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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event
reported): June 5, 1997
CNF TRANSPORTATION INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-5046 94-1444798
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
3240 Hillview Avenue
Palo Alto, California 94304
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(Address of principal (Zip Code)
executive offices)
(415) 494-2900
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
Exhibit Index Located at Page 4
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Item 5. Other Events.
On June 5, 1997, CNF Transportation Inc. (the "Company") executed an
Underwriting Agreement in connection with the previously announced public
offering of 2,200,000 $2.50 Term Convertible Securities, Series A ("TECONS")
(2,500,000 if the underwriters' over-allotment option is exercised in full).
The TECONS will be issued by CNF Trust I, a newly formed Delaware business trust
(the "Trust"), and will be convertible into common stock of the Company. The
Company is filing this Current Report on Form 8-K in connection with the
issuance of the TECONS under the Company's shelf registration statement on Form
S-3 (File No. 333-26595).
This Current Report on Form 8-K shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any offer of the TECONS
in any State in which such offer, solicitation or sale would be unlawful prior
to the registration or qualification under the securities laws of any such
state.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit No. Description
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1(b) Underwriting Agreement with respect to the TECONS dated
June 5, 1997 between CNF Transportation Inc., CNF Trust
I, J.P. Morgan Securities Inc., Goldman, Sachs & Co. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
4(e) Form of Subordinated Indenture between CNF Transportation
Inc. and The First National Bank of Chicago, as trustee
4(l) Form of Amended and Restated Declaration of Trust by and
among CNF Trust I, CNF Transportation Inc., the Regular
Trustees named therein, The First National Bank of
Chicago, as trustee, and First Chicago Delaware Inc., as
Delaware trustee, including the form of certificate
evidencing the TECONS
4(m) Form of Preferred Securities Guarantee Agreement with
respect to the TECONS between CNF Transportation Inc. and
The First National Bank of Chicago, as trustee
4(n) Form of First Supplemental Indenture between CNF
Transportation Inc. and The First National Bank of
Chicago, as trustee, including the form of certificate
evidencing the 5% Convertible Subordinated Debenture due
June 1, 2012
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CNF Transportation Inc.
(Registrant)
Date: June 11, 1997 /s/ Eberhard G. H. Schmoller
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Eberhard G. H. Schmoller
Senior Vice President, General
Counsel and Secretary
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Exhibit Index
Exhibit No. Description
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1(b) Underwriting Agreement with respect to the TECONS dated June
5, 1997 between CNF Transportation Inc., CNF Trust I, J.P.
Morgan Securities Inc., Goldman, Sachs & Co. and Merrill
Lynch, Pierce, Fenner & Smith Incorporated
4(e) Form of Subordinated Indenture between CNF Transportation Inc.
and The First National Bank of Chicago, as trustee
4(l) Form of Amended and Restated Declaration of Trust by and among
CNF Trust I, CNF Transportation Inc., the Regular Trustees
named therein, The First National Bank of Chicago, as trustee,
and First Chicago Delaware Inc., as Delaware trustee,
including the form of certificate evidencing the TECONS
4(m) Form of Preferred Securities Guarantee Agreement with respect
to the TECONS between CNF Transportation Inc. and The First
National Bank of Chicago, as trustee
4(n) Form of First Supplemental Indenture between CNF
Transportation Inc. and The First National Bank of Chicago, as
trustee, including the form of certificate evidencing the 5%
Convertible Subordinated Debenture due June 1, 2012
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Exhibit 1(b)
$110,000,000
CNF TRUST I
2,200,000 Trust Preferred Securities
Guaranteed by
CNF TRANSPORTATION INC.
UNDERWRITING AGREEMENT
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June 5, 1997
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
CNF Trust I (the "Trust"), a statutory business trust created under
the Business Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Code, 12 Del. C. (S)3801 et seq.), proposes to
issue and sell 2,200,000 shares of its $2.50 preferred trust securities (the
"Firm Securities") to the several underwriters named in Schedule I hereto (the
"Underwriters"). The Trust also proposes to issue and sell to the several
Underwriters not more than 300,000 additional shares of its $2.50 preferred
trust securities (the "Additional Securities") if requested by the Underwriters
as provided in Section 2 hereof. The Firm Securities and the Additional
Securities are herein collectively called the "Securities." The Securities will
be guaranteed by CNF Transportation Inc., a Delaware corporation (the
"Company"), to the extent set forth in the Guarantee (as defined herein).
It is understood that substantially contemporaneously with the
offering and sale of the Firm Securities to the Underwriters contemplated
hereby, (i) the Trust, its trustees (the "Trustees") and the Company shall take
all necessary action to adopt an Amended and Restated Declaration of Trust in
substantially the form of the Amended and Restated
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Declaration of Trust heretofore provided to you by the Company as an exhibit to
a Form 8-K to be filed by the Company prior to the Closing Date (as hereinafter
defined) (as so amended and restated, the "Declaration") pursuant to which the
Trust shall (x) issue and sell the Securities to the Underwriters pursuant
hereto and (y) issue 68,042 shares of its $2.50 common securities (and up to an
additional 9,278 shares of such securities in connection with the issuance and
sale of the Additional Securities) (the "Common Securities" and, together with
the Securities, the "Trust Securities"), to the Company, in each case with such
rights and obligations as shall be set forth in the Declaration, (ii) the
Company and The First National Bank of Chicago, as Trustee, shall enter into an
Indenture in substantially the form of the Form of the Subordinated Debt
Indenture attached as Exhibit 4(e) to the Registration Statement referred to
below and a First Supplemental Indenture thereto in substantially the form
heretofore provided to you by the Company as an exhibit to a Form 8-K to be
filed by the Company prior to the Closing Date (together the "Indenture")
providing for the issuance of up to $128,866,000 in aggregate principal amount
of the Company's 5% Convertible Subordinated Debentures due June 1, 2012 (the
"Debentures"), (iii) the Company shall deposit such Debentures in the Trust in
conjunction with the consummation of the sale of the Securities to the
Underwriters contemplated hereby and (iv) the Company and The First National
Bank of Chicago, as Guarantee Trustee, shall enter into a Preferred Securities
Guarantee Agreement in substantially the form of the Form of Preferred
Securities Guarantee Agreement attached as Exhibit 4(m) of the Registration
Statement referred to below (the "Guarantee") for the benefit of holders from
time to time of the Securities. The Common Securities will be sold to the
Company pursuant to a Common Securities Purchase Agreement (the "Common
Securities Purchase Agreement") between the Company and the Trust, and the
Debentures will be sold to the Trust pursuant to a Debenture Purchase Agreement
(the "Debenture Purchase Agreement") between the Company and the Trust.
1. Registration Statement and Prospectus. The Trust and the Company
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have prepared and filed with the Securities and Exchange Commission (the
"Commission") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively called the "Securities Act"), a registration statement on Form S-
3, including a prospectus, relating to, among other things, certain preferred
securities of the Trust, certain subordinated debt of the Company and guarantees
by the Company of preferred securities of the Trust (collectively, the "Shelf
Securities"). The Trust and the Company also have filed with, or propose to file
with, the Commission pursuant to Rule 424 under the Securities Act a prospectus
supplement specifically relating to the Securities. The registration statement
as amended to the date of this Agreement is hereinafter referred to as the "Base
Registration Statement" and any registration statement filed pursuant to Rule
462(b) under the Securities Act relating to the Securities is herein referred to
as the "Additional Registration Statement," and, together with the Base
Registration Statement, the "Registration Statement." The related prospectus
covering the
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Shelf Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Basic Prospectus." The Basic Prospectus as
supplemented by the prospectus supplement (the "Prospectus Supplement")
specifically relating to the Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Prospectus." Any reference
in this Agreement to the Registration Statement, the Basic Prospectus, any
preliminary form of Prospectus (a "preliminary prospectus") previously filed
with the Commission pursuant to Rule 424 or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act which were filed under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") on or before the
date of this Agreement or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be; and any reference to "amend,"
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed
to refer to and include any documents filed under the Exchange Act after the
date of this Agreement, or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be, which are deemed to be
incorporated by reference therein.
2. Agreements to Sell and Purchase. On the basis of the
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representations and warranties contained in this Agreement, and subject to its
terms and conditions, the Trust agrees to issue and sell and each Underwriter
agrees, severally and not jointly, to purchase from the Trust at a price per
share of $50 (the "Purchase Price"), the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Trust agrees to issue
and sell the Additional Securities and the Underwriters shall have the right to
purchase, severally and not jointly, up to an aggregate of 300,000 Additional
Securities from the Trust at the Purchase Price. Additional Securities may be
purchased solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Securities. The Underwriters may exercise their
right to purchase Additional Securities in whole or in part from time to time by
giving written notice thereof to the Company within 30 days after the date of
this Agreement. You shall give any such notice on behalf of the Underwriters and
such notice shall specify the aggregate number of Additional Securities to be
purchased pursuant to such exercise and the date for payment and delivery
thereof. The date specified in any such notice shall be a business day (i) no
earlier than the Closing Date (as hereinafter defined), (ii) no later than five
business days after such notice has been given and (iii) no earlier than two
business days after such notice has been given. If any Additional Securities are
to be purchased, each Underwriter, severally and not jointly, agrees to purchase
from the Trust the number of Additional Securities (subject to such adjustments
to eliminate fractional shares as you may
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determine) which bears the same proportion to the total number of Additional
Securities to be purchased from the Trust as the number of Firm Securities set
forth opposite the name of such Underwriter in Schedule I bears to the total
number of Firm Securities.
In view of the fact that the proceeds of the sale of the Securities
will be used to purchase Debentures, the Company agrees to pay as compensation
("Underwriter's Compensation") for the Underwriters' arranging the investment
therein of such proceeds an amount in immediately available funds of $1.1875 per
Security purchased hereunder.
3. Terms of Public Offering. The Company is advised by you that the
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Underwriters propose (i) to make a public offering of their respective portions
of the Securities as soon after the parties hereto have executed this Agreement,
as in your judgment is advisable and (ii) initially to offer the Securities upon
the terms set forth in the Prospectus.
4. Delivery and Payment. Delivery to the Underwriters of and
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payment for the Firm Securities and payment of the related Underwriters'
Compensation shall be made at 10:00 A.M., New York City time, on June 11, 1997,
or at such other time or such other date as the Underwriters and the Company may
agree upon in writing. The time and date of such payment are referred to herein
as the "Closing Date." As used herein, the term "Business Day" means any day
other than a day on which banks are permitted or required to be closed in New
York City.
Delivery to the Underwriters of and payment for any Additional
Securities to be purchased by the Underwriters and payment of the related
Underwriters' Compensation shall be made at such place as you shall designate at
10:00 A.M., New York City time, on the date specified in the applicable exercise
notice given by you pursuant to Section 2 (an "Option Closing Date"). Any such
Option Closing Date and the location of delivery of and the form of payment for
such Additional Securities may be varied by agreement between you and the
Company.
Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection
not later than 9:30 A.M., New York City time, on the business day next preceding
the Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Securities shall be delivered to
you or as directed by you on the Closing Date or the applicable Option Closing
Date, as the case may be, with any transfer taxes thereon duly paid by the
Company, for the respective accounts of the several Underwriters, against
payment to the Trust of the Purchase Price therefor by wire transfer in
immediately available funds to the account specified by the
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Company to the Underwriters (no later than noon the Business Day prior to the
Closing Date or the applicable Option Closing Date, as the case may be).
5. Agreements of the Trust and the Company. The Trust and the
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Company agree with each of you:
(a) To file the Prospectus, which shall be in a form reasonably
satisfactory to you, with the Commission within the time periods specified
by Rule 424; and to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Securities; and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 5:00 p.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such
quantities as the Underwriters may reasonably request;
(b) To advise you promptly and, if requested by you, to confirm
such advice in writing, (i) when any post-effective amendment to the
Registration Statement has been filed or becomes effective after the date
of this Agreement, (ii) when any supplement to the Prospectus or any
amended Prospectus has been filed, (iii) of any request by the Commission
for amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information, (iv) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purposes, and (v) of the happening of any event
during the period referred to in paragraph (e) below which makes any
statement of a material fact made in the Registration Statement or the
Prospectus untrue or which requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make
the statements therein not misleading. The Trust and the Company will use
their reasonable best efforts to prevent the issuance of any stop order by
the Commission, and if at any time the Commission shall issue any stop
order suspending the effectiveness of the Registration Statement, the Trust
and the Company will make every reasonable effort to obtain the withdrawal
or lifting of such order at the earliest possible time.
(c) To furnish to you one signed copy and three conformed copies
of the Registration Statement as first filed with the Commission and of
each amendment to it, including all exhibits thereto and documents
incorporated by reference
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therein, and to furnish to you and each Underwriter designated by you such
number of conformed copies of the Registration Statement as so filed and of
each amendment to it, without exhibits thereto but including the documents
incorporated by reference therein, as you may reasonably request.
(d) During the period specified in paragraph (e) below, not to
file any amendment or supplement to the Registration Statement, whether
before or after the time when it becomes effective, or to make any
amendment or supplement to the Prospectus of which you shall not previously
have been advised and given the opportunity to review, or to which you
shall reasonably object; and to prepare and file with the Commission,
promptly upon your reasonable request, any amendment to the Registration
Statement or supplement to the Prospectus which may be necessary or
advisable in connection with the distribution of the Securities by you,
and, if applicable, to use its reasonable best efforts to cause the same
to become promptly effective.
(e) Promptly after the Registration Statement becomes effective,
and from time to time thereafter for such period as in the opinion of
counsel for the Underwriters a prospectus is required by law to be
delivered in connection with sales by an Underwriter or a dealer, to
furnish to each Underwriter and dealer as many copies of the Prospectus
(and of any amendment or supplement to the Prospectus) as such Underwriter
or dealer may reasonably request.
(f) If during the period specified in paragraph (e) any event
shall occur as a result of which, in the opinion of counsel for the
Underwriters, it becomes necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if it
is necessary to amend or supplement the Prospectus to comply with any law,
forthwith to prepare and file with the Commission an appropriate amendment
or supplement to the Prospectus so that the statements in the Prospectus,
as so amended or supplemented, will not in the light of the circumstances
when it is so delivered, be misleading, or so that the Prospectus will
comply with law, and to furnish to each Underwriter and to such dealers as
you shall specify, such number of copies thereof as such Underwriter or
dealers may reasonably request.
(g) Prior to any public offering of the Securities, to cooperate
with you and counsel for the Underwriters in connection with the
registration or qualification of the Securities for offer and sale by the
several Underwriters and by dealers under the state securities or Blue Sky
laws of such jurisdictions as you may request, to continue such
qualification in effect so long as required for distribution of the
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Securities and to file such consents to service of process or other
documents as may be necessary in order to effect such registration or
qualification.
(h) To mail and make generally available to its securityholders
and to the Underwriters as soon as reasonably practicable an earnings
statement covering a period of at least twelve months beginning with the
first fiscal quarter of the Company occurring after the effective date of
the Registration Statement, which shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder, and to advise you in writing when such statement has been so
made available.
(i) For a period of 90 days after the date of the Prospectus
Supplement not to (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant any option to purchase or otherwise transfer or dispose of any
Securities, any equity securities of the Company, the Trust or any similar
trust or any securities convertible into or exchangeable or exercisable
for any equity securities of the Company, the Trust or any similar trust or
(ii) enter into any swap or other agreement the transfers, in whole or in
part, any of the economic consequences of ownership of any equity
securities of the Company, the Trust or any similar trust, whether any such
transaction described in clause (i) or (ii) above is to be settled by
delivery of equity securities of the Company, the Trust or any similar
trust, other securities, cash or otherwise, without prior written consent
of J.P. Morgan Securities Inc., except for (a) sales, issuances or other
dispositions made pursuant to existing officer, director or employee
benefit plans (collectively, "Plans") and other incentive plans or upon the
exercise of options issued, under existing or prior Plans, (b) conversion
of the Series B Preferred Stock (as defined in the Registration
Statement), the Securities, the Common Securities, and the Debentures, (c)
shares of capital stock or other rights to acquire capital stock issued as
consideration for acquired businesses, provided any such shares or rights
referred to in this clause (c) are subject to resale restrictions
equivalent to those in Exhibit A hereto and (d) sales pursuant to this
Agreement.
(j) To use the net proceeds received by the Company from the sale
of the Securities pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds."
(k) To use its reasonable best efforts to list, subject to
official notice of issuance, the Securities on the New York Stock Exchange
(the "Exchange").
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(l) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of its
obligations hereunder (excluding, without limitation, fees and
disbursements of counsel for the Underwriters other than pursuant to
clauses (iv) and (v) below), including without limiting the generality of
the foregoing, all costs and expenses incident to (i) the preparation,
issuance, and delivery of the certificates for the Securities, including
any expenses of the Trustees, (ii) the preparation, printing, filing and
distribution under the Securities Act of the Registration Statement
(including financial statements and exhibits), each preliminary prospectus
and all amendments and supplements to any of them prior to or during the
period specified in paragraph (e), (iii) the printing and delivery of the
Prospectus and any Preliminary Prospectus and all amendments or supplements
to it during the period specified in paragraph (e), (iv) the printing and
delivery of this Agreement, the Indenture, Preliminary and Supplemental
Blue Sky Memoranda and all other agreements, memoranda, correspondence and
other documents printed and delivered in connection with the offering of
the Securities (including in each case any disbursements of counsel for
the Underwriters relating to such printing and delivery of the Blue Sky
Memorandum), (v) the registration or qualification of the Securities for
offer and sale under the securities or Blue Sky laws of the several states
(including in each case the reasonable fees and disbursements of counsel
for the Underwriters relating to such registration or qualification and
memoranda relating thereto), (vi) in connection with the listing of the
Securities on the Exchange, (vii) filings and clearance with the National
Association of Securities Dealers, Inc. in connection with the offering,
(viii) furnishing such copies of the Registration Statement, the Prospectus
and all amendments and supplements thereto as may be requested for use in
connection with the offering or sale of the Securities by the Underwriters
or by dealers to whom Securities may be sold, and (ix) the rating of the
Securities including, without limitation, fees payable to rating agencies
in connection therewith.
(m) To use its reasonable best efforts to do and perform all
things required or necessary to be done and performed under this Agreement
by the Trust and the Company prior to the Closing Date and to satisfy all
conditions precedent to the delivery of the Securities.
6. Representations and Warranties of the Trust and the Company. The
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Trust and the Company, jointly and severally, represent and warrant to each
Underwriter that:
(a) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed
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as part of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act,
and did not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through J.P. Morgan Securities Inc. expressly for use therein;
(b) The Registration Statement has been declared effective by the
Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of the
Company, threatened by the Commission; and the Registration Statement and
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) comply, or will comply, as the case
may be, in all material respects with the Securities Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Trust Indenture Act"), and do not
and will not, as of the applicable effective date as to the Registration
Statement and any amendment thereto and as of the date of the Prospectus
and any amendment or supplement thereto, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and the
Prospectus, as amended or supplemented, if applicable, at the Closing Date
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part
of the Registration Statement which constitutes the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
any trustee (each a "Form T-1"), and (ii) statements or omissions in the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through J.P. Morgan Securities Inc. expressly for use therein;
(c) The documents incorporated by reference in the Prospectus,
when they were filed with the Commission conformed in all material respects
to the requirements of the Exchange Act, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not
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misleading; and any further documents so filed and incorporated by
reference in the Prospectus, when such documents are filed with the
Commission, will conform in all material respects to the requirements of
the Exchange Act, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(d) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware with corporate
power and corporate authority under such laws to own, lease and operate its
properties and conduct its business as described in the Prospectus; and the
Company is duly qualified to transact business as a foreign corporation and
is in good standing in each other jurisdiction in which it owns or leases
property of a nature, or transacts business of a type, that would make such
qualification necessary, except to the extent that the failure to so
qualify or be in good standing would not have a material adverse effect on
the Company and its subsidiaries, considered as one enterprise.
(e) Each of Con-Way Transportation Services, Inc., Emery
Worldwide Airlines, Inc. ("EWA") and Menlo Logistics, Inc. (each
individually, a "Significant Subsidiary" and collectively, the
"Significant Subsidiaries") is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization with corporate power and corporate authority under such laws
to own, lease and operate its properties and conduct its business; and each
Significant Subsidiary is duly qualified to transact business as a foreign
corporation and is in good standing in each other jurisdiction in which it
owns or leases property of a nature, or transacts business of a type, that
would make such qualification necessary, except to the extent that the
failure to so qualify or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, considered as one
enterprise. All of the outstanding shares of capital stock of each
Significant Subsidiary have been duly authorized and validly issued and are
fully paid and non-assessable and are owned by the Company (except for
directors' qualifying shares), free and clear of any pledge, lien, security
interest, charge, claim, equity, encumbrance or adverse interest of any
kind (except for restrictions on transfer arising under federal or state
securities or blue sky laws).
