additional borrowers or guarantors thereunder) all or any portion of the
indebtedness and other obligations under such agreement or any successor or
replacement agreement and whether by the same or any other agent, lender or
group of lenders.
"SENIOR SUBORDINATED CREDIT AGREEMENT" means the Senior Subordinated
Credit Agreement, dated as of November 27, 1998, among Superior/Essex Corp., as
borrower, the guarantors named therein (including, without limitation, the
Company), the lenders party thereto in their capacities as lenders thereunder,
Bankers Trust Company, as administrative agent, and Fleet Corporate Finance,
Inc., as syndication agent, together with the related documents thereto
(including, without limitation, any guarantee agreements), in each case as such
agreements may be amended (including any amendment and restatement thereof),
supplemented or otherwise modified from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including increasing the amount of available borrowings thereunder or adding
subsidiaries as additional borrowers or guarantors thereunder) all or any
portion of the indebtedness and other obligations under such agreement or
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any successor or replacement agreement and whether by the same or any other
agent, lender or group of lenders.
"SPECIAL EVENT" means a Tax Event or an Investment Company Event.
"STATED MATURITY" means, when used with respect to any Debenture or
any installment of principal thereof or interest thereon, the date specified in
such Debenture or this Indenture as the fixed date on which any principal of
such Debenture or such installment of interest is due and payable, and when used
with respect to any other Debt or any installment of interest thereon, means any
date specified in the instrument governing such Debt as the fixed date on which
the principal of such Debt, or such installment of interest thereon, is due and
payable.
"SUBSIDIARY", with respect to any Person, means (i) any corporation of
which the outstanding Capital Stock having at least a majority of the votes
entitled to be cast in the election of directors under ordinary circumstances
(without regard to the occurrence of any contingency) shall at the time be
owned, directly or indirectly, by such Person or (ii) any other Person of which
at least a majority of the voting interests under ordinary circumstances is at
the time owned, directly or indirectly, by such Person.
"TAX EVENT" means the receipt by the Property Trustee, on behalf of
the Trust, of an Opinion of Counsel, rendered by a law firm having a national
tax and securities practice (which opinion shall not have been rescinded by such
law firm), to the effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein affecting taxation, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date hereof, there is
more than an insubstantial risk in each case after the date hereof that (i) the
Trust is, or will be within 90 days of the date thereof, subject to United
States federal income tax with respect to income received or accrued on the
Debentures, (ii) interest paid by the Company on the Debentures is not, or
within 90 days of the date thereof will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within 90 days of the date thereof, subject to more than a
de minimis amount of other taxes, duties or other governmental charges.
"TRUST" has the meaning specified in the first recital of this
Indenture.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture; provided, however, that in the event the Trust Indenture Act of 1939
is amended after such date, "Trust Indenture Act" means, to the extent required
by any such amendment, the Trust Indenture Act of 1939 as so amended.
"TRUST SECURITIES" means the Common Securities and Preferred
Securities.
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"VOTING STOCK" has the meaning specified in the definition of Change
of Control.
SECTION 1.2 COMPLIANCE CERTIFICATE AND OPINIONS. Upon any application
or request by the Company to the Indenture Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Indenture Trustee
an Officer's Certificate stating that all conditions precedent (including
covenants, 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 (including covenants, compliance with
which constitute a condition precedent), if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished. The Company covenants that each such Officer's
Certificate and Opinion of Counsel shall comply with the requirements of the
Trust Indenture Act.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he
or she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORMS OF DOCUMENTS DELIVERED TO INDENTURE 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
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representations with respect to matters upon which his certificate or opinion is
based are erroneous. Any certificate of counsel or Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that
the information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this
Indenture to be given to or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor
signed by such Holders in person or by an agent duly appointed in
writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments is
or are delivered to the Indenture Trustee, and, where it is hereby
expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "ACT" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.1(a)(ii))
conclusive in favor of the Indenture Trustee and the Company and any
agent of the Indenture Trustee or the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of
such execution or by the certificate of any notary public or other
officer authorized by law to take acknowledgments of deeds, certifying
that the individual signing such instrument or writing acknowledged to
him the execution thereof. Where such execution is by a Person acting
in other than his or her individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Indenture
Trustee deems sufficient and in accordance with such reasonable rules
as the Indenture Trustee may determine.
(d) The ownership of Debentures shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act by the Holder of any Debenture shall bind
every future Holder of the same Debenture and the Holder of every
Debenture issued upon the transfer thereof or in
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exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Indenture Trustee or the Company
in reliance thereon, whether or not notation of such action is made
upon such Debenture.
(f) The Indenture Trustee may make reasonable rules for action by
or meetings of the Holders. The Securities Registrar and Paying Agent
may make reasonable rules for their functions.
(g) Without limiting the foregoing, a Holder entitled hereunder
to give or take any action with regard to any particular Debenture may
do so with regard to all or any part of the principal amount of such
Debenture or by one or more duly appointed agents, each of which may
do so pursuant to such appointment with regard to all or any part of
such principal amount.
SECTION 1.5 NOTICES, ETC. TO INDENTURE TRUSTEE AND 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 the following:
(a) the Indenture Trustee by any Holder or by the Company shall
be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Indenture Trustee at its Corporate
Trust Office; or
(b) the Company by the Indenture Trustee or by any Holder shall
be sufficient for every purpose (except as otherwise provided in
Section 5.1 hereof) hereunder if in writing and mailed, first-class,
postage prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the
Indenture Trustee by the Company.
SECTION 1.6 NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at the
address of such Holder as it appears in the Securities Register on the date such
notice is mailed, which shall be not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver. In case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Indenture Trustee shall constitute a sufficient
notification for every purpose hereunder.
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SECTION 1.7 CONFLICT WITH TRUST INDENTURE ACT; CONFLICTING INTERESTS.
If any provision of this Indenture limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under the Trust Indenture
Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the former
provision shall be deemed to apply. The Declaration and the Guarantee shall be
deemed to be specifically described in this Indenture for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 1.8 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the table of contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.9 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture by the Company shall bind its successors, whether so expressed or
not.
SECTION 1.10 SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Debentures shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto or thereto, any Paying Agent and their successors and assigns and
the Holders of the Debentures, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
SECTION 1.12 GOVERNING LAW. This Indenture and the Debentures shall be
governed by and construed in accordance with the laws of the State of New York
without regard to its principles of conflicts of laws.
SECTION 1.13 NON-BUSINESS DAYS. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Debenture shall not be a
Business Day, then (notwithstanding any other provision of this Indenture or the
Debentures) payment of interest or principal 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 any Interest Payment
Date is in the next succeeding calendar year, then such payment shall be made on
the immediately preceding Business Day, in each case 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.
SECTION 1.14 NO RECOURSE AGAINST OTHERS. A director, officer,
employee, stockholder or incorporator, as such, of the Company shall not have
any liability for any obligations of the Company under the Debentures or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder by accepting a
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Debenture waives and releases all such liability. Such waiver and release are
part of the consideration for the issuance of the Debentures.
SECTION 1.15 DUPLICATE ORIGINALS. All parties may sign any number of
copies or counterparts of this Indenture. Each signed copy or counterpart shall
be an original, but all of them together shall represent the same agreement.
ARTICLE 2.
DEBENTURE FORM
SECTION 2.1 FORMS GENERALLY. The Debentures and the Indenture
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article 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 applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such Debentures, as evidenced by their
execution of the Debentures.
The definitive Debentures shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange on which the Debentures may be listed, on a steel engraved
border or steel engraved borders, or may be produced in any other manner
permitted by the rules of any securities exchange on which the Debentures may be
listed, all as determined by the officers executing such Debentures, as
evidenced by their execution of such Debentures.
SECTION 2.2 FORM OF FACE OF DEBENTURE.
SUPERIOR TELECOM INC.
8 1/2% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2014, $_________
NO. CUSIP NO.
------------ --------------
Superior TeleCom Inc., a corporation organized and existing under the
laws of Delaware (hereinafter called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _____________________, or registered
assigns, the principal sum of ____________________ on March 30, 2014 and to pay
interest, plus Additional Interest and Additional Sums, if any, on said
principal sum from March 31, 1999, or from the most recent Interest Payment Date
on which interest has been paid or duly provided for, quarterly until the
principal hereof is paid or duly provided for or made available for payment,
subject to deferral as set forth herein, in arrears, on March 15, June 15,
September 15 and December 15 of each year (each such date, an "Interest Payment
Date"), commencing June 15, 1999, at the rate of eight and one-half percent (8
1/2%) per annum, until the principal hereof shall have become due and payable,
and thereafter such interest shall be payable on demand.
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Reference is hereby made to the further provisions of this Debenture
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee referred to on the reverse hereof by manual signature,
this Debenture shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
SUPERIOR TELECOM INC.
By:
--------------------------------------
Name:
Title:
SECTION 2.3 FORM OF REVERSE OF DEBENTURE. This Debenture is one of a
duly authorized issue of Debentures of the Company (herein called the
"DEBENTURES"), limited to the aggregate principal amount of $171,765,650, issued
and to be issued under an Indenture, dated as of March 31, 1999 (herein called
the "INDENTURE"), between the Company and American Stock Transfer & Trust
Company, as Indenture Trustee (herein called the "INDENTURE TRUSTEE," which term
includes any successor Indenture Trustee under the Indenture). Reference is
hereby made to the Indenture and all indentures supplemental thereto for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Indenture Trustee, the Company and the Holders of the
Debentures, and of the terms upon which the Debentures are, and are to be,
authenticated and delivered. All terms used in this Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. For periods of less than three
months, interest shall be computed on the actual number of elapsed days in such
period based on 30-day months. In the event that any date on which interest is
payable on this Debenture is not a Business Day, then the payment of interest on
such date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except that
if any Interest Payment Date is in the next succeeding calendar year, then such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date the payment was originally
payable. A "BUSINESS DAY" shall mean any day other than a Saturday or a Sunday
or a day on which banking institutions in the City of New York are authorized or
required by law or executive order to remain closed or a day on which the
Corporate Trust Office of the Indenture Trustee, or the principal office of the
Property Trustee under the Declaration, is closed for business. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture, be paid to the Person
in whose name this Debenture (or one or more Predecessor Debentures, as
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<PAGE>
defined in the Indenture) is registered at the close of business on the Regular
Record Date for such interest installment, which shall be the date which is the
fifteenth day preceding such Interest Payment Date. The term "interest" as used
herein shall include quarterly interest payments, interest on quarterly interest
payments not paid on the applicable Interest Payment Date and Additional Sums,
as applicable. If the Company defaults in a payment of interest on the
Debentures, it shall pay the defaulted amounts, plus (to the extent provided in
the Indenture and permitted by law) any interest payable on defaulted amounts at
the rate specified herein, to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) are registered on a subsequent special
record date. The Company shall fix the special record date and payment date in a
manner satisfactory to the Indenture Trustee and provide the Indenture Trustee
at least 20 days' notice of the proposed amount of default interest, if any, to
be paid and the special payment date. At least 15 days before the special record
date, the Company shall mail or cause to be mailed to each Holder at his address
as it appears on the Securities Register a notice that states the special record
date, the payment date (which shall be not less than five nor more than ten days
after the special record date) and the amount to be paid. In lieu of the
foregoing procedures, the Company may pay defaulted interest in any other lawful
manner satisfactory to the Indenture Trustee and not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
upon such notice as may be required by such exchange.
So long as no Event of Default under the Indenture (relating solely to
clauses (e) and (f) under the definition thereof in Section 5.1 thereof) has
occurred and is continuing, the Company shall have the right under the Indenture
to defer the payment of interest (including any Additional Interest and
Additional Sums, if any) under this Debenture, at any time or from time to time,
for a period not exceeding 20 consecutive quarters with respect to each deferral
period, but not to extend beyond the Stated Maturity (each such deferral period,
an "EXTENSION PERIOD"). During any such Extension Period, the Company shall not,
and shall not permit any Subsidiary to, (a) declare or pay, or set apart for
payment, any dividends on or other distributions with respect to, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any shares of
the Company's Capital Stock or (b) make any payment of principal of, premium, if
any, or interest on, or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness) issued by the Company that rank pari
passu with or junior to this Debenture (other than with respect to both (a) and
(b) (i) any dividend, redemption, liquidation, interest, principal or guarantee
payment by the Company where the payment is made with securities (including
Capital Stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, liquidation, interest, principal or guarantee payment
is being made, (ii) payments under the Guarantee, (iii) payments under the
Senior Subordinated Credit Agreement, (iv) purchases of Common Stock related to
the issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees, (v) as a result of a reclassification of the
Company's Capital Stock or the exchange or conversion of one series or class of
the Company's Capital Stock for another series or class of the Company's Capital
Stock and (vi) the purchase of fractional interests in shares of the Company's
Capital Stock pursuant to the conversion or exchange provisions of such Capital
Stock or the security being converted or exchanged). Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period; provided, however, that no such Extension Period as so
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<PAGE>
extended shall exceed 20 consecutive quarters or extend beyond the Stated
Maturity of this Debenture. Upon the termination of any such Extension Period
and upon the payment of all amounts then accrued and unpaid, the Company may
elect to begin a new Extension Period, subject to the above requirements. No
interest, including Additional Interest and Additional Sums, if any, shall be
due and payable during an Extension Period except at the end thereof; however,
interest and Additional Interest shall continue to accrue. The Company shall
give the Indenture Trustee and the Property Trustee under the Declaration notice
of its election to begin any Extension Period at least one Business Day prior to
the earlier of (i) the record date for the date the distributions on the
Preferred Securities (or if no Preferred Securities are outstanding, for the
date interest on the Debentures) would have been payable except for the election
to begin such Extension Period and (ii) the date the Property Trustee under the
Declaration is (or if no Preferred Securities are outstanding, the Indenture
Trustee is) required to give notice to the New York Stock Exchange or other
applicable self-regulatory organizations or to holders of such Preferred
Securities (or, if no Preferred Securities are outstanding, to the holders of
such Debentures) of such election.
Payment of the principal of (and premium, if any) and interest on this
Debenture will be made at the Corporate Trust Office of the Indenture Trustee or
at the office or agency of the Paying Agent or Paying Agents as the Company may
designate maintained for that purpose in the United States, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made (i) by check mailed to the
address of the Person entitled thereto at such address as shall appear in the
Securities Register or (ii) by wire transfer in immediately available funds at
such place and to such account as may be designated by the Person entitled
thereto as specified in the Securities Register, provided that proper transfer
instructions have been received by the Regular Record Date.
All obligations with respect to the Debentures are, to the extent and
in the manner provided in the Indenture, subordinated in right of payment to the
prior indefeasible payment and satisfaction in full in cash of all existing and
future Senior Debt as defined in the Indenture, and this Debenture is issued
subject to such provisions. Each Holder of this Debenture, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Indenture Trustee, on behalf of such Holder, to take such action as
may be necessary or appropriate to effectuate the subordination as provided in
the Indenture and (c) appoints the Indenture Trustee attorney-in-fact of such
Holder for such purpose.
After March 31, 2003, the Company may, at its option, subject to the
terms and conditions of Article 11 of the Indenture, redeem this Debenture in
whole at any time or in part from time to time, at the Redemption Prices set
forth in Section 11.7 of the Indenture.
In the event of redemption of this Debenture in part only, a new
Debenture or Debentures for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
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If a Special Event shall occur and be continuing, this Debenture may
be distributed to holders of Trust Securities in accordance with Section 11.8 of
the Indenture or, in certain circumstances, redeemable by the Company in
accordance with Section 11.7 of the Indenture.
Subject to the terms and conditions set forth in Article 13 of the
Indenture, this Debenture is convertible, at the option of the Holder hereof,
into shares of Common Stock (and/or such other cash, securities or property as
then provided for by the Indenture), all as provided in Article 13 of the
Indenture.
If an Event of Default shall occur and be continuing, the principal of
the Debentures may be declared due and payable in the manner, with the effect
and subject to the conditions provided in the Indenture.
As provided in and subject to the provisions of the Indenture, if an
Event of Default occurs and is continuing, then and in every such case the
Indenture Trustee or the Holders of not less than a majority in aggregate
principal amount of the Outstanding Debentures may declare the aggregate
principal amount of all the Outstanding Debentures to be due and payable, by a
notice in writing to the Company (and to the Indenture Trustee if given by
Holders) specifying the respective Event of Default and that it is a "Notice of
Default"; provided, however, that, if upon an Event of Default, the Indenture
Trustee or the Holders of not less than a majority in aggregate principal amount
of the Outstanding Debentures fail to declare the principal of all the
Debentures to be immediately due and payable, the holders of at least a majority
in aggregate liquidation amount of the Preferred Securities then outstanding
shall have such right to make the declaration by a notice in writing to the
Company and the Indenture Trustee. Upon any such notice, such principal amount
of (including premium, if any) and the accrued and unpaid interest (including
any Additional Interest and Additional Sums, if any) on all the Debentures then
Outstanding shall become immediately due and payable, provided that the payment
of principal (including premium, if any) and interest (including any Additional
Interest and Additional Sums, if any) on such Debentures shall remain
subordinated to the extent provided in Article 12 of the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Debentures to be affected under the
Indenture at any time by the Company and the Indenture Trustee with the consent
of the Holders of a majority in principal amount of the Debentures. In addition,
without the consent of any Holder of a Debenture, the Indenture and the
Debentures may be amended and supplemented to cure any ambiguity or
inconsistency, make other changes which will not adversely affect in any
material aspect the rights of the Holders or certain other matters specified in
the Indenture. The Indenture also contains provisions permitting Holders of
specified percentages in principal amount of the Debentures at the time
Outstanding, on behalf of the Holders of all Debentures, to waive compliance by
the Company with certain provisions of the Indenture and certain past Defaults
and Events of Default under the Indenture and their consequences, and, should
the Holders of the Debentures fail to annul and rescind such declaration, the
holders of a majority in liquidation amount of the Preferred Securities then
outstanding shall have the right. Any such consent or waiver shall be conclusive
20
<PAGE>
and binding upon the Holder of this Debenture and upon all future Holders of
this Debenture and of any Debenture issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of
such consent or wavier is made upon this Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of (and
premium, if any) and interest (including Additional Interest and Additional
Sums, if any) on this Debenture at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Debenture is registrable in the Securities
Register, upon surrender of this Debenture for registration of transfer, at the
office or agency of the Company maintained under Section 10.2 of the Indenture,
duly endorsed by or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees. No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Debenture for registration of
transfer, the Company, the Indenture Trustee and any agent of the Company or the
Indenture Trustee may treat the Person in whose name this Debenture is
registered as the owner hereof for all purposes, whether or not this Debenture
be overdue, and neither the Company, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $50 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Debenture or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Debenture agree that for United States federal, state and
local tax purposes it is intended that this Debenture constitute indebtedness.
No director, officer, employee, stockholder or incorporator of the
Company shall have any liability for any obligations of the Company under this
Debenture or the Indenture or for any claim based on, in respect of or by reason
of such obligations or their creation. Each Holder by accepting this Debenture
waives and releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Debenture.
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THE INDENTURE AND THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICTS OF LAW PRINCIPLES THEREOF.
ASSIGNMENT FORM
To assign this Debenture, fill in the form below:
(I) or (we) assign and transfer this Debenture to
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint _____________________agent to transfer this Debenture on
the books of the Company. The agent may substitute another to act for him.
Your Signature:
-------------------------------------------
(Sign exactly as your name appears on the other side
of this Debenture)
Date:
-----------------------------
Signature Guarantee:(1)
----------------------------------------
- ---------------
(1) Signature must be guaranteed by an institution which is a member of one of
the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP);
or (iv) such other guarantee programs acceptable to the Indenture Trustee.
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NOTICE OF CONVERSION
To: Superior TeleCom Inc.
The undersigned owner of this Debenture hereby irrevocably exercises
the option to convert this Debenture, or the portion below designated, into
Common Stock of Superior TeleCom Inc. in accordance with the terms of the
Indenture referred to in this 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
--- Portions of Debenture to be
converted ($50 or integral
multiples thereof):
$
----------------------------------------
Signature (for conversion only)
Please Print or Type Name and
Address, Including Zip Code,
and Social Security or Other
Identifying Number
----------------------------------------
----------------------------------------
----------------------------------------
Signature Guarantee:(1)
----------------------------------------
SECTION 2.4 FORM OF INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The form of Indenture Trustee's Certificate of Authentication shall be as
follows (or in the form provided in Section 6.15 in the event that a separate
Authenticating Agent is appointed pursuant thereto):
- ---------------
(1) Signature must be guaranteed by an institution which is a member of one of
the following recognized Signature Guaranty Programs: (i) The Securities
Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MSP); (iii) The Stock Exchange Medallion Program (SEMP);
or (iv) such other guarantee programs acceptable to the Indenture Trustee.
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This is one of the Debentures designated therein referred to in the
within mentioned Indenture.
American Stock Transfer & Trust Company
as Indenture Trustee
By:
---------------------------------
Authorized Signatory
Dated:
-----------------------------
SECTION 2.5 INITIAL ISSUANCE TO PROPERTY TRUSTEE. The Debentures
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without
coupons.
ARTICLE 3.
THE DEBENTURES
SECTION 3.1 TITLE AND AMOUNT OF DEBENTURES. The aggregate principal
amount at Stated Maturity of Debentures which may be authenticated and delivered
under this Indenture is $171,765,650, except for Debentures authenticated and
delivered upon registration of, transfer of, or in exchange for, or in lieu of,
other Debentures pursuant to Sections 3.4, 3.5, 3.6, 3.15, 9.6, 11.7 or 11.8.
The Debentures shall be known and designated as "8 1/2% Convertible Subordinated
Debentures due 2014." Their Maturity shall be March 30, 2014 and they shall bear
interest as provided in the form of Debenture and as herein provided.
SECTION 3.2 DENOMINATIONS. The Debentures shall be in registered form
without coupons and shall be issuable in denominations of $50 and any integral
multiple thereof.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Debentures shall be executed on behalf of the Company by its President, Chief
Executive Officer, Chief Financial Officer or one of its Executive Vice
Presidents. The signature of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures. Upon the execution and
delivery of this Indenture, and at any time from time to time after the
execution and delivery of this Indenture, Debentures may be executed by the
Company and delivered to the Indenture Trustee for authentication, together with
a Company Order for the authentication and delivery of such Debentures, and the
Indenture Trustee, in accordance with the Company Order,
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<PAGE>
shall thereupon authenticate and make said Debentures available for delivery
without any further action by the Company. Debentures may be authenticated on
original issuance from time to time and delivered pursuant to such procedures
acceptable to the Indenture Trustee ("Procedures") as may be specified from time
to time by Company Order. Procedures may authorize authentication and delivery
pursuant to oral instructions of the Company or a duly authorized agent, which
instructions shall be promptly confirmed in writing.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee (or the Authenticating Agent) by the manual
signature of one of its authorized officers, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
SECTION 3.4 TEMPORARY DEBENTURES. Pending the preparation of
definitive Debentures, the Company may execute, and upon Company Order the
Indenture Trustee shall authenticate and deliver, temporary Debentures which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive Debentures in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Debentures may
determine, as evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at the office
or agency of the Company designated for the purpose, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Debentures,
the Company shall execute and the Indenture Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Debentures of authorized denominations. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as definitive Debentures.
SECTION 3.5 REGISTRATION, TRANSFER AND EXCHANGE. The Company shall
cause to be kept at the Corporate Trust Office of the Indenture Trustee a
register in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Debentures and of transfers
and exchanges of Debentures (such register is herein sometimes referred to as
the "Securities Register"). The Indenture Trustee is hereby appointed
"Securities Registrar" for the purpose of the registering Debentures and
transfers and exchanges of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at the
office or agency of the Company designated pursuant to Section 10.2 for that
purpose, the Company shall execute, and the Indenture Trustee shall authenticate
and make available for delivery, in the name of the
25
<PAGE>
designated transferee or transferees, one or more new Debentures of any
authorized denominations, of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Indenture Trustee shall authenticate and make available
for delivery, the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any transfer or exchange of Debentures
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such transfer or exchange.
Every Debenture presented or surrendered for transfer or exchange
shall (if so required by the Company or the Securities Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Securities Registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Debentures, other than exchanges pursuant to
Sections 3.4, 3.15, 9.6, 11.7 and 11.8.
Neither the Company, the Securities Registrar nor the Indenture
Trustee shall be required, pursuant to the provisions of this Section, (a) to
issue, transfer or exchange any Debenture during a period beginning at the
opening of business 15 days before the day of selection for redemption of
Debentures pursuant to Article 11 and ending at the close of business on the day
of mailing of notice of redemption or (b) to transfer or exchange any Debenture
so selected for redemption in whole or in part, except, in the case of any
Debenture to be redeemed in part, any portion thereof not to be redeemed.
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES. If any
mutilated Debenture is surrendered to the Indenture Trustee, the Company shall
execute and the Indenture Trustee shall authenticate and make available for
delivery in exchange therefor a new Debenture and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and to the Indenture
Trustee (a) evidence to their satisfaction of the destruction, loss or theft of
any Debenture, and (b) such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of actual notice to the Company
or the Indenture Trustee that such Debenture has been acquired by a protected
purchaser, the Company shall execute and upon a Company Order, the Indenture
Trustee shall authenticate and make available for delivery, in lieu of any such
destroyed, lost or stolen Debenture, a new Debenture bearing a number not
contemporaneously outstanding.
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<PAGE>
In case any such mutilated, destroyed, lost or stolen Debenture has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Debenture, pay such Debenture.
Upon the issuance of any new Debenture under this Section, 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 Indenture Trustee) connected
therewith.
Every new Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Debentures.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Interest
(including Additional Interest and Additional Sums, if any) on any Debenture
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date, shall be paid to the Person in whose name that Debenture (or one
or more Predecessor Debentures) is registered at the close of business on the
Regular Record Date for such interest payment, except that interest payable on
the Maturity of the Debentures shall be paid to the Person to whom principal is
paid.
If the Company defaults in a payment of interest on the Debentures, it
shall pay the defaulted amounts, plus (to the extent permitted by law) any
interest payable on defaulted amounts (which default interest shall only accrue
with respect to any interest payment period, or part thereof, occurring from and
after the Liquidation Date) at the rate specified in the Debentures, to the
Persons in whose names the Debentures (or their respective Predecessor
Debentures) are registered on a subsequent special record date. The Company
shall fix the special record date and payment date in a manner satisfactory to
the Indenture Trustee and provide the Indenture Trustee at least 20 days' notice
of the proposed amount of default interest, if any, to be paid and the special
payment date. At least 15 days before the special record date, the Company shall
mail or cause to be mailed to each Holder at his address as it appears on the
Securities Register a notice that states the special record date, the payment
date (which shall be not less than five nor more than ten days after the special
record date) and the amount to be paid. In lieu of the foregoing procedures, the
Company may pay defaulted interest in any other lawful manner satisfactory to
the Indenture Trustee and not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, upon such notice as
may be required by such exchange.
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<PAGE>
Subject to the foregoing provisions of this Section, each Debenture
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Debenture shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Debenture.
SECTION 3.8 PERSONS DEEMED OWNERS. Prior to due presentment of a
Debenture for registration of transfer or exchange, the Company, the Indenture
Trustee, the Paying Agent and any agent of the Company, the Indenture Trustee or
the Paying Agent may treat the Person in whose name any Debenture is registered
as the owner of such Debenture for the purpose of receiving payment of principal
of (and premium, if any) and (subject to Section 3.7) interest (including
Additional Interest and Additional Sums, if any) on such Debenture and for all
other purposes whatsoever, whether or not such Debenture be overdue, and neither
the Company, the Indenture Trustee, the Paying Agent nor any agent of the
Company, the Indenture Trustee or the Paying Agent shall be affected by notice
to the contrary.
SECTION 3.9 CANCELLATION. All Debentures surrendered for payment,
redemption, conversion, transfer or exchange shall, if surrendered to any Person
other than the Indenture Trustee, be delivered to the Indenture Trustee, and any
such Debentures and Debentures surrendered directly to the Indenture Trustee for
any such purpose shall be promptly canceled by the Indenture Trustee. The
Company may at any time deliver or cause to be delivered to the Indenture
Trustee for cancellation any Debentures previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Debentures so delivered shall be promptly canceled by the Indenture Trustee. No
Debentures shall be authenticated in lieu of or in exchange for any Debentures
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Debentures shall be returned to the Company by the
Indenture Trustee.
SECTION 3.10 COMPUTATION OF INTEREST. Interest on the Debentures shall
be computed on the basis of a 360-day year of twelve 30-day months. For periods
of less than three months, interest shall be computed on the actual number of
elapsed days in such period based on 30-day months.
SECTION 3.11 DEFERRALS OF INTEREST PAYMENT DATES. So long as no Event
of Default (relating solely to clauses (e) and (f) under Section 5.1 hereof) has
occurred and is continuing, the Company shall have the right to defer the
payment of interest (including Additional Interest and Additional Sums, if any)
under the Debentures, at any time, or from time to time, for a period not
exceeding 20 consecutive quarters with respect to each deferral period, but not
to extend beyond the Stated Maturity (each such deferral period, an "EXTENSION
PERIOD"). During any such Extension Period, the Company shall not, and shall not
permit any Subsidiary to, (a) declare or pay, or set apart for payment, any
dividends on or other distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any shares of the
Company's Capital Stock or (b) make any payment of principal of, premium, if
any, or interest on, or repay, repurchase or redeem any debt securities
(including guarantees of indebtedness) issued by the Company that rank pari
passu with or junior to the Debentures (other than with respect to both (a) and
(b) (i) any dividend, redemption, liquidation, interest, principal or guarantee
payment by the Company where the payment is made with securities (including
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Capital Stock) that rank pari passu with or junior to the securities on which
such dividend, redemption, liquidation, interest, principal or guarantee payment
is being made, (ii) payments under the Guarantee, (iii) payments under the
Senior Subordinated Credit Agreement, (iv) purchases of Common Stock related to
the issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees, (v) as a result of a reclassification of the
Company's Capital Stock or the exchange or conversion of one series or class of
the Company's Capital Stock for another series or class of the Company's Capital
Stock and (vi) the purchase of fractional interests in shares of the Company's
Capital Stock pursuant to the conversion or exchange provisions of such Capital
Stock or the security being converted or exchanged). Prior to the termination of
any such Extension Period, the Company may further extend the interest payment
period; provided, however, that no such Extension Period as so extended shall
exceed 20 consecutive quarters or extend beyond the Stated Maturity of the
Debentures. Upon the termination of any Extension Period and upon the payment of
all amounts then accrued and unpaid, the Company may elect to begin a new
Extension Period, subject to the above requirements. No interest, including
Additional Interest and Additional Sums, if any, shall be due and payable during
an Extension Period, except at the end thereof; however, interest and Additional
Interest shall continue to accrue. The Company shall give the Indenture Trustee
and the Property Trustee under the Declaration notice of its election to begin
any Extension Period at least one Business Day prior to the earlier of (i) the
record date for the date the distributions on the Preferred Securities (or if no
Preferred Securities are outstanding, for the date interest on the Debentures)
would have been payable except for the election to begin such Extension Period
and (ii) the date the Property Trustee under the Declaration (or if no Preferred
Securities are outstanding, the Indenture Trustee) is required to give notice to
the New York Stock Exchange or other applicable self-regulatory organization or
to holders of such Preferred Securities (or, if no Preferred Securities are
outstanding, to the holders of such Debentures) of such election. Such notice
shall specify the Extension Period selected.
The Indenture Trustee, upon receipt of notice thereof from the
Company, shall promptly give notice, in the name and at the expense of the
Company, of the Company's election to begin an Extension Period to the Holders
of the Outstanding Debentures.
SECTION 3.12 RIGHT OF SET-OFF. Notwithstanding anything to the
contrary in this Indenture, the Company shall have the right to set-off any
payment it is otherwise required to make in respect of the Debentures to the
extent the Company has theretofore made, or is concurrently on the date of such
payment making, a payment relating to the Debentures under the Guarantee.
SECTION 3.13 AGREED TAX TREATMENT. Each Debenture issued hereunder
shall provide that the Company and, by its acceptance of a Debenture or a
beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, such Debenture agree that, subject to any applicable
change in law, for United States federal, state and local tax purposes it is
intended that such Debenture constitute indebtedness of the Company, and will be
treated in a manner consistent therewith.
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SECTION 3.14 CUSIP NUMBERS. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Indenture
Trustee shall use such "CUSIP" number provided to it by the Company 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 number either
as printed on the Debentures or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed on
the Debentures, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Company will promptly notify the Indenture
Trustee of any change in CUSIP numbers.
SECTION 3.15 DISTRIBUTION OF DEBENTURES.
In connection with distribution of Debentures to holders of the
Preferred Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Special Event or otherwise, the Debentures may be presented to
the Indenture Trustee by the Property Trustee under the Declaration and any
Preferred Security certificate will be deemed to represent beneficial interests
in Debentures presented to the Indenture Trustee by the Property Trustee having
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities until such Preferred Security certificates are presented to
the Securities Registrar for transfer or reissuance, at which time such
Preferred Security certificates will be canceled and a Debenture, registered in
the name of the holder of the Preferred Security certificate or the transferee
of the holder of such Preferred Security certificate, as the case may be, with
an aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Security certificate so canceled, will be executed by the Company and
delivered to the Indenture Trustee for authentication and delivery in accordance
with this Indenture. On issue of such Debentures, Debentures with an equivalent
aggregate principal amount that were presented by the Property Trustee to the
Indenture Trustee will be deemed to have been canceled.
ARTICLE 4.
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect (except as to (i) any surviving rights of
transfer, substitution and exchange of Debentures, (ii) rights hereunder of
Holders to receive payments of principal of (and premium, if any) and interest
(including Additional Interest and Additional Sums, if any) on the Debentures
and other rights, duties and obligations of the Holders as beneficiaries hereof
with respect to the amounts, if any, so deposited with the Indenture Trustee and
(iii) the rights of the Indenture Trustee hereunder), and the Indenture Trustee,
on written demand of and at the expense of the Company, shall execute
instruments supplied by the Company acknowledging satisfaction and discharge of
this Indenture, when
(a) either
(i) all Debentures theretofore authenticated and delivered (other
than (i) Debentures which have been destroyed, lost or stolen and
which have been replaced or
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paid as provided in Section 3.6 and (ii) Debentures for whose payment
money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have been
delivered to the Indenture Trustee for cancellation; or
(ii) all such Debentures not theretofore delivered to the
Indenture Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity
within one year of the date of deposit or are to be called for
redemption within one year under irrevocable arrangements
satisfactory to the Indenture Trustee for the giving of notice of
redemption by the Company to the Indenture Trustee in the name,
and at the expense, of the Company, and the Company has
irrevocably deposited or caused to be deposited with the
Indenture Trustee (in the case of Debentures that have become due
and payable) funds in trust for such purpose in an amount
sufficient (without regard to investment of such amount
deposited) to pay and discharge the entire indebtedness on the
Debentures not theretofore delivered to the Indenture Trustee for
cancellation, for principal (and premium, if any) and interest
(including Additional Interest and Additional Sums, if any) to
the date of such deposit (in the case of Debentures that have
become due and payable) or to the Stated Maturity, as the case
may be, or
(C) have been redeemed or tendered for conversion;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Indenture Trustee an Officer's
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, (i)
the obligations of the Company to the Indenture Trustee under Section 6.7 and
the obligations of the Company to any Authenticating Agent under Section 6.14,
(ii) the conversion provisions contained in Article 13 and the redemption
provisions of Article 11 prior to the Redemption Date or date of Maturity, and
(iii) if money shall have been deposited with the Indenture Trustee pursuant to
subclause (ii) of clause (a) of this Section, the obligations of the Indenture
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2 APPLICATION OF TRUST MONEY. Subject to the provisions of
the last paragraph of Section 10.3, all money deposited with the Indenture
Trustee pursuant to Section 4.1 shall be held in trust and applied by the
Indenture Trustee, in accordance with the provisions of the Debentures and this
Indenture, to the payment, either directly or through any
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Paying Agent (including the Company acting as its own Paying Agent) as the
Indenture Trustee may determine, to the Persons entitled thereto, of the
principal (and premium, if any) and interest (including Additional Interest and
Additional Sums, if any) for whose payment such money has been deposited with or
received by the Indenture Trustee; provided, however, that if any Debenture is
converted after the deposit of money with the Indenture Trustee pursuant to
Section 4.1, the Indenture Trustee shall pay over to the Company out of the
money so deposited an amount equal to the money deposited in respect of the
Debenture so converted and not previously paid with respect to the Debenture so
converted; and provided, further, such money need not be segregated from other
funds maintained by the Indenture Trustee except to the extent required by law.
If the Indenture Trustee or Paying Agent is unable to apply any money in
accordance with Section 4.1 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Debentures shall be revived and reinstated as
though no deposit had occurred pursuant to Section 4.1 until such time as the
Indenture Trustee or Paying Agent is permitted to apply all such money in
accordance with the first sentence of this Section 4.2; provided, however, that
if the Company has made any payment of interest on or principal of any Debenture
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Debentures to receive such payment from the
assets held by the Indenture Trustee or Paying Agent.
ARTICLE 5.
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT. "Event of Default," wherever used
herein with respect to the Debentures, means any one of the following events:
(a) failure to pay any interest upon the Debentures, including any
Additional Interest and any Additional Sums, if any, in respect thereof, when
such amounts become due and payable and continuance of such failure for a period
of 30 days (unless such interest payment is subject to deferral in the case of
an Extension Period or to any prohibition on the payment of interest hereunder,
including, without limitation, as a result of the subordination provisions of
Article 12); or
(b) failure to pay any principal of (or premium, if any, on) the
Debentures when due and payable, whether at Maturity, upon redemption,
acceleration or otherwise, unless such payment is prohibited hereunder,
including, without limitation, as a result of the subordination provisions of
Article 12; or
(c) failure to observe or perform in any material respect any other
covenants or agreements of the Company contained in the Debentures or contained
in this Indenture and continuance of such failure for a period of 60 days after
the date on which written notice of such failure shall have been given to the
Company by the Indenture Trustee, or to the Company and the Indenture Trustee by
Holders of at least a majority in aggregate principal amount of the Debentures
at the time Outstanding or the Holders of at least a
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majority in aggregate liquidation amount of the Preferred Securities at the time
outstanding; or
(d) the dissolution, winding up or termination of the Trust, except in
connection with the distribution of Debentures or the making of a full
Liquidation Distribution (as defined in the Declaration) to the holders of Trust
Securities in liquidation of the Trust, upon the redemption, conversion or
exchange of all the outstanding Trust Securities, upon certain mergers,
consolidations or amalgamations permitted by Section 9.5 of the Declaration or
in any other manner permitted under the Declaration; or
(e) the entry by a court of competent jurisdiction of (i) a decree or
order for relief in respect of the Company in an involuntary case or proceeding
under United States bankruptcy laws, as now or hereafter constituted, or any
other applicable federal, state or foreign bankruptcy, insolvency or other
similar law or (ii) a decree or order adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of, or in respect of, the Company under
United States bankruptcy laws, as now or hereafter constituted, or any other
applicable federal, state or foreign bankruptcy, insolvency or similar law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of the property
or assets of the Company, or ordering the winding-up or liquidation of the
affairs of the Company, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for a period of
180 consecutive days; or
(f) (i) the commencement by the Company of a voluntary case or
proceeding under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable federal, state or foreign bankruptcy, insolvency or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent; or (ii) the consent by the Company to the entry of a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under United States bankruptcy laws, as now or hereafter constituted,
or any other applicable federal, state or foreign bankruptcy, insolvency, or
other similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company; or (iii) the filing by the Company of a petition
or answer or consent seeking reorganization or relief under United States
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal, state or foreign bankruptcy, insolvency or other similar law; or (iv)
the consent by the Company to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of the Company or of any substantial part of
the property or assets of the Company, or the making by the Company of an
assignment for the benefit of creditors; or (v) the taking of corporate action
by the Company in furtherance of any such action.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default occurs and is continuing, then and in every such case the
Indenture Trustee or the Holders of not less than a majority in aggregate
principal amount of the
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Outstanding Debentures may declare the aggregate principal amount of all the
Outstanding Debentures to be due and payable, by a notice in writing to the
Company (and to the Indenture Trustee if given by Holders) specifying the
respective Event of Default and that it is a "NOTICE OF DEFAULT"; provided,
however, that, if upon an Event of Default, the Indenture Trustee or the Holders
of not less than a majority in aggregate principal amount of the Outstanding
Debentures fail to declare the principal of all the Debentures to be immediately
due and payable, the holders of at least a majority in aggregate liquidation
amount of the Preferred Securities then outstanding shall have the right to make
the declaration by such notice in writing to the Company and the Indenture
Trustee; and upon any such notice such principal amount of (including premium,
if any) and the accrued and unpaid interest (including Additional Interest and
Additional Sums, if any), on all the Debentures then Outstanding shall become
immediately due and payable, provided that the payment of principal (including
premium, if any) and interest (including Additional Interest and Additional
Sums, if any), on the Debentures shall remain subordinated to the extent
provided in Article 12.
The Holders of a majority in principal amount of the Debentures then
Outstanding (by notice to the Company and the Indenture Trustee) may rescind and
cancel a declaration of acceleration and its consequences if (i) the rescission
would not conflict with any judgement or decree of a court of competent
jurisdiction, (ii) all existing Events of Default have been cured or waived,
except non-payment of the principal of or interest (including Additional
Interest and Additional Sums, if any) on the Debentures which have become due
solely by such declaration of acceleration, (iii) to the extent the payment of
such interest is lawful, interest (at the rate specified in the Debentures) on
overdue installments of interest and overdue payments of principal (which
default interest shall only accrue with respect to any interest payment period,
or part thereof, or with respect to any payment of principal upon Maturity,
occurring from and after the Liquidation Date), which has become due otherwise
than by such declaration of acceleration, has been paid or a sum sufficient to
pay such interest has been deposited with the Indenture Trustee, (iv) the
Company has paid the Indenture Trustee its reasonable compensation and
reimbursed the Indenture Trustee for its expenses, disbursements and advances
and (v) in the event of the cure or waiver of a Default or Event of Default of
the type described in Section 5.1(e) or (f), the Indenture Trustee shall have
received an Officer's Certificate and an Opinion of Counsel that such Default or
Event of Default has been cured or waived and the Indenture Trustee shall be
entitled to conclusively rely upon such Officer's Certificate and Opinion of
Counsel. No such rescission shall affect any subsequent default or impair any
right consequent thereon. If the holders of a majority in aggregate principal
amount of the Outstanding Debentures fail to rescind and annul such declaration
and its consequences, the holders of a majority in aggregate liquidation amount
of the Preferred Securities then outstanding shall have such right.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE. The Company covenants that if an Event of Default under
Section 5.1(a) or Section 5.1(b) occurs and is continuing, the Company will,
upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders
of the Debentures, the whole amount then due and payable on the Debentures for
principal (and premium, if any) and interest (including Additional Interest and
Additional Sums, if any), including, to the extent that
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payment of such interest shall be lawful, interest on any overdue principal (and
premium, if any) and on any overdue installments of interest (which default
interest shall only accrue with respect to any interest payment period, or part
thereof, or with respect to any payment of principal upon Maturity, occurring
from and after the Liquidation Date), in each case at the rate specified in the
Debentures, and, in addition thereto, all amounts owing the Indenture Trustee
under Section 6.7.
If the Company fails to pay such amounts forthwith upon such demand,
the Indenture Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon the Debentures
and, subject to the provisions of Article 12, collect the moneys adjudged or
decreed to be payable in the manner provided by law out of the property of the
Company or any other obligor upon the Debentures, wherever situated.
If an Event of Default occurs and is continuing, the Indenture Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders of the Debentures by such appropriate judicial proceedings as the
Indenture Trustee shall deem most effectual to protect and enforce any such
rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 5.4 INDENTURE TRUSTEE MAY FILE PROOFS OF CLAIM. The Indenture
Trustee may file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Indenture Trustee, its agents and counsel) and the Holders
allowed in any judicial proceedings relative to the Company (or any other
obligor upon the Debentures), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same after
deduction of its reasonable charges and expenses to the extent that any such
charges and expenses are not paid out of the estate in any such proceedings, and
any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Indenture Trustee, and in the event that the
Indenture Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Indenture Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel, and any other amounts due the Indenture Trustee under
Section 6.7 hereof.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Debentures or the rights of any Holder thereof, or to authorize the Indenture
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 5.5 INDENTURE TRUSTEE MAY ENFORCE CLAIM WITHOUT POSSESSION OF
DEBENTURES. All rights of action and claims under this Indenture or the
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Debentures may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Debentures or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Indenture Trustee
shall be brought in its own name as a trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of all the amounts
owing the Indenture Trustee (and any predecessor Indenture Trustee) under
Section 6.7, its agents and counsel, be for the ratable benefit of the Holders
of the Debentures in respect of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED. Any money or property
collected or to be applied by the Indenture Trustee with respect to the
Debentures pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Indenture Trustee, and, in case of the
distribution of such money or property on account of principal (or premium, if
any) or interest (including Additional Interest and Additional Sums, if any),
upon presentation of the Debentures and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the holders of Senior Debt in accordance with the terms of
Article 12,
SECOND: To the payment of all amounts due the Indenture Trustee and
any predecessor Indenture Trustee under Section 6.7,
THIRD: To the payment of the amounts then due and unpaid upon the
Debentures for principal (and premium, if any) and interest (including
Additional Interest and Additional Sums, if any), in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on the Debentures
for principal (and premium, if any) and interest (including Additional Interest
and Additional Sums, if any), respectively; and
FOURTH: The balance, if any, to the Company or other Person or Persons
entitled thereto.
SECTION 5.7 LIMITATION ON SUITS. No Holder of the Debentures,
including any holder of Preferred Securities acting to enforce the rights of the
Property Trustee as a Holder of the Debentures pursuant to Section 6.8 of the
Declaration, shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture or for the appointment of a receiver,
assignee, trustee, liquidator, sequestrator (or other similar official), or for
any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) if the Trust is not the sole Holder of the Outstanding Debentures,
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Debentures shall have made written request to the Indenture Trustee
to institute proceedings in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
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(c) such Holder or Holders have offered and, if requested, provided to
the Indenture Trustee security and/or indemnity reasonably satisfactory to the
Indenture Trustee against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been given
to the Indenture Trustee during such 60-day period by the Holders of a majority
in aggregate principal amount of the Outstanding Debentures or by the holders of
a majority in aggregate liquidation amount of the outstanding Preferred
Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of any provision
of, this Indenture to affect, disturb or prejudice the rights of any other
Holders of the Debentures, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the
Holder of any Debenture shall have the right which is absolute and unconditional
to receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest (including any Additional Interest and Additional Sums, if
any) on such Debenture on the Maturity or to convert such Debenture in
accordance with Article 13 and to institute suit for the enforcement of any such
payment and right to convert, and such right shall not be impaired without the
consent of such Holder. For so long as any Preferred Securities remain
Outstanding, to the fullest extent permitted by law and subject to the terms of
this Indenture and the Declaration, upon an Event by Default specified in
Sections 5.1(a) or 5.1(b), any holder of Preferred Securities shall have the
right to institute a proceeding directly against the Company for enforcement of
payment to such holder of the principal amount of or interest on Debentures
having a principal amount equal to the liquidation preference of the Preferred
Securities of such holder (a "DIRECT ACTION"). Notwithstanding any payment made
to such holder of Preferred Securities by the Company in connection with a
Direct Action, the Company shall remain obligated to pay the principal of or
interest on the Debentures held by the Trust or the Property Trustee. In
connection with any such Direct Action, the Company will be subrogated to the
rights of any holder of the Preferred Securities to the extent of any payment
made by the Company to such holder of Preferred Securities as a result of such
Direct Action. Except as set forth in this Article, the other holders of
Preferred Securities shall have no right to exercise directly any other rights
or remedy available to the Holders of or in respect of, the Debentures.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
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 Indenture
Trustee or to such Holder, then and in every such case the
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Company, the Indenture Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Holders shall continue as though no such proceeding
had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided in Section 3.6, no right or remedy herein conferred upon or reserved to
the Indenture Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Indenture Trustee or of any Holder of the Debentures 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
Indenture Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Indenture Trustee or by the Holders, as
the case may be.