(f) As of the Closing Date, the Trust Securities will have been
duly authorized by the Declaration and (x) when the Securities are duly
executed, authenticated and issued in accordance with the terms of the
Declaration and delivered to and paid for by the Underwriters in accordance
with the terms of this Agreement and (y) the Common Securities, when duly
executed and issued in accordance with the terms
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of the Declaration and delivered to and paid for by the Company as provided
in the Common Securities Purchase Agreement, such Trust Securities will be
duly and validly issued and (subject to the terms of and except as provided
in the Declaration) will be fully paid and nonassessable undivided
beneficial interests in the assets of the Trust, not subject to any
preemptive or similar rights, and will be convertible into shares of Common
Stock as provided in the Declaration and the Indenture. Holders of
Securities will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Delaware (the "DGCL"). As of
the Closing Date, all of the issued and outstanding Common Securities will
be directly owned by the Company free and clear of any pledge, lien,
security interest, charge, claim, equity, encumbrance or adverse interest
of any kind, except for restrictions on transfer arising under the
Declaration or federal or state securities or blue sky laws.
(g) As of the Closing Date, the Declaration will have been duly
authorized, executed and delivered by the Company and will be a valid and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or
other similar laws relating or affecting creditors' rights generally or by
general equitable principals and except as rights to indemnification and
contribution may be limited by applicable law or public policy.
(h) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, is and will be
treated as a "grantor trust" for Federal income tax purposes under existing
law, has the business trust power and business trust authority to enter
into and perform its obligations under this Agreement and the Trust
Securities and the Declaration and to conduct its business as described in
the Registration Statement and Prospectus, has not conducted and will
conduct no business other than as permitted by the Declaration and is not
required to be authorized to do business in any other jurisdiction.
(i) The Indenture has been duly qualified under the Trust
Indenture Act and, at the Closing Date, will have been duly authorized,
executed and delivered by the Company and will be a valid and binding
agreement of the Company, enforceable in accordance with its terms subject
to applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, fraudulent transfer or other similar laws relating
or affecting creditors' rights generally or by general equitable principals
and except as rights to indemnification and contribution may be limited by
applicable law or public policy; the Debentures have been duly authorized
and when duly executed, attested and authenticated in accordance with the
provisions of the
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Indenture and delivered to the Trust against payment therefor as provided
in the Debenture Purchase Agreement, will be entitled to the benefits of
the Indenture.
(j) The Guarantee has been duly qualified under the Trust
Indenture Act and, as of the Closing Date, assuming due authorization,
execution and delivery by the Company thereunder, of the Guarantee, the
Guarantee will be a valid and binding agreement of the Company, enforceable
in accordance with its terms subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer or
other similar laws relating or affecting creditors' rights generally or by
general equitable principals and except as rights to indemnification and
contribution may be limited by applicable law or public policy.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) The Securities, the Guarantee, the Indenture and the
Debentures conform as to legal matters in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus. The Company had at the date indicated in the Prospectus a duly
authorized, issued and outstanding capitalization as set forth in the
Prospectus under the caption "Capitalization" and such authorized capital
stock conforms as to legal matters in all material respects to the
description thereof set forth in the Prospectus. All of the outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and non-assessable. There are no
outstanding options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any shares of Common Stock of the Company,
any shares of capital stock of any subsidiary, or any such warrants,
convertible securities or obligations, except as set forth in the
Prospectus and except for options granted under, or contracts or
commitments pursuant to, the Company's previous or currently existing stock
option and other similar officer, director or employee benefit plans.
(m) The Company is not in violation of its charter or by-laws,
the Trust is not in violation of the Declaration and none of the
Significant Subsidiaries is in violation of its charter or by-laws, except
for any such violations which, individually and in the aggregate, would
not have a material adverse effect on, with respect to the Company and the
Significant Subsidiaries, the Company and its subsidiaries taken as a
whole, or with respect to the Trust, the Trust, nor is the Trust, the
Company or any of the Significant Subsidiaries in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture,
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mortgage, loan agreement, note, lease or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties is subject, except for such defaults that would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of, with respect to the
Company and the Significant Subsidiaries, the Company and its subsidiaries,
considered as one enterprise, or with respect to the Trust, the Trust.
The execution, delivery and performance by the Trust or the Company, as the
case may be, of this Agreement, the Indenture, the Debentures, the
Guarantee, the Declaration and the Securities and the compliance by the
Trust or the Company, as the case may be, with all of their respective
obligations hereunder and thereunder and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
all necessary action (corporate or otherwise) on the part of the Trust and
the Company, as the case may be, and do not and will not result in any
violation of the Declaration of the Trust or charter or by-laws of the
Company or any Significant Subsidiary, and do not and will not violate or
conflict with, or result in a breach of any of the terms or provisions of,
or constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Trust,
the Company or any Significant Subsidiary under any contract, indenture,
mortgage, loan agreement, note, lease or other agreement or instrument to
which the Trust, the Company or any Significant Subsidiary is a party or by
which it is bound or to which any of their respective properties are
subject or any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court,
domestic or foreign, having jurisdiction over the Trust, the Company or any
Significant Subsidiary or any of their respective properties (except for
such violations, conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition
(financial or otherwise), earnings, business affairs or business prospects
of, with respect to the Trust, the Trust, or with respect to the Company
and the Significant Subsidiaries, the Company and its subsidiaries,
considered as one enterprise).
(n) No authorization, approval, consent or license of any
government, governmental instrumentality or court, domestic or foreign
(other than under the Securities Act, the Exchange Act, the Trust Indenture
Act, and the securities or blue sky laws of the various states and of
foreign jurisdictions) is required for the valid authorization, issuance,
sale and delivery of the Securities, for the execution, delivery or
performance by the Trust or the Company, as the case may be, of this
Agreement, the Indenture, the Debentures, the Guarantee, the Declaration
and the Securities or for the consummation by the Company or the Trust, as
the case may be, of the transactions contemplated hereby or thereby, except
such of the foregoing as will be obtained prior to the Closing Date.
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<PAGE>
(o) Except as disclosed in the Prospectus, there is no action, suit or
proceeding before or by any government, governmental instrumentality or
court, domestic or foreign, now pending or, to the knowledge of the Company
or the Trust, threatened against or affecting the Trust, the Company or any
Significant Subsidiary or any of their respective officers or Regular
Trustees (as defined in the Declaration), as applicable, in their capacity
as such, in which there is a reasonable possibility of an adverse decision
that would (A) result in any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects
of, with respect to the Trust, the Trust or, with respect to the Company
and the Significant Subsidiaries, the Company and its subsidiaries,
considered as one enterprise, (B) materially and adversely affect the
properties or assets of, with respect to the Trust, the Trust or, with
respect to the Company and the Significant Subsidiaries, the Company and
its subsidiaries, considered as one enterprise or (C) adversely affect the
consummation of the transactions contemplated in this Agreement; the
aggregate of all pending legal or governmental proceedings that are not
described in the Prospectus to which the Trust, the Company or any
Significant Subsidiary is a party or which affect any of their respective
properties and in which there is a reasonable possibility of an adverse
decision, including ordinary routine litigation incidental to the business
of the Trust, the Company or any Significant Subsidiary, would not have a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of, with respect to the
Trust, the Trust or, with respect to the Company and the Significant
Subsidiaries, the Company and its subsidiaries, considered as one
enterprise; and there are no contracts or other documents that are required
to be described in the Registration Statement or Prospectus or to be filed
as exhibits to the Registration Statement that are not described or filed
as required;
(p) Each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended,
("ERISA") that is maintained, administered or contributed to by the Company
or any of its subsidiaries for employees or former employees of the Company
and its subsidiaries has been maintained in compliance with its terms and
the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue
Code of 1986, as amended, ("Code"), except where the failure to comply
would not have a material adverse effect on the Company and its
subsidiaries considered as one enterprise. No prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code has
occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption, except where such
prohibited transaction would not have a material adverse effect on the
Company and its subsidiaries taken as one enterprise. For each such plan
which is subject to the funding rules of Section 412 of the Code or Section
14
<PAGE>
302 of ERISA no "accumulated funding deficiency" as defined in Section 412
of the Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan (excluding for these purposes accrued
but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.
There is no reasonable likelihood that the Company or any of its
subsidiaries could incur liability under Title IV of ERISA or suffer the
imposition of one or more liens under ERISA or the Code with respect to any
such plan or other employee benefit plan, except as otherwise disclosed in
or contemplated by the Prospectus and except for such liability or lien
which would not have a material adverse effect on the Company and its
subsidiaries considered as one enterprise.
(q) The Company has no knowledge of any actionable violation by
the Company or any of its subsidiaries of any federal, state or local law
relating to employment and employment practices, discrimination in the
hiring, promotion or pay of employees, or any applicable wage or hour laws,
which, individually or in the aggregate, would result in a material adverse
effect on the Company and its subsidiaries, considered as one enterprise.
There is (A) no material unfair labor practice complaint pending or, to
the knowledge of the Company, threatened against the Company before the
National Labor Relations Board or any state or local labor relations board,
nor are any material grievance or arbitration proceedings arising under any
collective bargaining agreement pending or, to the knowledge of the
Company, threatened against the Company, (B) no labor strike, dispute,
slowdown or stoppage ("Labor Dispute") in which the Company is involved,
nor, to the knowledge of the Company, is any Labor Dispute imminent, other
than routine disciplinary and grievance matters, and (C) except as
disclosed in or contemplated by the Prospectus, no question concerning
union representation within the meaning of the National Labor Relations Act
existing with respect to the employees of the Company and, to the knowledge
of the Company, no union organizing activities are taking place by
employees of the Company or any of its subsidiaries, which, with respect to
any matter specified in clauses (A), (B) or (C) above, whether considered
singly or in the aggregate, would have a material adverse effect on the
Company and its subsidiaries, considered as one enterprise.
(r) Arthur Andersen LLP, which reported upon the audited
financial statements and related notes included in the Prospectus, is an
independent public accountant with respect to the Company in accordance
with the provisions of the Securities Act and the rules and regulations of
the Commission thereunder.
15
<PAGE>
(s) The financial statements, together with the related notes and
schedules thereto, included or incorporated by reference in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto) present fairly the consolidated financial position, results of
operations and cash flow of the Company and its subsidiaries on the basis
stated in the Registration Statement and the Prospectus at the respective
dates and for the respective periods to which they apply; such statements
and related notes and schedules thereto have been prepared in accordance
with generally accepted accounting principles consistently applied
throughout the periods involved, except as disclosed therein; and the other
financial and statistical information and data set forth in the
Registration Statement and the Prospectus (and any amendment or supplement
thereto), in all material respects, present fairly the information
purported to be shown thereby at the respective dates or for the respective
periods to which they apply and, to the extent that such information is set
forth in or has been derived from the financial statements and accounting
books and records of the Company, have been prepared on a basis consistent
with such financial statements and the books and records of the Company.
(t) Since the respective dates as of which information is given
in the Prospectus, except as otherwise stated therein or contemplated
thereby, there has not been (A) any material adverse change, or any
development involving a prospective material adverse change, in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (B)
any transaction or agreement entered into by the Company, whether or not
arising in the ordinary course of business, that is material to the Company
and its subsidiaries, considered as one enterprise, (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, except for regular periodic dividends on its capital stock,
or (D) any change in the capital stock or long-term debt of the Company or
any of its subsidiaries, except for the issuance of Common Stock upon the
conversion of the Company's Series B Cumulative Convertible Preferred
Stock, the issuance of capital stock, options and other securities under
existing officer, director or employee benefit plans or upon the exercise
of options issued under existing or prior officer, director or employee
benefit plans and except for changes in long-term debt in the ordinary
course of business.
(u) The Company and the Significant Subsidiaries each owns,
possesses or has obtained all governmental licenses, permits, certificates,
consents, orders, approvals and other authorizations necessary to own or
lease, as the case may be, and to operate its properties and to carry on
its business as presently conducted, and the Company has not received any
notice of proceedings relating to revocation or
16
<PAGE>
modification of any such licenses, permits, certificates, consents, orders,
approvals or authorizations, except in each case for such licenses,
permits, certificates, consents, orders, approvals and other authorizations
or revocations or modifications thereof which would not have a material
adverse effect on the Company and its subsidiaries considered as one
enterprise. Each of the Company and the Significant Subsidiaries is in
compliance with all laws and regulations relating to the conduct of its
business as conducted as of the date of the Prospectus. The Company is in
compliance with all the laws and regulations relating to the conduct of its
business except for any such non-compliance which, individually or in the
aggregate, would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
(v) Neither the Trust nor the Company is and, after giving effect
to the offering and the sale of the Securities, will be an "investment
company" or a company controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(w) Except as would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, or otherwise
require disclosure in the Registration Statement, and except as otherwise
set forth in or contemplated by the Prospectus, (i) none of the Company or
any of its subsidiaries is in violation of any federal, state or local laws
and regulations relating to pollution or protection of human health or the
environment, including, without limitation, laws and regulations relating
to emissions, discharges, releases or threatened releases of toxic or
hazardous substances, materials or wastes, or petroleum and petroleum
products ("Materials of Environmental Concern"), or otherwise relating to
the protection of human health and safety, or the use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with, or lack of, any permits or other
environmental authorizations, and (ii) (A) none of the Company or any of
its subsidiaries has received any communication (written or oral), whether
from a governmental authority or otherwise, alleging any such violation or
noncompliance, and there are no circumstances, either past, present or that
are reasonably foreseeable, that could reasonably be expected to lead to
any such violation in the future, (B) there is no pending or, to the
knowledge of the Company, threatened claim, action, investigation or notice
(written or oral) by any person or entity alleging potential liability for
investigatory, cleanup, or governmental response costs, or natural
resources or property damages, or personal injuries, attorney's fees or
penalties relating to (x) the presence, or release into the environment, of
any Materials of Environmental Concern at any location owned or operated by
the Company or any of its subsidiaries now or in the past, or (y)
circumstances forming the basis of any violation or potential
17
<PAGE>
violation, of any Environmental Law (collectively, "Environmental Claims"),
and (C) there are no past or present actions, activities, circumstances,
conditions, events or incidents that could form the basis of any
Environmental Claim against the Company or any of its subsidiaries or
against any person or entity for whose acts or omissions the Company or any
of its subsidiaries is or may reasonably be expected to be liable, either
contractually or by operation of law. In the ordinary course of business,
the Company and/or certain of its subsidiaries, as appropriate, have
conducted environmental investigations of, and have reviewed reasonably
available information regarding, the business, properties and operations
of the Company and its subsidiaries, and of other properties within the
vicinity of their business, properties and operations, as appropriate for
the circumstances of each such property and operation; on the basis of such
reviews and investigations, the Company has reasonably concluded that,
except as disclosed or contemplated by the Prospectus, any costs and
liabilities associated with such matters would not have, singly or in the
aggregate, a material adverse effect on the Company and its subsidiaries,
considered as one enterprise, or otherwise require disclosure in the
Registration Statement.
(x) No person has the right to require the Trust or the Company
to register any securities for offering and sale under the Securities Act
by reason of the filing of the Registration Statement with the Commission
or the issue and sale of the Securities.
(y) The Common Stock issuable upon conversion of the Securities
has been duly authorized by the Company and validly reserved for issuance
by the Company upon such conversion by all necessary corporate action and
such Common Stock, when duly issued upon such conversion, will be validly
issued and fully paid and non-assessable; no holder thereof will be subject
to personal liability solely by reason of being such a holder; and the
issuance of such Common Stock upon such conversion will not be subject to
preemptive rights.
(z) The Company and each of the Significant Subsidiaries have
timely filed (or have had timely filed on their behalf) all material Tax
returns required by applicable law to be filed by them prior to the date
hereof (taking into account any properly granted extensions of time to file
any Tax returns), and all such Tax returns are true, complete, and correct
in all material respects. Except as otherwise stated in the Prospectus,
the Company and each of the Significant Subsidiaries have paid (or have had
paid on their behalf) all material Taxes (as defined below) due or claimed
to be due from the Company, other than those (i) currently payable without
penalty or interest or (ii) being contested in good faith and by
appropriate proceedings. Other than Tax items relating to proposed
assessments or Audits (as defined below) which
18
<PAGE>
have been disclosed to counsel for the Underwriters, there are no other Tax
items that are currently under examination by any Tax Authority (as defined
below) or, to the best knowledge of the Company, could result in a proposed
deficiency if examined by a Tax Authority in respect of which there is a
reasonable possibility of a determination that would be adverse to the
Company and that would have a material adverse effect on the Company and
its subsidiaries considered as one enterprise. In addition, the Company
hereby confirms that it has disclosed to counsel for the Underwriters all
proposed assessments that have been made by the Internal Revenue Service
and all issues that have been raised by the Internal Revenue Service in
connection with the matters set forth in the Prospectus under the caption
"Risk Factors -- Certain Tax Matters Relating to Emery".
For purposes of this paragraph 6(z):
"Taxes" shall mean all federal, state, local and foreign taxes,
and other assessments of a similar nature, whether imposed directly or
through withholding), including any interest, additions to tax or penalties
applicable thereto; and
"Audit" shall mean any audit, assessment of Taxes, other
-----
examination by any tax authority, proceeding or appeal of such proceeding
relating to Taxes.
"Tax Authority" means the Internal Revenue Service and any other
-------------
domestic or foreign governmental authority responsible for the
administration of any Taxes.
(aa) Neither the Trust, the Company nor any of the Significant
Subsidiaries has taken or will take, directly or indirectly, any action
designed to, or that might be reasonably expected to, cause or result in
stabilization or manipulation of the price of the Securities.
(ab) Any certificate signed by any Regular Trustee of the Trust
or officer of the Company and delivered to you or your counsel on or after
the date of this Agreement shall be deemed a representation and warranty by
the Company to you as to the matters covered thereby.
(ac) The United States Postal Service ("USPS") Agreement, dated
April 23, 1997, has been duly authorized, executed and delivered by EWA and
is a valid and binding agreement of EWA which is in full force and effect
and there are no material breaches of the Agreement by EWA or, to the
Company's knowledge, the USPS.
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<PAGE>
7. Indemnification. (a) Each of the Trust and the Company, jointly
---------------
and severally, agrees to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from and against any and
all losses, claims, damages, liabilities (including, without limitation, but
subject to paragraph (b) below, the legal fees and other expenses incurred in
connection with any suit, action or proceeding or any claim asserted) and
judgments (i) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or the Prospectus or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
furnished in writing to the Company by or on behalf of any Underwriter through
J.P. Morgan Securities Inc. expressly for use therein; provided, however, that
-------- -------
the foregoing indemnity agreement with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter from whom the person asserting
any such losses, claims, damages, liabilities or judgments purchased Securities,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages, liabilities or judgments.
(b) In case any action shall be brought against any Underwriter
or any person controlling such Underwriter, based upon any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
or supplement thereto and with respect to which indemnity may be sought
against the Trust and the Company, such Underwriter shall promptly notify
the Trust and the Company in writing and the Trust and the Company shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and
expenses. Any Underwriter or any such controlling person shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Underwriter or such controlling person unless (i) the
employment of such counsel has been specifically authorized in writing by
the Trust and the Company, (ii) the Trust and the Company have failed
within a reasonable time to retain counsel reasonably satisfactory to such
Underwriter or such controlling person or (iii) the named parties to any
such action (including any impleaded parties) include both such Underwriter
or such controlling person and the Trust and the Company and such
Underwriter or such
20
<PAGE>
controlling person shall have been advised by such counsel that there may
be one or more legal defenses available to it which are different from or
additional to those available to the Trust and the Company (in which case
the Trust and the Company shall not have the right to assume the defense of
such action on behalf of such Underwriter or such controlling person, it
being understood, however, that the Trust and the Company shall not, in
connection with any one such action or separate but substantially similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to one
firm of local counsel) for all such Underwriters and controlling persons,
which firm shall be designated in writing by J.P. Morgan Securities Inc.
and that all such fees and expenses shall be reimbursed as they are
incurred). The Trust and the Company shall not be liable for any settlement
of any such action effected without the written consent of the Trust and
the Company but if settled with the written consent of the Trust and the
Company, the Trust and the Company agree to indemnify and hold harmless any
Underwriter and any such controlling person from and against any loss or
liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 business days after receipt by such indemnifying
party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. Notwithstanding the immediately
preceding sentence, if at any time an indemnified party shall have
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel as contemplated by the second sentence of this
paragraph, such indemnifying party shall not be liable for any settlement
effected without its written consent if such indemnifying party (x)
reimburses such indemnified party in accordance with such request to the
extent that the indemnifying party in its judgment considers such request
to be reasonable and (y) provides written notice to the indemnified party
stating that reason it deems the unpaid balance unreasonable, in each case
prior to the date of such settlement. No indemnifying party shall, without
the prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
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<PAGE>
(c) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless (i) the Trust, the Trustees, each person who, on behalf
of the Company as sponsor of the Trust, signed the Registration Statement
and any person controlling the Trust within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act and (ii) the
Company, its directors, its officers who signed the Registration Statement
and any person controlling the Company within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, in each such case to
the same extent as the foregoing indemnity from the Trust and the Company
to each Underwriter but only with reference to information furnished in
writing by or on behalf of such Underwriter through J.P. Morgan Securities
Inc. expressly for use in the Registration Statement, the Prospectus, any
preliminary prospectus or any amendment or supplement thereto. In case any
action shall be brought against the Trust, any Trustee, any person who, on
behalf of the Company as sponsor of the Trust, signed the Registration
Statement or any person controlling the Trust or against the Company, any
of its directors, any officer of the Company who signed the Registration
Statement or any person controlling the Company based on the Registration
Statement, the Prospectus or any preliminary prospectus or any amendment
or supplement thereto and in respect of which indemnity may be sought
against any Underwriter, the Underwriter shall have the rights and duties
given to the Trust and the Company (except that if the Trust and the
Company shall have assumed the defense thereof, such Underwriter shall not
be required to do so, but may employ separate counsel therein and
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such Underwriter), and the Trust, the
Trustees, any person who, on behalf of the Company as sponsor of the Trust,
signed the Registration Statement and any person controlling the Trust, and
the Company, its directors, any officers of the Company who signed the
Registration Statement and any person controlling the Company shall have
the rights and duties given to the Underwriter, by Section 7(b) hereof.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party in respect of any losses, claims,
damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Trust and the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust,
the Company and the Underwriters in connection with the state-
22
<PAGE>
ments or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the
Company on the one hand and the Underwriters on the other hand shall be
deemed to be in the same respective proportions as the total proceeds from
the offering received by the Trust and the Company (before deducting
expenses but after deducting the total Underwriters' Compensation), and the
total Underwriters Compensation received by the Underwriters, in each case
as set forth in the table on the cover page of the Prospectus, bear to the
total price to the public of the Securities. The relative fault of the
Trust and the Company on the one hand and the Underwriters on the other
hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied
by the Trust, the Company or the Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Trust, the Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7(d) were
determined by pro rata allocation (even if the Underwriters were treated as
--- ----
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages, liabilities
or judgments referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Securities underwritten by it and distributed to the public was
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7(d) are several in
proportion to the respective number of Securities purchased by each of the
Underwriters hereunder and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
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8. Conditions of Underwriters' Obligations. The several obligations
---------------------------------------
of the Underwriters to purchase the Securities under this Agreement on the
Closing Date or the Option Closing Date, as the case may be, are subject to the
performance by the Company and the Trust of their obligations hereunder and to
the following additional conditions:
(a) All the representations and warranties of the Trust and the
Company contained in this Agreement shall be true and correct on the
Closing Date or the Option Closing Date, as the case may be, with the same
force and effect as if made on and as of the Closing Date or the Option
Closing Date, as the case may be.