SECTION 5.12 CONTROL BY HOLDERS. The Holders of a majority in
principal amount of the Outstanding Debentures shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Indenture Trustee or exercising any trust or power conferred on the
Indenture Trustee, with respect to the Debentures, provided that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee which is not inconsistent with such direction; and
(c) subject to the provisions of Section 6.1, the Indenture Trustee
shall have the right to decline to follow such direction if the Indenture
Trustee in good faith shall, by a Responsible Officer or Responsible Officers of
the Indenture Trustee, determine that the proceeding so directed would be
unjustly prejudicial to the Holders not joining in any such direction or would
involve the Indenture Trustee in personal liability.
SECTION 5.13 WAIVER OF PAST DEFAULTS. Subject to Section 9.2 hereof,
the Holders of not less than a majority in principal amount of the Outstanding
Debentures may on behalf of the Holders of all the Debentures waive any existing
Event of Default or Default hereunder or compliance with any provision of this
Indenture or the Debentures. Upon any such waiver, such Event of Default or
Default shall cease to exist, and any Event of Default arising
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therefrom shall be deemed to have been cured, for every purpose of this
Indenture, but no such waiver shall extend to any subsequent or other Event of
Default or Default or impair any right consequent thereon. If the Holders of a
majority in aggregate principal amount of the Outstanding Debentures fail to
waive such Event of Default, the Holders of a majority in aggregate liquidation
amount of the outstanding Preferred Securities shall have such right.
SECTION 5.14 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Debenture 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 Indenture Trustee for any action taken or omitted by it as Indenture
Trustee, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Indenture Trustee or to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 25% in principal amount of the Outstanding Debentures.
ARTICLE 6.
THE INDENTURE TRUSTEE
SECTION 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default,
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture, and
no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture, but in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Indenture Trustee, the
Indenture Trustee shall be under a duty to examine the same to
determine whether or not on their face they conform to the
requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Indenture Trustee from liability for its own negligent action, its own negligent
failure to act or its own willful misconduct except as follows:
(i) this subsection shall not be construed to limit the effect of
subsection (a) or (b) of this Section;
(ii) the Indenture 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 Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of Holders pursuant to Section 5.12
relating to the time, method and place of conducting any proceeding
for any remedy available to the Indenture Trustee, or exercising any
trust or power conferred upon the Indenture Trustee, under this
Indenture.
(d) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if the Indenture Trustee reasonably believes that repayment of
such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Indenture Trustee shall be subject to the provisions
of this Section.
SECTION 6.2 NOTICE OF DEFAULTS. Within 30 days after a Responsible
Officer of the Indenture Trustee obtains actual knowledge of the occurrence of
any Event of Default or Default hereunder, the Indenture Trustee shall transmit
by mail to all Holders of Debentures, as their names and addresses appear in the
Securities Register, notice of such Event of Default or Default hereunder known
to the Indenture Trustee, unless such Default shall have been cured or waived;
provided, however, that, except in the case of an Event of Default or Default in
the payment of the principal of (or premium, if any) or interest (including
Additional Interest and Additional Sums, if any) on any Debenture, the Indenture
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Indenture Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of Debentures;
provided, further, that, except in the case of any Event of Default or Default
of the character specified in Section 5.1(c), no such notice to Holders of the
Debentures shall be given until at least 30 days after the occurrence thereof.
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SECTION 6.3 CERTAIN RIGHTS OF INDENTURE TRUSTEE. Subject to the
provisions of Section 6.1:
(a) the Indenture Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Indenture
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Indenture Trustee
(unless other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officer's Certificate and an Opinion of
Counsel;
(d) the Indenture Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Indenture Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Indenture Trustee security and/or indemnity reasonably
satisfactory to the Indenture Trustee against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Indenture Trustee is not required to expend or risk its own
funds or otherwise incur personal financial liability in the performance of its
duties if the Indenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
(g) the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
indenture, Debenture or other paper or document, but the Indenture Trustee in
its discretion may make such inquiry or investigation into such facts or matters
as it may see fit, and, if the Indenture Trustee shall determine to make such
inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
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(h) the Indenture 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 Indenture Trustee shall not be responsible for any
misconduct or negligence on any part of any agent or attorney appointed with due
care by it hereunder.
(i) the Indenture Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith, without negligence and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures, except the Indenture
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Indenture Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Indenture Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Debentures. Neither the Indenture Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company of the Debentures or the
proceeds thereof.
SECTION 6.5 MAY HOLD DEBENTURES. The Indenture Trustee, any Paying
Agent, any Securities Registrar, any Authenticating Agent or any other agent of
the Company, in its individual or any other capacity, may become the owner or
pledgee of Debentures and, subject to Sections 6.8 and 6.13, may otherwise deal
with the Company with the same rights it would have if it were not Indenture
Trustee, Paying Agent, Securities Registrar, Authenticating Agent or such other
agent.
SECTION 6.6 MONEY HELD IN TRUST. Money held by the Indenture Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Indenture Trustee shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company.
SECTION 6.7 COMPENSATION AND REIMBURSEMENT. The Company agrees as
follows:
(a) to pay to the Indenture Trustee from time to time such
compensation for all services rendered by it hereunder in such amounts as the
Company and the Indenture Trustee shall agree in writing from time to time
(which compensation shall not be limited by any provision of law in regard to
the compensation of an Indenture Trustee of an express trust);
(b) to reimburse the Indenture Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Indenture Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its agents and
counsel) in connection with the Indenture Trustee's discharge of its duties
hereunder; and
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(c) to the fullest extent permitted by law to indemnify the Indenture
Trustee (including in its individual capacity) for, and to hold it harmless
against, any loss, liability, damage, claim or expense (including the reasonable
compensation and expenses and disbursements of its agents and counsel), to the
extent incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this Indenture or the
performance of its duties hereunder, including the reasonable costs and expenses
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The Indenture
Trustee shall notify the Company in writing promptly of any claim asserted
against it for which it may seek indemnity. However, the failure by the
Indenture Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Indenture Trustee shall have a lien prior
to the Debentures on all money or property held or collected by the Indenture
Trustee except assets held in trust to pay principal and premium, if any, or
interest on particular Debentures or pursuant to any redemption pursuant to
Article 11 hereof if monies have been deposited for such redemption and notice
has been given and the Redemption Date has passed. Such lien shall survive the
satisfaction and discharge of this Indenture.
When the Indenture Trustee incurs expenses or renders services after
an Event of Default specified in Section 5.1(e) or (f) occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy law or a successor statute.
The provisions of this Section 6.7 shall survive the discharge or
termination of this Indenture and shall survive the resignation or removal of
the Indenture Trustee.
SECTION 6.8 DISQUALIFICATION; CONFLICTING INTERESTS. The Indenture
Trustee shall be subject to the provisions of Section 310(b) of the Trust
Indenture Act. Nothing herein shall prevent the Indenture Trustee from filing
with the Commission the application referred to in the second to last paragraph
of Section 310(b) of the Trust Indenture Act. The Declaration and the Guarantee
shall be deemed to be specifically described in this Indenture for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
SECTION 6.9 CORPORATE INDENTURE TRUSTEE REQUIRED; ELIGIBILITY. There
shall at all times be a Indenture Trustee hereunder which shall be as follows:
(a) a corporation, banking corporation, national banking association
or other Person organized and doing business under the laws of the United States
of America or of any state, territory or the District of Columbia, authorized
under such laws to exercise corporate trust powers and subject to supervision or
examination by federal, state, territorial or District of Columbia authority; or
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(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Indenture Trustee
pursuant to a rule, regulation or order of the Commission, authorized under such
laws to exercise corporate trust powers, and subject to supervision or
examination by authority of such foreign government or a political subdivision
thereof substantially equivalent to supervision or examination applicable to
United States institutional Indenture Trustees;
in either case having a combined capital and surplus of at least $10,000,000,
subject to supervision or examination by federal or state authority. If such
corporation, banking corporation, national banking association or other Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then, for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Indenture Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article. Neither the Company nor any Affiliate of the Company shall
serve as Indenture Trustee hereunder.
SECTION 6.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 6.11.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Indenture Trustee shall not have been delivered to the Indenture Trustee, with a
copy for the Company, within 30 days after the giving of such notice of
resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by Act of the
Holders of a majority in principal amount at Stated Maturity of the Outstanding
Debentures, delivered to the Indenture Trustee and to the Company.
(d) If at any time:
(i) the Indenture Trustee shall fail to comply with Section 6.8
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Debenture for at least six months, or
(ii) the Indenture Trustee shall cease to be eligible under
Section 6.9 and shall fail to resign after written request therefor by
the Company or by any such Holder, or
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(iii) the Indenture Trustee shall become incapable of acting or
shall be adjudged as bankrupt or insolvent or a receiver of the
Indenture Trustee or of its property shall be appointed or any public
officer shall take charge or control of the Indenture Trustee or of
its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Indenture Trustee, or (B) subject to Section 5.14, any Holder who has been a
bona fide Holder of a Debenture for at least six months may, on behalf of
himself and all other similarly situated Holders, petition any court of
competent jurisdiction for the removal of the Indenture Trustee and the
appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Indenture
Trustee for any cause, the Company, by a Board Resolution, shall promptly
appoint a successor Indenture Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Indenture Trustee with respect to the Debentures shall be appointed by
Act of the Holders of a majority in principal amount of the Outstanding
Debentures delivered to the Company and the retiring Indenture Trustee, the
successor Indenture Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Indenture Trustee and supersede the
successor Indenture Trustee appointed by the Company. If no successor Indenture
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Debenture for at least six months may, subject to Section 5.14,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Indenture Trustee and each appointment of a successor Indenture Trustee
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of the Debentures as their name and addresses appear in the
Securities Register. Each notice shall include the name of the successor
Indenture Trustee and the address of its Corporate Trust Office.
SECTION 6.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Indenture
Trustee, every such successor Indenture Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Indenture Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Indenture
Trustee, but, on the request of the Company or the successor Indenture Trustee,
such retiring Indenture Trustee shall, upon payment of all amounts
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then due under Section 6.7, execute and deliver an instrument transferring to
such successor Indenture Trustee all the rights, powers and trusts of the
retiring Indenture Trustee and shall duly assign, transfer and deliver to such
successor Indenture Trustee all property and money held by such retiring
Indenture Trustee hereunder, subject however to its lien, if any, provided for
in Section 6.7.
(b) Upon request of any such successor Indenture Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Indenture Trustee all rights, power and trusts
referred to in paragraph (a) of this Section.
(c) No successor Indenture Trustee shall accept its appointment unless
at the time of such acceptance such successor Indenture Trustee shall be
qualified and eligible under this Article.
SECTION 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation, banking corporation, national banking association or
other Person into which the Indenture Trustee may be merged or converted or with
which it may be consolidated, or any corporation, banking corporation, national
banking association or other Person resulting from any merger, conversion or
consolidation to which the Indenture Trustee shall be a party, or any
corporation, banking corporation, national banking association or other Person
succeeding to all or substantially all of the corporate trust business of the
Indenture Trustee, shall be the successor of the Indenture Trustee hereunder;
provided, however, that such corporation, banking corporation, national banking
association or other Person shall be otherwise qualified and eligible under this
Article and the Trust Indenture Act, without the execution or filing of any
paper or any further act on the part of any of the parties hereto. In case any
Debentures shall have been authenticated, but not delivered, by the Indenture
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Indenture Trustee may adopt such authentication and deliver
the Debentures so authenticated, and in case any Debentures shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Debentures either in the name of any predecessor Indenture Trustee or in the
name of such successor Indenture Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Debentures or in this Indenture that the certificate of the Indenture Trustee
shall have.
SECTION 6.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and
when the Indenture Trustee shall be or become a creditor of the Company (or any
other obligor upon the Debentures), the Indenture Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.14 APPOINTMENT OF AUTHENTICATING AGENT. The Indenture
Trustee may appoint an Authenticating Agent or Agents with respect to the
Debentures which shall be authorized to act on behalf of the Indenture Trustee
to authenticate the Debentures issued upon original issue, exchange,
registration of transfer or partial redemption or conversion thereof,
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and Debentures 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 Indenture Trustee hereunder. Wherever reference is made in this Indenture
to the authentication and delivery of Debentures by the Indenture Trustee or the
Indenture Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Indenture Trustee
by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation, banking corporation, national
banking association or other Person organized and doing business under the laws
of the United States of America, or of any state, territory or the District of
Columbia, authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than $10,000,000 and subject to
supervision or examination by federal or state authority. 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
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, banking corporation, national banking association or
other Person into which an Authenticating Agent may be merged or converted or
with which it may be consolidated, or any corporation, banking corporation,
national banking association or other Person resulting from any merger,
conversion or consolidation to which such Authenticating Agent shall be a party,
or any corporation, banking corporation, national banking association or other
Person succeeding to all or substantially all of the corporate trust business of
an Authenticating Agent, shall be the successor Authenticating Agent hereunder;
provided, however, that such corporation, banking corporation, national banking
association or other Person shall be otherwise eligible under this Section,
without the execution or filing of any paper or any further act on the part of
the Indenture Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Indenture Trustee and to the Company. The Indenture
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and to the Company.
Upon receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Indenture Trustee may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment in the manner provided in
Section 1.6 to all Holders of the Debentures. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
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If an appointment is made pursuant to this Section, the Debentures may
have endorsed thereon, in addition to the Indenture Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Debentures referred to in the within-mentioned
Indenture.
Dated:
-----------------------------
American Stock Transfer & Trust Company
As Indenture Trustee
By:
------------------------------------
As Authenticating Agent
By:
------------------------------------
Authorized Signatory
ARTICLE 7.
HOLDERS LISTS AND REPORTS BY INDENTURE TRUSTEE AND COMPANY
SECTION 7.1 COMPANY TO FURNISH NAMES AND ADDRESSES OF HOLDERS. The
Company will furnish or cause to be furnished to the Indenture Trustee the
following:
(a) quarterly at least five Business Days before each Interest Payment
Date, a list, in such form as the Indenture Trustee may reasonably require, of
the names and addresses of the Holders as of the related Regular Record Date;
and
(b) at such other times as the Indenture Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished; excluding from any such list names and addresses
received by the Indenture Trustee in its capacity as Securities Registrar.
SECTION 7.2 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Indenture Trustee as provided in Section 7.1 and
the names and addresses of Holders received by the Indenture Trustee in its
capacity as Securities Registrar. The
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Indenture Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and the
corresponding rights and privileges of the Indenture Trustee, shall be as
provided in the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Indenture Trustee that neither the Company nor
the Indenture Trustee nor any agent of either of them shall be held accountable
by reason of the disclosure of information as to the names and addresses of the
Holders made pursuant to the Trust Indenture Act.
SECTION 7.3 REPORTS BY INDENTURE TRUSTEE.
(a) The Indenture Trustee shall transmit to Holders such reports
concerning the Indenture Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act, at the times and in the manner
provided pursuant thereto.
(b) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than May 15 in each calendar
year, commencing with the first May 15 after the first issuance of Debentures
under this Indenture.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Indenture Trustee with each stock exchange or self
regulatory organization upon which the Debentures are listed and also with the
Commission. The Company will notify the Indenture Trustee whenever the
Debentures are listed on any stock exchange or self-regulatory organization.
SECTION 7.4 REPORTS BY COMPANY. The Company shall file with the
Indenture Trustee and with the Commission, and transmit to Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided in the Trust Indenture Act, provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act shall be filed with the
Indenture Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company shall continue to file with the Commission and provide the
Indenture Trustee and Holders with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act (without exhibits). The Company also shall comply with the other
provisions of Section 314(a) of the Trust Indenture Act and shall provide the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act; and such compliance certificate shall be delivered on or before
120 days after the end of each calendar year.
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ARTICLE 8.
CONSOLIDATION, MERGER, CONTINUANCE,
CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Company shall not, in a single transaction or series of related transactions,
consolidate with or merge into any other Person, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets to any Person, or adopt a plan of liquidation, unless:
(a) either (i) the Company is the survivor of such merger or
consolidation or (ii) the surviving or transferee Person is an entity organized
and existing under the laws of the United States of America or any state or the
District of Columbia, and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, all the obligations of the Company under the Debentures
and this Indenture;
(b) immediately after giving effect to such transaction, no Event of
Default and no Default shall have occurred and be continuing;
(c) such transaction is permitted under the Declaration and Guarantee
and does not give rise to any breach or violation of the Declaration or
Guarantee; and
(d) the Company has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such transaction and any
such supplemental indenture comply with this Article and that all conditions
precedent herein relating to such transaction have been complied with, and the
Indenture Trustee, subject to Section 6.1, may rely upon such Officer's
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 8.1.
SECTION 8.2 SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation or
merger by the Company with or into any other Person, or any disposition of all
or substantially all of the assets of the Company in accordance with Section
8.1, the successor Person formed by such consolidation or into which the Company
is merged or to which such disposition is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; and thereafter the predecessor Company shall be
discharged from all obligations and covenants under the Indenture and the
Debentures.
Such successor Person 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 Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Indenture Trustee, and, upon the Company Order of such
successor Person instead of the Company and subject to all the terms, conditions
and limitations in this Indenture, the Indenture Trustee shall authenticate and
shall
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make available for delivery any Debentures which previously shall have been
signed and delivered by the officers of the Company to the Indenture Trustee for
authentication pursuant to such Company Order and such provisions and any
Debentures which such successor Person thereafter shall cause to be signed and
delivered to the Indenture Trustee on its behalf for the purpose pursuant to
such provisions. All the Debentures so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Debentures theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Debentures had been issued at the date of the execution hereof.
In case of any such transaction described above, such changes in
phraseology and form may be made in the Debentures thereafter to be issued as
may be appropriate and reasonably agreed to by the successor Person and the
Indenture Trustee.
ARTICLE 9.
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of or notice to any Holder, the Company, when authorized by
a Board Resolution, and the Indenture Trustee, at any time and from time to
time, may modify, waive any provision of, amend or supplement this Indenture or
the Debentures for any of the following purposes:
(a) to comply with Section 8.1 hereof; or
(b) to convey, transfer, assign, mortgage or pledge any property to or
with the Indenture Trustee; or
(c) to cure any ambiguity, defect, omission or inconsistency; or
(d) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Article 13; or
(e) to make any other change that does not materially adversely affect
the interest and rights of the Holders of Debentures and, for so long as any of
the Preferred Securities shall remain outstanding, the holders of such Preferred
Securities; or
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor Indenture Trustee 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 Trust hereunder by more than one Indenture Trustee,
pursuant to the requirements of Section 6.11(b); or
(g) to comply with the requirements of the Commission under the Trust
Indenture Act; or
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(h) to make provision for any matters required pursuant to Section 3.5
or otherwise necessary, desirable or appropriate in connection with the issuance
of Debentures to holders of Trust Securities in the event of a distribution of
Debentures by the Trust if a Special Event occurs and is continuing.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. The
Company and the Indenture Trustee may modify, amend, waive any provision of or
supplement this Indenture with the written consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Debentures
without notice to any Holder. The Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures may waive compliance in
a particular instance by the Company with any provision of this Indenture or the
Debentures without notice to any Holder. However, without the consent of each
Holder affected, an amendment, supplement or waiver, including a waiver pursuant
to Section 5.13, may not:
(a) except to the extent permitted by Section 3.11 with respect to the
extension of the interest payment period of the Debentures, extend the Stated
Maturity of the principal of, or any installment of interest (including any
Additional Interest) on, the Debentures, or reduce the principal amount thereof
or the rate of interest thereon or reduce any premium payable upon the
redemption thereof, or change the place of payment where, or the coin or
currency in which, any Debenture or interest thereon is payable; or
(b) materially and adversely affect any right to convert or exchange
any Debenture, including increasing the conversion price of any Debenture; or
(c) reduce the amount of Debentures whose Holders must consent to an
amendment, modification, waiver of any provision or supplement of this Indenture
or the Debentures; or
(d) modify any of the provisions of this Section, Section 5.8 or
Section 5.13; or
(e) modify the provisions in Article 12 of this Indenture with respect
to the subordination of Outstanding Debentures in a manner materially adverse to
the Holders thereof;
provided, however, that, so long as any Preferred Securities remain outstanding,
no such amendment, modification or supplement of the Indenture that materially
adversely affects the holders of the Preferred Securities shall be entered into,
no termination of this Indenture shall occur and no waiver under this Indenture
shall be effective, without the prior consent of the holders of at least a
majority of the aggregate liquidation amount of such Preferred Securities then
outstanding unless and until the principal (and premium, if any) of the
Debentures and all accrued and unpaid interest (including Additional Interest
and Additional Sums, if any) thereon have been paid in full; provided, however,
that where a consent under the Indenture would require the consent of each
Holder of Debentures affected thereby, no such consent shall be given by the
Property Trustee without the prior consent of each holder of Preferred
Securities.
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After a modification, amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the Holders a notice
briefly describing the modification, amendment, supplement or waiver. 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 modification,
amendment, supplement or waiver.
It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, modification,
supplement or waiver, but it shall be sufficient if such consent shall approve
the substance thereof.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. The Indenture
Trustee is hereby authorized to join with the Company in the execution of any
supplemental indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations which may be
therein contained. In executing or accepting the additional trusts created by
any supplemental indenture permitted by this Article or the modifications
thereby of the trust created by this Indenture, the Indenture Trustee shall be
entitled to receive, and (subject to Section 6.1) shall be fully protected in
relying upon, an Officer's Certificate and an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture, and that all conditions precedent have been complied with. The
Indenture Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Indenture Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes, and every Holder of the Debentures theretofore
or thereafter authenticated and delivered hereunder shall be bound thereby
unless it makes a change described in any of clauses (a) through (e) of Section
9.2, in which case the supplemental indenture shall bind only each Holder of a
Debenture who has consented to it and every subsequent Holder of a Debenture or
portion of a Debenture that evidences the same Debt as the consenting Holder's
Debenture.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 9.6 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Company,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and made available for delivery by the Indenture Trustee in
exchange for Outstanding Debentures presented to the Indenture Trustee. Any
failure to make the appropriate notation shall not affect the validity of such
Debenture.
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ARTICLE 10.
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company
shall, subject to Article 12 and Section 3.11, pay the principal of and interest
(including Additional Interest and Additional Sums, if any) on the Debentures on
the dates and in the manner provided in the Debentures and this Indenture. An
installment of principal or interest shall be considered paid on the date it is
due if the Indenture Trustee or Paying Agent holds on that date money designated
for and sufficient to pay such installment and is not prohibited from paying
such money to the Holders on that date pursuant to Article 12.
The Company shall, subject to Article 12, pay interest on overdue
principal (including post-petition interest in a proceeding under any bankruptcy
law) and overdue interest, to the extent lawful, at the rate specified in the
Debentures (which default interest shall only accrue with respect to any
interest payment period, or part thereof, or with respect to any payment of
principal upon Maturity, occurring from and after the Liquidation Date).
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain in the United States an office or agency where Debentures may be
presented or surrendered for payment and an office or agency where Debentures
may be surrendered for transfer or exchange and where notices and demands to or
upon the Company in respect of the Debentures and this Indenture may be served.
The Company initially appoints the Indenture Trustee, acting through its
Corporate Trust Office, as its agent for said purposes. The Company will give
prompt written notice to the Indenture Trustee of any change in the location of
any such office or agency. If at any time the Company shall fail to maintain
such office or agency or shall fail to furnish the Indenture Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Indenture Trustee, and the
Company hereby appoints the Indenture Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Debentures may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
United States for such purposes. The Company will give prompt written notice to
the Indenture Trustee of any such designation and any change in the location of
any such office or agency.
SECTION 10.3 MONEY FOR DEBENTURE PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent with respect to the
Debentures, it will, on or before each due date of the principal of (and
premium, if any) or interest on any of the Debentures, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest (including Additional Interest
and Additional Sums, if any) so becoming due until such sums shall be paid to
such Persons or
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otherwise disposed of as herein provided, and will promptly notify the Indenture
Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, on
or before 10:00 a.m. New York City time on each due date of the principal of or
interest on the Debentures, deposit with a Paying Agent a sum sufficient to pay
the principal (and premium, if any) or interest (including Additional Interest
and Additional Sums, if any) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal and premium (if any) or
interest, and (unless such Paying Agent is the Indenture Trustee) the Company
will promptly notify the Indenture Trustee of its failure so to act.
The Company will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest (including Additional Interest and Additional Sums,
if any) on Debentures in trust for the benefit of the Persons entitled thereto
until such sums shall be paid to such Persons or otherwise disposed of as herein
provided;
(b) give the Indenture Trustee notice of any default by the Company
(or any other obligor upon the Debentures) in the making of any payment of
principal (and premium, if any) or interest (including Additional Interest and
Additional Sums, if any);
(c) at any time during the continuance of any such default, upon the
written request of the Indenture Trustee, forthwith pay to the Indenture Trustee
all sums so held in trust by such Paying Agent; and
(d) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent.
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 Indenture Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by
the Indenture 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 the Company
or any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Indenture Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Debenture and remaining unclaimed for two
years after such principal (and premium, if any) or interest has become due and
payable shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be paid on Company Request,
after all payments owing the Indenture Trustee have been paid, to the Company or
(if then held by the
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Company) shall (unless otherwise required by mandatory provision of applicable
escheat or abandoned or unclaimed property law) be discharged from such trust;
and the Holder of such Debenture shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Indenture 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 Indenture 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 City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days after the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company.
SECTION 10.4 EXISTENCE. Subject to Article 8, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence.
SECTION 10.5 ADDITIONAL SUMS. In the event that (a) the Trust is the
Holder of all of the Outstanding Debentures, (b) a Tax Event in respect of the
Trust shall have occurred and be continuing and (c) the Company shall not have
terminated the Trust pursuant to Section 9.2(b) of the Declaration, the Company
shall pay to the Trust (and its permitted successors or assigns under the
Declaration) for so long as the Trust (or its permitted successor or assignee)
is the registered holder of the Debentures, such additional amounts as may be
necessary in order that the net amount of Distributions received by holders of
the outstanding Trust Securities shall not be reduced as a result of any
additional taxes, duties and other governmental charges to which the Trust has
become subject as a result of a Tax Event (the "ADDITIONAL SUMS"), unless the
Company shall have revoked such election or failed to make such payments.
Whenever in this Indenture or the Debentures there is a reference in any context
to the payment of principal of or interest on the Debentures, such mention shall
be deemed to include mention of the payments of the Additional Sums provided for
in this paragraph to the extent that, in such context, Additional Sums are, were
or would be payable in respect thereof pursuant to the provisions of this
paragraph, and express mention of the payment of Additional Sums (if applicable)
in any provisions hereof shall not be construed as excluding Additional Sums in
those provisions hereof where such express mention is not made.
SECTION 10.6 ADDITIONAL COVENANTS. The Company covenants with each
Holder of the Debentures that for so long as Preferred Securities are
outstanding (a) not to convert the Debentures except pursuant to a Notice of
Conversion delivered to the Conversion Agent by a holder of Trust Securities,
(b) to maintain directly or indirectly 100% ownership of the Common Securities
of the Trust; provided, however, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities, (c)
not to voluntarily dissolve, terminate, wind-up or liquidate the Trust, except
in accordance with the terms of the Declaration and (d) to use its reasonable
efforts, consistent with the terms and provisions of the Declaration, to cause
the Trust to remain classified as a grantor trust and not as an association
taxable as a corporation for United States federal income tax purposes.
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ARTICLE 11.
REDEMPTION OR EXCHANGE OF DEBENTURES
SECTION 11.1 ELECTION TO REDEEM; NOTICE TO INDENTURE TRUSTEE. The
election of the Company to redeem any Debentures shall be evidenced by or
pursuant to a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, not less than 30 days nor more than 60 days prior to
the date fixed for redemption (unless a shorter notice shall be satisfactory to
the Indenture Trustee), notify the Indenture Trustee in writing of such date and
of the principal amount of Debentures to be redeemed.
SECTION 11.2 SELECTION OF DEBENTURES TO BE REDEEMED. If less than all
the Debentures are to be redeemed, the particular Debentures to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Indenture Trustee from the Outstanding Debentures not previously called for
redemption. The Indenture Trustee shall select the Debentures to be redeemed, if
the Debentures are listed on a national securities exchange, in accordance with
the rules of such exchange or, if the Debentures are not so listed, on a pro
rata basis, by lot or by such other method as the Indenture Trustee shall deem
fair and appropriate and which may provide for the selection for redemption of a
portion of the principal amount of the Debentures Outstanding, provided that the
unredeemed portion of the principal amount of the Debentures be in an authorized
denomination (which shall not be less than the minimum authorized denomination)
for the Debentures.
The Indenture Trustee shall promptly notify the Company in writing of
the Debentures selected for partial redemption and the principal amount thereof
to be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures shall relate,
in the case of any Debenture redeemed or to be redeemed only in part, to the
portion of the principal amount of such Debenture which has been or is to be
redeemed. If the Company shall so direct, Debentures registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Debentures selected for redemption.
SECTION 11.3 NOTICE OF REDEMPTION. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 days, and not more
than 60 days, prior to the date fixed for redemption, to each Holder of
Debentures to be redeemed, at the address of such Holder as it appears in the
Securities Register. With respect to Debentures to be redeemed, each notice of
redemption shall state:
(a) the date fixed for such redemption (the "Redemption Date");
(b) the Redemption Price;
(c) if less than all Outstanding Debentures are to be redeemed, the
identification (and, in the case of partial redemption, the respective principle
amounts) of the particular Debentures to be redeemed (including, if relevant,
the CUSIP or ISIN number);
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(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Debenture or portion thereof, and that upon deposit
of the Redemption Price and any unaccrued and unpaid interest with the Paying
Agent, interest (including Additional Interest and Additional Sums, if any)
thereon, if any, shall cease to accrue on and after the Redemption Date;
(e) the place or places where the Debentures are to be surrendered for
payment of the Redemption Price at which the Debentures are to be redeemed;
(f) that a Holder of Debentures who desires to convert Debentures
called for redemption must satisfy the requirements for conversion contained in
the Debentures, the then existing Conversion Rate, and the date and time when
the option to convert shall expire; and
(g) the aggregate principal amount of Debentures that are being
redeemed.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Indenture Trustee in the name and at the expense of the Company. The notice if
mailed in the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the Holder receives such notice. In any case, a
failure to give such notice by mail, or any defect in the notice, to the Holder
of any Debenture designated for redemption in whole or in part shall not affect
the validity of the proceedings for the redemption of any other Debenture.
SECTION 11.4 DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m.,
New York City time, on the Redemption Date specified in the notice of redemption
given as provided in Section 11.3, the Company will deposit with the Indenture
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 10.3) an
amount of money, in immediately available funds, sufficient to pay the
Redemption Price of and accrued interest on all the Debentures so called for
redemption on the Redemption Date.
If any Debenture called for redemption has been converted, any money
deposited with the Indenture Trustee or with any Paying Agent or so segregated
and held in trust for the redemption of such Debenture shall (subject to any
right of the Holder of such Debenture or any Predecessor Debenture to receive
interest as provided in the last paragraph of Section 3.7) be paid to the
Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 11.5 DEBENTURES PAYABLE ON REDEMPTION DATE. Once the notice of
redemption described in Section 11.3 is mailed, Debentures called for redemption
become due and payable on the Redemption Date and at the Redemption Price,
including any premium, plus interest accrued to the Redemption Date (and
Additional Interest and Additional Sums, if any). Upon surrender to the Paying
Agent, such Debentures shall be paid at the Redemption Price, including any
premium, plus interest accrued to the Redemption Date (and
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Additional Interest and Additional Sums, if any); provided that if a Redemption
Date is not a Business Day, payment shall be made on the next succeeding
Business Day (and no interest shall accrue for the period from such Redemption
Date to such succeeding Business Day), except that, if such Business Day falls
in the next 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 the Redemption Date.
On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and accrued interest on Debentures called for redemption
shall have been made available in accordance with Section 11.4 and payment
thereof is not prohibited pursuant to the terms of this Indenture, the
Debentures to be redeemed will cease to accrue interest and the only right of
the Holders of such Debentures will be to receive payment of the Redemption
Price of and accrued and unpaid interest (and Additional Interest and Additional
Sums, if any) on such Debentures to the Redemption Date. Any monies deposited
with the Paying Agent pursuant to Section 11.4 and unclaimed at the end of one
year from the Redemption Date shall, to the extent permitted by law, be returned
to the Company, after which the Holders of Debentures called for redemption
shall look only to the Company for the payment thereof.
SECTION 11.6 DEBENTURES REDEEMED IN PART. Any Debenture which is to be
redeemed only in part shall be surrendered at the place of payment therefor
(with, if the Company or the Indenture Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the
Indenture Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Indenture Trustee
shall authenticate and make available for delivery to the Holder of such
Debenture without service charge, a new Debenture in principal amount at Stated
Maturity equal to and in exchange for the unredeemed portion of the principal
amount of the Debenture so surrendered. Each Debenture shall be subject to
partial redemption only in the amount of $50 or integral multiples thereof.
SECTION 11.7 OPTIONAL REDEMPTION.
(a) Subject to Section 11.7(b), the Company may not redeem the
Debentures prior to March 31, 2003. The Company, at its option, may, after March
31, 2003, redeem at any time all, or from time to time a portion, of the
Debentures on any date set by the Board of Directors, if redeemed during the
twelve-month period beginning April 1 of the year specified below, at the
following Redemption Prices (expressed as a percentage of principal amount at
Stated Maturity), together, in each case, with accrued and unpaid interest
(including Additional Interest and Additional Sums, if any) to the Redemption
Date:
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<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003........................................ 105.100%
2004........................................ 104.250%
2005........................................ 103.400%
2006........................................ 102.550%
2007........................................ 101.700%
2008........................................ 100.850%
and thereafter.............................. 100.000%
</TABLE>
Notwithstanding the foregoing, the Company shall not redeem less than all of the
Debentures at any time Outstanding until all accrued but unpaid interest
(including Additional Interest and Additional Sums, if any) upon all Debentures
then Outstanding shall have been paid.
(b) During the one-year period commencing on March 31, 2002, the
Company, at its option, may redeem at any time all, or from time to time a
portion, of the Debentures on any date set by the Board of Directors at a cash
Redemption Price of 105.95% (expressed as a percentage of principal amount at
Stated Maturity), plus accrued and unpaid interest (including Additional
Interest and Additional Sums, if any) to the Redemption Date, provided that the
product of (i) the average Closing Price of a share of Common Stock, for any 10
consecutive trading days preceding the date of such call for redemption,
multiplied by (ii) the Conversion Rate, shall have equaled or exceeded $65.00
per share. Notwithstanding the foregoing, the Company shall not redeem less than
all of the Debentures at any time Outstanding until all accrued but unpaid
interest (including Additional Interest and Additional Sums, if any) upon all
Debentures then Outstanding shall have been paid.
SECTION 11.8 EXCHANGE OF TRUST SECURITIES FOR DEBENTURES.
(a) At any time, the Company shall have the right to terminate or
dissolve the Trust and cause the Debentures to be distributed to the holders of
the Preferred Securities and the Common Securities in liquidation of the Trust
after satisfaction of the Trust's liabilities to its creditors as provided by
applicable law.
(b) If a Special Event in respect of the Trust shall occur, the
Company shall give the Property Trustee notice of the same. If a Special Event
in respect of the Trust shall occur and be continuing, the Declaration requires
the Administrative Trustees thereunder to direct the Conversion Agent (as such
terms are defined in the Declaration) to exchange all outstanding Trust
Securities for the Debentures having a principal amount at Stated Maturity equal
to the aggregate liquidation amount of the Trust Securities to be exchanged,
with accrued interest in an amount equal to any unpaid distributions (including
any Additional Sums) on the Trust Securities; provided, however, that, in the
case of a Tax Event, the Company shall have the right to direct the Property
Trustee that less than all, or none, of the Trust Securities be so exchanged if
and for so long as the Company shall have elected to pay any Additional Sums
such that the net amount received by holders of the Trust Securities not so
exchanged in respect of distributions
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thereon is not reduced as a result of such Tax Event, and shall not have revoked
any such election or failed to make such payments.
SECTION 11.9 NO SINKING FUND; REDEMPTION UPON CHANGE OF CONTROL.
(a) Subject to Section 11.9(b), the Debentures shall not be subject to
the operation of a purchase, retirement or sinking fund.
(b) If the Trust is no longer the record Holder of the Debentures,
then, in the event of a Change of Control (as hereinafter defined), the Company
will, to the extent of funds legally available therefore and subject to the
prior payment in full of all other obligations (including, without limitation,
Senior Debt) that are then due or become due as a result of such Change of
Control (or similar event), make an offer to redeem (the "CHANGE OF CONTROL
OFFER") all of the then Outstanding Debentures at a purchase price in cash equal
to 101% of the principal amount thereof, plus accrued and unpaid interest
(including Additional Interest and Additional Sums, if any) thereon, to the date
of redemption. Within 30 days following the occurrence of any Change of Control,
notice by first-class mail, postage prepaid, shall be given to each Holder of
Debentures to be redeemed at his or her last address as the same appears on the
Securities Register. Such notice shall state: (i) that a Change of Control has
occurred and that the Holders of Debentures have the right to require the
Company to redeem all or a portion of their Debentures at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest (including Additional Interest and Additional Sums, if any) thereon
(the "CHANGE OF CONTROL REDEMPTION PRICE") to the date of purchase (the "CHANGE
OF CONTROL PURCHASE DATE"), which shall be a Business Day, specified in such
notice, that is not earlier than 30 days or later than 60 days from the date
such notice is mailed; (ii) the then effective Conversion Rate; (iii) that
payment will be made upon presentation and surrender of the Debentures; (iv)
that accrued but unpaid interest (including Additional Interest and Additional
Sums, if any) thereon to the Change of Control Purchase Date will be paid; (v)
that on and after the Change of Control Purchase Date, interest will cease to
accrue on such Debentures so redeemed and (vi) such other information as is
specified in Section 11.3.
(c) Any notice of a Change of Control Offer which is mailed as herein
provided shall be conclusively presumed to have been duly given, whether or not
the Holder of the Debentures receives such notice. On or after the date fixed
for redemption as stated in such notice of a Change of Control Offer, each
Holder of Debentures electing to accept such Change of Control Offer shall
surrender the Debentures to the Company at the place designated in such notice
and shall thereupon be entitled to receive payment of the Change of Control
Redemption Price. If the Holder elects to have redeemed less than the entire
principal amount represented by any such Debentures, a new Debenture shall be
issued representing the portion of the principal amount not so redeemed.
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(d) In the event a Change of Control Offer is made to holders of
Preferred Securities under the Declaration, then, on or after the applicable
Change of Control Purchase Date with respect to the Preferred Securities, upon
the election of holders of Preferred Securities to accept such Change of Control
Offer by surrendering their certificate (or certificates) therefor, the Company
shall, subject to the provisions of Article 12, redeem Debentures in an
aggregate principal amount at Stated Maturity equal to the aggregate liquidation
amount of such Preferred Securities so redeemed, at the Change of Control
Redemption Price, plus accrued and unpaid interest thereon, in accordance with
the applicable procedures set forth in, and the terms of, Sections 11.5 and 11.6
hereof. For the purpose of this Section, the terms "Redemption Price" and
"Redemption Date," as used in Sections 11.5 and 11.6 hereof, shall be deemed to
refer to the "Change of Control Redemption Price" and the "Change of Control
Purchase Date," respectively.
ARTICLE 12.
SUBORDINATION OF DEBENTURES
SECTION 12.1 DEBENTURES SUBORDINATE TO SENIOR DEBT. The Company
covenants and agrees, and each Holder of Debentures, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article 12, all obligations represented by the Debentures
(including the payment of the principal of, premium, if any, and interest
(including Additional Interest and Additional Sums, if any) on the Debentures)
are hereby expressly made subordinate and subject in right of payment as
provided in this Article 12 to the prior indefeasible payment and satisfaction
in full in cash of all existing and future Senior Debt.
This Article 12 shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of or continue to hold
Senior Debt; and such provisions are made for the benefit of the holders of
Senior Debt; and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
SECTION 12.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, whether voluntary or involuntary, or (b) any total or partial
liquidation, dissolution or other winding-up of the Company, whether voluntary
or involuntary and whether or not involving insolvency or bankruptcy, or (c) any
general assignment for the benefit of creditors or any other marshalling of
assets or liabilities of the Company, then and in any such event:
(1) the holders of Senior Debt shall be entitled to receive payment
and satisfaction in full in cash of all amounts due on or in respect of all
Senior Debt before the Holders of the Debentures are entitled to receive or
retain any payment or distribution of any kind or character on account of
the Debentures (including, without limitation, with
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respect to principal of, premium, if any, or interest (including Additional
Interest and Additional Sums, if any)); and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Indenture Trustee would be entitled
but for the provisions of this Article 12, shall be paid by the liquidating
trustee or agent or other Person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holders of Senior Debt or their Representative
or Representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Debt may have been
issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Debt held or represented by each, to the extent
necessary to make payment in full in cash of all Senior Debt remaining
unpaid, after giving effect to any concurrent payment or distribution to
the holders of such Senior Debt; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section 12.2, the Indenture Trustee or the Holder of any Debenture
shall have received any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, including,
without limitation, by way of set-off or otherwise, in respect of the
Debentures before all Senior Debt is paid and satisfied in full in cash,
then and in such event such payment or distribution shall be held by the
Indenture Trustee or the Holder of such Debenture, as the case may be, in
trust for the benefit of the holders of such Senior Debt and shall be
immediately paid over or delivered forthwith to the liquidating trustee or
agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Debt remaining unpaid,
to the extent necessary to pay all Senior Debt in full in cash after giving
effect to any concurrent payment or distribution to or for the holders of
Senior Debt.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the transfer of all its assets (as an entirety or substantially as an
entirety) to another Person upon the terms and conditions set forth in Article 8
hereof shall not be deemed a dissolution, winding-up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Article 12 if the Person
formed by such consolidation or the surviving entity of such merger or the
Person which acquires by transfer such assets (as an entirety or substantially
as an entirety) shall, as a part of such consolidation, merger or transfer,
comply with the conditions set forth in such Article 8 hereof.
SECTION 12.3 SUSPENSION OF PAYMENT WHEN SENIOR DEBT IN DEFAULT.
(a) Unless Section 12.2 hereof shall be applicable, after the
occurrence of a Payment Default or Non-Payment Event of Default, no payment
or distribution of any assets or securities of the Company of any kind or
character (including, without
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limitation, cash, property and any payment or distribution which may be
payable or deliverable by reason of the payment of any other indebtedness of
the Company being subordinated to the payment of the Debentures by the
Company) may be made by or on behalf of the Company, including, without
limitation, by way of set-off or otherwise, for or on account of the
Debentures (including, without limitation, principal, premium or interest
(including Additional Interest and Additional Sums, if any) thereon), or for
or on account of the purchase, redemption, defeasance or other acquisition of
the Debentures, and neither the Indenture Trustee nor any holder or owner of
any Debenture shall take or receive from the Company or any Subsidiary of the
Company, directly or indirectly in any manner, payment in respect of all or
any portion of Debentures (including, without limitation, principal, premium
or interest (including Additional Interest and Additional Sums, if any)
thereon) following the occurrence of a Payment Default on Senior Debt or the
occurrence of a Non-Payment Event of Default on Senior Debt and in any such
event, such prohibition shall continue until such Payment Default or
Non-Payment Event of Default is cured, waived in writing or ceases to exist
and any related acceleration has been rescinded or otherwise cured; provided
that nothing in this sentence shall be deemed to affect the right of the
Holders to receive payments that are made from funds on deposit pursuant to
Section 4.1(a)(ii)(B). At such time as the prohibition set forth in the
preceding sentence shall no longer be in effect, the Company shall resume
making any and all required payments in respect of the Debentures, including
any missed payments.
(b) In the event that, notwithstanding the foregoing, the Indenture
Trustee or the Holder of any Debenture shall have received any payment
prohibited by the foregoing provisions of this Section 12.3, then and in such
event such payment shall be paid over and delivered forthwith to the
Representative, in trust for distribution to the holders of Senior Debt or, if
no amounts are then due in respect of Senior Debt, promptly returned to the
Company, or otherwise as a court of competent jurisdiction shall direct.
SECTION 12.4 INDENTURE TRUSTEE'S RELATION TO SENIOR DEBT. With respect
to the holders of Senior Debt, the Indenture Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth
in this Article 12, and no implied covenants or obligations with respect to the
holders of Senior Debt shall be read into this Indenture against the Indenture
Trustee. The Indenture Trustee shall not be deemed to owe any fiduciary duty to
the holders of Senior Debt and the Indenture Trustee shall not be liable to any
holder of Senior Debt if it shall mistakenly pay over or deliver to Holders, the
Company or any other Person moneys or assets to which any holder of Senior Debt
shall be entitled by virtue of this Article 12 or otherwise.
SECTION 12.5 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR DEBT. Subject
to the payment in full in cash of all Senior Debt, the Holders of the Debentures
shall be subrogated to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of, premium, if any, and interest (including
Additional Interest and Additional Sums, if any) on the Debentures shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Debt of any cash, property or securities to which the Holders
of the Debentures
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or the Indenture Trustee would be entitled except for the provisions of this
Article 12, and no payments pursuant to the provisions of this Article 12 to the
holders of Senior Debt by Holders of the Debentures or the Indenture Trustee,
shall, as among the Company, its creditors other than holders of Senior Debt and
the Holders of the Debentures, be deemed to be a payment or distribution by the
Company to or on account of the Senior Debt.
If any payment or distribution to which the Holders would otherwise
have been entitled but for the provisions of this Article 12 shall have been
applied, pursuant to the provisions of this Article 12, to the payment of all
amounts payable under the Senior Debt of the Company, then and in such case the
Holders shall be entitled to receive from the holders of such Senior Debt at the
time outstanding any payments or distributions received by such holders of such
Senior Debt in excess of the amount sufficient to indefeasibly pay all amounts
payable under or in respect of such Senior Debt in full in cash.
SECTION 12.6 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. The
provisions of this Article 12 are and are intended solely for the purpose of
defining the relative rights of the Holders of the Debentures on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Debt and the Holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Debentures the
principal of, premium, if any, and interest (including Additional Interest and
Additional Sums, if any) on the Debentures 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 the Debentures and creditors of the
Company other than the holders of Senior Debt in any insolvency or bankruptcy
case or proceeding, or any receivership, liquidation, arrangement,
reorganization or other similar case or proceeding in connection therewith, or
any liquidation, dissolution or other winding-up, or any assignment for the
benefit of creditors or other marshaling of assets and liabilities referred to
in Section 12.2 hereof, to receive, pursuant to and in accordance with such
Section, cash, property and securities otherwise payable or deliverable to the
Indenture Trustee or such Holder.