(b) The Registration Statement shall have become effective (or if
a post-effective amendment is required to be filed under the Securities
Act, such post-effective amendment shall have become effective) not later
than 5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any post-
effective amendment shall be in effect, and no proceedings for such purpose
shall be pending before or threatened by the Commission; the Prospectus
shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and
regulations under the Securities Act and in accordance with Section 5(a)
hereof; and all requests for additional information shall have been
complied with to the satisfaction of the Underwriters;
(c) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date or the Option Closing Date, as the case may
be, there shall not have been any downgrading, nor shall any notice have
been given of any intended or potential downgrading or of any review for a
possible change that does not indicate the direction of the possible
change, in the rating accorded to any of the Company's or the Trust's
securities or to any securities of any other trust that is organized in
substantially the form of, and for substantially the same purpose as, the
Trust and whose common equity capital is wholly owned by the Company or any
subsidiary, by any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act.
(d) (i) Since the date of the latest balance sheet included or
incorporated by reference in the Prospectus, there shall not have been any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the condition, financial or
otherwise, or in the earnings, affairs or business prospects, whether or
not arising in the ordinary course of business, of the Company and its
subsidiaries, taken as a whole, from that described in the Prospectus, (ii)
since the date of the latest balance sheet included or incorporated by
reference in the Pro-
24
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spectus there shall not have been any material adverse change, or any
development involving a prospective material adverse change, in the capital
stock or in the long-term debt of the Company from that set forth in the
Prospectus, (iii) the Trust and the Company shall have no liability or
obligation, direct or contingent, which is material to, in the case of the
Trust, the Trust, or, in the case of the Company, the Company and its
subsidiaries, taken as a whole, other than those reflected in or
contemplated by the Prospectus, (iv) since the date of the latest balance
sheet included or incorporated by reference in the Prospectus, neither the
Trust nor Company has sustained any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and (v) on the Closing Date or the Option Closing Date, as the
case may be, you shall have received a certificate dated the Closing Date,
signed on behalf of the Company by the Chief Executive Officer, Chief
Financial Officer, Treasurer, or any Vice President of the Company as you
may specify confirming the matters set forth in paragraphs (a), (b), (c)
and (d) of this Section 8.
(e) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date or the Option Closing Date, as the case may be, of Eberhard G.H.
Schmoller, General Counsel for the Company, to the effect that:
(i) the Company and each of the Significant Subsidiaries
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of its jurisdiction (other than foreign
jurisdictions) of incorporation and has the corporate power and
corporate authority to conduct its business and to own, lease and
operate its properties as described in the Prospectus;
(ii) the Company and each of the Significant Subsidiaries
is duly qualified and is in good standing as a foreign corporation
authorized to do business in each jurisdiction (other than foreign
jurisdiction) in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the
failure to be so qualified or in good standing would not have a
material adverse effect on the Company and its subsidiaries, taken as
a whole;
(iii) except as set forth in the Prospectus, all of the
outstanding shares of capital stock of the Significant Subsidiaries
have been duly authorized and are owned by the Company (except for
directors qualifying
25
<PAGE>
shares), free and clear of any pledge, lien, security interest,
charge, claim, equity or encumbrance of any kind (except for
restrictions on transfer arising under federal or state securities or
blue sky laws);
(iv) the outstanding shares of capital stock of the Company
have been duly authorized and are validly issued, fully paid and non-
assessable;
(v) the Company is not in violation of its charter or by-
laws, the Trust is not in violation of the Declaration, and none of
the Significant Subsidiaries is in violation of its charter or by-
laws, except for any such violations which would not have a material
adverse effect on, in the case of the Trust, the Trust, or, in the
case of the Company and the Significant Subsidiaries, the Company and
its subsidiaries taken as a whole;
(vi) the execution, delivery and performance of this
Agreement, the Indenture, Debentures, Guarantee and Declaration by
the Company, the compliance by the Trust and the Company with their
respective obligations hereunder and thereunder, the issuance of the
Securities and the consummation of the transactions contemplated
hereby and thereby do not, to the knowledge of such counsel, require
any consent, approval, authorization, license or other order of any
United States federal court sitting in the State of California, any
California state court or any United States federal or California
state regulatory body, administrative agency or other governmental
body under Applicable Laws (as defined below) (except such as may be
required under the Securities Act, the Exchange Act, the Trust
Indenture Act or other securities or Blue Sky laws) and do not
conflict with or constitute a breach of any of the terms or provisions
of, or a violation or a default under, the Declaration, the charter or
by-laws of the Company or any of the Significant Subsidiaries or, to
the knowledge of such counsel, any bond, debenture, note, indenture,
mortgage, deed of trust, loan arrangement or any other agreement or
other instrument to which the Trust, the Company or any of the
Significant Subsidiaries is a party or by which the Trust, the Company
or any of the Significant Subsidiaries or their respective properties
are bound that is material to, in the case of the Trust, the Trust,
or, in the case of the Company and the Significant Subsidiaries, the
Company and its subsidiaries, taken as a whole, or, to the knowledge
of such counsel, violate or conflict with any United States federal or
California state laws or administrative regulations or any rulings or
decrees of any United States federal court sitting in the State of
California or any California state court which are applicable to the
Trust, the Company or any of the Significant
26
<PAGE>
Subsidiaries or their respective properties, except in any such case
for such conflicts, breaches, violations or defaults which would not
have a material adverse effect on, in the case of the Trust, the
Trust, or, in the case of the Company and the Significant
Subsidiaries, the Company and its subsidiaries taken as a whole. Such
counsel may state that, for purposes of such opinion, the term
"Applicable Laws" means those state laws of the State of California,
federal laws of the United States of America and portions of the DGCL
which, in such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement (provided that
the term "Applicable Laws" shall not include United States federal or
state securities or blue sky laws or the rules and regulations
thereunder, the Trust Indenture Act or the rules and regulations of
the Commission thereunder, the Investment Company Act of 1940, as
amended, or the rules and regulations thereunder (collectively, the
"1940 Act"), any antifraud laws or any law, rule or regulation that
may have become applicable as a result of any Underwriter's
involvement with the transactions contemplated by this Agreement or
because of any facts specifically pertaining to any Underwriter), but
without such counsel having made any special investigation concerning
the applicability of any other law, rule or regulation;
(vii) other than as set forth or contemplated in the
Prospectus, to such counsel's knowledge, there are no legal or
governmental investigations, actions, suits or proceedings (other
than any legislative proceedings) pending or threatened against the
Trust, the Company or any of the Significant Subsidiaries or any of
their respective properties or to which the Company or any of the
Significant Subsidiaries is or may be a party or to which any property
of the Trust, the Company or any of the Significant Subsidiaries is or
may be the subject in which there is a reasonable possibility of a
determination adverse to the Trust, the Company or any of the
Significant Subsidiaries that would have individually or in the
aggregate, a material adverse effect on, in the case of the Trust, the
Trust, or, in the case of the Company and the Significant
Subsidiaries, the Company and its subsidiaries taken as a whole;
(viii) to the knowledge of such counsel, each of the
Company and the Significant Subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all United States federal and California state
governmental authorities necessary to own or lease, as the case may
be, and to operate its properties and to carry on its business as
conducted as of the date hereof, except where the failure to own,
possess or
27
<PAGE>
obtain any such license, permit, certificate, consent, order, approval
or authorization would not have a material adverse effect on the
Company and its subsidiaries taken as a whole, and to the knowledge of
such counsel, neither the Company nor any of the Significant
Subsidiaries has received any actual notice of any proceeding relating
to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except
as described in the Registration Statement or the Prospectus and
except where the revocation or modification thereof would not have a
material adverse effect on the Company and its subsidiaries taken as a
whole; and
(ix) the documents incorporated by reference in the
Prospectus or any further amendment or supplement thereto made by the
Company prior to the Closing Date or the Option Closing Date, as the
case may be, (other than the financial statements and schedules and
other financial and statistical data included or incorporated by
reference therein or omitted therefrom, and other than the exhibits
thereto, as to which such counsel need express no opinion) when they
were filed with the Commission, complied as to form in all material
respects with the requirements of the Exchange Act.
Eberhard G.H. Schmoller shall further state that he has participated
in conferences with officers and other representatives of the Company, and
representatives of the independent public accountants for the Company and your
representatives, at which conferences the contents of the Registration
Statement, the Prospectus and related matters were discussed and although such
counsel has not independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the statements
included or incorporated by reference in the Registration Statement, the
Prospectus or the documents incorporated or deemed to be incorporated by
reference therein and has made no independent verification thereof, no facts
have come to such counsel's attention which led him to believe that the
Registration Statement (other than financial statements and schedules and other
financial or statistical data included therein or omitted therefrom and other
than any Form T-1, as to which no statement need be made) at its effective date,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements contained
therein not misleading, or the Prospectus (other than financial statements and
schedules and other financial or statistical data included therein or omitted
therefrom, as to which no statement need be made), as of the date of the
Prospectus Supplement or the Closing Date, contains any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements contained therein, in the light of the circumstances under which they
were made, not misleading. Such counsel may further state that such opinion is
limited to matters arising under the federal laws of the United States of
America, the laws of the State of California
28
<PAGE>
and the DGCL, and such counsel expresses no opinion as to the laws of any other
jurisdiction or, in the case of Delaware, any other Delaware laws, or as to the
municipal laws or the laws of any other local agencies or governmental
authorities within the State of California or any matters arising thereunder or
relating thereto. Such counsel may further state that any opinions as to good
standing or due qualification of the Company or any of its subsidiaries are
based solely upon good standing and other similar certificates of public
officials. Such counsel may further state that, insofar as such opinion
concerns any bond, debenture, note, indenture, mortgage, deed of trust, loan
arrangement or other agreement or instrument referred to in clause (vi) above or
this Agreement, the Indenture, the Debentures, the Guarantee, the Declaration
(collectively, "Relevant Agreements"), such counsel has assumed that such
Relevant Agreements are governed by and construed in accordance with the
internal laws of the State of California and, insofar as such opinion concerns
the Trust, such counsel has assumed that the laws of the State of Delaware
applicable to Delaware statutory business trusts are the same as the laws of the
State of California applicable to California corporations.
In rendering his opinions above, Mr. Schmoller may rely as to factual
matters on such certificates of the Company's officers, the Regular Trustees or
of governmental officials as he may deem relevant or necessary for such opinions
and as to matters governed by other than federal or California law or by the
DGCL on opinions of local counsel.
(f) You shall have received on the Closing Date an opinion
(satis factory to you and counsel for the Underwriters), dated the Closing
Date or the Option Closing Date, as the case may be, of Brown & Wood LLP,
counsel for the Company, to the effect that:
(i) the Trust is not and, immediately after giving effect
to the sale of the Securities to the Underwriters on the date of such
opinion, will not be required to be registered under the Investment
Company Act of 1940, as amended.
(ii) the Debentures have been duly authorized by all
necessary corporate action on the part of the Company and (assuming
the due authorization, execution and delivery of the Indenture by the
trustee thereunder), when executed and attested by duly authorized
officers of the Company under its corporate seal, authenticated,
issued and delivered, all in accordance with the provisions of the
Indenture, and delivered to and paid for by the Trust as set forth in
the Debenture Purchase Agreement, will be entitled to the benefits of
the Indenture and will be valid and binding obligations of the Company
enforceable against the Company in accordance with their terms
29
<PAGE>
except as may be limited by bankruptcy, insolvency reorganization,
moratorium, arrangement, fraudulent conveyance, fraudulent transfer
or other similar laws relating to or affecting creditors' rights
generally or by general equitable principles;
(iii) this Agreement has been duly authorized by all
necessary corporate action on the part of the Company and has been
duly executed and delivered by the Company;
(iv) the Indenture and the Guarantee have been duly
qualified under the Trust Indenture Act, the Indenture, Declaration
and Guarantee have been duly authorized by all necessary corporate
action on the part of the Company and have been duly executed and
delivered by the Company, and (assuming the due authorization,
execution and delivery of the Indenture and the Guarantee by the
trustees thereunder) the Indenture and the Guarantee are valid and
binding agreements of the Company, enforceable against the Company in
accordance with their respective terms except as may be limited by
bankruptcy, insolvency reorganization, moratorium, arrangement,
fraudulent conveyance, fraudulent transfer or other similar laws
relating to or affecting creditors' rights generally or by general
equitable principles, and except that no opinion need be expressed
regarding Section 606 of the Indenture or Section 8.2 of the Guarantee
and except as rights to indemnity and contribution may be limited by
applicable law or public policy;
(v) the Registration Statement has become effective under
the Securities Act (assuming compliance with clause (2) of Rule 462(b)
in the case of any Additional Registration Statement) and, to the best
of such counsel's knowledge, no stop order suspending its
effectiveness has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission;
(vi) the statements under the captions "Description of
Capital Stock" (other than statements under such caption (i) regarding
the number of outstanding shares of any class or series of capital
stock, (ii) the number of shares of Common Stock issuable upon
conversion of the Series B Preferred Stock (as defined in the
Prospectus) or the number of votes per share of Series B Preferred
Stock, or (iii) in the first sentence of the second paragraph and the
last sentence of the third paragraph under the subcaption "--
Preferred Stock -- Series B Preferred Stock"), "Description of Debt
Securities," (other than statements under such caption regarding the
Senior Debt Securities and the
30
<PAGE>
Senior Indenture (as such terms are defined in the Prospectus)),
"Description of the TECONS (other than the statements under the
subcaption "-- Book-Entry Only Issuance -- The Depository Trust
Company"), "Description of the Guarantee," "Description of the
Convertible Debentures" (other than the statements under the sub-
captions "-- Book-Entry and Settlement" and "-- The Depository"),
"Description of Trust Preferred Securities," and "Description of
Preferred Securities Guarantee," in the Prospectus, insofar as such
statements constitute a summary of certain provisions of the
Indenture, the Debentures, the Declaration, the Securities, the
Guarantee or the Company's charter and by-laws (assuming for such
purpose that the Declaration and the Securities and all rights and
obligations thereunder were governed by and construed in accordance
with the internal laws of the State of New York) accurately summarize
such provisions in all material respects;
(vii) Although the discussion set forth in the Prospectus
under the caption "Certain Federal Tax Consequences" does not purport
to discuss all possible United States federal income tax consequences
of the purchase, ownership and disposition of the Securities, such
discussion constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of the
purchase, ownership and disposition of the Securities under current
law;
(viii) The Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an
association taxable as a corporation;
(ix) To such counsel's knowledge, no consent, approval,
authorization or other order of any federal regulatory body,
administrative agency or other governmental body of the United States
of America or any state regulatory body, administrative agency or
other governmental body of the States of California or New York is
legally required under Applicable Laws for the issuance and sale of
the Securities to the Underwriters as contemplated by this Agreement
or the public offering of the Securities contemplated by the
Prospectus. Such counsel may state that, for purposes of such
opinion, the term "Applicable Laws" means those state laws of the
State of California and the State of New York, federal laws of the
United States of America and portions of the DGCL which, in the
experience of such counsel, are normally applicable to transactions of
the type contemplated by the Underwriting Agreement (provided that the
term "Applicable Laws" shall not include federal or state securities
or blue sky laws, the Trust Indenture Act or the rules and
31
<PAGE>
regulations of the Commission thereunder, the 1940 Act, any antifraud
laws, any law or regulation relating to transportation, aviation or
similar matters, or any law, rule or regulation that may have become
applicable as a result of any Underwriter's involvement with the
transactions contemplated by this Agreement or because of any facts
specifically pertaining to any Underwriter), but without such counsel
having made any special investigation concerning the applicability of
any other law, rule or regulation;
(x) the Common Stock initially issuable upon conversion of
the Debentures has been duly authorized by the Company and validly
reserved for issuance by the Company upon such conversion by all
necessary corporate action on the part of the Company and such Common
Stock, when duly issued upon such conversion in accordance with terms
of the Indenture and at conversion prices at or in excess of the par
value of the Common Stock at the time, will be validly issued and
fully paid and non-assessable; no holder of Common Stock is subject to
personal liability under the DGCL solely by reason of being such a
holder; and the issuance of such Common Stock upon such conversion is
not subject to preemptive rights arising under the certificate of
incorporation or by-laws of the Company or the DGCL.
Brown & Wood LLP shall further state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the independent public accountants for the Company
and your representatives, at which conferences the contents of the Registration
Statement, Prospectus and related matters were discussed, and although such
counsel has not independently verified and is not passing upon and assumes no
responsibility for the accuracy, completeness or fairness of the statements
included or incorporated by reference in the Registration Statement, the
Prospectus or the documents incorporated or deemed to be incorporated by
reference therein and has made no independent verification thereof (A) such
counsel is of the opinion that the Registration Statement, as amended if
applicable, except for financial statements and schedules and other financial or
statistical data included or incorporated by reference therein or omitted
therefrom, the documents incorporated by reference therein, the exhibits thereto
and other than any Form T-1, as to which no opinion need be expressed, at the
time the most recent post-effective amendment thereto was declared effective,
complied as to form in all material respects with the applicable requirements of
the Securities Act and (B) no facts have come to such counsel's attention which
led them to believe that the Registration Statement (other than financial
statements and schedules and other financial or statistical data included or
incorporated by reference therein or omitted therefrom and other than any Form
T-1, as to which no statement need be made) at the effective date of the most
recent post-effective amendment thereto, contained any untrue statement of a
material fact or omitted to state a material fact
32
<PAGE>
required to be stated therein or necessary to make the statements therein not
misleading, or the Prospectus (other than financial statements and schedules and
other financial or statistical data included or incorporated by reference
therein or omitted therefrom, as to which no statement need be made), as of the
date of the Prospectus Supplement or the Closing Date, included any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel may further state that any
opinions as to good standing or due qualification of the Company or any of its
subsidiaries are based solely upon good standing and other similar certificates
of public officials. Such counsel may further state that such opinion is limited
to matters arising under the federal laws of the United States of America, the
laws of the States of California and New York and the DGCL, and such counsel
expresses no opinion as to the laws of any other jurisdiction or, in the case of
Delaware, any other Delaware laws, or as to the municipal laws or the laws of
any other local agencies or governmental authorities within the States of
California and New York or any matters arising thereunder or relating thereto.
In rendering their opinions above, Brown & Wood LLP may rely as to
factual matters on such certificates of the Company's officers, the Regular
Trustees, or of governmental officials as they may deem relevant or necessary
for such opinions and as to matters governed by other than federal or California
or New York law or by the DGCL on opinions of local counsel.
(g) The Underwriters shall have received on and as of the Closing
Date or Option Closing Date, as the case may be, an opinion of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel to the Underwriters, with respect
to the due authorization and valid issuance of the Securities, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may reasonably request, and such counsel shall have received
such papers and information as they may reasonably request to enable them
to pass upon such matters.