SECTION 12.7 INDENTURE TRUSTEE TO EFFECTUATE SUBORDINATION. Each
Holder of a Debenture by his acceptance thereof authorizes and directs the
Indenture Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Indenture Trustee his attorney-in-fact for any and all such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings or otherwise, the timely filing of a claim for the unpaid balance of
the indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved. If the Indenture
Trustee does not file such a claim prior to 30 days before the expiration of the
time to file such a claim, the holders of Senior Debt, or any Representative,
may file such a claim on behalf of Holders of the Debentures.
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SECTION 12.8 NO WAIVER OF SUBORDINATION PROVISIONS.
(a) No right of any present or future holder of any Senior Debt 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 by any such holder, or by any non-compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof the Company or any such holder may have or
be otherwise charged with.
(b) Without limiting the generality of subsection (a) of this Section
12.8, the holders of Senior Debt may, at any time and from time to time, without
the consent of or notice to the Indenture Trustee or the Holders of the
Debentures, without incurring responsibility to the Holders of the Debentures
and without impairing or releasing the subordination provided in this Article 12
or the obligations hereunder of the Holders of the Debentures to the holders of
Senior Debt, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Debt or any instrument evidencing the same or any agreement under which Senior
Debt is outstanding; (2) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing Senior Debt; (3) release any
Person liable in any manner for the collection or payment of Senior Debt; and
(4) exercise or refrain from exercising any rights against the Company or any
other Person.
SECTION 12.9 NOTICE TO INDENTURE TRUSTEE.
(a) The Company shall give prompt written notice to the Indenture
Trustee of any fact known to the Company which would prohibit the making of any
payment to or by the Indenture Trustee in respect of the Debentures.
Notwithstanding the provisions of this Article 12 or any other provision of this
Indenture, the Indenture 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 Indenture Trustee in respect of the Debentures, unless and until the
Indenture Trustee shall have received written notice thereof from the Company or
a holder of Senior Debt or from any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Indenture Trustee, subject
to the provisions of this Section 12.9, shall be entitled in all respects to
assume that no such facts exist.
(b) Subject to the provisions of Section 6.1 hereof, the Indenture
Trustee shall be entitled to rely on the delivery to it of a written notice to
the Indenture Trustee and the Company by a Person representing itself to be a
holder of Senior Debt (or a trustee, fiduciary or agent therefor) to establish
that such notice has been given by a holder of Senior Debt (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
notice to the Company shall not affect in any way the ability of the Indenture
Trustee to rely on such notice. In the event that the Indenture Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Debt to participate in any payment or
distribution pursuant to this Article 12, the Indenture Trustee may request such
Person to furnish evidence to the reasonable
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satisfaction of the Indenture Trustee as to the amount of Senior Debt 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 12, and if such evidence is not furnished, the
Indenture Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 12.10 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article 12, the Indenture Trustee, subject to the provisions of Section 6.1
hereof, and the Holders shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which any 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 Indenture Trustee or to the Holders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other Debt of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 12.11 RIGHTS OF INDENTURE TRUSTEE AS A HOLDER OF SENIOR DEBT;
PRESERVATION OF INDENTURE TRUSTEE'S RIGHTS. The Indenture Trustee in its
individual capacity shall be entitled to all the rights set forth in this
Article 12 with respect to any Senior Debt which may at any time be held by it,
to the same extent as any other holder of Senior Debt, and nothing in this
Indenture shall deprive the Indenture Trustee of any of its rights as such
holder. Nothing in this Article 12 shall apply to claims of, or payments to, the
Indenture Trustee under or pursuant to Section 6.7 hereof.
SECTION 12.12 ARTICLE APPLICABLE TO PAYING AGENTS. In case at any time
any Paying Agent other than the Indenture Trustee shall have been appointed by
the Company and be then acting hereunder, the term "Indenture Trustee" as used
in this Article 12 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 12 in addition to or in place of the Indenture Trustee.
ARTICLE 13.
CONVERSION OF DEBENTURES
SECTION 13.1 CONVERSION RIGHTS. Subject to and upon compliance with
the provisions of this Article, the Debentures are convertible, in whole or in
part, at the option of any Holder (or, if Trust Securities are outstanding, then
only at the option of any holder of Trust Securities to convert his Trust
Securities by delivery of a Notice of Conversion), at any time after six months
following the first date of original issuance of the Debentures, but not later
than the close of business on the date which is 10 days preceding the date fixed
for redemption thereof in any notice of redemption given pursuant to the
provisions of Section 11.3 hereof if there is no default in payment of the
Redemption Price, into that number of fully paid and nonassessable
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shares of Common Stock (calculated as to each conversion to the nearest 1/100th
of a share) as shall be equal to the Conversion Rate in effect at the time of
conversion. Debentures may initially be converted into full shares of Common
Stock at the rate of 22.3225 shares of Common Stock for each $1,000 of principal
amount at Stated Maturity of the Debentures, subject to adjustment as
hereinafter provided (the "CONVERSION RATE"). Notwithstanding anything in this
Article 13 to the contrary, no change in the Conversion Rate shall actually be
made until the cumulative effect of the adjustments called for by this Article
13 since the date of the last change in the Conversion Rate would change the
Conversion Rate by more than 1%. However, once the cumulative effect would
result in such a change, the Conversion Rate shall actually be changed to
reflect all adjustments called for by this Article 13 and not previously made.
SECTION 13.2 CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Debentures into Common
Stock, the Holder thereof shall deliver to the Indenture Trustee, as conversion
agent, or to such other agent appointed for such purposes (the "CONVERSION
AGENT"), an irrevocable Notice of Conversion to convert Debentures on behalf of
such Holder, together with the actual Debentures to be converted, duly endorsed
in blank or accompanied by proper instruments of transfer. The Notice of
Conversion shall set forth the principal amount at Stated Maturity of Debentures
to be converted, together with the name or names, if other than the Holder, in
which the shares of Common Stock should be issued upon conversion of the
Debentures. In addition, a holder of Trust Securities may exercise its right
under the Declaration to convert such Trust Securities into Common Stock by
delivering to the Conversion Agent an irrevocable Notice of Conversion, which
shall (i) set forth the number of Trust Securities to be converted and the name
or names, if other than the holder, in which the shares of Common Stock should
be issued and (ii) direct the Conversion Agent (a) to exchange such Trust
Security for a portion of the Debentures equal in principal amount at Stated
Maturity to the aggregate liquidation amount of the Trust Securities to be
converted and (b) to immediately convert such Debentures, on behalf of such
holder, into Common Stock (and, if applicable, other securities, cash or
property), and by surrendering certificates for such Trust Securities to the
Conversion Agent, duly endorsed in blank or accompanies by proper instruments of
transfer. So long as the Trust Securities are outstanding, the Trust shall not
convert any Debentures except pursuant to a Notice of Conversion delivered to
the Conversion Agent by a holder of Trust Securities.
(b) Except as described below, no payment or adjustment is to be made
on conversion for accrued and unpaid interest on the Debentures, including as a
result of the Company's exercise of its right to defer payment of amounts due
under the Debentures pursuant to Section 3.7 hereof or otherwise, or for
dividends on the Common Stock issued on conversion. The Holder of record of
Debentures on a Regular Record Date with respect to the payment of interest on
such Debentures will be entitled to receive interest in respect of such
Debentures on the corresponding Interest Payment Date notwithstanding the
conversion of any such Debentures after the Regular Record Date or any default
by the Company in the payment of interest on that Interest Payment Date.
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Notwithstanding the foregoing, Debentures surrendered for conversion during the
period from the close of business on any Regular Record Date for the payment of
interest in respect of such Debentures to the opening of business on the
corresponding Interest Payment Date (except any such Debentures called for
redemption on a Redemption Date during such period) must be accompanied by
payment by the Holder of record on the Regular Record Date of an amount equal to
the interest payable on such Interest Payment Date. The interest with respect to
Debentures called for redemption on a Redemption Date during the period from the
close of business on a Regular Record Date with respect to the payment of
interest in respect of such Debentures to the opening of business on the
corresponding Interest Payment Date will be payable on that Interest Payment
Date to the Holder of record of such Debentures on such Regular Record Date
notwithstanding the conversion of the Debentures after the Regular Record Date
and prior to the Interest Payment Date, and the Holder of record of such
Debentures on such Regular Record Date need not include a payment of such
interest amount upon surrender of such Debentures for conversion. Holders of
record of Debentures on a Regular Record Date with respect to the payment of
interest in respect of such Debentures whose Debentures are converted on or
after the corresponding Interest Payment Date will receive the interest payable
by the Company on that date and need not include payment in the amount of such
interest upon surrender of such Debentures for conversion.
(c) Debentures shall be deemed to have been converted upon the
surrender of the Debentures to the Conversion Agent (the "CONVERSION DATE"). On
the Conversion Date, the Person or Persons converting shall be deemed to be the
holder or holders of record of the Common Stock issuable upon conversion of the
Debentures, and all rights with respect to the Debentures surrendered shall
forthwith terminate except the right to receive the Common Stock or other
securities, cash or other assets as herein provided (including the provisions of
Section 13.2(b)). As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver at the office of the Conversion Agent a
certificate or certificates for the number of full shares of Common Stock
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 in accordance with Section 13.2(e), and the Conversion Agent shall
distribute such certificate or certificates to such Person or Persons.
(d) The Company's delivery to the Holder or Holders of the Debentures
(through the Conversion Agent) upon conversion of the fixed number of shares of
Common Stock into which the Debentures are convertible (together with the cash
payment, if any, in lieu of fractional shares) shall be deemed to satisfy the
Company's obligation to pay the principal amount at Maturity of the portion of
Debentures so converted and any unpaid interest (including Additional Interest
and Additional Sums, if any) accrued on such Debentures at the time of such
conversion.
(e) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Company to the Conversion Agent in an amount equal to the product of (i)
the Closing
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Price of a share of Common stock on the last trading day before the Conversion
Date and (ii) such fraction of a share, and the Conversion Agent will in turn
make such payment, if any, to the Holder or Holders of the Debentures (or the
holder or holders of the Trust Securities, as the case may be) so converted.
(f) In the event of the conversion of any Debenture in part only, a
new Debenture or Debentures for the unconverted portion thereof will be issued
in the name of the Holder thereof upon the cancellation of the Debenture
converted in part, in accordance with Section 3.5.
(g) In effecting the conversion transactions described in this Article
13, the Conversion Agent is acting as agent of the holders of Trust Securities
(in exchange of Trust Securities for Debentures) and as agent of the holders of
Debentures (in conversion of Debentures into Common Stock), as the case may be,
directing it to effect such conversion transactions. The Conversion Agent is
hereby authorized (i) to exchange Debentures held by the Trust from time to time
for Trust Securities in connection with the conversion of such Trust Securities
and (ii) to convert all or a portion of the Debentures into Common Stock and
thereupon to deliver such shares of Common Stock in accordance with the
provisions of this Article 13 and to deliver to the Trust a new Debenture or
Debentures for any resulting unconverted principal amount.
(h) The Company (and any successor corporation) shall take all action
necessary so that a number of shares of the authorized but unissued Common Stock
(or common stock in the case of any successor corporation) sufficient to provide
for the conversion of the Outstanding Debentures upon the basis hereinbefore
provided are at all times reserved by the Company (or any successor
corporation), free from preemptive rights, for such conversion, subject to the
provisions of Section 13.4. If the Company shall issue any securities or make
any change in its capital structure which would change the number of shares of
Common Stock into which each share of the Debentures shall be convertible as
herein provided, the Company shall at the same time also make proper provision
so that thereafter there shall be a sufficient number of shares of Common Stock
authorized and reserved, free from preemptive rights, for conversion of the
Outstanding Debentures on the new basis.
(i) The Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery upon
conversion of shares of Common Stock or other securities or property in a name
other than that of the Holder of the Debentures being converted, and the Company
shall not be required to issue or deliver any such shares or other securities or
property unless and until the Person or Persons requesting the issuance thereof
shall have paid to the Conversion Agent the amount of any such tax or shall have
established to the satisfaction of the Conversion Agent that such tax has been
paid.
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SECTION 13.3 CONVERSION PRICE ADJUSTMENTS.
(a) The Conversion Rate shall be adjusted from time to time under
certain circumstances, subject to the provisions of the last three sentences of
Section 13.1, as follows:
(i) In case the Company shall (A) pay a dividend or make a
distribution on its Common Stock in shares of its Capital Stock, (B)
subdivide its outstanding Common Stock into a greater number of
shares, (C) combine the shares of its outstanding Common Stock into a
smaller number of shares or (D) issue by reclassification of its
Common Stock any shares of its Capital Stock, then in each such case
the Conversion Rate in effect immediately prior thereto shall be
proportionately adjusted so that the Holder of any Debentures
thereafter surrendered for conversion shall be entitled to receive, to
the extent permitted by applicable law, the number and kind of shares
of Capital Stock of the Company which it would have owned or have been
entitled to receive after the happening of such event had such
Debentures been converted immediately prior to the record date for
such event (or if no record date has been established in connection
with such event, the effective date for such action). An adjustment
pursuant to this Section 13.3(a)(i) shall become effective immediately
after the record date in the case of a stock dividend or distribution
and shall become effective immediately after the effective date in the
case of a subdivision, combination or reclassification.
(ii) In case the Company shall issue rights or warrants to all
holders of the Common Stock entitling such holders to subscribe for or
purchase Common Stock on the record date referred to below at a price
per share less than the average daily Closing Prices of the Common
Stock on the 30 consecutive business days commencing 45 business days
before the record date (the "Current Market Price"), then in each such
case the Conversion Rate in effect on such record date shall be
adjusted in accordance with the formula
c(1) = c x O + N
---------
O + N x P
-----
M
where
c(1) = the adjusted Conversion Rate
c = the current Conversion Rate (immediately preceding the
issuance of such rights or warrants)
O = the number of shares of Common Stock outstanding on the
record date
N = the number of additional shares of Common Stock issuable
pursuant to the exercise of such rights or warrants
71
<PAGE>
P = the exercise price per share of such rights or warrants
M = the Current Market Price per share of Common Stock on such
record date
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights or warrants.
(iii) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any
warrants or subscription rights referred to in Section 13.3(a)(ii)
above, any ordinary dividend paid in cash out of the retained earnings
of the Company and any dividend or distribution referred to in Section
13.3(a)(i) above), then in each such case the Conversion Rate then in
effect shall be adjusted in accordance with the formula
M
c(1) = c x -----
M - F
where
c(1) = the adjusted Conversion Rate
c = the current Conversion Rate (immediately preceding such
distribution)
M = the Current Market Price per share of Common Stock
with respect to the record date mentioned below
F = the aggregate amount of such cash dividend and/or the fair
market value on such record date of the assets or securities
to be distributed divided by the number of shares of Common
Stock outstanding on the record date. In the case of
securities, the fair market value shall be the average of
the daily Closing Price for the 30 trading days preceding
such record date (or such fewer number of days for which
there shall be a recognized trading market); provided,
however, that if there shall not be any recognized trading
market for such securities until after such record date, the
fair market value shall be the average of the daily Closing
Price for the 10 trading days following such record date. In
all other cases, the Board of Directors shall determine such
fair market value, which determination shall be conclusive.
72
<PAGE>
Such adjustment shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution.
(iv) All calculations hereunder shall be made to the nearest cent or
to the nearest 1/100 of a share, as the case may be.
(v) If at any time as a result of an adjustment made pursuant to
Section 13.3(a)(i), the Holder of any Debentures thereafter surrendered for
conversion shall become entitled to receive securities, cash or assets
other than Common Stock, the number or amount of such securities or
property so receivable upon conversion shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions with respect to the Common Stock contained in Section
13.3(a)(i) to (iv), inclusive, above.
(b) Except as otherwise provided above in this Section 13.3, no
adjustment in the Conversion Rate shall be made in respect of any conversion for
share distributions or dividends theretofore declared and paid or payable on the
Common Stock.
SECTION 13.4 FUNDAMENTAL CHANGE. In case of any consolidation or
merger of the Company with any other corporation or in case of any sale or
transfer of all or substantially all of the assets of the Company, or in the
case of any share exchange, in each case, pursuant to which all of the
outstanding shares of Common Stock are converted into other securities, cash or
other property, the Company shall make appropriate provision or cause
appropriate provision to be made so that each Holder of Debentures then
Outstanding shall have the right thereafter to convert such Debentures into the
kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock into which such Debentures could have been
converted immediately prior to the effective date of such consolidation, merger,
sale, transfer or share exchange. If, in connection with any such consolidation,
merger, sale, transfer or share exchange, each holder of shares of Common Stock
is entitled to elect to receive either securities, cash or other property upon
completion of such transaction, the Company shall provide or cause to be
provided to each Holder of Debentures the right to elect the securities, cash or
other property into which the Debentures held by such Holder shall be
convertible after completion of any such transaction on the same terms and
subject to the same conditions applicable to holders of the Common Stock
(including, without limitation, notice of the right to elect, limitations on the
period in which such election shall be made and the effect of failing to
exercise the election). The Company shall not effect any such transaction unless
the provisions of this Section 13.4 have been complied with. The above
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or share exchanges.
SECTION 13.5 NOTICE OF ADJUSTMENTS OF CONVERSION PRICE. Whenever the
Conversion Rate is adjusted as herein provided, the Company shall send to the
Indenture Trustee, the Conversion Agent and the transfer agent for the Preferred
Securities, the Debentures and the Common Stock, and to the principal securities
exchange, if any, on which the Preferred Securities, the Debentures and the
Common Stock are traded, or the Nasdaq National
73
<PAGE>
Market if the Preferred Securities, the Debentures or the Common Stock is
admitted for quotation thereon, a statement signed by the Chairman of the Board,
the President or any Vice President of the Company and by its Treasurer or its
Secretary or Assistant Secretary stating the adjusted Conversion Rate determined
as provided in Section 13.3, and any adjustment so evidenced, given in good
faith, shall be binding upon all holders of Preferred Securities and Debentures
and upon the Company. Whenever the Conversion Rate is adjusted, the Company will
give notice by mail to the holders of record of Preferred Securities and
Debentures, which notice shall be made within 45 days after the effective date
of such adjustment and shall state the adjustment and the Conversion Rate.
Notwithstanding the foregoing notice provisions, failure by the Company to give
such notice or a defect in such notice shall not affect the binding nature of
such corporate action of the Company.
SECTION 13.6 PRIOR NOTICE OF CERTAIN EVENTS. Whenever the Company
shall propose to take any of the actions specified in Section 13.3(a)(i), (ii)
or (iii) or in Section 13.4 which would result in any adjustment in the
Conversion Rate hereunder, the Company shall use its best efforts to cause a
notice to be mailed at least 20 days prior to the date on which the books of the
Company will close or on which a record will be taken for such action to the
holders of record of the outstanding Preferred Securities and Debentures on the
date of such notice. Such notice shall specify the action proposed to be taken
by the Company and the date as of which holders of record of the Common Stock
shall participate in any such actions or be entitled to exchange their Common
Stock for securities or other property, as the case may be. Failure by the
Company to mail the notice or any defect in such notice shall not affect the
validity of the transaction.
SECTION 13.7 CIRCUMSTANCES NOT REQUIRING CONVERSION RATE ADJUSTMENT.
Notwithstanding any other provision of this Article, no adjustment in the
Conversion Rate need be made (i) for a transaction referred to in Section
13.3(a)(i), (ii) or (iii) if Holders of Preferred Securities and Debentures are
to participate in the transaction or distribution on a basis and with notice
that the Board of Directors reasonably determines to be fair to the Holders of
the Preferred Securities and Debentures and appropriate in light of the basis on
which holders of Common Stock participate in the transaction; (b) for sales of
Common Stock pursuant to a plan for reinvestment of dividends and interest,
provided that the purchase price in any such sale is at least equal to 90% of
the fair market value of the Common Stock at the time of such purchase, or
pursuant to any plan adopted by the Company for the benefit of its employees,
directors or consultants; (c) for a change in par value of the Common Stock not
involving a subdivision or combination described in Section 13.3(a)(i)(B) or
13.3(a)(i)(C); or (d) after the Debentures become convertible solely into cash
by reason of an adjustment pursuant to Section 13.4 hereof.
SECTION 13.8 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee has
no duty to determine when an adjustment under this Article or under the terms of
the Debentures should be made, how it should be made or what it should be. The
Indenture Trustee has no duty to determine whether any provisions of a
supplemental indenture under Article 9 are correct. The Indenture Trustee makes
no representation as to the validity or value of any securities or assets issued
upon conversion of Debentures. The Indenture Trustee shall not be
74
<PAGE>
responsible for the Company's failure to comply with this Article. Each
Conversion Agent other than the Company shall have the same protection under
this Section as the Indenture Trustee.
75
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written
SUPERIOR TELECOM INC.
By: /s/ Steven S. Elbaum
-------------------------------------------
Name: Steven S. Elbaum
Title: Chairman and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY,
not in its individual capacity but solely as
Indenture Trustee
By: /s/ Herbert J. Lemmer
-------------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
76
<PAGE>
Exhibit 4.8
EXECUTION COPY
GUARANTEE AGREEMENT
SUPERIOR TELECOM INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Dated as of March 31, 1999
with respect to
8 1/2% TRUST CONVERTIBLE PREFERRED SECURITIES
(Liquidation Amount $50 per Preferred Security)
<PAGE>
CROSS REFERENCE TABLE*
SECTION OF TRUST SECTION OF
INDENTURE ACT OF GUARANTEE
1939, AS AMENDED AGREEMENT
<TABLE>
<S> <C>
310(a) ......................................................................... 4.1(a)
310(b) ......................................................................... 4.1(c), 2.8
310(c).......................................................................... Inapplicable
311(a).......................................................................... 2.2(b)
311(b) ......................................................................... 2.2(b)
311(c).......................................................................... Inapplicable
312(a) ......................................................................... 2.2(a)
312(b).......................................................................... 2.2(b)
313............................................................................. 2.3
314(a).......................................................................... 2.4
314(b) ......................................................................... Inapplicable
314(c) ......................................................................... 2.5
314(d) ......................................................................... Inapplicable
314(e) ........................................................................ 1.1, 2.5, 3.2
314(f) ........................................................................ 3.2
315(a) ........................................................................ 3.1(d)
315(b) ........................................................................ 2.7
315(c) ........................................................................ 3.1
315(d) ........................................................................ 3.1(d)
316(a) ........................................................................ 1.1, 2.6, 5.4
316(b) ........................................................................ 5.3
317(a) ........................................................................ Inapplicable
317(b) ........................................................................ Inapplicable
318(a) ........................................................................ 2.1(b)
318(b) ........................................................................ 2.1
318(c) ........................................................................ 2.1(a)
</TABLE>
- -----------------------------------------------------------------
*This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
ARTICLE 1
DEFINITIONS..............................................................................................2
SECTION 1.1 DEFINITIONS..................................................................................2
ARTICLE 2
TRUST INDENTURE ACT......................................................................................5
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION............................................................5
SECTION 2.2 LIST OF HOLDERS.............................................................................5
SECTION 2.3 REPORTS BY THE GUARANTEE TRUSTEE............................................................6
SECTION 2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE.......................................................6
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT............................................6
SECTION 2.6 EVENTS OF DEFAULT; WAIVER...................................................................6
SECTION 2.7 EVENT OF DEFAULT; NOTICE....................................................................6
SECTION 2.8 CONFLICTING INTERESTS.......................................................................7
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE.......................................................7
SECTION 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE..................................................7
SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.........................................................8
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE AGREEMENT............................10
ARTICLE 4
GUARANTEE TRUSTEE.......................................................................................10
SECTION 4.1 GUARANTEE TRUSTEE; ELIGIBILITY.............................................................10
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE TRUSTEE..............................11
ARTICLE 5
GUARANTEE...............................................................................................12
SECTION 5.1 GUARANTEE..................................................................................12
SECTION 5.2 WAIVER OF NOTICE AND DEMAND................................................................12
SECTION 5.3 OBLIGATIONS NOT AFFECTED...................................................................12
SECTION 5.4 RIGHTS OF HOLDERS..........................................................................13
SECTION 5.5 GUARANTEE OF PAYMENT.......................................................................13
SECTION 5.6 SUBROGATION................................................................................13
ARTICLE 6
COVENANTS AND SUBORDINATION.............................................................................14
SECTION 6.1 SUBORDINATION..............................................................................14
SECTION 6.2 CERTAIN COVENANTS OF THE GUARANTOR.........................................................15
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
PAGE NO.