In addition, Skadden, Arps, Slate, Meagher and Flom LLP, will make a
statement to the effect that such counsel has participated in conferences with
officers and other representatives of the Company and representatives of the
independent public accountants for the Company, at which conferences the
contents of the Registration Statement, Prospectus and related matters were
discussed, and, although such counsel has not independently verified and is not
passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, except as
specified, no facts have come to such counsel's attention which lead such
counsel to believe that the Registration Statement (other than any financial
statements or other financial or statistical information therein and that part
of the Registration Statement that constitutes the
33
<PAGE>
Form T-1 as to which no opinion is expressed) at the effective date of the most
recent post-effective amendment thereto contained any untrue statement or a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements contained therein not misleading, or
that the Prospectus as of its date or the Closing Date (other than any financial
statements or other financial or statistical information therein as to which no
opinion is expressed), contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing
Date, or Option Closing Date, as the case may be, of Richards, Layton &
Finger, P.A., special counsel for the Trust, to the effect that:
(i) the Trust has been duly created and is validly
existing in good standing as a business trust under the Delaware Act
and under the Declaration and the Delaware Act has the business trust
power and authority to conduct its business as described in the
Registration Statement and Prospectus;
(ii) assuming due authorization, execution and delivery of
the Declaration by the Company and the Trustees, the Declaration is a
legal, valid and binding agreement of the Company and the Trustees,
enforceable against the Company and the Trustees in accordance with
its terms, except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency, moratorium, receivership, reorganization,
liquidation, fraudulent conveyance or other similar laws relating to
or affecting the rights and remedies of creditors generally, (b)
principles of equity, including applicable laws relating to fiduciary
duties (regardless of whether considered and applied in a proceeding
in equity or at law) and (c) the effect of the applicable public
policy on the enforceability of provisions relating to indemnification
and contribution;
(iii) under the Declaration and the Delaware Act, (x) the
Trust has the requisite trust power and authority to execute and
deliver, and to perform its obligations under, this Agreement and to
issue and perform its obligations under the Trust Securities and (y)
the execution and delivery of this Agreement by the Trust, and the
performance by the Trust of its obligations hereunder, have been duly
authorized by all business trust action on the part of the Trust;
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(iv) the Trust Securities have been duly authorized by the
Declaration and (x) when the Securities are issued in accordance with
the terms of this Agreement and delivered to and paid for by the
Underwriters and (y) the Common Securities are issued against payment
therefor as provided in the Declaration, such Trust Securities will be
duly and validly issued and the Securities will be fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust; the holders of Securities, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware;
(v) under the Declaration and the Delaware Act, the
issuance of the Trust Securities is not subject to preemptive rights;
(vi) no authorization, approval, consent or order of any
Delaware court or governmental authority or agency is required to be
obtained by the Trust solely in connection with the issuance of the
Securities;
(vii) assuming that the Trust is a grantor trust for
Federal income tax purposes the holders of the Securities (other than
holders of the Securities who reside or are domiciled in the State of
Delaware) will have no liability for income taxes imposed by the State
of Delaware solely as a result of participation in the Trust, and the
Trust will not be liable for any income tax imposed by the State of
Delaware; and
(viii) We have reviewed the statements in the Prospectus
under the captions "The Trust" and "CNF Trust I" and, insofar as they
contain statements of Delaware law, such statements are fairly
presented.
In rendering such opinion, such counsel may note that holders of Trust
Securities may be obligated, pursuant to the Declaration, to (i) provide
indemnity and security in connection with and pay taxes or other governmental
charges arising from transfers of certificates for Trust Securities and the
issuance of replacement certificates for Trust Securities, (ii) provide security
and indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and remedies under the Declaration and (iii)
undertake as a party litigant to pay costs in any suit for the enforcement of
any right or remedy under the Declaration or against the Property Trustee, to
the extent provided in the Declaration. In rendering such opinion such counsel
may also note that the Company, in its capacity as Sponsor and not in its
capacity as a holder, has undertaken certain payment obligations as set forth in
the Declaration.
35
<PAGE>
(i) You shall have received a letter on and as of the date of
this Agreement, in form and substance satisfactory to you, from Arthur
Andersen LLP independent public accountants, with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus, and you shall have received a letter on and
as of the Closing Date or Option Closing Date, as the case may be, in form
and substance satisfactory to you, from Arthur Andersen LLP, confirming the
letter delivered on the date of this Agreement.
(j) The Securities to be delivered on the Closing Date or the
Option Closing Date, as the case may be, shall have been approved for
listing on the Exchange, subject to official notice of issuance.
(k) The "lock-up" letters, each substantially in the form of
Exhibit A hereto, from certain directors and executive officers of the
---------
Company as set forth in Exhibit B hereto relating to sales and certain
---------
other dispositions of shares of Common Stock or certain other securities,
shall have been delivered to you on or before the date hereof, and shall be
in full force and effect on the Closing Date.
(l) The Company and the Trust shall not have failed at or prior
to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or
the Trust at or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Securities hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Trust and the Company, the due authorization and issuance
of such Additional Securities and other matters related to the issuance of such
Additional Securities.
9. Effective Date of Agreement and Termination. This Agreement
-------------------------------------------
shall become effective upon the later of (i) execution of this Agreement and
(ii) when notification of the effectiveness of the Registration Statement has
been released by the Commission.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Company if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, or the earnings, affairs, or business prospects of the
Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business, which would, in your judgment, make
it impracti-
36
<PAGE>
cable to market the Securities on the terms and in the manner contemplated in
the Prospectus, (ii) any outbreak or escalation of hostilities or other
national or international calamity or crisis or material change in economic
conditions, if the effect of such outbreak, escalation, calamity, crisis or
change on the financial markets of the United States or elsewhere would, in your
judgment, make it impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the Exchange, the American Stock Exchange
or the NASDAQ National Market System or limitation on prices for securities on
any such exchange or National Market System, (iv) trading of any securities of
the Company shall have been suspended on any exchange, (v) the declaration of a
banking moratorium by either federal, California or New York State authorities
or (vi) the taking of any action by any federal, state or local government or
agency in respect of its monetary or fiscal affairs which in your judgment has a
material adverse effect on the financial markets in the United States and would,
in your judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated by the Prospectus.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Securities which it or they have agreed to purchase hereunder on such date and
the aggregate Firm Securities or Additional Securities, as the case may be,
which such defaulting Underwriter or Underwriters, as the case may be, agreed
but failed or refused to purchase is not more than one-tenth of the total number
of Securities to be purchased by all Underwriters on such date, each non-
defaulting Underwriter shall be obligated severally, in the proportion which the
number of Securities set forth opposite its name in Schedule I bears to the
aggregate number of Firm Securities which all the non-defaulting Underwriters
have agreed to purchase, or in such other proportion as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters, as
the case may be, agreed but failed or refused to purchase on such date; provided
--------
that in no event shall the number of Firm Securities or Additional Securities,
as the case may be, which any Underwriter has agreed to purchase pursuant to
Section 2 hereof be increased pursuant to this Section 9 by an amount in excess
of one-ninth of such number of Firm Securities or Additional Securities, as the
case may be, without the written consent of such Underwriter. If on the Closing
Date or on an Option Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase Securities and the aggregate
number of Firm Securities or Additional Securities, as the case may be, with
respect to which such default occurs is more than one-tenth of the aggregate
number of Securities to be purchased on such date by all Underwriters and
arrangements satisfactory to you and the Company for purchase of such Securities
are not made within 48 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter and the Company.
In any such case which does not result in termination of this Agreement, either
you or the Company shall have the right to postpone
37
<PAGE>
the Closing Date or on the Option Closing Date, as the case may be, but in no
event for longer than seven days, in order that the required changes, if any, in
the Registration Statement and the Prospectus or any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
any such Underwriter under this Agreement.
10. Miscellaneous. Notices given pursuant to any provision of this
-------------
Agreement shall be addressed as follows: (a) if to the Trust, to CNF Trust I,
c/o CNF Transportation Inc., 3240 Hillview Avenue, Palo Alto, CA 94304,
Attention: General Counsel; (b) if to the Company, to CNF Transportation Inc.,
3240 Hillview Avenue, Palo Alto, CA 94304, Attention: General Counsel and (c)
if to any Underwriter or to you, to you c/o J.P. Morgan Securities Inc., 60 Wall
Street, New York, New York 10260, Attention: Syndicate Department, or in any
case to such other address as the person to be notified may have requested in
writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Trust and of the several
Underwriters set forth in or made pursuant to this Agreement shall remain
operative and in full force and effect, and will survive delivery of and payment
for the Securities, regardless of (i) any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter or by or on behalf of
the Company, the officers or directors of the Company or any controlling person
of the Company or by or on behalf of the Trust, the Trustees or the officers or
any controlling person of the Trust, (ii) acceptance of the Securities and
payment for them hereunder and (iii) termination of this Agreement.
If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of the Trust or the Company to comply with
the terms or to fulfill any of the conditions of this Agreement, the Company
agrees to reimburse the several Underwriters for all out-of-pocket expenses
(including the reasonable fees and disbursements of counsel) reasonably incurred
by them.
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of the Trust, the Company, the Underwriters, any
controlling persons referred to herein, the Trustees, the officers and directors
referred to in Section 7 hereof and their respective successors, assigns, heirs
and legal representatives, and shall be binding upon the Trust, the Company and
the Underwriters and their respective successors and assigns, all as and to the
extent provided in this Agreement, and no other person shall acquire or have any
right under or by virtue of this Agreement. The term "successors and assigns"
shall not include a purchaser of any of the Securities from any of the several
Underwriters merely because of such purchase.
38
<PAGE>
THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
39
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
among the Trust, the Company and the Underwriters.
Very truly yours,
CNF TRUST I,
a Delaware statutory business trust
By: CNF TRANSPORTATION INC.,
as Sponsor
By___________________________
Title:
CNF TRANSPORTATION INC.
By___________________________
Title:
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
By: J.P. Morgan Securities Inc.
By_______________________
Title:
40
<PAGE>
SCHEDULE I
----------
<TABLE>
<CAPTION>
Number of Firm Securi-
Underwriters ties to be Purchased
- ------------ ----------------------
<S> <C>
J.P. Morgan Securities Inc. 733,334
Goldman, Sachs & Co. 733,333
Merrill Lynch & Co 733,333
---------
Total 2,200,000
</TABLE>
41
<PAGE>
EXHIBIT A
______________ __, 1997
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Re: CNF Trust I
-----------
Ladies and Gentlemen:
The undersigned understands that J.P. Morgan Securities Inc., Goldman, Sachs &
Co. and Merrill Lynch & Co. (the "Underwriters") intend to enter into an
Underwriting Agreement (the "Underwriting Agreement") with the Company and CNF
Trust I, a statutory business trust formed under the laws of the State of
Delaware (the "Trust"), providing for the offering of term convertible preferred
securities (the "TECONS") of the Trust.
To induce the Underwriters to enter into the Underwriting Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the undersigned hereby agrees that, without the prior
written consent of J.P. Morgan Securities Inc., the undersigned will not, during
the period commencing on the date of the Underwriting Agreement and ending 90
days after the date of the Underwriting Agreement, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, or
otherwise transfer or dispose of, directly or indirectly, any equity securities
of the Company, the Trust or any similar trust affiliated with the Company or
any securities convertible into or exchangeable or exercisable for any equity
securities of the Company, the Trust or any similar trust affiliated with the
Company, whether now owned or hereafter acquired by the undersigned or with
respect to which the undersigned has or hereafter acquires the power of
disposition, or (ii) enter into any swap or any other agreement or arrangement
that transfers to another, in a whole or in part, directly or indirectly, any of
the economic consequences of ownership of any equity securities of the Company,
the Trust or any similar trust affiliated with the Company, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of any equity securities of the Company, the Trust or any such similar trust
affiliated with the Company, other securities, in cash or otherwise.
Notwithstanding the
42
<PAGE>
foregoing, (a) the undersigned may transfer, pledge or otherwise dispose of any
equity securities of the Company, the Trust or any similar trust affiliated with
the Company, or any securities convertible into or exchangeable or exercisable
for any equity securities of the Company, the Trust or any similar trust
affiliated with the Company, to any present or former spouse of the undersigned
or persons who are directly or indirectly related to the undersigned or to any
present or former spouse of the undersigned by blood, marriage or adoption
(collectively, "Related Persons"), to a trust or similar arrangement established
for or for the benefit of the undersigned or any Related Persons, or to any
educational or charitable institution or organization, provided that in each
instance the transferee agrees to be similarly bound; and (b) this agreement
shall not restrict the transfer or disposition of any securities by will,
pursuant to the terms of any so-called family or similar trust, or by testate or
intestate succession.
If the offering of TECONS has not been closed 10 days after the effective date
of the Underwriting Agreement, this agreement shall be of no further force or
effect.
This agreement shall be governed by and construed in accordance with the laws of
the State of New York.
Very truly yours,
Signature: _____________________
Print Name: ____________________
43
<PAGE>
EXHIBIT B
---------
Persons Executing Lock-up Letters
---------------------------------
Donald E. Moffitt
Robert Alpert
Earl F. Cheit
Richard A. Clarke
Margaret G. Gill
Robert Jaunich II
W. Keith Kennedy, Jr.
Richard B. Madden
Michael J. Murray
Robert D. Rogers
William J. Schroeder
Robert P. Wayman
Gregory L. Quesnel
David I. Beatson
Robert T. Robertson
Eberhard G. H. Schmoller
John H. Williford
<PAGE>
Exhibit 4(e)
================================================================================
CNF TRANSPORTATION INC.
Issuer
to
THE FIRST NATIONAL BANK OF CHICAGO,
Trustee
---------------
INDENTURE
---------------
Dated as of June 11, 1997
Subordinated Debt Securities
================================================================================
<PAGE>
Reconciliation and tie between
Trust Indenture Act of 1939 (the "Trust Indenture Act")
and Indenture
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
<S> <C>
(S)310(a)(1) 607
(a)(2) 607
(b) 608
(S)312(a) 701
(b) 702
(c) 702
(S)313(a) 703
(b)(2) 703
(c) 703
(d) 703
(S)314(a) 704
(c)(1) 102
(c)(2) 102
(e) 102
(f) 102
(S)316(a) (last sentence) 101
(a)(1)(A) 502, 512
(a)(1)(B) 513
(b) 508
(S)317(a)(1) 503
(a)(2) 504
(b) 1003
(S)318(a) 108
</TABLE>
- ----------------------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Recitals......................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.................................................... 2
Section 102. Compliance Certificates and Opinions........................... 12
Section 103. Form of Documents Delivered to Trustee......................... 12
Section 104. Acts of Holders................................................ 12
Section 105. Notices, etc. to Trustee and Company........................... 14
Section 106. Notice to Holders of Securities; Waiver........................ 15
Section 107. Language of Notices............................................ 16
Section 108. Conflict with Trust Indenture Act.............................. 16
Section 109. Effect of Headings and Table of Contents....................... 16
Section 110. Successors and Assigns......................................... 16
Section 111. Separability Clause............................................ 16
Section 112. Benefits of Indenture.......................................... 16
Section 113. Governing Law.................................................. 16
Section 114. Legal Holidays................................................. 16
Section 115. Counterparts................................................... 17
Section 116. Judgment Currency.............................................. 17
Section 117. Extension of Payment Dates..................................... 18
Section 118. Immunity of Stockholders, Directors, Officers and Agents of the
Company........................................................ 18
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally................................................ 18
Section 202. Form of Trustee's Certificate of Authentication................ 19
Section 203. Securities in Global Form...................................... 19
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series........................... 20
Section 302. Currency; Denominations........................................ 24
Section 303. Execution, Authentication, Delivery and Dating................. 24
Section 304. Temporary Securities........................................... 26
Section 305. Registration, Transfer and Exchange............................ 26
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 306. Mutilated, Destroyed, Lost and Stolen Securities...................... 30
Section 307. Payment of Interest and Certain Additional Amounts; Rights to Interest
and Certain Additional Amounts Preserved.............................. 31
Section 308. Persons Deemed Owners................................................. 33
Section 309. Cancellation.......................................................... 33
Section 310. Computation of Interest............................................... 34
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge............................................ 34
Section 402. Defeasance and Covenant Defeasance.................................... 35
Section 403. Application of Trust Money............................................ 39
Section 404. Effect on Subordination Provisions.................................... 40
ARTICLE FIVE
REMEDIES
Section 501. Events of Default..................................................... 40
Section 502. Acceleration of Maturity; Rescission and Annulment.................... 42
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee....... 43
Section 504. Trustee May File Proofs of Claim...................................... 44
Section 505. Trustee May Enforce Claims without Possession of Securities or
Coupons............................................................... 44
Section 506. Application of Money Collected........................................ 45
Section 507. Limitations on Suits.................................................. 45
Section 508. Unconditional Right of Holders to Receive Principal and any Premium,
Interest and Additional Amounts....................................... 46
Section 509. Restoration of Rights and Remedies.................................... 46
Section 510. Rights and Remedies Cumulative........................................ 46
Section 511. Delay or Omission Not Waiver.......................................... 47
Section 512. Control by Holders of Securities...................................... 47
Section 513. Waiver of Past Defaults............................................... 47
Section 514. Waiver of Stay or Extension Laws...................................... 48
Section 515. Undertaking for Costs................................................. 48
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee............................................. 48
Section 602. Notice of Defaults.................................................... 50
Section 603. Not Responsible for Recitals or Issuance of Securities................ 50
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
Section 604. May Hold Securities................................................... 50
Section 605. Money Held in Trust................................................... 51
Section 606. Compensation and Reimbursement........................................ 51
Section 607. Corporate Trustee Required; Eligibility............................... 52
Section 608. Resignation and Removal; Appointment of Successor..................... 52
Section 609. Acceptance of Appointment by Successor................................ 53
Section 610. Merger, Conversion, Consolidation or Succession to Business........... 55
Section 611. Appointment of Authenticating Agent................................... 55
ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders............. 57
Section 702. Preservation of Information; Communications to Holders................ 57
Section 703. Reports by Trustee.................................................... 57
Section 704. Reports by Company.................................................... 58
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.................. 58
Section 802. Successor Person Substituted for Company.............................. 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.................... 59
Section 902. Supplemental Indentures with Consent of Holders....................... 61
Section 903. Execution of Supplemental Indentures.................................. 62
Section 904. Effect of Supplemental Indentures..................................... 62
Section 905. Reference in Securities to Supplemental Indentures.................... 62
Section 906. Effect on Senior Indebtedness......................................... 63
Section 907. Conformity with Trust Indenture Act................................... 63
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium, Interest and Additional Amounts....... 63
Section 1002. Maintenance of Office or Agency...................................... 63
Section 1003. Money for Securities Payments to Be Held in Trust.................... 64
Section 1004. Additional Amounts................................................... 66
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
Section 1005. Corporate Existence.................................................. 67
Section 1006. Waiver of Certain Covenants.......................................... 67
Section 1007. Company Statement as to Compliance................................... 67
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article............................................. 67
Section 1102. Election to Redeem; Notice to Trustee................................ 67
Section 1103. Selection by Trustee of Securities to be Redeemed.................... 68
Section 1104. Notice of Redemption................................................. 68
Section 1105. Deposit of Redemption Price.......................................... 70
Section 1106. Securities Payable on Redemption Date................................ 70
Section 1107. Securities Redeemed in Part.......................................... 71
ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article............................................. 72
Section 1202. Satisfaction of Sinking Fund Payments with Securities................ 72
Section 1203. Redemption of Securities for Sinking Fund............................ 73
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article............................................. 73
ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401. Applicability of Article............................................. 74
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called............................ 74
Section 1502. Call, Notice and Place of Meetings................................... 74
Section 1503. Persons Entitled to Vote at Meetings................................. 75
Section 1504. Quorum; Action....................................................... 75
Section 1505. Determination of Voting Rights; Conduct and Adjournment of Meetings.. 76
</TABLE>
iv
<PAGE>
<TABLE>
<S> <C> <C>
Section 1506. Counting Votes and Recording Action of Meetings...................... 77
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Agreement to Subordinate............................................. 77
Section 1602. Distribution on Dissolution, Liquidation and Reorganization;
Subrogation of Securities.... 77
Section 1603. No Payment on Securities in Event of Default on Senior Indebtedness.. 79
Section 1604. Payments on Securities Permitted..................................... 80
Section 1605. Authorization of Holders to Trustee to Effect Subordination.......... 80
Section 1606. Notices to Trustee................................................... 80
Section 1607. Trustee as Holder of Senior Indebtedness............................. 81
Section 1608. Modifications of Terms of Senior Indebtedness........................ 81
Section 1609. Reliance on Judicial Order or Certificate of Liquidating Agent....... 81
</TABLE>
v
<PAGE>
INDENTURE, dated as of June 11, 1997 (the "Indenture"), among CNF
TRANSPORTATION INC., a corporation duly organized and existing under the laws of
State of Delaware (hereinafter called the "Company"), having its principal
executive office located at 3240 Hillview Avenue, Palo Alto, California 94304,
and THE FIRST NATIONAL BANK OF CHICAGO, a banking association duly organized and
existing under the laws of the United States of America (hereinafter called the
"Trustee").
Recitals
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
unsecured debentures, notes or other evidences of Indebtedness (hereinafter
called the "Securities"), unlimited as to principal amount, to bear such rates
of interest, to mature at such time or times, to be issued in one or more series
and to have such other provisions as shall be fixed as hereinafter provided.