<S> <C> <C>
ARTICLE 7
TERMINATION.............................................................................................16
SECTION 7.1 TERMINATION................................................................................16
ARTICLE 8
MISCELLANEOUS...........................................................................................16
SECTION 8.1 SUCCESSORS AND ASSIGNS.....................................................................16
SECTION 8.2 AMENDMENTS.................................................................................16
SECTION 8.3 NOTICES....................................................................................17
SECTION 8.4 BENEFIT....................................................................................17
SECTION 8.5 INTERPRETATION.............................................................................18
SECTION 8.6 GOVERNING LAW..............................................................................18
ARTICLE 9
INDEMNIFICATION.........................................................................................18
SECTION 9.1 EXCULPATION................................................................................18
SECTION 9.2 COMPENSATION AND INDEMNIFICATION...........................................................19
</TABLE>
ii
<PAGE>
GUARANTEE
This GUARANTEE AGREEMENT, dated as of March 31, 1999, is executed and
delivered by Superior TeleCom Inc., a Delaware corporation (the "Guarantor"),
and American Stock Transfer & Trust Company, a New York corporation, as trustee
(the "Guarantee Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein) of Superior
Trust I, a Delaware statutory business trust (the "Trust").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of March 31, 1999, among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
3,332,254 of its 8 1/2% Trust Convertible Preferred Securities (liquidation
preference $50 per preferred security) (the "Preferred Securities") representing
preferred undivided beneficial interests in the assets of the Trust and having
the terms set forth in the Declaration of Trust;
WHEREAS, the Preferred Securities and Common Securities (as defined
herein) will be issued by the Trust in consideration for the Debentures (as
defined in the Declaration of Trust) of the Guarantor, which will be deposited
with American Stock Transfer & Trust Company, as Property Trustee under the
Declaration of Trust, as Trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee Agreement for
the benefit of the Holders from time to time of the Preferred Securities.
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Guarantee Agreement, the terms
set forth below shall, unless the context otherwise requires, have the following
meanings. Capitalized or otherwise defined terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Declaration of
Trust as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Trust. For the purposes of this
definition, "control" when used with respect to any specified Person means the
possession, directly or indirectly, of the power to direct or cause the
direction
2
<PAGE>
of the management or policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; provided, however, that beneficial
ownership of 10% or more of the Voting Stock of an entity will be deemed to be
control. The terms "controlling" and "controlled" have meanings correlative to
"control."
"Common Securities" means the securities representing common beneficial
interests in the assets of the Trust.
"Common Stock" means common stock, par value $0.01 per share, of the
Guarantor or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of
dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Guarantor and which are not
subject to redemption by the Guarantor.
"Corporate Trust Office" shall mean the office of the Guarantee Trustee
at which the corporate trust business of the Guarantee Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at 40 Wall Street, New York,
New York 10005.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement, unless such payment
is prohibited by the subordination provisions of Article 6; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received written notice of default and shall not have cured
such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by or on behalf of the Trust: (a) any accumulated and unpaid
Distributions required to be paid on the Preferred Securities, but only if and
to the extent that the Trust has funds on hand available therefor at such time;
(b) the Redemption Price or Optional Redemption Price, as the case may be, of
any Preferred Securities called for redemption, but only if and to the extent
that the Trust has funds on hand available therefor at such time; and (c) upon a
voluntary or involuntary dissolution, winding up or liquidation of the Trust
(unless the Debentures are distributed to Holders of the Preferred Securities),
the lesser of (i) the Liquidation Distribution, but only if and to the extent
that the Trust has funds on hand available therefor at such time and (ii) the
amount of assets of the Trust remaining available for distribution to Holders of
Preferred Securities.
"Guarantee Trustee" means American Stock Transfer & Trust Company,
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement, and thereafter
means each such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and records of
the Trust, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite
3
<PAGE>
percentage of Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor, the Guarantee
Trustee or any Affiliate of the Guarantor or the Guarantee Trustee.
"Indemnified Person" shall mean the Guarantee Trustee (including in its
individual capacity), any Affiliate of the Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee (but in no event shall
"Indemnified Person" include the Trust, the Guarantor or any Holder in their
capacities as such).
"Indenture" means the Indenture, dated as of March 31, 1999, between
the Guarantor and American Stock Transfer & Trust Company, as Indenture Trustee,
as amended and supplemented.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Preference of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holders, voting separately as
a class, of more than 50% of the aggregate Liquidation Amount of all the
Outstanding Preferred Securities issued by the Trust.
"Officer's Certificate" means a certificate signed by the Chairman of
the Board of Directors, the President, the Chief Executive Officer, any Vice
President, the Chief Financial Officer or the Secretary of the Guarantor, and
delivered to the Guarantee Trustee. Any Officer's Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Guarantee Agreement shall include:
(a) a statement that each officer signing the Officer's 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 Officer's Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof or other entity.
4
<PAGE>
"Responsible Officer" shall mean, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee
with direct responsibility for the administration of this Guarantee Agreement
and also means, with respect to a particular corporate trust matter, any other
officer of the Guarantee Trustee to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbb), as amended and as in force at the date as of which this
instrument was executed; provided, however, that in the event the Trust
Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means,
to the extent required by any such amendment, the Trust Indenture Act of 1939 as
so amended.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (unless the Guarantee Trustee is acting as Securities
Registrar) (i) semi-annually, on or before January 15 and July 15 of each year,
a list, in such form as the Guarantee Trustee may reasonably require, of the
names and addresses of the Holders ("List of Holders") as of a date not more
than 15 days prior to the delivery thereof and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days after the receipt by
the Guarantor of any such written request, a List of Holders as of a date not
more than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantor and is
not identical to a previously supplied List of Holders or has not otherwise been
received by the Guarantee Trustee. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
5
<PAGE>
SECTION 2.3 REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
December 31 in each calendar year, commencing December 31, 1999, the Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO GUARANTEE TRUSTEE. The Guarantor shall
provide to the Guarantee Trustee, the Securities and Exchange Commission and the
Holders such documents, reports and information, if any, as required by Section
314 of the Trust Indenture Act and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act; and such compliance
certificate of the Guarantor shall be delivered on or before 120 days after the
end of each calendar year. Delivery of such reports, information and documents
to the Guarantee Trustee is for informational purposes only and the Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Guarantee Trustee is entitled to rely exclusively on
Officer's Certificates).
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officer's
Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER. The Holders of a Majority in
Liquidation Preference of the Securities may, by vote, on behalf of the Holders
of all Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Guarantee Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent therefrom.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Guarantee Trustee shall, within 30 days after a Responsible
Officer of the Guarantee Trustee obtains actual knowledge of the occurrence of
an Event of Default, transmit by mail, first-class postage prepaid, to the
Holders, notice of such Event of Default actually known to a Responsible Officer
of the Guarantee Trustee, unless such defaults have been cured before the giving
of such notice, provided, that, except in the case of a default in the payment
of a Guarantee Payment, the Guarantee Trustee shall be fully protected in
withholding such notice if and so long as a Responsible Officer of the Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders.
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(b) The Guarantee Trustee shall not be deemed to have actual knowledge
of any Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the
Declaration of Trust shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8 CONFLICTING INTERESTS. The Declaration of Trust and the
Indenture shall be deemed to be specifically described in this Guarantee
Agreement for the purposes of clause (i) of the first proviso contained in
Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her rights
pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on acceptance by
such Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee
shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee 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 Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to the Responsible Officer of the Guarantee Trustee, the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee 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 any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Guarantee Trustee shall
be determined solely by the express provisions of this Guarantee Agreement, and
the Guarantee Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Guarantee
Agreement, and no implied covenants or obligations shall be read into this
Guarantee Agreement against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case of any such
certificates or opinions that by any provision hereof or of the Trust Indenture
Act are specifically required to be furnished to the Guarantee Trustee, the
Guarantee Trustee shall be under a duty to examine the same to determine whether
or not on their face they conform to the requirements of this Guarantee
Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of not less than a Majority in Liquidation
Preference of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee, or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if the Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this Guarantee Agreement or
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it.
SECTION 3.2 CERTAIN RIGHTS OF GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, proxy, 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.
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(ii) Any direction or act of the Guarantor contemplated by
this Guarantee Agreement shall be sufficiently evidenced by an Officer's
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting to take any action
hereunder, the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officer's Certificate which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of
its selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted to be taken by it hereunder in good
faith and in accordance with such advice or opinion. Such legal counsel may be
legal counsel to the Guarantor or any of its Affiliates, and may include any of
its employees. The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee Agreement from any
court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee Agreement at
the request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee and its officers, directors and agents such security
and indemnity, reasonably satisfactory to the Guarantee Trustee, against the
costs, expenses (including attorneys' fees and expenses and the expenses of the
Guarantee Trustee's agents, nominees and 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 Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(v) shall be taken to relieve the
Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation
to exercise the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall have no obligation to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Guarantee Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through its agents, custodians, nominees or attorneys or any Affiliate, and the
Guarantee Trustee shall not be responsible for any misconduct or negligence on
the part of any such person appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive instructions
with respect to enforcing any
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remedy or right or taking any other action hereunder, the Guarantee Trustee (A)
may request written instructions from the Holders of a Majority in Liquidation
Preference of the Securities, (B) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received and (C)
shall be fully protected in relying on and acting in accordance with such
instructions.
(ix) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument or other document (or any
rerecording, refiling or re-registration thereof).
(x) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the signature
of the Guarantee 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 Guarantee Trustee to so act or as to its compliance with
any of the terms and provisions of this Guarantee Agreement, both of which shall
be conclusively evidenced by the Guarantee Trustee's or its agent's taking such
action.
(xi) the Guarantee Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Guarantee Agreement.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE
AGREEMENT. The recitals contained in this Guarantee Agreement shall be taken as
the statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee Agreement.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
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(ii) be a corporation or other Person 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 other
Person permitted by the Securities and Exchange Commission to act as an
indenture trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $10,000,000, and subject to supervision or examination by federal, state,
territorial or District of Columbia authority; it being understood that if such
corporation or other Person publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and the Guarantor shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantor of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantor, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
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(e) No Guarantee Trustee shall be liable for the acts or omissions of
any Successor Guarantor Trustee.
(f) Upon termination of this Guarantee Agreement or the removal or
resignation of the Guarantee Trustee, the Guarantor shall pay all amounts due
and owing to such Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 GUARANTEE. The Guarantor irrevocably and unconditionally
agrees to pay in full, subject to the subordination provisions set forth in
Article 6, to the extent set forth herein, the Guarantee Payments to the Holders
(without duplication of amounts theretofore paid by or on behalf of the Trust),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Trust may have or assert, other than the defense of payment. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, Trust or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Optional
Redemption Price, Liquidation Distribution or any other sums payable under the
terms of the Preferred Securities or the extension of time for the performance
of any other obligation under, arising out of, or in connection with, the
Preferred Securities;
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
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(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances. There shall be no
obligation of the Holders or the Guarantee Trustee to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 RIGHTS OF HOLDERS. The Guarantor expressly acknowledges
that: (i) an executed copy of this Guarantee Agreement will be deposited with
the Guarantee Trustee to be held for the benefit of the Holders; (ii) the
Guarantee Trustee has the right to enforce this Guarantee Agreement on behalf of
the Holders; (iii) the Holders of a Majority in Liquidation Preference of the
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of this
Guarantee Agreement or to direct the exercise of any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and (iv) regardless
of whether the Guarantee Trustee fails to enforce the Guarantee, any Holder may
institute a legal proceeding directly against the Guarantor to enforce its
rights under this Guarantee Agreement, without first instituting a legal
proceeding against the Guarantee Trustee, the Trust or any other Person.
SECTION 5.5 GUARANTEE OF PAYMENT. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Trust) or upon distribution of
Debentures to Holders as provided in the Declaration of Trust.
SECTION 5.6 SUBROGATION. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of the Trust with
respect to the Preferred Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
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ARTICLE 6
COVENANTS AND SUBORDINATION
SECTION 6.1 SUBORDINATION.
(a) If an Event of Default (as defined in the Indenture) has occurred
and is continuing, the rights of holders of Common Securities to receive
payments on liquidation, redemption and otherwise are subordinate to the rights
of Preferred Securities to receive Guarantee Payments under this Guarantee.
(b) In the event and during the continuation of any default by the
Guarantor in the payment of principal, premium, interest or any other payment
due on any Senior Debt (as defined in the Indenture) (whether or not dependent
upon the giving of notice, the lapse of time or both, or any other condition to
such default becoming an event of default), unless and until such default shall
have been cured or waived or shall have ceased to exist, and in the event that
the maturity of any Senior Debt has been accelerated because of a default, then
no Guarantee Payments shall be made hereunder by the Guarantor and neither the
Guarantee Trustee nor any Holder shall have any rights or remedies hereunder to
receive such Guarantee Payments.
(c) In the event of any default (other than a default described in the
immediately preceding paragraph) by the Guarantor under the terms of any
instrument evidencing any Senior Debt (whether or not dependent upon the giving
of notice, the lapse of time or both or any other condition), unless and until
such default shall have been cured or waived or shall have ceased to exist, no
Guarantee Payments shall be made hereunder by the Guarantor and neither the
Guarantee Trustee nor any Holder shall have any rights or remedies hereunder to
receive such Guarantee Payments.
(d) In the event of (i) any insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Guarantor or to its
creditors, as such, or to its assets, whether voluntary or involuntary, or (b)
any total or partial liquidation, dissolution or other winding-up of the
Guarantor, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any general assignment for the benefit of
creditors or any other marshaling of assets or liabilities of the Guarantor,
then and in any such event:
(1) the holders of Senior Debt shall be entitled to receive payment
and satisfaction in full in cash of all amounts due on or in respect of
all Senior Debt before any Guarantee Payment is made; and
(2) any payment or distribution of assets of the Guarantor of any
kind or character, whether in cash, property or securities, by set-off
or otherwise, to which the Holders or the Guarantee Trustee would be
entitled but for the provisions of this Section 6.1, shall be paid by
the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or
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otherwise, directly to the holders of Senior Debt or their
representative or representatives, or to the trustee or trustees under
any indenture under which any instruments evidencing any of such Senior
Debt may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Senior Debt held or represented by
each, to the extent necessary to make payment in full in cash of all
Senior Debt remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Debt, before any
such payment or distribution is made to the Holders or to the Guarantee
Trustee.
(e) In the event that, notwithstanding the foregoing, the Guarantee
Trustee or any Holder shall have received any payment or distribution of assets
of the Guarantor of any kind or character, whether in cash, property or
securities, including, without limitation, by way of set-off or otherwise,
before all Senior Debt is paid and satisfied in full in cash, then and in such
event such payment or distribution shall be held by the Guarantee Trustee or
such Holder, as the case may be, in trust for the benefit of the holders of such
Senior Debt and shall be immediately paid over or delivered forthwith to the
liquidating trustee or agent or other Person making payment or distribution of
assets of the Guarantor for application to the payment of all Senior Debt
remaining unpaid, to the extent necessary to pay all Senior Debt in full in cash
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Debt.
(f) The consolidation of the Guarantor with, or the merger of the
Guarantor with or into, another Person or the liquidation or dissolution of the
Guarantor following the transfer of all its assets (as an entirety or
substantially as an entirety) to another Person upon the terms and conditions
set forth in Article 8 of the Indenture shall not be deemed a dissolution,
winding-up, liquidation, reorganization, assignment for the benefit of creditors
or marshaling of assets and liabilities of the Guarantor for the purposes of
this Section 6.1 if the Person formed by such consolidation or the surviving
entity of such merger or the Person which acquires by transfer such assets (as
an entirety or substantially as an entirety) shall, as a part of such
consolidation, merger or transfer, comply with the conditions set forth in
Article 8 of the Indenture.
(g) Amounts paid or payable by the Guarantor under Article 9 hereof
shall not be subject to the provisions and operation of this Article 6.
(h) This Guarantee Agreement shall rank pari passu with any guarantee
now or hereafter entered into by the Guarantor in respect of any preferred or
preference stock of any Affiliate of the Guarantor that is senior to the Common
Stock.
SECTION 6.2 CERTAIN COVENANTS OF THE GUARANTOR.
(a) Guarantor covenants and agrees that if and so long as (i) the Trust
is the holder of all the Debentures, (ii) a Tax Event in respect of the Trust
has occurred and is continuing and (iii) the Guarantor has elected, and has not
revoked such election, to pay Additional Sums in respect of the Preferred
Securities and Common Securities, the Guarantor will pay to the Trust such
Additional Sums.
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(b) The Guarantor covenants and agrees for so long as Preferred
Securities are Outstanding (i) not to convert Debentures except pursuant to a
Notice of Conversion delivered to the Conversion Agent by a Holder of Trust
Securities, (ii) to maintain directly or indirectly 100% ownership of the Common
Securities, provided that certain successors which are permitted pursuant to the
Indenture may succeed to the Guarantor's ownership of the Common Securities,
(iii) not to voluntarily dissolve, wind-up, liquidate or terminate the Trust,
except in accordance with the terms of the Declaration of Trust, (iv) to
maintain the reservation for issuance of the number of shares of Common Stock
that would be required from time to time upon the conversion of all the
Debentures then outstanding, (v) to use its reasonable best efforts, consistent
with the terms and provisions of the Declaration of Trust, to cause the Trust to
remain classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes and (vi) to deliver
shares of Common Stock as promptly as practicable on or after any Conversion
Date.
ARTICLE 7
TERMINATION
SECTION 7.1 TERMINATION. This Guarantee Agreement shall terminate and
be of no further force and effect upon (i) full payment of the Redemption Price
or Optional Redemption Price, as the case may be, of all Preferred Securities,
(ii) the distribution of Debentures to the Holders in exchange for all of the
Preferred Securities, (iii) full payment of the amounts payable in accordance
with the Declaration of Trust upon dissolution or liquidation of the Trust or
(iv) the distribution, if any, of Common Stock to the Holders of the Preferred
Securities in respect of the conversion of all such Holders' Preferred
Securities into Common Stock. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid with respect
to Preferred Securities or this Guarantee Agreement.
ARTICLE 8
MISCELLANEOUS
SECTION 8.1 SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the Preferred Securities then Outstanding. Except in
connection with a consolidation, merger or sale involving the Guarantor that is
permitted under Article 8 of the Indenture and pursuant to which the assignee
agrees in writing to perform the Guarantor's obligations hereunder, the
Guarantor shall not assign its obligations hereunder.
SECTION 8.2 AMENDMENTS. Except with respect to any changes that do not
materially adversely affect the rights of the Holders (in which case no vote
will be required), this Guarantee Agreement may not be amended without the prior
approval of the Holders of not less than a Majority in Liquidation Preference of
the Securities. The provisions of Article 6 of the Declaration of Trust
concerning meetings of the Holders shall apply to the giving of such
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approval. No provisions in Article 3, Article 4 or Article 9, Section 6.1(g) or
this sentence may be amended without the prior written consent of the Guarantee
Trustee, which consent may be granted or withheld in the sole discretion of the
Guarantee Trustee. The Guarantor shall furnish the Guarantee Trustee with an
Officer's Certificate and an Opinion of Counsel to the effect that any amendment
of this Guarantee Agreement is authorized and permitted.
SECTION 8.3 NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied or mailed by first-class
mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice of to the Holders:
Superior TeleCom Inc.
1790 Broadway
New York, New York 10019
Phone: (212) 757-3333
Facsimile: (212) 757-3423
Attention: Stewart H. Wahrsager, Esq.
(b) if given to the Trust, in care of the Guarantee Trustee, at the
Trust's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Trust may give notice of to
the Holders:
Superior TeleCom Inc.
1790 Broadway
New York, New York 10019
Phone: (212) 757-3333
Facsimile: (212) 757-3423
Attention: Stewart H. Wahrsager, Esq.
(c) if given to any Holder, at the address set forth on the books and
records of the Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first-class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.4 BENEFIT. This Guarantee Agreement is solely for the benefit
of the Holders, the Guarantee Trustee and other Indemnified Persons and is not
separately transferable from the Preferred Securities.
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SECTION 8.5 INTERPRETATION. In this Guarantee Agreement, unless the
context otherwise requires:
(a) Capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6 GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
ARTICLE 9
INDEMNIFICATION
SECTION 9.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Holder for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Guarantee Agreement and
in a manner that such Indemnified Person reasonably believed to be within the
scope of the authority conferred on such Indemnified Person by this Guarantee
Agreement or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
18
<PAGE>
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 9.2 COMPENSATION AND INDEMNIFICATION.
The Guarantor agrees to pay to the Guarantee Trustee such compensation
for its services as shall be mutually agreed upon by the Guarantor and the
Guarantee Trustee (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust). The
Guarantor shall reimburse the Guarantee Trustee upon request for all reasonable
out-of-pocket expenses incurred by it, including the reasonable compensation and
expenses of the Guarantee Trustee's agents and counsel, except any expense as
may be attributable to the negligence or bad faith of the Guarantee Trustee.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The provisions of this
Section 9.2 shall survive the termination of this Guarantee Agreement and shall
survive the resignation or removal of the Guarantee Trustee.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all of which together
shall constitute one and the same instrument.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
SUPERIOR TELECOM INC.,
as Guarantor
By: /s/ Steven S. Elbaum
---------------------------------------
Name: Steven S. Elbaum
Title: Chairman and Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY,
not in its individual capacity but solely as
Guarantee Trustee
By: /s/ Herbert J. Lemmer
---------------------------------------
Name: Herbert J. Lemmer
Title: Vice President
20
<PAGE>
EXHIBIT 5.1
PROSKAUER ROSE LLP
1585 Broadway
New York, New York 10036-8299
August 17, 1999
Superior TeleCom Inc.
1790 Broadway
New York, New York 10019
Dear Sirs:
We are acting as counsel to Superior TeleCom Inc., a Delaware corporation (the
"Company"), in connection with the Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company and Superior Trust I, a statutory
business trust created under the laws of the State of Delaware (the "Trust"),
under the Securities Act of 1933, as amended (the "Act"), relating to the
registration of 1,473,352 8 1/2% trust convertible preferred securities (the
"Trust Preferred Securities") issued by the Trust, up to $73,667,600 aggregate
principal amount of the Company's 8 1/2% convertible subordinated debentures
(the "Debentures"), shares of the Company's common stock, par value $.01 per
share, issuable upon conversion of the Trust Preferred Securities and the
Debentures (the "Shares"), and the guarantee of the Company relating to the
Trust Preferred Securities (the "Guarantee").
We have examined such records, documents and other instruments as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth. We
have also assumed, without investigation, the authenticity of any document
submitted to us as an original, the conformity to originals of any document
submitted to us as a copy, the authenticity of the originals of such latter
documents, the genuineness of all signatures and the legal capacity of natural
persons signing such documents.
Based upon, and subject to, the foregoing, we are of the opinion that:
1. the Debentures have been duly authorized by the Company for issuance.