The Company has duly authorized the execution and delivery of this
Indenture. All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder that are required to be part of this Indenture
and, to the extent applicable, shall be governed by such provisions.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders (as herein defined) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Securities
or of any series thereof and any Coupons (as herein defined) as follows:
1
<PAGE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.
Except as otherwise expressly provided in or pursuant to this Indenture or
unless the context otherwise requires, for all purposes of this Indenture:
(1) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the terms
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(4) the words "herein", "hereof", "hereto" 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; and
(5) the word "or" is always used inclusively (for example, the phrase
"A or B" means "A or B or both", not "either A or B but not both").
Certain terms used principally in certain Articles hereof are defined in
those Articles.
"Act", when used with respect to any Holders, has the meaning specified in
Section 104.
"Additional Amounts" means any additional amounts which are required hereby
or by any Security, under circumstances specified herein or therein, to be paid
by the Company in respect of certain taxes, assessments or other governmental
charges imposed on Holders specified therein and which are owing to such
Holders; provided that such amounts are specifically identified as "Additional
Amounts" in the Board Resolution, Officers' Certificate or supplemental
indenture, as the case may be, establishing the terms of such Securities
pursuant to Section 301 hereof; and, provided, further, that the term Additional
Amounts shall not include any amounts identified as "additional interest" or
"compound interest" which may be payable with respect to the Securities of any
series unless otherwise expressly provided in or pursuant to this Indenture.
"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; and the term "Affiliated" has a meaning
correlative to the foregoing. For the purposes
2
<PAGE>
of this definition, "control", when used with respect to any specified Person
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 611 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Authorized Newspaper" means a newspaper, in an official language of the
place of publication or in the English language, customarily published on each
day that is a Business Day in the place of publication, whether or not published
on days that are Legal Holidays in the place of publication, and of general
circulation in each place in connection with which the term is used or in the
financial community of each such place. Where successive publications are
required to be made in Authorized Newspapers, the successive publications may be
made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any day that is a Business Day in the
place of publication.
"Bearer Security" means any Security in the form established pursuant to
Section 201 which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
committee of that board duly authorized to act generally or in any particular
respect for the Company hereunder.
"Board Resolution" means a copy of one or more resolutions, certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, delivered to the Trustee.
"Business Day", with respect to any Place of Payment or other location,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day other than a Saturday, Sunday or other day on which banking
institutions in such Place of Payment or other location are authorized or
obligated by law, regulation or executive order to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, or, if at any time after the execution of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor Person shall have become such pursuant to the
applicable provisions
3
<PAGE>
of this Indenture, and thereafter "Company" shall mean such successor Person,
and any other obligor upon the Securities.
"Company Request" and "Company Order" mean, respectively, a written request
or order, as the case may be, signed in the name of the Company by the Chairman
of the Board of Directors, the President or a Vice President, and by a Vice
President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary, of the Company, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign Currency
both by the government of the country or the confederation which issued such
Foreign Currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community, (ii)
the ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Union or (iii) any
currency unit or composite currency other than the ECU for the purposes for
which it was established.
"Corporate Trust Office" means either (A) the principal corporate trust
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office at the date of original execution
of this Indenture is located at One First National Plaza, Suite 0126, Chicago,
Illinois 60670-0126, Attention: Corporate Trust Services Division, or (B) for
purposes of Sections 1002, "Corporate Trust Office" means the principal
corporate trust office of the Trustee in the Borough of Manhattan, The City of
New York at which at any particular time its corporate trust business shall be
administered in The City of New York, which office at the date of original
execution of this Indenture is located at c/o First Chicago Trust Company of New
York, Attn: Corporate Trust Department, 14 Wall Street, 8th Floor, Window 2,
New York, New York 10005; provided that, for purposes of any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document or notice provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with, the Trustee, whether pursuant to Section
105, Article Sixteen or otherwise, "Corporate Trust Office" means any office
referred to in clause (A) or (B) of this paragraph.
"Corporation" includes corporations, associations, companies and business
trusts.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Currency", with respect to any payment, deposit or other transfer in
respect of the principal of or any premium or interest on or any Additional
Amounts with respect to any Security, means Dollars or the Foreign Currency, as
the case may be, in which such payment, deposit or other transfer is required to
be made by or pursuant to the terms hereof or such Security and, with respect to
any other payment, deposit or transfer pursuant to or contemplated by the terms
hereof or such Security, means Dollars.
"CUSIP number" means the alphanumeric designation assigned to a Security by
Standard & Poor's Corporation, CUSIP Service Bureau.
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"Declaration" means the Amended and Restated Declaration of Trust dated as
of June 11, 1997 among the Company, as sponsor, The First National Bank of
Chicago, as property trustee, First Chicago Delaware Inc., as Delaware trustee,
and certain officers and employees of the Company, as regular trustees, as the
same may be amended or supplemented from time to time in accordance with its
terms.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollars" or "$" means a dollar or other equivalent unit of legal tender
for payment of public or private debts in the United States of America.
"ECU" means the European Currency Units as defined and revised from time to
time by the Council of the European Community.
"European Monetary System" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European Community.
"European Union" means the European Community, the European Coal and Steel
Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 501.
"Foreign Currency" means any currency, currency unit or composite currency,
including, without limitation, the ECU, issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such government.
"GAAP" means such accounting principles as are generally accepted in the
United States of America as of the date or time of any computation required
hereunder.
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the other government or governments in the
confederation which issued the Foreign Currency in which the principal of or any
premium or interest on the relevant Security or any Additional Amounts in
respect thereof shall be payable, in each case where the payment or payments
thereunder are supported by the full faith and credit of such government or
governments or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America or such
other government or governments, in each case where the timely payment or
payments thereunder are unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government or
governments, and which, in the case of (i) or (ii), are not callable or
redeemable at the option of the issuer or issuers thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of or other amount with respect to any such Government Obligation
held by such custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the
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custodian in respect of the Government Obligation or the specific payment of
interest on or principal of or other amount with respect to the Government
Obligation evidenced by such depository receipt.
"Holder", in the case of any Registered Security, means the Person in whose
name such Security is registered in the Security Register and, in the case of
any Bearer Security, means the bearer thereof and, in the case of any Coupon,
means the bearer thereof.
"Indebtedness" means with respect to any Person (a) any liability of such
Person (1) for borrowed money or under any reimbursement obligation relating to
a letter of credit, or (2) evidenced by a bond, note, debenture or similar
instrument, or (3) for payment obligations arising under any conditional sale or
other title retention arrangement (including a purchase money obligation) given
in connection with the acquisition of any businesses, properties or assets of
any kind, or (4) for the payment of money relating to a capitalized lease
obligation; (b) any liability of others described in the preceding clause (a)
that such Person has guaranteed or that is otherwise its legal liability; and
(c) any amendment, supplement, modification, deferral, renewal, extension or
refunding of any liability of the types referred to in clauses (a) and (b)
above.
"Indenture" means this instrument 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 and, with respect to any
Security, by the terms and provisions of such Security and any Coupon
appertaining thereto established pursuant to Section 301 (as such terms and
provisions may be amended pursuant to the applicable provisions hereof).
"Independent Public Accountants" means accountants or a firm of accountants
that, with respect to the Company and any other obligor under the Securities or
the Coupons, are independent public accountants within the meaning of the
Securities Act of 1933, as amended, and the rules and regulations promulgated by
the Commission thereunder, who may be the independent public accountants
regularly retained by the Company or who may be other independent public
accountants. Such accountants or firm shall be entitled to rely upon any
Opinion of Counsel as to the interpretation of any legal matters relating to
this Indenture or certificates required to be provided hereunder.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"interest", with respect to any Original Issue Discount Security which by
its terms bears interest only after Maturity, means interest payable after
Maturity.
"Interest Payment Date", with respect to any Security, means the Stated
Maturity of an installment of interest on such Security.
"Judgment Currency" has the meaning specified in Section 116.
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"Legal Holidays" has the meaning specified in Section 114.
"Maturity", with respect to any Security, means the date on which the
principal of such Security or an installment of principal becomes due and
payable as provided in or pursuant to this Indenture, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption or repurchase,
notice of option to elect repayment or otherwise, and includes a Redemption Date
for such Security.
"New York Banking Day" has the meaning specified in Section 116.
"Office" or "Agency", with respect to any Securities, means an office or
agency of the Company maintained or designated in a Place of Payment for such
Securities pursuant to Section 1002 or any other office or agency of the Company
maintained or designated for such Securities pursuant to Section 1002 or, to the
extent designated or required by Section 1002 in lieu of such office or agency,
the Corporate Trust Office of the Trustee.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President, and by a Vice President, the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
the Company, that complies with the requirements of Section 314(e) of the Trust
Indenture Act and is delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of or counsel for the Company, that, if required by the Trust Indenture
Act, complies with the requirements of Section 314(e) of the Trust Indenture
Act.
"Original Issue Discount Security" means a Security issued pursuant to this
Indenture which provides for declaration of an amount less than the principal
face amount thereof to be due and payable upon acceleration pursuant to Section
502.
"Outstanding", when used with respect to any Securities, means, as of the
date of determination, all such Securities theretofore authenticated and
delivered under this Indenture, except:
(a) any such Security theretofore cancelled by the Trustee or the
Security Registrar or delivered to the Trustee or the Security
Registrar for cancellation;
(b) any such Security for whose payment at the Maturity thereof money
in the necessary amount has been theretofore deposited pursuant
hereto (other than pursuant to Section 402) with the Trustee or
any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities and
any Coupons appertaining thereto, provided that, if such
Securities are to be redeemed, notice of such redemption has
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been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(c) any such Security with respect to which the Company has effected
defeasance or covenant defeasance pursuant to Section 402, except
to the extent provided in Section 402;
(d) any such Security which has been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, unless
there shall have been presented to the Trustee proof satisfactory
to it and to the Company that such Security is held by a bona
fide purchaser in whose hands such Security is a valid obligation
of the Company; and
(e) any such Security converted or exchanged as contemplated by this
Indenture into Common Stock or other securities, if the terms of
such Security provide for such conversion or exchange pursuant to
Section 301;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders of Securities for quorum purposes, (i) the principal amount
of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be Outstanding for such purposes shall
be equal to the amount of the principal thereof that pursuant to the terms of
such Original Issue Discount Security would be declared (or shall have been
declared to be) due and payable upon a declaration of acceleration thereof
pursuant to Section 502 at the time of such determination, and (ii) the
principal amount of any Indexed Security that may be counted in making such
determination and that shall be deemed outstanding for such purpose shall be
equal to the principal face amount of such Indexed Security at original
issuance, unless otherwise provided in or pursuant to this Indenture, and (iii)
the principal amount of a Security denominated in a Foreign Currency shall be
the Dollar equivalent, determined on the date of original issuance of such
Security, of the principal amount (or, in the case of an Original Issue Discount
Security, the Dollar equivalent on the date of original issuance of such
Security of the amount determined as provided in (i) above) of such Security,
and (iv) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate (other than the Trust) of the Company or such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in making any such
determination or relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer of the Trustee knows to be so owned shall be so disregarded. Securities
so owned which shall have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee (A)
the pledgee's right so to act with respect to such Securities and (B) that the
pledgee is not the Company or any other obligor upon the Securities or any
Coupons appertaining thereto or an Affiliate of the Company or such other
obligor.
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"Paying Agent" means any Person authorized by the Company to pay the
principal of, or any premium or interest on, or any Additional Amounts with
respect to, any Security or any Coupon on behalf of the Company.
"Person" means any individual, Corporation, partnership, joint venture,
joint-stock company, limited liability company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment", with respect to any Security, means the place or places
where the principal of, or any premium or interest on, or any Additional Amounts
with respect to such Security are payable as provided in or pursuant to this
Indenture or such Security.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same indebtedness as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a lost, destroyed, mutilated or stolen Security or any Security to which
a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to
evidence the same indebtedness as the lost, destroyed, mutilated or stolen
Security or the Security to which a mutilated, destroyed, lost or stolen Coupon
appertains.
"Redemption Date", with respect to any Security or portion thereof to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or such Security.
"Redemption Price", with respect to any Security or portion thereof to be
redeemed, means the price at which it is to be redeemed as determined by or
pursuant to this Indenture or such Security.
"Registered Security" means any Security established pursuant to Section
201 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Registered Security
on any Interest Payment Date therefor means the date, if any, specified in or
pursuant to this Indenture or such Security as the "Regular Record Date".
"Required Currency" has the meaning specified in Section 116.
"Responsible Officer" means any officer of the Trustee in its Corporate
Trust Office and also means, with respect to a particular corporate trust
matter, any other officer or employee of the Trustee to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, authenticated and delivered under this Indenture; provided, however, that,
if at any time there is more than one Person acting as Trustee under this
Indenture, "Securities", with respect to any such Person,
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shall mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Senior Indebtedness" means (a) any liability of the Company (1) for
borrowed money or under any reimbursement obligation relating to a letter of
credit, surety bond or similar instrument, or (2) evidenced by a bond, note,
debenture or similar instrument, or (3) for obligations to pay the deferred
purchase price of property or services, except trade accounts payable arising in
the ordinary course of business, or (4) for the payment of money relating to a
capitalized lease obligation, or (5) for the payment of money under any Swap
Agreement; (b) any liability of others described in the preceding clause (a)
that the Company has guaranteed or that is otherwise its legal liability; and
(c) any deferral, renewal, extension or refunding of any liability of the types
referred to in clauses (a) and (b) above, unless, in the instrument creating or
evidencing any such liability referred to in clause (a) or (b) above or any such
deferral, renewal, extension or refunding referred to in clause (c) above or
pursuant to which the same is outstanding, it is expressly provided that such
liability, deferral, renewal, extension or refunding is subordinate in right of
payment to all other Indebtedness of the Company or is not senior or prior in
right of payment to the Securities or ranks pari passu with or subordinate to
the Securities in right of payment; provided that the Securities shall not
constitute Senior Indebtedness; and provided, further, that Senior Indebtedness
shall not include any indebtedness or guarantees between or among the Company or
its Affiliates, including all debt securities or guarantees in respect of those
debt securities issued to any trust (including, without limitation, the Trust),
trustee of a trust (including, without limitation, the Trust), partnership,
limited liability company or other Person Affiliated with the Company that is a
financing vehicle of the Company (a "financing entity") in connection with the
issuance by such financing entity of preferred securities unless otherwise
expressly provided in the instrument creating or evidencing such indebtedness,
debt securities or guarantees, as the case may be, or pursuant to which the same
is outstanding.
"Special Record Date" for the payment of any Defaulted Interest on any
Registered Security means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", with respect to any Security or any installment of
principal thereof or interest thereon or any Additional Amounts with respect
thereto, means the date established by or pursuant to this Indenture or such
Security as the fixed date on which the principal of such Security or such
installment of principal or interest is, or such Additional Amounts are, due and
payable.
"Swap Agreement" means any financial agreement designed to manage the
Company's exposure to fluctuations in interest rates, currency exchange rates or
commodity prices, including without limitation swap agreements, option
agreements, cap agreements, floor agreements, collar agreements and forward
purchase agreements.
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"Trust" means CNF Trust I, a Delaware business trust, until a successor
shall have become such pursuant to the applicable provisions of the Declaration,
and thereafter "Trust" shall mean such successor Trust.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
and any reference herein to the Trust Indenture Act or a particular provision
thereof shall mean such Act or provision, as the case may be, as amended or
replaced from time to time or as supplemented from time to time by rules or
regulations adopted by the Commission under or in furtherance of the purposes of
such Act or provision, as the case may be.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor Trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean each Person who is then a Trustee
hereunder; provided, however, that if at any time there is more than one such
Person, "Trustee" shall mean each such Person and as used with respect to the
Securities of any series shall mean the Trustee with respect to the Securities
of such series.
"United States", except as otherwise provided in or pursuant to this
Indenture or any Security, means the United States of America (including the
states thereof and the District of Columbia), its territories, its possessions
and other areas subject to its jurisdiction.
"United States Alien", except as otherwise provided in or pursuant to this
Indenture or any Security, means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.
"United States Person" means any citizen or resident of the United States,
any corporation, partnership or other entity created or organized in or under
the laws of the United States, any estate the income of which is subject to
United States federal income taxation regardless of its source, or any trust
whose administration is subject to the primary supervision of a United States
court and which has one or more United States fiduciaries who have the authority
to control all substantial decisions of the trust.
"U.S. Depository" or "Depository" means, with respect to any Security
issuable or issued in the form of one or more global Securities, the Person
designated as U.S. Depository or Depository by the Company in or pursuant to
this Indenture, which Person must be, to the extent required by applicable law
or regulation, a clearing agency registered under the Securities Exchange Act of
1934, as amended, and, unless otherwise provided with respect to any Security,
any successor to such Person. If at any time there is more than one such
Person, "U.S. Depository" or "Depository" shall mean, with respect to any
Securities, the qualifying entity which has been appointed with respect to such
Securities.
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"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "Vice President".
Section 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided in or pursuant to this Indenture,
upon any application or request by the Company to the Trustee to take any action
under any provision of this Indenture, the Company shall furnish to the Trustee
an Officers' Certificate stating that all conditions 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, 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
or any of them is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, unless such
officer knows that the opinion with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such Opinion of Counsel may
be based upon a certificate or opinion of, or representations by, an officer or
officers of the Company unless such counsel knows 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 or any Security, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders.
(1) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by or pursuant to this Indenture to be made, given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing. If, but only if, Securities of a series are issuable as
Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided in or pursuant to this Indenture to be
made, given or taken by Holders of Securities of such series may, alternatively,
be embodied in and evidenced by the record of Holders of Securities of such
series voting in favor thereof, either in person or
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by proxies duly appointed in writing, at any meeting of Holders of Securities of
such series duly called and held in accordance with the provisions of Article
Fifteen, or a combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become effective when
such instrument or instruments or record or both are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments or so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent, or
of the holding by any Person of a Security, shall be sufficient for any purpose
of this Indenture and (subject to Section 315 of the Trust Indenture Act)
conclusive in favor of the Trustee and the Company and any agent of the Trustee
or the Company, if made in the manner provided in this Section. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
Without limiting the generality of this Section 104, unless otherwise
provided in or pursuant to this Indenture, a Holder, including a U.S. Depository
that is a Holder of a global Security, may make, give or take, by a proxy or
proxies, duly appointed in writing, any request, demand, authorization,
direction, notice, consent, waiver or other Act provided in or pursuant to this
Indenture or the Securities to be made, given or taken by Holders, and a U.S.
Depository that is a Holder of a global Security may provide its proxy or
proxies to the beneficial owners of interests in any such global Security
through such U.S. Depository's standing instructions and customary practices.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.
(3) The ownership, principal amount and serial numbers of Registered
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, shall be proved by the Security Register.
(4) The ownership, principal amount and serial numbers of Bearer
Securities held by any Person, and the date of the commencement and the date of
the termination of holding the same, may be proved by the production of such
Bearer Securities or by a certificate executed, as depositary, by any trust
company, bank, banker or other depositary reasonably acceptable to the Company,
wherever situated, if such certificate shall be deemed by the Company and the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Securities therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such certificate or
affidavit is deemed by the Company and the Trustee to be satisfactory. The
Trustee and the Company may assume that such ownership of any Bearer Security
continues until (1) another certificate or affidavit bearing a later date issued
in respect of the same Bearer Security is produced, or (2) such Bearer Security
is produced to the Trustee by some other Person, or (3) such Bearer Security is
surrendered in exchange for a Registered Security, or (4) such Bearer Security
is no longer Outstanding. The ownership, principal amount and serial
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numbers of Bearer Securities held by the Person so executing such instrument or
writing and the date of the commencement and the date of the termination of
holding the same may also be proved in any other manner which the Company and
the Trustee deem sufficient.
(5) If the Company shall solicit from the Holders of any Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may at its option (but is not obligated to), by
Board Resolution, fix in advance a record date for the determination of Holders
of Registered Securities entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of Registered Securities of record at the close of business on such record date
shall be deemed to be Holders for the purpose of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders of Registered Securities shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
(6) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee, any Security Registrar, any
Paying Agent or the Company in reliance thereon, whether or not notation of such
Act is made upon such Security.
Section 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, or
(2) the Company by the Trustee or any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed
to the attention of its Treasurer, with a copy addressed to the attention
of its General Counsel, in each case at the address of its principal office
specified in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
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Section 106. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided in or pursuant to this Indenture,
where this Indenture provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to each
Holder of a Registered Security affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and
not earlier than the earliest date, prescribed for the giving of such
notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities, if any, if published in an Authorized Newspaper in The City of
New York and, if such Securities are then listed on any stock exchange
outside the United States, in an Authorized Newspaper in such city as the
Company shall advise the Trustee that such stock exchange so requires, on a
Business Day at least twice, the first such publication to be not earlier
than the earliest date and the second such publication not later than the
latest date prescribed for the giving of such notice.
In any case where notice to Holders of Registered Securities is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided. In
the case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearers Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice mailed to
Holders of Registered Securities as provided above.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders of Securities shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
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Section 107. Language of Notices.