2. the Shares have been duly authorized by the Company and, when issued upon
the due conversion of the Trust Preferred Securities or the Debentures, will be
validly issued, fully paid and non-assessable.
3. the Guarantee has been duly authorized by the Company.
<PAGE>
4. The Debentures and the Guarantee are the legal, valid and binding obligations
of the Company, enforceable against it in accordance with their terms, except as
may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent
transfer, reorganization, moratorium and other similar laws now or hereafter in
effect relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether enforcement is sought in equity or
at law), including, without limitation, principles regarding good faith and fair
dealing.
The foregoing opinion is limited to the laws of the State of New York and the
corporate laws of the State of Delaware, and we express no opinion as to the
effect on the matters covered by this letter of the laws of any other
jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters." In giving the foregoing consent, we do not admit that we are in the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ PROSKAUER ROSE LLP
- ----------------------
<PAGE>
Exhibit 5.2
[Letterhead of Morris, Nichols, Arsht & Tunnell]
August 17, 1999
Superior Trust I
c/o Superior TeleCom Inc.
1790 Broadway
New York, New York 10019
Re: SUPERIOR TRUST I
Ladies and Gentlemen:
We have acted as special Delaware counsel to Superior Trust I, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters relating to the registration of certain Preferred Securities of the
Trust (the "S-3 Preferred Securities") as described in the Registration
Statement (and the Prospectus forming a part thereof) on Form S-3 filed with the
Securities and Exchange Commission (the "Commission") on August 17, 1999 (the
"S-3 Registration Statement") by the Trust and Superior TeleCom Inc.
(the "Company").
The Preferred Securities have been issued (i) pursuant to the
Amended and Restated Declaration of Trust of the Trust dated as of March 31,
1999 (the "Governing Instrument"), (ii) pursuant to the Agreement and Plan of
Merger dated as of October 21, 1998, as amended by an amendment thereto dated
February 24, 1999 (as amended, the "Merger Agreement") among the Company, SUT
Acquisition Corp., a Delaware corporation and a subsidiary of the Company, and
Essex International Inc. ("Essex") and (iii) as described in Registration
Statement No. 333-68889 (and the Prospectus forming a part thereof) on Form S-4
filed with the Commission on December 14, 1998, as amended by Pre-Effective
Amendments Nos. 1, 2 and 3 thereto (as amended, the "S-4 Registration
Statement"). Capitalized terms used
<PAGE>
herein and not otherwise herein defined are used as defined in the Governing
Instrument.
In rendering this opinion, we have examined and relied upon copies
of the following documents in the forms provided to us: the Certificate of Trust
of the Trust as filed in the Office of the Secretary of State of the State of
Delaware (the "State Office") on December 9, 1998 (the "Certificate"); the
Declaration of Trust of the Trust dated as of December 9, 1998 (the "Original
Governing Instrument"); the Governing Instrument; the Indenture dated as of
March 31, 1999 entered into by the Company relating to the Debentures; the
Guarantee Agreement dated as of March 31, 1999 entered into by the Company
relating to the Preferred Securities; the Merger Agreement; the Registration
Rights Agreement dated as of March 17, 1999 among the Trust, the Company and the
"Investors" named therein; the S-3 Registration Statement; the S-4 Registration
Statement; and a certification of good standing of the Trust obtained as of a
recent date from the State Office. In such examinations, we have assumed the
genuineness of all signatures, the conformity to original documents of all
documents submitted to us as drafts or copies or forms of documents to be
executed and the legal capacity of natural persons to complete the execution of
documents. We have further assumed for purposes of this opinion: (i) the due
formation or organization, valid existence and good standing of each entity that
is a party to any of the documents reviewed by us under the laws of the
jurisdiction of its respective formation or organization; (ii) the due
authorization, execution and delivery by, or on behalf of, each of the parties
thereto of the above-referenced documents (including, without limitation, the
due authorization, execution and delivery of the Governing Instrument prior to
the first issuance of Preferred Securities); (iii) that no event has occurred
subsequent to the filing of the Certificate that would cause a dissolution or
liquidation of the Trust under the Original Governing Instrument or the
Governing Instrument, as applicable; (iv) that the activities of the Trust have
been and will be conducted in accordance with the Original Governing Instrument
or the Governing Instrument, as applicable, and the Delaware Business Trust Act,
12 DEL. C. ss.ss. 3801 ET SEQ. (The "Delaware Act"); (v) that each Person that
acquired Preferred Securities in the "Merger" (as defined in the Merger
Agreement) validly tendered common stock of Essex ("Essex Common Stock") in
exchange therefor, that such Essex Common Stock was duly accepted, and that such
Person duly received Preferred Securities in consideration thereof, all in
accordance with the terms and conditions of the Governing Instrument, the S-4
Registration Statement and the Merger Agreement; (vi) that the Preferred
Securities have otherwise been issued and sold to, and held or transferred by,
the holders of Preferred Securities (and any subsequent transferee), and all
transfers have been made, in accordance with the terms, conditions, requirements
and procedures set forth in the Governing Instrument, the S-4 Registration
Statement and the Merger Agreement; (vii) that none of the Preferred Securities
have been called for redemption, redeemed, converted or exchanged or canceled
(except in connection with a permitted transfer) and all of the Preferred
Securities remain outstanding; and (viii) that the documents examined by us are
in full force and effect, express the entire understanding of the parties
thereto with respect to the subject matter thereof
<PAGE>
and have not been amended, supplemented or otherwise modified, except as herein
referenced. No opinion is expressed with respect to the requirements of, or
compliance with, federal or state securities or blue sky laws. We have not
reviewed any documents other than those identified above in connection with this
opinion, and we have assumed that there are no other documents that are contrary
to or inconsistent with the opinions expressed herein. Further, we have not
participated in the preparation of the S-3 Registration Statement, the S-4
Registration Statement or any other offering materials relating to the Preferred
Securities, and we assume no responsibility for their contents. As to any fact
material to our opinion, other than those assumed, we have relied without
independent investigation on the above-referenced documents and certificates and
on the accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects
to matters of Delaware law, it is our opinion that:
1. The Trust is a duly formed and validly existing business trust in
good standing under the laws of the State of Delaware.
2. The S-3 Preferred Securities constitute validly issued and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable beneficial interests in the assets of the Trust.
3. Under the Delaware Act and the terms of the Governing Instrument,
each holder of S-3 Preferred Securities of the Trust, in such capacity, will be
entitled to the same limitation of personal liability as that extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware; provided, however, we express no
opinion with respect to the liability of any holder of S-3 Preferred Securities
who is, was or may become a named Trustee of the Trust. Notwithstanding the
foregoing, we note that pursuant to the Governing Instrument, holders of S-3
Preferred Securities may be obligated to make payments or provide indemnity or
security under the circumstances set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
S-3 Registration Statement and to the use of our name and reference to our
opinion under the heading "LEGAL MATTERS" in the Prospectus forming a part
thereof. In giving this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of the Securities
Act of 1933, as amended, or the rules and regulations of the Commission
thereunder. This opinion speaks only as of the date hereof and is based on our
understandings and assumptions as to present facts, and on our review of the
above-referenced documents and the application of Delaware law as the same exist
as of the date hereof, and we undertake no obligation to update or supplement
this opinion after the date hereof for the benefit
<PAGE>
of any person or entity with respect to any facts or circumstances that may
hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the addressee hereof in connection with the matters contemplated hereby and
may not be relied on by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
EXHIBIT 8.1
PROSKAUER ROSE LLP
1585 Broadway
New York, New York 10036-8299
August 17, 1999
Superior TeleCom Inc.
Superior Trust I
1790 Broadway
New York, N.Y. 10019-1412
Ladies and Gentlemen:
We have acted as counsel to Superior TeleCom Inc., a Delaware
corporation (the "Company"), and Superior Trust I, a Delaware statutory business
trust (the "Trust"), in connection with the preparation and filing with the
Securities and Exchange Commission (the "SEC") of the Company's and the Trust's
Registration Statement on Form S-3 (the "Registration Statement").
Pursuant to the Registration Statement, up to $73,667,600 aggregate
principal amount of the Company's 8 1/2% Convertible Subordinated Debentures due
2014 ("Convertible Subordinated Debt Securities") that have been issued to the
Trust in connection with the issuance by the Trust of 1,473,352 8 1/2% Trust
Convertible Preferred Securities (the "Trust Preferred Securities") to certain
former stockholders of Essex International Inc. ("Essex") in connection with the
merger of Essex into a wholly owned subsidiary of the Company, are each being
registered with the SEC for proposed sale to the public.
You have requested our opinion as to the material United States
federal income tax consequences of the ownership, disposition and conversion of
the Convertible Subordinated Debt Securities and Trust Preferred Securities. In
preparing our opinion, we have reviewed and relied upon the Registration
Statement with respect to the matters discussed therein and such other documents
as we deemed necessary.
In our opinion, the discussion in the Registration Statement under
the caption "Material Federal Income Tax Consequences" accurately describes the
material U.S. federal income tax consequences of the ownership, disposition and
conversion of the Convertible Subordinated Debt Securities and Trust Preferred
Securities.
<PAGE>
The foregoing opinion is based upon the Internal Revenue Code of
1986, as amended, Treasury Regulations (including proposed and temporary
regulations) promulgated thereunder, rulings, official pronouncements and
judicial decisions all as in effect on the date hereof and all of which are
subject to change, possibly with retroactive effect.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and the reference to this firm under the caption
"Legal Matters" and "Material Federal Income Tax Consequences" in the
Registration Statement. In giving such consent, we do not hereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933 and the rules and regulations of the SEC promulgated
thereunder.
Sincerely yours,
/s/ PROSKAUER ROSE LLP
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report (and to all references to our firm) included in or made a part of this
registration statement.
/s/ Arthur Andersen LLP
Atlanta, Georgia
August 16, 1999
<PAGE>
Exhibit 99.1
EXECUTION COPY
REGISTRATION RIGHTS AGREEMENT dated as of
March 17, 1999, among the individuals and entities
named in Schedule I hereto (the "Investors"),
SUPERIOR TELECOM INC., a Delaware corporation (the
"Company"), and SUPERIOR TRUST I, a Delaware
statutory business trust (the "Trust").
WHEREAS the Company, SUT Acquisition Corp. ("Merger Sub") and
Essex International Inc., a Delaware corporation ("Essex"), have entered into an
Agreement and Plan of Merger dated as of October 21, 1998 (the "Merger
Agreement"), pursuant to which Merger Sub will be merged with and into Essex
(the "Merger");
WHEREAS in connection with the Merger the Trust will issue
8-1/2% Trust Convertible Preferred Securities (the "Trust Preferred Securities")
to the Investors and has agreed to provide certain registration rights;
WHEREAS in accordance with the Amended and Restated
Declaration of Trust governing the Trust Preferred Securities, the Trust
Preferred Securities shall be exchangeable into the Company's 8-1/2% Convertible
Subordinated Debentures due 2014 (the "Subordinated
Debentures");
WHEREAS the parties hereto desire to set forth the terms and
conditions relating to the sale by means of public offerings of Trust Preferred
Securities owned by the Investors and their respective affiliates and
transferees.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
SECTION 1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"BUSINESS DEVELOPMENT DETERMINATION" has the meaning set forth
in Section 6 hereof.
"DEMAND REGISTRATION" has the meaning set forth in Section 4
hereof.
"DEMAND REGISTRATION PERIOD" has the meaning set forth in
Section 4 hereof.
<PAGE>
"EFFECTIVE TIME" shall have the meaning ascribed to such term
in the Merger Agreement.
"EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
"FORM S-3" means a registration statement on Form S-3 under
the Securities Act or any successor form or any similar form that permits
incorporation by reference of reports filed by the Company under the Exchange
Act.
"FORM S-4" means the joint preliminary proxy statement and
registration statement on Form S-4 under the Securities Act, and any amendments
thereto, initially filed by the Company, the Trust and Essex on December 14,
1998.
"LOSSES" has the meaning set forth in Section 8(d)
hereof.
"MANAGING UNDERWRITERS" means the Underwriter or Underwriters
that manage or lead an underwritten offering.
"PROSPECTUS" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Securities Act), as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all amendments and supplements to the prospectus, including post-effective
amendments.
"REGISTRABLE SECURITIES" means all Securities held by the
Investors and their respective affiliates and transferees. As to any particular
Registrable Securities, such Securities will cease to be Registrable Securities
when they have been effectively registered under the Securities Act and disposed
of in accordance with any Registration Statement covering them.
"REGISTRATION STATEMENT" means any registration statement
filed by the Company or the Trust or both, as the case may be, with the SEC
under the Securities Act that covers some or all Registrable Securities, and any
amendments or supplements thereto, including post-effective amendments, in each
case including the Prospectus contained therein, all exhibits thereto and all
documents and other materials incorporated by reference therein, including a
Shelf Registration Statement.
2
<PAGE>
"SEC" means the Securities and Exchange
Commission.
"SECURITIES" means the Trust Preferred Securities received by
the Investors in connection with the Merger or any shares of capital stock of
the Company issuable upon conversion of such Trust Preferred Securities as well
any other shares of capital stock or other securities, including Subordinated
Debentures, into which any such securities are reclassified or changed,
including by reason of a merger, consolidation, reorganization or
recapitalization.
"SECURITIES ACT" means the Securities Act of 1933.
"SELLING PARTY" has the meaning set forth in
Section 8(b) hereof.
"SHELF REGISTRATION" means a registration effected
pursuant to Section 2 hereof.
"SHELF REGISTRATION PERIOD" has the meaning set
forth in Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" registration
statement filed by the Company or the Trust or both, as the case may be,
pursuant to the provisions of Section 2 hereof with the SEC covering offers and
sales in accordance with Rule 415 under the Securities Act, or any similar rule
that may be adopted by the SEC (whether or not the Company or the Trust is then
eligible to use Form S-3), that covers some or all of the Registrable
Securities, and any amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"UNDERWRITER" means any underwriter of Registrable Securities
in connection with an offering thereof pursuant to a Registration Statement.
SECTION 2. SHELF REGISTRATION. (a) The Company or the Trust or
both, as the case may be, shall prepare and, not later than 10 days after the
Effective Time, shall file with the SEC, and thereafter shall use its best
efforts to cause to be declared effective under the Securities Act as soon as
practicable, a Shelf Registration Statement relating to the offer and sale by
the Investors of all Registrable Securities in a manner elected by the Investors
and set forth in such Shelf Registration Statement. No securities other than
Registrable Securities shall be included in any such initial Shelf Registration
Statement or any additional
3
<PAGE>
Shelf Registration Statement with respect thereto without the consent of the
Investors.
(b) The Company or the Trust, as the case may be, shall use
its best efforts to keep the Shelf Registration Statement continuously effective
during the period (the "Shelf Registration Period") from the date a Registration
Statement is declared effective by the SEC until 30 days following the first
anniversary of the Effective Time.
(c) Without limiting the foregoing, the Company or the Trust
or both, as the case may be, shall be deemed not to have used its best efforts
to keep the Shelf Registration Statement effective during the Shelf Registration
Period if the Company or the Trust, as the case may be, voluntarily takes any
action or fails to take any action that would result in (i) the Investors not
being able to offer and sell Registrable Securities thereunder, (ii) such Shelf
Registration Statement failing to comply as to form with the applicable
requirements of the Securities Act or (iii) any Prospectus forming a part of any
Shelf Registration Statement containing an untrue statement of a material fact
or omitting to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading unless,
in each case, (x) such action or failure to take action is required by
applicable law, rule, regulation, or legal proceeding or (y) such action or
failure to take action is permitted by Section 6 hereof.
(d) Subject to Section 6 hereof, if the Shelf Registration
Statement ceases to be effective for any reason at any time during the Shelf
Registration Period, the Company or the Trust or both, as the case may be, shall
use its best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and shall (i) within five days after such cessation of
effectiveness, amend the Shelf Registration Statement in a manner reasonably
expected to obtain the withdrawal of the order suspending the effectiveness
thereof, or (ii) file an additional Shelf Registration Statement subsequent to
the expired or ineffective Shelf Registration Statement covering the Registrable
Securities. If any additional Shelf Registration Statement is filed, the Company
or the Trust or both, as the case may be, shall use its or their best efforts to
cause such Shelf Registration Statement to be declared effective as soon as
practicable after such filing and to keep such Shelf Registration Statement
continuously effective for the remainder of the Shelf Registration Period. As
used herein, the term "Shelf Registration Statement" means any initial Shelf
Registration Statement
4
<PAGE>
and any additional Shelf Registration Statement filed as contemplated by this
Section 2.
(e) Subject to Section 6 hereof, the Company or the Trust or
both, as the case may be, shall supplement and amend as promptly as practicable
any Shelf Registration Statement if (i) required by the SEC or the rules,
regulations or instructions applicable to such Shelf Registration Statement
(including to cause all information in such Shelf Registration Statement to
conform in all respects to all information contained in reports filed by the
Company with the SEC pursuant to the Exchange Act), (ii) otherwise required by
or advisable under the Securities Act or (iii) requested by the Investors or the
Managing Underwriters with respect to an underwritten offering of such
Registrable Securities.
(f) If during the Shelf Registration Period any Registrable
Securities have not been included in a Shelf Registration Statement, the Company
or the Trust or both, as the case may be, shall upon the request of any Investor
file a subsequent Shelf Registration Statement covering all such unregistered
Registrable Securities that includes a combined Prospectus permitting the
inclusion in such Prospectus of all Registrable Securities, including
Registrable Securities included in a previously filed Registration Statement.
(g) If at any time or from time to time the Investors desire
to sell Registrable Securities in an underwritten offering pursuant to the Shelf
Registration Statement, the Underwriters, including the Managing Underwriter,
shall be selected by the Investors, subject to the consent of the Company which
may not be unreasonably withheld.
SECTION 3. PIGGYBACK REGISTRATIONS. If the Company at any time
after the Shelf Registration Period and prior to the expiration of the second
anniversary of the Effective Time proposes to register securities under the
Securities Act (other than pursuant to a registration statement on Form S-4 or
S-8 or the equivalent thereof or pursuant to Section 2 hereof) involving any of
its equity securities (or any security with respect to which equity securities
may be issuable upon exercise, conversion or exchange of any options, rights
thereto or thereunder) to be offered for cash or cash equivalents in an
underwritten public offering, the Company shall each such time give prompt
written notice to the Investors of the Company's intention to do so, describing
such securities and specifying the form and manner and the other relevant facts
involved in such proposed registration (including the identity of the Managing
Underwriter and whether such
5
<PAGE>
offering will be pursuant to a "best efforts" or "firm commitment"
underwriting). Upon the written request of the Investors delivered to the
Company within 15 days after such notice shall have been given to the Investors
(which request shall specify the Registrable Securities intended to be disposed
of by the Investors and the intended method of disposition thereof), the Company
and the Trust or both, as the case may be, shall effect the registration (a
"Piggyback Registration") under the Securities Act, as expeditiously as is
reasonable, of the sale of all Registrable Securities that the Company has been
so requested to register by the Investors and include all such Registrable
Securities in such offering (by means of a combined Prospectus if the offering
of such Registrable Securities is covered by another Registration Statement
declared effective in accordance with Section 2 hereof) (in accordance with the
intended methods of distribution thereof as aforesaid); PROVIDED, HOWEVER, that:
(i) if, at any time after giving such written notice of its
intention to register any offering of such securities and prior to the
effective date of the Registration Statement filed in connection with
such Piggyback Registration, the Company shall determine for any reason
not to register or to delay the registration of such offering of
securities, the Company may, at its election, give written notice of
such determination to the Investors in connection with such Piggyback
Registration thereby relieving the Company or the Trust or both of its
or their obligations to register such securities in such offering (but
the Company shall not thereby be relieved from its obligation to pay
the registration expenses in connection therewith to the extent
provided in Section 7 hereof);
(ii) if the Managing Underwriter of such proposed Piggyback
Registration offering shall advise the Company in writing that, in the
judgment of such Managing Underwriter, the inclusion in any
Registration Statement pursuant to this Section 3 of some or all of the
Registrable Securities creates a substantial risk that the proceeds or
price per unit the Company or persons other than the Company will
derive from such registration will be materially reduced and/or that
the number of securities included in the offering to be registered
(including those sought to be included at the insistence of the Company
and any other party entitled to participate in such offering) is too
large a number to be reasonably sold, or the Managing Underwriter of
such underwritten offering shall inform the Company in writing of its
opinion that the securities requested to be included in such offering
6
<PAGE>
would materially adversely affect its ability to effect such offering,
the Company shall register an offering of, and shall subsequently
offer, that number of securities that the Company is so advised can be
sold in such offering, which shall be allocated in the following
priority: (A) FIRST, the securities the Company proposes to sell,
(B) SECOND, the securities proposed to be sold by any person exercising
demand registration rights and (C) THIRD, the Registrable Securities
requested to be included in such offering and the securities proposed
to be sold by any other holder allocated ratably among such holders on
the basis of the securities proposed to be sold; and
(iii) if the Managing Underwriter of such proposed Piggyback
Registration offering shall advise the Company in writing that, in the
judgment of such Managing Underwriter, the inclusion of any Registrable
Securities in such offering of a type, class or series, as the case may
be, different from that of the securities originally intended to be
included in such offering would materially adversely affect the success
of the offering of such securities originally intended to be so
included, then the Company shall promptly advise the Investors thereof
and may require, by written notice to the Investors accompanying such
advice, that such different Registrable Securities be excluded from
such offering to the extent the inclusion thereof could adversely
affect such offering.
SECTION 4. DEMAND REGISTRATION RIGHT. If the Company or the
Trust, as the case may be, is not permitted under applicable law from time to
time in effect to maintain an effective Shelf Registration Statement during the
Shelf Registration Period or if, during the one-year period terminating on the
second anniversary of the Effective Time, the Company or the Trust does not meet
the requirements of Rule 144(c) under the Securities Act, each of the Investors
may make a written request to the Company for registration with the SEC under
and in accordance with the provisions of the Securities Act of all or part of
their Registrable Securities and the Company or the Trust or both, as the case
may be, shall use its or their best efforts to effect such registration (a
"Demand Registration"); PROVIDED, HOWEVER, that (i) the Company or the Trust, as
the case may be, need effect, and the Investors are entitled to, only one such
Demand Registration during the period (the "Demand Registration Period") between
the first and second anniversary of the Effective Time, and (ii) no Demand
Registration may be requested after the end of the Demand Registration Period.
No securities other than Registrable
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Securities shall be included in any such Demand Registration offering without
the consent of the Investors.
SECTION 5. REGISTRATION PROCEDURES. In connection with any
Registration Statement, the following provisions shall apply:
(a) The Company shall furnish to the Investors (if they are
then holding Registrable Securities) and their counsel prior to the filing
thereof with the SEC, a copy of any such Registration Statement (including any
preliminary prospectus contained therein), and each amendment thereto and each
amendment or supplement, if any, to the Prospectus included therein and shall
reflect in each such document, when so filed with the SEC, such comments as the
Investors reasonably may propose.
(b) The Company shall ensure that (i) any such Registration
Statement and any amendment thereto and any Prospectus forming part thereof and
any amendment or supplement thereto complies as to form in all material respects
with the Securities Act, (ii) any such Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) subject to
Section 6 hereof, any Prospectus forming part of any such Registration
Statement, and any amendment or supplement to such Prospectus, does not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading other than, in clauses
(ii) and (iii), any such untrue statement or omission made therein in reliance
upon and conformity with written information furnished to the Company by or on
behalf of the Investors specifically for inclusion therein.