Any request, demand, authorization, direction, notice, consent, election or
waiver required or permitted under this Indenture shall be in the English
language, except that, if the Company so elects, any published notice may be in
an official language of the country of publication.
Section 108. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any duties
under any required provision of the Trust Indenture Act imposed hereon by
Section 318(c) thereof, such required provision shall control.
Section 109. 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 110. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
In case any provision in this Indenture, any Security or any Coupon 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 112. Benefits of Indenture.
Nothing in this Indenture, any Security or any Coupon, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent and their successors hereunder, the holders of Senior
Indebtedness and the Holders of Securities or Coupons, any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
This Indenture, the Securities and any Coupons shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made or instruments entered into and, in each case, performed in said
State.
Section 114. Legal Holidays.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, in any case where any Interest Payment Date, Stated Maturity or
Maturity of any Security shall be a Legal
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Holiday at any Place of Payment, then (notwithstanding any other provision of
this Indenture, any Security or any Coupon other than a provision in any
Security or Coupon that specifically states that such provision shall apply in
lieu hereof) payment need not be made at such Place of Payment on such date but
such payment may be made on the next succeeding day that is a Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date or at the Stated Maturity or Maturity, and no interest shall accrue
on the amount payable on such date or at such time for the period from and after
such Interest Payment Date, Stated Maturity or Maturity, as the case may be, to
the next succeeding Business Day.
Section 115. Counterparts.
This Indenture may be executed in several counterparts, each of which shall
be an original and all of which shall constitute but one and the same
instrument.
Section 116. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due in respect of the principal of, or
premium or interest, if any, or Additional Amounts on the Securities of any
series (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
New York Banking Day preceding that on which a final unappealable judgment is
given and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
clause (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to be closed. The provisions of
this Section 116 shall not be applicable with respect to any payment due on a
Security which is payable in Dollars.
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Section 117. Extension of Payment Dates.
In the event that (i) the terms of any Security or Coupon appertaining
thereto established in or pursuant to this Indenture permit the Company or any
Holder thereof to extend the date on which any payment of principal of, or
premium, if any, or interest, if any, on, or Additional Amounts, if any, with
respect to such Security or Coupon is due and payable and (ii) the due date for
any such payment shall have been so extended, then all references herein to the
Stated Maturity of such payment (and all references of like import) shall be
deemed to refer to the date as so extended.
Section 118. Immunity of Stockholders, Directors, Officers and Agents of
the Company.
No recourse under or upon any obligation, covenant or agreement contained
in this Indenture, or in any Security, or because of any indebtedness evidenced
thereby, shall be had against any past, present or future stockholder, employee,
officer or director, as such, of the Company or of any predecessor or successor,
either directly or through the Company or any predecessor or successor, under
any rule of law, statute or constitutional provision or by the enforcement of
any assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities by the Holders and as part of the consideration for the issue of the
Securities.
ARTICLE TWO
SECURITIES FORMS
Section 201. Forms Generally.
Each Registered Security, Bearer Security, Coupon and temporary or
permanent global Security issued pursuant to this Indenture shall be in the form
established by or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by or pursuant
to this Indenture or any indenture supplemental hereto and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officer of the Company executing such Security or Coupon as evidenced by the
execution of such Security or Coupon.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall be issuable in registered form without Coupons.
Definitive Securities and definitive Coupons shall be printed, lithographed
or engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or may be produced in any other manner, all as
determined by the officer of the Company executing such Securities or Coupons,
as evidenced by the execution of such Securities or Coupons.
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Section 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall
be in substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The First National Bank of Chicago,
as Trustee
By __________________________________________
Authorized Signatory
Section 203. Securities in Global Form.
Unless otherwise provided in or pursuant to this Indenture or any
Securities, the Securities shall not be issuable in global form. If Securities
of a series shall be issuable in temporary or permanent global form, any such
Security may provide that it or any number of such Securities shall represent
the aggregate amount of all Outstanding Securities of such series (or such
lesser amount as is permitted by the terms thereof) from time to time endorsed
thereon and may also provide that the aggregate amount of Outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
exchanges. Any endorsement of any Security in global form to reflect the
amount, or any increase or decrease in the amount, or changes in the rights of
Holders, of Outstanding Securities represented thereby shall be made in such
manner and by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 303 or 304 with respect
thereto. Subject to the provisions of Section 303 and, if applicable, Section
304, the Trustee shall deliver and redeliver any Security in permanent global
form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order. If a Company Order
pursuant to Section 303 or 304 has been, or simultaneously is, delivered, any
instructions by the Company with respect to a Security in global form shall be
in writing but need not be accompanied by or contained in an Officers'
Certificate and need not be accompanied by an Opinion of Counsel.
Notwithstanding the provisions of Section 307, unless otherwise specified
in or pursuant to this Indenture or any Securities, payment of principal of, any
premium and interest on, and any Additional Amounts in respect of any Security
in temporary or permanent global form shall be made to the Person or Persons
specified therein.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a global Security (i) in the case of a global Security
in registered form, the Holder of such global
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Security in registered form, or (ii) in the case of a global Security in bearer
form, the Person or Persons specified pursuant to Section 301.
ARTICLE THREE
THE SECURITIES
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited. The Securities may be issued in one
or more series. The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Sixteen.
With respect to any Securities to be authenticated and delivered hereunder,
there shall be established in or pursuant to a Board Resolution and set forth in
an Officers' Certificate, or established in one or more indentures supplemental
hereto prior to the issuance of any Securities of a series,
(1) the title of such Securities and the series in which such
Securities shall be included;
(2) any limit upon the aggregate principal amount of the Securities
of such title or the Securities of such series which may be authenticated
and delivered under this Indenture (except for Securities authenticated and
delivered upon registration or transfer of, or in exchange for, or in lieu
of, other Securities of such series pursuant to Section 304, 305, 306, 905
or 1107, upon repayment in part of any Security of such series pursuant to
Article Thirteen or upon surrender in part of any Security for conversion
or exchange into Common Stock or other securities pursuant to its terms);
(3) if such Securities are to be issuable as Registered Securities,
as Bearer Securities or alternatively as Bearer Securities and Registered
Securities, and whether the Bearer Securities are to be issuable with
Coupons, without Coupons or both, and any restrictions applicable to the
offer, sale or delivery of the Bearer Securities and the terms, if any,
upon which Bearer Securities may be exchanged for Registered Securities and
vice versa;
(4) if any of such Securities are to be issuable in global form, when
any of such Securities are to be issuable in global form and (i) whether
such Securities are to be issued in temporary or permanent global form or
both, (ii) whether beneficial owners of interests in any such global
Security may exchange such interests for Securities of the same series and
of like tenor and of any authorized form and denomination, and the
circumstances under which any such exchanges may occur, if other than in
the manner specified in Section 305, and (iii) the name of the Depository
or the U.S. Depository, as the case may be, with respect to any global
Security;
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(5) if any of such Securities are to be issuable as Bearer
Securities, the date as of which any such Bearer Security shall be dated
(if other than the date of original issuance of the first of such
Securities to be issued);
(6) if any of such Securities are to be issuable as Bearer
Securities, whether interest in respect of any portion of a temporary
Bearer Security in global form payable in respect of an Interest Payment
Date therefor prior to the exchange, if any, of such temporary Bearer
Security for definitive Securities shall be paid to any clearing
organization with respect to the portion of such temporary Bearer Security
held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest
payment received by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date;
(7) the date or dates, or the method or methods, if any, by which
such date or dates shall be determined, on which the principal of such
Securities is payable;
(8) the rate or rates at which such Securities shall bear interest,
if any, or the method or methods, if any, by which such rate or rates are
to be determined, the date or dates, if any, from which such interest shall
accrue or the method or methods, if any, by which such date or dates are to
be determined, the Interest Payment Dates, if any, on which such interest
shall be payable and the Regular Record Date, if any, for the interest
payable on Registered Securities on any Interest Payment Date, whether and
under what circumstances Additional Amounts on such Securities or any of
them shall be payable, the notice, if any, to Holders regarding the
determination of interest on a floating rate Security and the manner of
giving such notice, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(9) if in addition to or other than the Borough of Manhattan, The
City of New York, the place or places where the principal of, any premium
and interest on or any Additional Amounts with respect to such Securities
shall be payable, any of such Securities that are Registered Securities may
be surrendered for registration of transfer or exchange, any of such
Securities may be surrendered for conversion or exchange and notices or
demands to or upon the Company in respect of such Securities and this
Indenture may be served;
(10) whether any of such Securities are to be redeemable at the option
of the Company and, if so, the date or dates on which, the period or
periods within which, the price or prices at which and the other terms and
conditions upon which such Securities may be redeemed, in whole or in part,
at the option of the Company;
(11) if the Company is obligated to redeem or purchase any of such
Securities pursuant to any sinking fund or analogous provision or at the
option of any Holder thereof and, if so, the date or dates on which, the
period or periods within which, the price or prices at which and the other
terms and conditions upon which such Securities shall be redeemed or
purchased, in whole or in part, pursuant to such obligation, and any
provisions for the remarketing of such Securities so redeemed or purchased;
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(12) the denominations in which any of such Securities that are
Registered Securities shall be issuable if other than denominations of
$1,000 and any integral multiple thereof, and the denominations in which
any of such Securities that are Bearer Securities shall be issuable if
other than the denomination of $5,000;
(13) whether the Securities of the series will be convertible into
shares of Common Stock and/or exchangeable for other securities, and if so,
the terms and conditions upon which such Securities will be so convertible
or exchangeable, and any deletions from or modifications or additions to
this Indenture to permit or to facilitate the issuance of such convertible
or exchangeable Securities or the administration thereof;
(14) if other than the principal amount thereof, the portion of the
principal amount of any of such Securities that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the method by which such portion is to be determined;
(15) if other than Dollars, the Foreign Currency in which payment of
the principal of, any premium or interest on or any Additional Amounts with
respect to any of such Securities shall be payable;
(16) if the principal of, any premium or interest on or any Additional
Amounts with respect to any of such Securities are to be payable, at the
election of the Company or a Holder thereof or otherwise, in Dollars or in
a Foreign Currency other than that in which such Securities are stated to
be payable, the date or dates on which, the period or periods within which,
and the other terms and conditions upon which, such election may be made,
and the time and manner of determining the exchange rate between the
Currency in which such Securities are stated to be payable and the Currency
in which such Securities or any of them are to be paid pursuant to such
election, and any deletions from or modifications of or additions to the
terms of this Indenture to provide for or to facilitate the issuance of
Securities denominated or payable, at the election of the Company or a
Holder thereof or otherwise, in a Foreign Currency;
(17) whether the amount of payments of principal of, any premium or
interest on or any Additional Amounts with respect to such Securities may
be determined with reference to an index, formula or other method or
methods (which index, formula or method or methods may be based, without
limitation, on one or more Currencies, commodities, equity indices or other
indices), and, if so, the terms and conditions upon which and the manner in
which such amounts shall be determined and paid or payable;
(18) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to any of such
Securities, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(19) if either or both of Section 402(2) relating to defeasance or
Section 402(3) relating to covenant defeasance shall not be applicable to
the Securities of such series,
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or any covenants in addition to those specified in Section 402(3) relating
to the Securities of such series which shall be subject to covenant
defeasance, and any deletions from, or modifications or additions to, the
provisions of Article Four in respect of the Securities of such series;
(20) if any of such Securities are to be issuable upon the exercise of
warrants, and the time, manner and place for such Securities to be
authenticated and delivered;
(21) if any of such Securities are to be issuable in global form and
are to be issuable in definitive form (whether upon original issue or upon
exchange of a temporary Security) only upon receipt of certain certificates
or other documents or satisfaction of other conditions, then the form and
terms of such certificates, documents or conditions;
(22) if there is more than one Trustee, the identity of the Trustee
and, if not the Trustee, the identity of each Security Registrar, Paying
Agent or Authenticating Agent with respect to such Securities;
(23) the Person to whom any interest on any Registered Security of
such series shall be payable, if other than the Person in whose name the
Registered Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer Security
of such series shall be payable, if other than upon presentation and
surrender of the Coupons appertaining thereto as they severally mature, and
the extent to which, or the manner in which, any interest payable on a
temporary global Security will be paid if other than in the manner provided
in this Indenture;
(24) any other terms of such Securities and any deletions from or
modifications or additions to this Indenture in respect of such Securities.
All Securities of any one series and all Coupons, if any, appertaining to
Bearer Securities of such series shall be substantially identical except as to
Currency of payments due thereunder, denomination and the rate of interest, or
method of determining the rate of interest, if any, Maturity, and the date from
which interest, if any, shall accrue and except as may otherwise be provided by
the Company in or pursuant to the Board Resolution and set forth in the
Officers' Certificate or in any indenture or indentures supplemental hereto
pertaining to such series of Securities. The terms of the Securities of any
series may provide, without limitation, that the Securities shall be
authenticated and delivered by the Trustee on original issue from time to time
upon telephonic or written order of persons designated in the Officers'
Certificate or supplemental indenture (telephonic instructions to be promptly
confirmed in writing by such person) and that such persons are authorized to
determine, consistent with such Officers' Certificate or any applicable
supplemental indenture, such terms and conditions of the Securities of such
series as are specified in such Officers' Certificate or supplemental indenture.
All Securities of any one series need not be issued at the same time and, unless
otherwise so provided by the Company as contemplated by this Section 301, a
series may be reopened for issuances of additional Securities of such series or
to establish additional terms of such series of Securities.
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If any of the terms of the Securities of any series shall be established by
action taken by or pursuant to a Board Resolution, the Board Resolution shall be
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of such series.
Section 302. Currency; Denominations.
Unless otherwise provided in or pursuant to this Indenture, the principal
of, any premium and interest on and any Additional Amounts with respect to the
Securities shall be payable in Dollars. Unless otherwise provided in or pursuant
to this Indenture, Registered Securities denominated in Dollars shall be
issuable in registered form without Coupons in denominations of $1,000 and any
integral multiple thereof, and the Bearer Securities denominated in Dollars
shall be issuable in the denomination of $5,000. Securities not denominated in
Dollars shall be issuable in such denominations as are established with respect
to such Securities in or pursuant to this Indenture.
Section 303. Execution, Authentication, Delivery and Dating.
Securities shall be executed on behalf of the Company by its Chairman of
the Board of Directors, its President or one of its Vice Presidents under its
corporate seal reproduced thereon and attested by its Treasurer, one of its
Assistant Treasurers, its Secretary or one of its Assistant Secretaries. Coupons
shall be executed on behalf of the Company by the Chairman of the Board of
Directors, the President, any Vice President, the Treasurer or any Assistant
Treasurer of the Company. The signature of any of these officers on the
Securities or any Coupons appertaining thereto may be manual or facsimile.
Securities and any Coupons appertaining thereto bearing the manual or
facsimile signatures of individuals who were at any time the proper officers of
the Company shall bind the Company, notwithstanding that such individuals or any
of them have ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at the date of such
Securities or Coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities, together with any Coupons
appertaining thereto, executed by the Company, to the Trustee for authentication
and, provided that the Board Resolution and Officers' Certificate or
supplemental indenture or indentures with respect to such Securities referred to
in Section 301 and a Company Order for the authentication and delivery of such
Securities have been delivered to the Trustee, the Trustee in accordance with
the Company Order and subject to the provisions hereof and of such Securities
shall authenticate and deliver such Securities. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities and any Coupons appertaining thereto, the Trustee
shall be entitled to receive, and (subject to Sections 315(a) through 315(d) of
the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of
Counsel to the effect that:
(a) the form or forms and terms of such Securities and Coupons, if
any, have been established in conformity with Sections 201 and 301 of this
Indenture;
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(b) all conditions precedent set forth in Sections 201, 301 and 303 of
this Indenture to the authentication and delivery of such Securities and
Coupons, if any, appertaining thereto have been complied with and that such
Securities, and Coupons, when completed by appropriate insertions (if
applicable), executed and attested under the Company's corporate seal by
duly authorized officers of the Company, delivered by duly authorized
officers of the Company to the Trustee for authentication pursuant to this
Indenture, and authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as enforcement thereof may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, arrangement, fraudulent conveyance,
fraudulent transfer or other similar laws relating to or affecting
creditors' rights generally, and subject to general principles of equity
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
If all the Securities of any series are not to be issued at one time, it
shall not be necessary to deliver an Opinion of Counsel at the time of issuance
of each Security, but such opinion, with such modifications as counsel shall
deem appropriate, shall be delivered at or before the time of issuance of the
first Security of such series. After any such first delivery, any separate
request by the Company that the Trustee authenticate Securities of such series
for original issue will be deemed to be a certification by the Company that all
conditions precedent provided for in this Indenture relating to authentication
and delivery of such Securities continue to have been complied with.
The Trustee shall not be required to authenticate or to cause an
Authenticating Agent to authenticate any Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under the Securities and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee or if the Trustee,
being advised by counsel, determines that such action may not lawfully be taken.
Each Registered Security shall be dated the date of its authentication.
Each Bearer Security and any Bearer Security in global form shall be dated as of
the date specified in or pursuant to this Indenture.
No Security or Coupon appertaining thereto shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose, unless there
appears on such Security a certificate of authentication substantially in the
form provided for in Section 202 or 611 executed by or on behalf of the Trustee
or by the Authenticating Agent by the manual signature of one of its authorized
officers. Such certificate upon any Security shall be conclusive evidence, and
the only evidence, that such Security has been duly authenticated and delivered
hereunder. Except as permitted by Section 306 or 307 or as may otherwise be
provided in or pursuant to this Indenture, the Trustee shall not authenticate
and deliver any Bearer Security unless all Coupons appertaining thereto then
matured have been detached and cancelled.
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Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute
and deliver to the Trustee and, upon Company Order, the Trustee shall
authenticate and deliver, in the manner provided in Section 303, temporary
Securities in lieu thereof which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form or, if authorized in or pursuant to this
Indenture, in bearer form with one or more Coupons or without Coupons and with
such appropriate insertions, omissions, substitutions and other variations as
the officers of the Company executing such Securities may determine, as
conclusively evidenced by their execution of such Securities. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form, which shall be
exchanged in accordance with the provisions thereof, if temporary Securities are
issued, the Company shall cause definitive Securities to be prepared without
unreasonable delay. After the preparation of definitive Securities of the same
series and containing terms and provisions that are identical to those of any
temporary Securities, such temporary Securities shall be exchangeable for such
definitive Securities upon surrender of such temporary Securities at an Office
or Agency for such Securities, without charge to any Holder thereof. Upon
surrender for cancellation of any one or more temporary Securities (accompanied
by any unmatured Coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of authorized denominations of the same series
and containing identical terms and provisions; provided, however, that no
definitive Bearer Security, except as provided in or pursuant to this Indenture,
shall be delivered in exchange for a temporary Registered Security; and
provided, further, that a definitive Bearer Security shall be delivered in
exchange for a temporary Bearer Security only in compliance with the conditions
set forth in or pursuant to this Indenture. Unless otherwise provided in or
pursuant to this Indenture with respect to a temporary global Security, until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. Registration, Transfer and Exchange.
With respect to the Registered Securities of each series, if any, the
Company shall cause to be kept a register (each such register being herein
sometimes referred to as the "Security Register") at an Office or Agency for
such series in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of the Registered
Securities of such series and of transfers of the Registered Securities of such
series. Such Office or Agency shall be the "Security Registrar" for that series
of Securities. Unless otherwise specified in or pursuant to this Indenture or
the Securities, the Trustee shall be the initial Security Registrar for each
series of Securities. The Company shall have the right to remove and replace
from time to time the Security Registrar for any series of Securities; provided
that no such removal or replacement shall be effective until a successor
Security Registrar with respect to such series of Securities shall have been
appointed by the Company and shall have accepted such appointment. In the event
that the Trustee shall not be or shall cease to be
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Security Registrar with respect to a series of Securities, it shall have the
right to examine the Security Register for such series at all reasonable times.
There shall be only one Security Register for each series of Securities.
Upon surrender for registration of transfer of any Registered Security of
any series at any Office or Agency for such series, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Registered Securities of the same
series denominated as authorized in or pursuant to this Indenture, of a like
aggregate principal amount bearing a number not contemporaneously outstanding
and containing identical terms and provisions.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series containing
identical terms and provisions, in any authorized denominations, and of a like
aggregate principal amount, upon surrender of the Securities to be exchanged at
any Office or Agency for such series. Whenever any Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive.
If provided in or pursuant to this Indenture, with respect to Securities of
any series, at the option of the Holder, Bearer Securities of such series may be
exchanged for Registered Securities of such series containing identical terms,
denominated as authorized in or pursuant to this Indenture and in the same
aggregate principal amount, upon surrender of the Bearer Securities to be
exchanged at any Office or Agency for such series, with all unmatured Coupons
and all matured Coupons in default thereto appertaining. If the Holder of a
Bearer Security is unable to produce any such unmatured Coupon or Coupons or
matured Coupon or Coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the Company
and the Trustee in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to any Paying
Agent any such missing Coupon in respect of which such a payment shall have been
made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in Section 1002, interest
represented by Coupons shall be payable only upon presentation and surrender of
those Coupons at an Office or Agency for such series located outside the United
States. Notwithstanding the foregoing, in case a Bearer Security of any series
is surrendered at any such Office or Agency for such series in exchange for a
Registered Security of such series and like tenor after the close of business at
such Office or Agency on (i) any Regular Record Date and before the opening of
business at such Office or Agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such Office or
Agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the Coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such Coupon
is so surrendered with such Bearer Security, such Coupon shall be returned to
the Person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, shall not be payable on such Interest Payment Date
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or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but shall be payable only
to the Holder of such Coupon when due in accordance with the provisions of this
Indenture.
If provided in or pursuant to this Indenture with respect to Securities of
any series, at the option of the Holder, Registered Securities of such series
may be exchanged for Bearer Securities upon such terms and conditions as may be
provided in or pursuant to this Indenture with respect to such series.
Whenever any Securities are surrendered for exchange as contemplated by the
immediately preceding two paragraphs, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise provided in or pursuant
to this Indenture, any global Security shall be exchangeable for definitive
Securities only if (i) the Depository for such Securities notifies the Company
that it is unwilling or unable to continue as a Depository for the global
Security or at any time the Depository for such Securities ceases to be a
clearing agency registered as such under the Securities Exchange Act of 1934, as
amended, and no successor Depository for such Securities shall have been
appointed within 90 days of such notification or of the Company becoming aware
of the Depository's ceasing to be so registered, as the case may be, (ii) the
Company, in its sole discretion, executes and delivers to the Trustee a Company
Order to the effect that such global Security shall be so exchangeable, or
(iii) an Event of Default has occurred and is continuing with respect to such
Securities. If the beneficial owners of interests in a global Security are
entitled to exchange such interests for definitive Securities as the result of
an event described in clause (i), (ii) or (iii) of the preceding sentence, then
without unnecessary delay but in any event not later than the earliest date on
which such interests may be so exchanged, the Company shall deliver to the
Trustee definitive Securities in such form and denominations as are required by
or pursuant to this Indenture, and of the same series, containing identical
terms and in aggregate principal amount equal to the principal amount of such
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such global Security shall be
surrendered from time to time by the Depository as shall be specified in the
Company Order with respect thereto, and in accordance with instructions given to
the Trustee and the Depository, as the case may be (which instructions shall be
in writing but need not be contained in or accompanied by an Officers'
Certificate or be accompanied by an Opinion of Counsel), as shall be specified
in the Company Order with respect thereto to the Trustee, as the Company's agent
for such purpose, to be exchanged, in whole or in part, for definitive
Securities as described above without charge. The Trustee shall authenticate
and make available for delivery, in exchange for each portion of such
surrendered global Security, a like aggregate principal amount of definitive
Securities of the same series of authorized denominations and of like tenor as
the portion of such global Security to be exchanged, which (unless such
Securities are not issuable both as Bearer Securities and as Registered
Securities, in which case the definitive Securities exchanged for the global
Security shall be issuable only in the form in which the Securities are
issuable, as provided in or pursuant to this Indenture) shall be in the form of
Bearer Securities or Registered Securities, or any combination thereof, as shall
be specified by the Depository, but subject to
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the satisfaction of any certification or other requirements to the issuance of
Bearer Securities; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 days before any selection of
Securities of the same series to be redeemed and ending on the relevant
Redemption Date; and provided, further, that (unless otherwise provided in or
pursuant to this Indenture) no Bearer Security delivered in exchange for a
portion of a global Security shall be mailed or otherwise delivered to any
location in the United States. Promptly following any such exchange in part,
such global Security shall be returned by the Trustee to such Depository, or
such other Depository referred to above in accordance with the instructions of
the Company referred to above. If a Registered Security is issued in exchange
for any portion of a global Security after the close of business at the Office
or Agency for such Security where such exchange occurs on or after (i) any
Regular Record Date for such Security and before the opening of business at such
Office or Agency on the next Interest Payment Date, or (ii) any Special Record
Date for such Security and before the opening of business at such Office or
Agency on the related proposed date for payment of interest or Defaulted
Interest, as the case may be, interest shall not be payable on such Interest
Payment Date or proposed date for payment, as the case may be, in respect of
such Registered Security, but shall be payable on such Interest Payment Date or
proposed date for payment, as the case may be, only to the Person to whom
interest in respect of such portion of such global Security shall be payable in
accordance with the provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company evidencing the same
debt and entitling the Holders thereof to the same benefits under this Indenture
as the Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar for such Security) be duly endorsed, or be accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar for such Security 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 Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge and any other expenses (including
fees and expenses of the Trustee) that may be imposed in connection with any
registration of transfer or exchange of Securities, other than exchanges
pursuant to Section 304, 905 or 1107, upon repayment in part of any Registered
Security pursuant to Article Thirteen, or upon surrender in part of any
Registered Security for conversion or exchange into Common Stock or other
securities pursuant to its terms, in each case not involving any transfer.
Except as otherwise provided in or pursuant to this Indenture, the Company
shall not be required (i) to issue, register the transfer of or exchange any
Securities during a period beginning at the opening of business 15 days before
the day of the selection for redemption of Securities of like tenor and the same
series under Section 1103 and ending at the close of business on the day of such
selection, or (ii) to register the transfer of or exchange any Registered
Security, or portion thereof, so selected for redemption, except in the case of
any
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Registered Security to be redeemed in part, the portion thereof not to be
redeemed, or (iii) to exchange any Bearer Security so selected for redemption
except, to the extent provided with respect to such Bearer Security, that such
Bearer Security may be exchanged for a Registered Security of like tenor and the
same series, provided that such Registered Security shall be simultaneously
surrendered for redemption with written instruction for payment consistent with
the provisions of this Indenture or (iv) to issue, register the transfer of or
exchange any Security which, in accordance with its terms, has been surrendered
for repayment at the option of the Holder, except the portion, if any, of such
Security not to be so repaid.
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security or a Security with a mutilated Coupon
appertaining to it is surrendered to the Trustee, subject to the provisions of
this Section 306, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of the same series containing
identical terms and of like principal amount and bearing a number not
contemporaneously outstanding, with Coupons appertaining thereto corresponding
to the Coupons, if any, appertaining to the surrendered Security.
If there be delivered to the Company and to the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Security or Coupon,
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security or Coupon has been acquired by a
bona fide purchaser, the Company shall execute and, upon the Company's request
the Trustee shall authenticate and deliver, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Security or in exchange for the
Security to which a destroyed, lost or stolen Coupon appertains with all
appurtenant Coupons not destroyed, lost or stolen, a new Security of the same
series containing identical terms and of like principal amount and bearing a
number not contemporaneously outstanding, with Coupons corresponding to the
Coupons, if any, appertaining to such destroyed, lost or stolen Security or to
the Security to which such destroyed, lost or stolen Coupon appertains.
Notwithstanding the foregoing provisions of this Section 306, in case any
mutilated, destroyed, lost or stolen Security or Coupon has become or is about
to become due and payable, the Company in its discretion may, instead of issuing
a new Security, pay such Security or Coupon; provided, however, that payment of
principal of, any premium or interest on or any Additional Amounts with respect
to any Bearer Securities shall, except as otherwise provided in Section 1002, be
payable only at an Office or Agency for such Securities located outside the
United States and, unless otherwise provided in or pursuant to this Indenture,
any interest on Bearer Securities and any Additional Amounts with respect to
such interest shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
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Every new Security, with any Coupons appertaining thereto issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen Coupon appertains
shall constitute a separate obligation of the Company, whether or not the
destroyed, lost or stolen Security and Coupons appertaining thereto or the
destroyed, lost or stolen Coupon shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of such series and any
Coupons, if any, duly issued hereunder.
The provisions of this Section, as amended or supplemented pursuant to this
Indenture with respect to particular Securities or generally, shall (to the
extent lawful) be exclusive and shall preclude (to the extent lawful) all other
rights and remedies with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities or Coupons.
Section 307. Payment of Interest and Certain Additional Amounts; Rights to
Interest and Certain Additional Amounts Preserved.
Unless otherwise provided in or pursuant to this Indenture, any interest on
and any Additional Amounts with respect to any Registered Security which shall
be payable, and are punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name such Security (or one or
more Predecessor Securities) is registered as of the close of business on the
Regular Record Date for such interest. Unless otherwise provided in or pursuant
to this Indenture, in case a Bearer Security is surrendered in exchange for a
Registered Security after the close of business at an Office or Agency for such
Security on any Regular Record Date therefor and before the opening of business
at such Office or Agency on the next succeeding Interest Payment Date therefor,
such Bearer Security shall be surrendered without the Coupon relating to such
Interest Payment Date and interest shall not be payable on such Interest Payment
Date in respect of the Registered Security issued in exchange for such Bearer
Security, but shall be payable only to the Holder of such Coupon when due in
accordance with the provisions of this Indenture.
Unless otherwise provided in or pursuant to this Indenture, any interest on
and any Additional Amounts with respect to any Registered Security which shall
be payable, but shall not be punctually paid or duly provided for, on any
Interest Payment Date for such Registered Security (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder; and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on such
Registered Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make
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arrangements satisfactory to the Trustee for such deposit on or prior to
the date of the proposed payment, such money when so deposited to be held
in trust for the benefit of the Person entitled to such Defaulted Interest
as in this Clause provided. Thereupon, the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest which shall be not
more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first-class
postage prepaid, to the Holder of such Registered Security (or a
Predecessor Security thereof) at his address as it appears in the Security
Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the
Company cause a similar notice to be published at least once in an
Authorized Newspaper of general circulation in the Borough of Manhattan,
The City of New York, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Person in whose name such Registered Security (or a Predecessor
Security thereof) shall be registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security is surrendered at the
Office or Agency for such Security in exchange for a Registered Security
after the close of business at such Office or Agency on any Special Record
Date and before the opening of business at such Office or Agency on the
related proposed date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the Coupon relating to such Defaulted
Interest and Defaulted Interest shall not be payable on such proposed date
of payment in respect of the Registered Security issued in exchange for
such Bearer Security, but shall be payable only to the Holder of such
Coupon when due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which such Security may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this Clause,
such payment shall be deemed practicable by the Trustee.
Unless otherwise provided in or pursuant to this Indenture or the
Securities of any particular series, at the option of the Company, interest on
Registered Securities that bear interest may be paid by mailing a check to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by transfer to an account maintained by the payee with a
bank located in the United States.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
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Section 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered in the
Security Register as the owner of such Registered Security for the purpose of
receiving payment of principal of, any premium and (subject to Sections 305 and
307) interest on and any Additional Amounts with respect to such Registered
Security and for all other purposes whatsoever, whether or not any payment with
respect to such Registered Security shall be overdue, and neither the Company,
the Trustee or any agent of the Company or the Trustee shall be affected by
notice to the contrary.
The Company, the Trustee and any agent of the Company or the Trustee may
treat the bearer of any Bearer Security or the bearer of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not any payment with respect to such Security or Coupon shall be overdue, and
neither the Company, the Trustee or any agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any global Security held on its
behalf by a Depository shall have any rights under this Indenture with respect
to such global Security, and such Depository may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such global
Security for all purposes whatsoever. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Section 309. Cancellation.
All Securities and Coupons surrendered for payment, redemption,
registration of transfer, exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee, and any such Securities and Coupons, as well as
Securities and Coupons surrendered directly to the Trustee for any such purpose,
shall be cancelled promptly by the Trustee. The Company may at any time deliver
to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be cancelled promptly by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by or pursuant to this Indenture. All cancelled Securities and Coupons held by
the Trustee shall be destroyed by the Trustee, unless by a Company Order the
Company directs their return to it.
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Section 310. Computation of Interest.
Except as otherwise provided in or pursuant to this Indenture or in the
Securities of any series, interest on the Securities shall be computed on the
basis of a 360-day year of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE OF INDENTURE
Section 401. Satisfaction and Discharge.
Upon the direction of the Company by a Company Order, this Indenture shall
cease to be of further effect with respect to any series of Securities specified
in such Company Order and any Coupons appertaining thereto, and the Trustee, on
receipt of a Company Order, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture as to
such series, when
(1) either
(a) all Securities of such series theretofore authenticated and
delivered and all Coupons appertaining thereto (other than (i) Coupons
appertaining to Bearer Securities of such series surrendered in exchange
for Registered Securities of such series and maturing after such exchange
whose surrender is not required or has been waived as provided in Section
305, (ii) Securities and Coupons of such series which have been destroyed,
lost or stolen and which have been replaced or paid as provided in Section
306, (iii) Coupons appertaining to Securities of such series called for
redemption and maturing after the relevant Redemption Date whose surrender
has been waived as provided in Section 1106, and (iv) Securities and
Coupons of such series 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 1003) have been delivered to the Trustee for cancellation; or
(b) all Securities of such series and, in the case of (i) or (ii)
below, if applicable, any Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements satisfactory
to the Trustee for the
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giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for such
purpose, money in the Currency in which such Securities are payable in an
amount sufficient to pay and discharge the entire indebtedness on such
Securities and any Coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation, including the principal of, any premium
and interest on, and, to the extent that the Securities of such series
provide for the payment of Additional Amounts thereon and the amount of any
such Additional Amounts is at the time of deposit reasonably determinable
by the Company (in the exercise by the Company of its sole and absolute
discretion), any Additional Amounts with respect to, such Securities and
any Coupons appertaining thereto, to the date of such deposit (in the case
of Securities which have become due and payable) or to the Maturity
thereof, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to the Outstanding Securities of such
series and any Coupons appertaining thereto; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture as to such series have been complied with.
In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so with respect to
Securities of such series as to which it is Trustee and if the other conditions
thereto are met.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to any series of Securities, the obligations of the Company to the
Trustee under Section 606 and, if money shall have been deposited with the
Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations
of the Company and the Trustee with respect to the Securities of such series
under Sections 305, 306, 403, 404, 1002 and 1003, with respect to the payment of
Additional Amounts, if any, with respect to such Securities as contemplated by
Section 1004 (but only to the extent that the Additional Amounts payable with
respect to such Securities exceed the amount deposited in respect of such
Additional Amounts pursuant to Section 401(1)(b)), and with respect to any
rights to convert or exchange such Securities into Common Stock or other
securities, shall survive.
Section 402. Defeasance and Covenant Defeasance.
(1) Unless, pursuant to Section 301, either or both of (i) defeasance of
the Securities of or within a series under clause (2) of this Section 402 or
(ii) covenant defeasance of the Securities of or within a series under clause
(3) of this Section 402 shall not be applicable with
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respect to the Securities of such series, then such provisions, together with
the other provisions of this Section 402 (with such modifications thereto as may
be specified pursuant to Section 301 with respect to any Securities), shall be
applicable to such Securities and any Coupons appertaining thereto, and the
Company may at its option by Board Resolution, at any time, with respect to such
Securities and any Coupons appertaining thereto, elect to have Section 402(2) or
Section 402(3) be applied to such Outstanding Securities and any Coupons
appertaining thereto upon compliance with the conditions set forth below in this
Section 402.
(2) Upon the Company's exercise of the above option applicable to this
Section 402(2) with respect to any Securities of or within a series, the Company
shall be deemed to have been discharged from its obligations with respect to
such Outstanding Securities and any Coupons appertaining thereto on the date the
conditions set forth in clause (4) of this Section 402 are satisfied
(hereinafter, "defeasance"). For this purpose, such defeasance means that the
Company shall be deemed to have paid and discharged the entire indebtedness
represented by such Outstanding Securities and any Coupons appertaining thereto,
which shall thereafter be deemed to be "Outstanding" only for the purposes of
clause (5) of this Section 402 and the other Sections of this Indenture referred
to in clauses (i) and (ii) of this paragraph, and to have satisfied all of its
other obligations under such Securities and any Coupons appertaining thereto and
this Indenture insofar as such Securities and any Coupons appertaining thereto
are concerned (and the Trustee, at the expense of the Company , shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (i) the rights of
Holders of such Outstanding Securities and any Coupons appertaining thereto to
receive, solely from the trust fund described in clause (4) of this Section 402
and as more fully set forth in such Section, payments in respect of the
principal of (and premium, if any) and interest, if any, on, and Additional
Amounts, if any, with respect to, such Securities and any Coupons appertaining
thereto when such payments are due, and any rights of such Holder to convert or
exchange such Securities into Common Stock or other securities, (ii) the
obligations of the Company and the Trustee with respect to such Securities under
Sections 305, 306, 1002 and 1003, with respect to the payment of Additional
Amounts, if any, on such Securities as contemplated by Section 1004 (but only to
the extent that the Additional Amounts payable with respect to such Securities
exceed the amount deposited in respect of such Additional Amounts pursuant to
Section 401(4)(a) below), and with respect to any rights to convert or exchange
such Securities into Common Stock or other securities, (iii) the rights, powers,
trusts, duties and immunities of the Trustee hereunder and (iv) this Section 402
and Sections 403 and 404. The Company may exercise its option under this Section
402(2) notwithstanding the prior exercise of its option under Section 402(3)
with respect to such Securities and any Coupons appertaining thereto.
(3) Upon the Company's exercise of the above option applicable to this
Section 402(3) with respect to any Securities of or within a series, the Company
shall be released from its obligations under Section 1005 and, to the extent
specified pursuant to Section 301, any other covenant applicable to such
Securities, with respect to such Outstanding Securities and any Coupons
appertaining thereto on and after the date the conditions set forth in clause
(4) of this Section 402 are satisfied (hereinafter, "covenant defeasance"), and
such Securities and any Coupons appertaining thereto shall thereafter be deemed
to be not "Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any
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thereof) in connection with any such covenant, but shall continue to be deemed
"Outstanding" for all other purposes hereunder. For this purpose, such covenant
defeasance means that, with respect to such Outstanding Securities and any
Coupons appertaining thereto, the Company may omit to comply with, and shall
have no liability in respect of, any term, condition or limitation set forth in
any such Section or such other covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such Section or such other
covenant or by reason of reference in any such Section or such other covenant to
any other provision herein or in any other document and such omission to comply
shall not constitute a default or an Event of Default under Section 501(4) or
501(8) or otherwise, as the case may be, but, except as specified above, the
remainder of this Indenture and such Securities and Coupons appertaining thereto
shall be unaffected thereby.
(4) The following shall be the conditions to application of clause (2) or
(3) of this Section 402 to any Outstanding Securities of or within a series and
any Coupons appertaining thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this
Section 402 applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities and any
Coupons appertaining thereto, (1) an amount in Dollars or in such Foreign
Currency in which such Securities and any Coupons appertaining thereto are
then specified as payable at Stated Maturity, or (2) Government Obligations
applicable to such Securities and Coupons appertaining thereto (determined
on the basis of the Currency in which such Securities and Coupons
appertaining thereto are then specified as payable at Stated Maturity)
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one day
before the due date of any payment of principal of (and premium, if any)
and interest, if any, on such Securities and any Coupons appertaining
thereto, money in an amount, or (3) a combination thereof, in any case, in
an amount, sufficient, without consideration of any reinvestment of such
principal and interest, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge, (y) the
principal of (and premium, if any) and interest, if any, on, and, to the
extent that such Securities provide for the payment of Additional Amounts
thereon and the amount of any such Additional Amounts is at the time of
deposit reasonably determinable by the Company (in the exercise by the
Company of its sole and absolute discretion), any Additional Amounts with
respect to, such Outstanding Securities and any Coupons appertaining
thereto on the Stated Maturity of such principal or installment of
principal or interest or the applicable Redemption Date, as the case may
be, and (z) any mandatory sinking fund payments or analogous payments
applicable to such Outstanding Securities and any Coupons appertaining
thereto on the day on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities and any Coupons
appertaining thereto.
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(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument relating to indebtedness for
borrowed money to which the Company is a party or by which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and
any Coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit, and, solely in the case of defeasance under
Section 402(2), no Event of Default with respect to such Securities and any
Coupons appertaining thereto under clause (6) or (7) of Section 501 or
event which with notice or lapse of time or both would become an Event of
Default with respect to such Securities and any Coupons appertaining
thereto under clause (6) or (7) of Section 501 shall have occurred and be
continuing at any time during the period ending on the 91st day after the
date of such deposit (it being understood that this condition to defeasance
under Section 402(2) shall not be deemed satisfied until the expiration of
such period).
(d) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of such Outstanding Securities and
any Coupons appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such defeasance or covenant
defeasance, as the case may be, and will be subject to Federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such defeasance or covenant defeasance, as the case may
be, had not occurred.
(e) The Company shall have delivered to the Trustee an Officers'
Certificate stating that all conditions precedent to the defeasance or
covenant defeasance under clause (2) or (3) of this Section 402 (as the
case may be) have been complied with.
(f) If the monies or Government Obligations or combination thereof, as
the case may be, deposited under clause (a) above are sufficient to pay the
principal of, and premium, if any, and interest, if any, on and, to the
extent applicable, Additional Amounts, if any, with respect to, such
Securities provided such Securities are redeemed on a particular Redemption
Date, the Company shall have given the Trustee irrevocable instructions to
redeem such Securities on such date and to provide notice of such
redemption to Holders as provided in or pursuant to this Indenture.
(g) Notwithstanding any other provisions of this Section 402(4), such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be
imposed on the Company in connection therewith pursuant to Section 301.