(c) The Company shall promptly advise the Investors (if they
are then holding Registrable Securities) and, if requested by the Investors,
promptly confirm such advice in writing:
(i) when any such Registration Statement and any amendment or
supplement thereto has been filed with the SEC and when any such
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of any request by the SEC for amendments or supplements
to any such Registration Statement or the Prospectus included therein
or for additional information;
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(iii) of the issuance by the SEC of any stop order suspending
the effectiveness of any such Registration Statement or the initiation
of any actions or proceedings for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Registrable
Securities included therein for sale in any jurisdiction or the
initiation or threatening of any action or proceeding for such purpose;
and
(v) of the happening of any event that requires the making of
any changes in any such Registration Statement or Prospectus so that,
as of such date, the statements therein are not misleading and do not
omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made)
not misleading.
(d) The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such Registration
Statement at the earliest possible time.
(e) The Company shall furnish to the Investors (if they are
then owning Registrable Securities) and their counsel, without charge, a copy of
each Registration Statement and any and all post-effective amendments thereto,
including financial statements and schedules, and all exhibits thereto
(including those incorporated therein by reference).
(f) The Company shall furnish the Investors (if they are then
owning Registrable Securities) and their counsel, without charge, copies of any
and all transmittal letters or other correspondence with the SEC or any other
governmental entity relating to a Registration Statement or the public offering
of the Company's or the Trust's securities, as applicable.
(g) The Company shall, during the Shelf Registration Period or
the Demand Registration Period, as the case may be, deliver to the Investors (if
they are then owning Registrable Securities), without charge, as many copies of
the Prospectus (including each preliminary Prospectus) included in such
Registration Statement and any amendment or supplement thereto as such Person
may reasonably request; and subject to Section 6 below, the Company or the Trust
or both, as the case may be, consents to the use of the Prospectus or any
amendment or supplement
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thereto by each such Person in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto.
(h) Prior to any offering of Registrable Securities pursuant
to any Registration Statement, the Company or the Trust or both, as the case may
be, shall use its or their best efforts to register or qualify or cooperate with
the Investors and their counsel in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities, Blue Sky or similar laws of such U.S. jurisdictions as the Investors
request, and the Company or the Trust or both, as the case may be, shall use its
or their best efforts to do any and all other acts or things necessary or
advisable to enable the offer and sale in such U.S. jurisdictions of the
Registrable Securities covered by such Registration Statement; PROVIDED,
HOWEVER, that the Company or the Trust or both, as the case may be, shall not be
required to qualify generally to do business in any jurisdiction where it is not
then so qualified or to take any action which would subject it to general
service of process or to taxation in any such jurisdiction where it is not then
so subject.
(i) The Company or the Trust, as the case may be, shall
cooperate with the Investors to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold pursuant to any
Registration Statement, free of any restrictive legends and in such
denominations and registered in such names as requested prior to such sales.
(j) Subject to Section 6 hereof, at any time and from time to
time upon the occurrence of any event contemplated by Section 5(c)(v) hereof,
the Company or the Trust or both, as the case may be, shall promptly prepare and
file with the SEC a post-effective amendment to any Registration Statement or an
amendment or supplement to the related Prospectus or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities offered thereby, the Prospectus will not include an untrue statement
of a material fact or omit to state any material fact necessary to make the
statement therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading.
(k) The Company or the Trust or both, as the case may be,
shall comply with all applicable rules and regulations of the SEC, and the
Company shall make generally available to the Investors as soon as practicable
after the effective date of the applicable Registration Statement an
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earnings statement satisfying the provisions of Section 11(a) of the Securities
Act and Rule 158 under the Securities Act.
(l) Each holder of Registrable Securities that plans to
participate in a distribution pursuant to a Registration Statement shall furnish
to the Company such information regarding such Person and its affiliates and the
distribution of such Registrable Securities as the Company may from time to time
reasonably require for inclusion in such Registration Statement. Such
information at the time any Registration Statement and any amendment thereto
becomes effective, and at the time any Prospectus or supplement thereto
previously reviewed by the Investors forming a part of any Registration
Statement is delivered in any offering of Registrable Securities, shall not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary (in the case of the Prospectus, in
light of the circumstances which the were made) to make the statements therein
not misleading. The Investors shall advise the Company and, if requested by the
Company, confirm such advice in writing in the event that the Investors become
aware of the happening of any event that requires the making of any changes in a
Registration Statement or Prospectus so that as of such dates the statements
therein provided by the Investors specifically for inclusion therein are not
misleading and do not omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
(m) Subject to Section 6 hereof, the Company or the Trust or
both, as the case may be, shall, upon request, promptly incorporate in a
Prospectus or Prospectus supplement or post-effective amendment to a
Registration Statement, such information, if any, as the Managing Underwriters,
the Investors and the Company reasonably agree should be included therein and
shall make all required filings of such Prospectus or Prospectus supplement or
post-effective amendment as soon as practicable following notification of the
matters to be incorporated in such Prospectus or Prospectus supplement or
post-effective amendment, and the Company shall print and deliver copies of such
amended Prospectus or Prospectus supplement to all purchasers of such
Registrable Securities.
(n) If requested by the Investors in connection with the
offering and sale of Registrable Securities pursuant to a Registration
Statement, the Company or the Trust or both, as the case may be, shall enter
into one or more underwriting agreements with the Managing Underwriters
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selected in accordance with Section 2(g) hereof. Any such underwriting agreement
shall contain such indemnities and other agreements as are then customarily
included in underwriting agreements relating to secondary public offerings.
(o) The Company shall: (i) make reasonably available for
inspection during normal business hours by the Investors, any Underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent or representative retained by the Investors
or any such Underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries or the
Trust, as the case may be; (ii) cause the Company's officers, directors and
employees or the trustees of the Trust, as the case may be, to supply all
relevant information reasonably requested by the Investors or any such
Underwriter, attorney, accountant, agent or representative in connection with
any such Registration Statement as is customary for similar due diligence
examinations; PROVIDED, HOWEVER, that any information that is designated in
writing by the Company as confidential at the time of delivery of such
information shall be kept confidential by the Investors or any such Underwriter,
attorney, accountant, agent or representative, unless (x) disclosure is, in the
opinion of counsel to the disclosing party, required to be made in connection
with a court proceeding or required by law or (y) such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality; (iii) make such representations and
warranties to the holders of Registrable Securities registered thereunder and
the Underwriters, if any, in form, substance and scope as are customarily made
by issuers to underwriters in secondary public underwritten offerings; (iv)
obtain opinions of counsel to the Company or the Trust or both, as the case may
be, and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each selling holder of Registrable Securities and the
Underwriters, if any, covering such matters as are customarily covered in
opinions requested in underwritten secondary public offerings by an affiliate
and such other matters as may be reasonably requested by such holders of
Registrable Securities and Underwriters; (v) obtain "cold comfort" letters and
updates thereof from the independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
a Registration Statement) addressed to each
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<PAGE>
holder of Registrable Securities and the Underwriters, if any, in customary form
and covering matters of the type customarily covered in "cold comfort" letters
in connection with underwritten secondary public offerings by an affiliate; (vi)
deliver such documents and certificates as may be reasonably requested by the
Investors and the Managing Underwriters, if any, including those to evidence
compliance with Section 5(i) hereof and with any customary condition contained
in the underwriting agreement or other agreement entered into by the Company or
the Trust or both, as the case may be; and (vii) use its best efforts to make
its senior management reasonably available for customary "roadshow" or similar
presentations to and meetings with potential investors. The foregoing action set
forth in clauses (iii), (iv), (v) and (vi) of this Section 5(o) shall be
performed at (A) the effectiveness of such Registration Statement and each
post-effective amendment thereto and (B) each closing under any underwriting or
similar agreement as and to the extent required thereunder.
(p) The Company shall cause all Registrable Securities to be
listed on each securities exchange or quoted through each automated interdealer
quotation system on which similar securities of the Company or the Trust, as the
case may be, are then listed or quoted.
SECTION 6. SUSPENSION OF OFFERINGS IN CERTAIN CIRCUMSTANCES.
The Company shall be entitled for the period referred to below to postpone the
filing of any Registration Statement or the taking of any other action otherwise
required to be prepared, filed or taken by it pursuant to Sections 2, 3, 4 and 5
hereof and/or to direct the suspension of any public offering, sale or
distribution of Registrable Securities if the Board of Directors of the Company
determines in good faith that any disclosure that would be required in
connection therewith would have a material adverse effect on the Company or any
financing, acquisition, disposition, merger, business combination, corporate
reorganization, or other transaction or development involving the Company or any
subsidiary of the Company (a "Business Development Determination"). Such
postponement or direction shall continue until such time as the Board of
Directors of the Company determines that the preparation and/or filing of such
Registration Statement or the taking of any such action and/or such public
offering, sale or distribution would no longer have a material adverse effect on
the Company or any such transaction but shall not, in any event, exceed 30 days
for any particular Business Development Determination or 60 days for all
Business Development Determinations during any twelve month period. No Business
Development Determination shall occur within 180 days of the expiration of a
postponement or suspension
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caused by another Business Development Determination. The Board shall, as
promptly as practicable, give the Investors written notice of any Business
Development Determination.
SECTION 7. REGISTRATION EXPENSES. The Company shall bear all
costs and expenses incurred in connection with Sections 2, 3, 4 and 5 hereof,
including fees and disbursements of counsel and accountants for it and the
holders of Registrable Securities, printing, messenger and delivery expenses and
all SEC, National Association of Securities Dealers, Inc. and Blue Sky filing
fees (including those payable by any Underwriters); PROVIDED, HOWEVER, that such
expenses shall exclude any brokerage fees or underwriting discounts and fees.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF HOLDERS OF REGISTRABLE SECURITIES. In the case of any
offering or sale of Registrable Securities covered by this Agreement, the
Company shall indemnify and hold harmless each of the holders of Registrable
Securities and each person affiliated with or retained by the holders of
Registrable Securities and who may be subject to liability under any applicable
securities laws, against any and all losses, claims, damages or liabilities to
which they or any of them may become subject under the Securities Act or any
other statute or common law of the United States of America or political
subdivision thereof, or any other country or political subdivision thereof or
otherwise, including, subject to Section 8(c) hereof, any amount paid in
settlement of any litigation commenced or threatened (including any amounts paid
pursuant to or in settlement of claims made under customary indemnification or
contribution provisions of any underwriting or similar agreement entered into by
the respective holders of Registrable Securities in connection with any offering
or sale of Registrable Securities), and shall, subject to Section 8(c) hereof,
promptly reimburse them, as and when incurred, for any legal fees or
disbursements or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of or shall be based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or in any preliminary or final
Prospectus included therein) or other offering document relating to the offering
and sale of such Registrable Securities, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that the Company shall
be liable in any case only to the extent that any such loss, claim, damage,
liability or action arises out of or is based
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upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any such holders of
Registrable Securities specifically for inclusion therein, including any such
information furnished pursuant to Section 5(l) hereof.
(b) INDEMNIFICATION OF THE COMPANY OR THE TRUST. In the case
of each offering or sale of Securities covered by this Agreement, each holder of
Registrable Securities that sells such Registrable Securities pursuant to a
Registration Statement ("Selling Party") shall indemnify and hold harmless the
Company or the Trust or both, as the case may be, and each person, if any, who
controls the Company or the Trust or either of them, as the case may be, within
the meaning of Section 15 of the Securities Act, each person affiliated with or
retained by the Company or the Trust or either of them, as the case may be, and
who may be subject to liability under any applicable securities laws, and each
of the Company's directors and those officers of the Company or each of the
Trust's trustees or any of the foregoing, as the case may be, who shall have
signed any Registration Statement, offering memorandum or other offering
document, against any and all losses, claims, damages or liabilities to which
they or any of them may become subject under the Securities Act or any other
statute or common law of the United States of America or political subdivision
thereof, or any other country or political subdivision thereof or otherwise,
including, subject to Section 8(c) hereof, any amount paid in settlement of any
litigation commenced or threatened (including any amounts paid pursuant to or in
settlement of claims made under customary indemnification or contribution
provisions of any underwriting or similar agreement entered into by the
respective holders of Registrable Securities in connection with any offering or
sale of Registrable Securities), and shall, subject to Section 8(c) hereof,
promptly reimburse them, as and when incurred, for any legal fees or
disbursements or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of or shall be based
upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or in any preliminary or final
Prospectus included therein) or other offering document relating to the offering
and sale of such Registrable Securities, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading; PROVIDED, HOWEVER, that such holders of
Registrable Securities shall be liable in any case only to the extent
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that such loss, claim, damage, liability or action arises out of or is based
upon written information solely relating to such holders of Registrable
Securities and their affiliates furnished to the Company by or on behalf of such
holders of Registrable Securities specifically for inclusion in any Registration
Statement, any preliminary Prospectus or Prospectus contained in such
Registration Statement, any offering memorandum or other offering document, or
any amendment thereof or supplement thereto, including any such information
furnished pursuant to Section 5(l) hereof.
(c) PROCEDURE FOR INDEMNIFICATION. Each party indemnified
under Section 8(a) or 8(b) hereof shall, promptly after receipt of notice of the
commencement of any action against such indemnified party in respect of which
indemnity may be sought, notify the indemnifying party in writing of the
commencement thereof. The omission of any indemnified party so to notify an
indemnifying party of such action shall not relieve the indemnifying party from
any liability in respect of such action which it may have to such indemnified
party on account of the indemnity agreement contained in Section 8(a) or 8(b)
hereof, except to the extent that the indemnifying party was or is actually
prejudiced thereby, and in no event shall relieve the indemnifying party from
any other liability that it may have to such indemnified party to the extent the
indemnifying party has not actually been prejudiced thereby. In case any such
action shall be brought against any indemnified party and such indemnified party
shall notify an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
party. If the indemnifying party so assumes the defense thereof, it may not
agree to any settlement of any such action as the result of which any remedy or
relief, other than monetary damages for which the indemnifying party shall be
responsible hereunder, shall be applied to or against the indemnified party,
without the prior written consent of the indemnified party. An indemnifying
party may not assume or jointly assume the defense of an action if in the
reasonable judgment of the indemnified party a conflict of interest may exist
between the indemnifying party and such indemnified party with respect to such
action. An indemnifying party who is not entitled to, who elects not to, or who
has not appointed counsel reasonably satisfactory to the indemnified party
within a reasonable time to, assume the defense of an action shall be obligated
to pay the fees and expenses of counsel for the indemnified party; PROVIDED,
HOWEVER, that the indemnifying party shall not be obligated to pay the fees and
the expenses of more than one counsel (plus local
16
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counsel) for all parties who may be indemnified by such indemnifying party with
respect to such action, unless in the opinion of counsel a conflict of interest
exists between such indemnified party and any other indemnified party with
respect to such action. If the indemnifying party does not assume the defense of
an action, it shall be bound by any settlement to which the indemnified party
agrees, irrespective of whether the indemnifying party consents thereto;
PROVIDED, HOWEVER, that if the indemnifying party does not assume the defense of
action because of a conflict of interest that prevented it from doing so, then
the indemnifying party shall be bound by any settlement to which the indemnified
party agrees and to which the indemnifying party consents (which consent shall
not be unreasonably withheld). If any settlement of any claim is effected by the
indemnified party prior to commencement of any action relating thereto, the
indemnifying party shall be bound thereby only if it has consented in writing
thereto. In any action with respect to which the indemnifying party has assumed
the defense thereof, the indemnified party shall continue to be entitled to
participate in the defense thereof, with counsel of its own choice; PROVIDED,
HOWEVER, that the indemnifying party shall be relieved of the obligation
hereunder to reimburse the indemnified party for the costs thereof.
(d) CONTRIBUTION. In the event that the indemnity provided in
Section 8(a) or 8(b) is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Selling Parties agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company, the Trust and one
or more of the Selling Parties may be subject in such proportion as is
appropriate to reflect the relative fault of the Company, the Trust and the
Selling Parties in connection with the statements or omissions which resulted in
such Losses and any other relevant equitable considerations; PROVIDED, HOWEVER,
that in no case shall any Selling Party be responsible for any amount in excess
of the gain to such Selling Party over the price paid for such Registrable
Securities sold by such Selling Party. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission related to
information provided by the Company, the Trust or the Selling Parties. The
Company and the Selling Parties agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation that does not take account of the equitable considerations referred
above. Notwithstanding the provisions of this Section 8(d), no person guilty of
fraudulent
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misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls a Selling Party within the meaning of either the Securities Act or the
Exchange Act and each director, officer, employee and agent of a Selling Party,
and each person who controls the Company or the Trust or either of them, as the
case may be, within the meaning of either the Securities Act or the Exchange
Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company or each trustee of the Trust or any
of the foregoing, as the case may be, shall have the same rights to contribution
as the Company, subject in each case to the applicable terms and conditions of
this Section 8(d).
SECTION 9. MISCELLANEOUS. (a) NO INCONSISTENT AGREEMENTS;
ENTIRE AGREEMENT. The Company or the Trust, as the case may be, has not as of
the date hereof taken any actions in accordance with or entered into and except
as expressly permitted by Section 5 hereof the Company or the Trust, as the case
may be, shall not from the date hereof until the expiration of the Registration
Period take any actions in accordance with or enter into, any agreement or
arrangement with respect to any class of its securities that limits or
interferes with or is inconsistent with the rights granted to the holders of
Registrable Securities herein or otherwise conflicts with the provisions hereof.
This Agreement, together with Schedule I attached hereto, constitutes the entire
agreement 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 and, except as otherwise expressly provided herein, is not intended to
confer upon any other Person any rights or remedies hereunder.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may be amended, qualified, modified
or supplemented only by means of a written instrument executed by the affected
party or parties.
(c) ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned or transferred,
in whole or in part, by the Company, the Trust or the Investors. Notwithstanding
the previous sentence, any Investor may assign, in whole or in part, any of or
all its rights, interests, and obligations under this Agreement to any affiliate
of such Investor, or any stockholder of, partner in, or member of such Investor,
and such transferee shall be deemed an
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"Investor" hereunder for all purposes. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns. Any attempted
assignment or transfer in violation of this Section 9(c) shall be void.
(d) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
taken together shall be considered one and the same agreement, it being
understood that the parties need not sign the same counterpart.
(e) INTERPRETATION. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. Whenever the words "included", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation".
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed in said State, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
(g) CONSENT TO JURISDICTION. Each of the Company, the Trust
and the Investors irrevocably submits to the exclusive jurisdiction of the
United States District Court for the Southern District of New York located in
the Borough of Manhattan in the City of New York, or if such court does not have
jurisdiction, the Supreme Court of the State of New York, New York County, for
the purposes of any suit, action or other proceeding arising out of this
Agreement or any transaction contemplated hereby. Each of the Company, the Trust
and the Investors further agrees that service of any process, summons, notice or
document by U.S. registered mail to such party's respective address set forth in
Section 9(h) (as it may be changed from time to time) shall be effective service
of process for any action, suit or proceeding in New York with respect to any
matters to which it has submitted to jurisdiction as set forth above in the
immediately preceding sentence. Each of the Company, the Trust and the Investors
irrevocably and unconditionally waives any objective to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the transactions
contemplated hereby in (a) the United States District Court for the Southern
District of New York or (b) the Supreme Court of the State of New York, New York
County, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim in any such court
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that any such action, suit or proceeding brought in any such court has been
brought in an inconvenient forum.
(h) NOTICES. All notices, requests and other communications
hereunder shall be in writing (including fax) and shall be sent, delivered or
mailed, addressed, or faxed to the following addresses (or to any other address
as any party or assignee of a party may specify as its own by giving notice in
accordance herewith):
(a) if to the Company or the Trust, to:
Superior TeleCom Inc.
1790 Broadway, 15th Floor
New York, NY 10019
Tel.: (212) 757-3333
Fax: (212) 757-3423
Attention: Mr. Steven Elbaum
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Tel.: (212) 969-3000
Fax: (212) 969-2900
Attention: Ronald R. Papa, Esq.
(b) if to the Investors, to:
Bessemer Partners & Co.
630 Fifth Avenue
New York, NY 10111
Tel.: (212) 708-9176
Fax: (212) 969-9032
Attention: Mr. Rodney A. Cohen
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Tel: (212) 474-1000
Fax: (212) 474-3700
Attention: Richard Hall, Esq.
20
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Each such notice, request or other communication shall be given (i) by hand
delivery, (ii) by nationally recognized courier service or (iii) by fax, receipt
confirmed. Each such notice, request or communication shall be effective (A) if
delivered by hand or by nationally recognized courier service, when delivered at
the address specified in this Section 9(h) (or in accordance with the latest
unrevoked written direction from such party) and (B) if given by fax, when such
fax is transmitted to the fax number specified in this Section 9(h) (or in
accordance with the latest unrevoked written direction from such party), and the
appropriate confirmation is received.
(i) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(j) EFFECTIVENESS. This Agreement shall become effective at
the Effective Time, other than Section 10, which shall be effective as of the
day and year first above written.
SECTION 10. FORM S-4. Following March 31, 1999, until the
Effective Time (if March 31, 1999, is not the Effective Time), at the written
request of the Investors, the Company and the Trust shall amend the Form S-4 in
accordance with the provisions of the Securities Act to permit the Form S-4 to
be used by the Investors for resales of all or part of their Registrable
Securities.
IN WITNESS WHEREOF, the Investors and the Company by their
duly authorized representatives have caused this Agreement to be executed as of
the day and year first above written.
SUPERIOR TELECOM INC.,
by /s/ Stewart H. Wahrsager
-----------------------------------
Name: Setwart H. Wahrsager
Title: Secretary
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SUPERIOR TRUST I,
by /s/ Stewart H. Wahrsager
-------------------------------
Name: Stewart H. Wahrsager
Title: Administrative Trustee
BESSEMER HOLDINGS, L.P.,
by KYLIX HOLDINGS, L.L.C.,
General Partner,
by DEMAREST CORPORATION,
a principal manager,
by /s/ Robert D. Lindsay
----------------------------
Name: Robert D. Lindsay
Title: President
BESSEC HOLDINGS, L.P.,
by KYLIX HOLDINGS, L.L.C.,
General Partner,
by DEMAREST CORPORATION,
a principal manager,
by /s/ Robert D. Lindsay
-------------------------
Name: Robert D. Lindsay
Title: President
/s/ Ward W. Woods
------------------------------
Ward W. Woods
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THE WOODS FOUNDATION,
by /s/ Ward W. Woods
---------------------------------
Name: Ward W. Woods
Title: President
WOODS 1994 FAMILY PARTNERSHIP,
L.P.,
by NORTH HAILEY
CORPORATION,
General Partner,
by /s/ Ward W. Woods
---------------------------
Name: Ward W. Woods
Title: President
NORTH HAILEY CORPORATION,
by /s/ Ward W. Woods
---------------------------------
Name: Ward W. Woods
Title: President
NEBRIS CORPORATION,
by /s/ Ward W. Woods
---------------------------------
Name: Ward W. Woods
Title: President
/s/ Robert D. Lindsay
------------------------------
Robert D. Lindsay
23
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LINDSAY 1994 FAMILY PARTNERSHIP,
L.P.,
by DEMAREST CORPORATION,
General Partner,
by /s/ Robert D. Lindsay
---------------------------------------
Name: Robert D. Lindsay
Title: President
DEMAREST CORPORATION,
by /s/ Robert D. Lindsay
------------------------------------------
Name: Robert D. Lindsay
Title: President
OLD HUNDRED CORPORATION,
by /s/ Robert D. Lindsay
---------------------------------------
Name: Robert D. Lindsay
Title: President
CRAIGHALL CORPORATION,
by /s/ Rodney A. Cohen
-----------------------------------------
Name: Rodney A. Cohen
Title: President
24
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SCHEDULE I
Bessemer Holdings, L.P.
Bessec Holdings, L.P.
Ward W. Woods
The Woods Foundation
Woods 1994 Family Partnership, L.P.
North Hailey Corporation
Nebris Corporation
Robert D. Lindsay
Lindsay 1994 Family Partnership, L.P.
Demarest Corporation
Old Hundred Corporation
Craighall Corporation