(5) Subject to the provisions of the last paragraph of Section 1003, all
money and Government Obligations (or other property as may be provided pursuant
to Section 301) (including the proceeds thereof) deposited with the Trustee (or
other qualifying trustee -- collectively for purposes of this Section 402(5) and
Section 403, the "Trustee") pursuant to
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clause (4) of Section 402 in respect of any Outstanding Securities of any series
and any Coupons appertaining thereto shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and any Coupons
appertaining thereto and this Indenture, to the payment, either directly or
through any Paying Agent (other than the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Securities and any Coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium, if any) and interest and Additional Amounts, if any, but
such money need not be segregated from other funds except to the extent required
by law.
Unless otherwise specified in or pursuant to this Indenture or any
Securities, if, after a deposit referred to in Section 402(4)(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a Currency other than that in which the deposit
pursuant to Section 402(4)(a) has been made in respect of such Security, or (b)
a Conversion Event occurs in respect of the Foreign Currency in which the
deposit pursuant to Section 402(4)(a) has been made, the indebtedness
represented by such Security and any Coupons appertaining thereto shall be
deemed to have been, and will be, fully discharged and satisfied through the
payment of the principal of (and premium, if any), and interest, if any, on, and
Additional Amounts, if any, with respect to, such Security as the same becomes
due out of the proceeds yielded by converting (from time to time as specified
below in the case of any such election) the amount or other property deposited
in respect of such Security into the Currency in which such Security becomes
payable as a result of such election or Conversion Event based on (x) in the
case of payments made pursuant to clause (a) above, the applicable market
exchange rate for such Currency in effect on the second Business Day prior to
each payment date, or (y) with respect to a Conversion Event, the applicable
market exchange rate for such Foreign Currency in effect (as nearly as feasible)
at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge, imposed on or assessed against the Government Obligations
deposited pursuant to this Section 402 or the principal or interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any Coupons
appertaining thereto.
Anything in this Section 402 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Obligations (or other property and any proceeds therefrom)
held by it as provided in clause (4) of this Section 402 which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect a
defeasance or covenant defeasance, as applicable, in accordance with this
Section 402.
Section 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and Government Obligations deposited with the Trustee pursuant to Section 401 or
402 shall be held in trust and applied by it, in accordance with the provisions
of the Securities, the Coupons and
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this Indenture, to the payment, either directly or through any Paying Agent
(other than the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal, premium, interest
and Additional Amounts for whose payment such money has or Government
Obligations have been deposited with or received by the Trustee; but such money
and Government Obligations need not be segregated from other funds except to the
extent required by law.
Section 404. Effect on Subordination Provisions.
Unless otherwise expressly provided pursuant to Section 301 with respect to
the Securities of any series, the provisions for subordination of the Securities
set forth in Article Sixteen hereof are hereby expressly made subject to the
provisions for satisfaction and discharge set forth in Section 401 hereof and
the provisions for defeasance and covenant defeasance set forth in Section 402
hereof and, anything herein to the contrary notwithstanding, upon the
effectiveness of such satisfaction and discharge pursuant to Section 401 or any
such defeasance or covenant defeasance pursuant to Section 402 with respect to
the Securities of any series, such Securities shall thereupon cease to be so
subordinated and shall no longer be subject to the provisions of Article Sixteen
hereof and, without limitation to the foregoing, all moneys, Government
Obligations and other securities or property deposited with the Trustee (or
other qualifying trustee) in trust in connection with such satisfaction and
discharge, defeasance or covenant defeasance, as the case may be, and all
proceeds therefrom may be applied to pay the principal of, premium, if any, and
interest, if any, on, and Additional Amounts, if any, with respect to the
Securities of such series as and when the same shall become due and payable
notwithstanding the provisions of Article Sixteen.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
"Event of Default", wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body) unless
such event is specifically deleted or modified in or pursuant to the
supplemental indenture, Board Resolution or Officers' Certificate establishing
the terms of such series pursuant to this Indenture:
(1) default in the payment of any interest on, or any Additional Amounts
payable in respect of any interest on, any Security of such series when such
interest or such Additional Amounts, as the case may be, become due and payable,
and continuance of such default for a period of 30 days; or
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(2) default in the payment of the principal of or premium, if any, on, or
any Additional Amounts payable in respect of the principal of or premium, if
any, on, any Security of such series when due upon Maturity (whether upon
redemption or otherwise); or
(3) default in the deposit of any sinking fund payment when and as due by
the terms of a Security of such series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture or any Security of such series (other than a
covenant or warranty for which the consequences of breach or nonperformance are
addressed elsewhere in this Section 501 or a covenant or warranty which has
expressly been included in this Indenture or a Security of that series, whether
or not by means of a supplemental indenture, solely for the benefit of
Securities of a series other than such series), and continuance of such default
or breach for a period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding Securities
of such series a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) acceleration of the maturity of any single outstanding issue of
Indebtedness of the Company with an outstanding aggregate principal amount in
excess of $35,000,000, whether such Indebtedness now exists or shall hereafter
be created (including an acceleration under this Indenture with respect to
Securities of any series other than the series for which the Event of Default
determination is being made under this Section 501(5)), as a result of an event
of default thereunder, which acceleration continues and is not annulled, or
which Indebtedness is not discharged, within 30 days or such longer period of
time during which the Company is contesting in good faith such acceleration, as
evidenced by the delivery to the Trustee on or prior to such thirtieth day after
such acceleration of an Officers' Certificate to such effect;
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) 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 any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 60 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by it to the entry of a decree or order for relief in
respect of the Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar law or
to the commencement of any bankruptcy or insolvency case or proceeding against
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it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or the
consent by it 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 its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company in furtherance of
any such action; or
(8) any other Event of Default provided in or pursuant to this Indenture
with respect to Securities of such series.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
may declare the principal of all the Securities of such series, or such lesser
amount as may be provided for in the Securities of such series, and accrued and
unpaid interest, if any, thereon to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal or such lesser amount, as the case may be,
and such accrued and unpaid interest shall become immediately due and payable.
At any time after Securities of any series have been accelerated and before
a judgment or decree for payment of the money due has been obtained by the
Trustee as hereinafter in this Article provided, the Holders of not less than a
majority in principal amount of the Outstanding Securities of such series, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum of money
sufficient to pay
(a) all overdue installments of any interest on any Securities of such
series and any Coupons appertaining thereto which have become due otherwise
then by such declaration of acceleration and any Additional Amounts with
respect thereto,
(b) the principal of and any premium on any Securities of such series
which have become due otherwise than by such declaration of acceleration
and any Additional Amounts with respect thereto and, to the extent
permitted by applicable law, interest thereon at the rate or rates borne by
or provided for in such Securities,
(c) to the extent permitted by applicable law, interest upon
installments of any interest, if any, which have become due otherwise then
by such declaration of acceleration and any Additional Amounts with respect
thereto at the rate or rates borne by or provided for in such Securities,
and
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(d) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel and all other amounts due the Trustee under
Section 606; and
(2) all Events of Default with respect to Securities of such series, other
than the non-payment of the principal of, any premium and interest on, and any
Additional Amounts with respect to Securities of such series which shall have
become due solely by such declaration of acceleration, shall have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any installment of interest on or any
Additional Amounts with respect to any Security or any Coupon appertaining
thereto when such interest or Additional Amounts shall have become due and
payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of or any premium on
any Security at its Maturity,
the Company shall, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities and any Coupons appertaining thereto,
the whole amount of money then due and payable with respect to such Securities
and any Coupons appertaining thereto, with interest upon the overdue principal,
any premium and, to the extent permitted by applicable law, upon any overdue
installments of interest and Additional Amounts at the rate or rates borne by or
provided for in such Securities, and, in addition thereto, such further amount
of money as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel and all other amounts due to the Trustee
under Section 606.
If the Company fails to pay the money it is required to pay the Trustee
pursuant to the preceding paragraph forthwith upon the demand of the Trustee,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the money 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 such Securities and any Coupons
appertaining thereto and collect the monies adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor upon such Securities and any Coupons appertaining thereto, wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
Coupons appertaining thereto by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such
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rights, whether for the specific enforcement of any covenant or agreement in
this Indenture or such Securities or in aid of the exercise of any power granted
herein or therein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of any overdue principal, premium, interest or
Additional Amounts) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(1) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of the
principal and any premium, interest and Additional Amounts owing and unpaid
in respect of the Securities and any Coupons appertaining thereto and to
file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents or counsel) and of the Holders of Securities or any
Coupons allowed in such judicial proceeding, and
(2) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities or any Coupons to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities or any Coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or any Coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or Coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or any Coupon in any such proceeding.
Section 505. Trustee May Enforce Claims without Possession of Securities
or Coupons.
All rights of action and claims under this Indenture or any of the
Securities or Coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or Coupons or the production thereof in any
proceeding relating thereto, and any such
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proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery or judgment, after provision for the
payment of the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel, shall be for the ratable benefit of each
and every Holder of a Security or Coupon in respect of which such judgment has
been recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, or any
premium, interest or Additional Amounts, upon presentation of the Securities or
Coupons, or both, as the case may be, and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of amounts then due and unpaid to the holders
of Senior Indebtedness, to the extent required by Article Sixteen;
THIRD: To the payment of the amounts then due and unpaid upon the
Securities and any Coupons for principal and any premium, interest and
Additional Amounts 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 aggregate amounts due and payable on such Securities
and Coupons for principal and any premium, interest and Additional Amounts,
respectively;
FOURTH: The balance, if any, to the Person or Persons entitled
thereto.
Section 507. Limitations on Suits.
No Holder of any Security of any series or any Coupons appertaining thereto
shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of such
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of such series;
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 or any Security to affect, disturb or prejudice the rights of
any other such Holders or Holders of Securities of any other series, or to
obtain or to seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all such Holders.
Section 508. Unconditional Right of Holders to Receive Principal and any
Premium, Interest and Additional Amounts.
Notwithstanding any other provision in this Indenture, the Holder of any
Security or Coupon shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium, if any, and (subject to
Sections 305 and 307) interest, if any, on, and any Additional Amounts with
respect to such Security or such Coupon, as the case may be, on the respective
Stated Maturity or Maturities therefor specified in such Security or Coupon (or,
in the case of redemption, on the Redemption Date or, in the case of repayment
at the option of such Holder if provided in or pursuant to this Indenture, on
the date such repayment is due), in each case as the same may be extended, if
applicable, pursuant to the terms of such Security or Coupon, and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or a Coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and each such Holder 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
Trustee and each such Holder shall continue as though no such proceeding had
been instituted.
Section 510. Rights and Remedies Cumulative.
To the extent permitted by applicable law and except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities or Coupons in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to each and every
Holder of a Security or a Coupon is intended to be exclusive of any other right
or remedy, and every right and remedy, to the extent permitted by law, shall be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter
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existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not, to the extent permitted by
law, prevent the concurrent assertion or employment of any other appropriate
right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
Coupon to exercise any right or remedy accruing upon any Event of Default shall,
to the extent permitted by applicable law, impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to any
Holder of a Security or a Coupon may, to the extent permitted by applicable law,
be exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by such Holder, as the case may be.
Section 512. Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee with respect to the Securities of
such series and any Coupons appertaining thereto, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture or with the Securities of any series,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) such direction is not unduly prejudicial to the rights of the
other Holders of Securities of such series not joining in such action.
Section 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series on behalf of the Holders of all the
Securities of such series and any Coupons appertaining thereto may waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, any premium or interest on, or
any Additional Amounts with respect to, any Security of such series or any
Coupons appertaining thereto, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
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Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
Section 514. Waiver of Stay or Extension Laws.
The Company covenants that (to the extent that it may lawfully do so) it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company expressly waives (to the extent
that it may lawfully do so) all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
Section 515. Undertaking for Costs
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of any
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 515 shall not apply to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the aggregate
more than 10% in principal amount of Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest, if any, on or Additional Amounts,
if any, with respect to any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date, and, in the case of repayment, on or after the date
for repayment) or for the enforcement of the right, if any, to convert or
exchange any Security into Common Stock or other securities in accordance with
its terms.
ARTICLE SIX
THE TRUSTEE
Section 601. Certain Rights of Trustee.
Subject to Sections 315(a) through 315(d) of the Trust Indenture Act:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or
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document reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order (in each
case, other than delivery of any Security, together with any Coupons
appertaining thereto, to the Trustee for authentication and delivery
pursuant to Section 303 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence shall be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by or pursuant to this Indenture at the
request or direction of any of the Holders of Securities of any series or
any Coupons appertaining thereto pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, coupon or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine,
during business hours and upon reasonable notice, the books, records and
premises of the Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties as Trustee hereunder or in the
exercise of any of its rights or powers if there is
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reasonable ground for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Section 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series entitled to receive reports pursuant to
Section 703(3), notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that, except in
the case of a default in the payment of the principal of (or premium, if any),
or interest, if any, on, or Additional Amounts or any sinking fund installment
with respect to, any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
best interest of the Holders of Securities and Coupons of such series; and
provided, further, that in the case of any default of the character specified in
Section 501(4) or 501(8) with respect to Securities of such series, no such
notice to Holders shall be given until at least 30 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
Section 603. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any Coupons shall be taken as the
statements of the Company and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or the Coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder and that the statements made by it in a
Statement of Eligibility on Form T-1 supplied to the Company are true and
accurate, subject to the qualifications set forth therein. Neither the Trustee
nor any Authenticating Agent shall be accountable for the use or application by
the Company of the Securities or the proceeds thereof.
Section 604. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other Person that may be an agent of the Trustee or the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities or Coupons and, subject to Sections 310(b) and 311 of the
Trust Indenture Act, may otherwise deal with the Company with the same rights it
would have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other Person.
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Section 605. Money Held in Trust.
Except as provided in Section 403 and Section 1003, money held by the
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by law and shall be held uninvested. The 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 606. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by the Trustee hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's negligence
or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending themselves against any claim
or liability in connection with the exercise or performance of any of their
powers or duties hereunder, except to the extent that any such loss,
liability or expense was due to the Trustee's negligence or bad faith.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of, or premium or
interest on or any Additional Amounts with respect to Securities or any Coupons
appertaining thereto.
Any compensation or expense incurred by the Trustee after a default
specified by Section 501(6) or 501(7) is intended to constitute an expense of
administration under any then applicable bankruptcy or insolvency law.
"Trustee" for purposes of this Section 606 shall include any predecessor Trustee
but the negligence or bad faith of any Trustee shall not affect the rights of
any other Trustee under this Section 606.
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Section 607. Corporate Trustee Required; Eligibility.
(1) There shall at all times be a Trustee hereunder that is a Corporation,
organized and doing business under the laws of the United States of America, any
state thereof or the District of Columbia, eligible under Section 310(a)(1) of
the Trust Indenture Act to act as trustee under an indenture qualified under the
Trust Indenture Act and that has a combined capital and surplus (computed in
accordance with Section 310(a)(2) of the Trust Indenture Act) of at least
$50,000,000 subject to supervision or examination by Federal or state authority.
If at any time the 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.
Section 608. Resignation and Removal; Appointment of Successor.
(1) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee pursuant to Section 609.
(2) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 609 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.
(3) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and the Company.
(4) If at any time:
(a) the Trustee shall fail to comply with the obligations imposed upon
it under Section 310(b) of the Trust Indenture Act with respect to
Securities of any series after written request therefor by the Company or
any Holder of a Security of such series who has been a bona fide Holder of
a Security of such series for at least six months, or
(b) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company or any such
Holder, or
(c) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by or pursuant to a Board Resolution,
may remove the Trustee with respect to all Securities or the Securities of such
series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder
of a Security who has been a bona fide Holder
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of a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to all Securities of such series and
the appointment of a successor Trustee or Trustees.
(5) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by or pursuant to a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 609. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
609, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 609, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series.
(6) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Registered Securities, if any, of such series as their names and
addresses appear in the Security Register and, if Securities of such series are
issued as Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the United States.
Each notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
Section 609. Acceptance of Appointment by Successor.
(1) Upon the appointment hereunder of any successor Trustee with respect to
all Securities, such successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and 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 hereunder of the retiring Trustee; but, on the request of the Company or
such successor Trustee, such retiring Trustee, upon payment of its charges,
shall execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the
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retiring Trustee and, subject to Section 1003, shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(2) Upon the appointment hereunder of any successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the retiring
Trustee and such successor Trustee shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, such successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and that no Trustee shall be responsible
for any notice given to, or received by, or any act or failure to act on the
part of any other Trustee hereunder, and, upon the execution and delivery of
such supplemental indenture, the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein, such retiring Trustee
shall have no further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the Trustee under
this Indenture with respect to the Securities of that or those series to which
the appointment of such successor Trustee relates other than as hereinafter
expressly set forth, 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 with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates; but, on
request of the Company or such successor Trustee, such retiring Trustee, upon
payment of its charges with respect to the Securities of that or those series to
which the appointment of such successor relates and subject to Section 1003,
shall duly assign, transfer and deliver to such successor Trustee, to the extent
contemplated by such supplemental indenture, the property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates, subject to
its claim, if any, provided for in Section 606.
(3) Upon request of any Person appointed hereunder as a successor Trustee,
the Company 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 paragraph (1) or (2) of this Section, as the case may be.
(4) No Person shall accept its appointment hereunder as a successor
Trustee unless at the time of such acceptance such successor Person shall be
qualified and eligible under this Article.
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Section 610. Merger, Conversion, Consolidation or Succession to Business.
Any Corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated
but not delivered by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 611. Appointment of Authenticating Agent.
The Trustee may, with the prior written consent of the Company, appoint one
or more Authenticating Agents acceptable to the Company with respect to one or
more series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of that or those series issued upon original
issue, exchange, registration of transfer, partial redemption or partial
repayment, or pursuant to Section 306, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and, except as
provided in or pursuant to this Indenture, shall at all times be a Corporation
that would be permitted by the Trust Indenture Act to act as trustee under an
indenture qualified under the Trust Indenture Act, is authorized under
applicable law and by its charter to act as an Authenticating Agent and has a
combined capital and surplus (computed in accordance with Section 310(a)(2) of
the Trust Indenture Act) of at least $50,000,000. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to all or substantially all of
the corporate agency or corporate trust business of an Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, provided such
Corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and the
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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 Trustee, with the prior
written consent of the Company, may appoint a successor Authenticating Agent
which shall be acceptable to the Company. 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 each Authenticating Agent from time to time
reasonable compensation for its services under this Section. If the Trustee
makes such payments, it shall be entitled to be reimbursed for such payments,
subject to the provisions of Section 606.
The provisions of Sections 308, 603 and 604 shall be applicable to each
Authenticating Agent.
If an Authenticating Agent is appointed with respect to one or more series
of Securities pursuant to this Section, the Securities of such series may have
endorsed thereon, in addition to or in lieu of the Trustee's certificate of
authentication, an alternate certificate of authentication in substantially the
following form:
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
The First National Bank of Chicago,
As Trustee
By___________________________________________
As Authenticating Agent
By___________________________________________
Authorized Signatory
If all of the Securities of any series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not be
accompanied by or contained in an Officers' Certificate by the Company), shall
appoint in accordance with this Section an Authenticating Agent having an office
in a Place of Payment designated by the Company with respect to such series of
Securities.
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ARTICLE SEVEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of Holders.
In accordance with Section 312(a) of the Trust Indenture Act, the Company
shall furnish or cause to be furnished to the Trustee
(1) semi-annually with respect to Securities of each series not later
than June 1 and December 1 of the year or upon such other dates as are set
forth in or pursuant to the Board Resolution or indenture supplemental
hereto authorizing such series, a list, in each case in such form as the
Trustee may reasonably require, of the names and addresses of Holders as of
the applicable date, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished,
provided, however, that so long as the Trustee is the Security Registrar no such
list shall be required to be furnished.
Section 702. Preservation of Information; Communications to Holders.
The Trustee shall comply with the obligations imposed upon it pursuant to
Section 312 of the Trust Indenture Act.
Every Holder of Securities or Coupons, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company, the Trustee,
any Paying Agent or any Security Registrar shall be held accountable by reason
of the disclosure of any such information as to the names and addresses of the
Holders of Securities in accordance with Section 312(c) of the Trust Indenture
Act, regardless of the source from which such information was derived, and that
the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 312(b) of the Trust Indenture Act.
Section 703. Reports by Trustee.
(1) Within 60 days after May 15 of each year commencing with the first May
15 following the first issuance of Securities pursuant to Section 301, if
required by Section 313(a) of the Trust Indenture Act, the Trustee shall
transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report
dated as of such May 15 with respect to any of the events specified in said
Sections 313(a) and 313(b)(2) which may have occurred since the later of the
immediately preceding May 15 and the date of this Indenture.
(2) The Trustee shall transmit the reports required by Section 313(a) of
the Trust Indenture Act at the times specified therein.
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(3) Reports pursuant to this Section shall be transmitted in the manner
and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture
Act.
Section 704. Reports by Company.
The Company, pursuant to Section 314(a) of the Trust Indenture Act, shall:
(1) file with the Trustee, within 15 days after the Company is required to
file the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934;
or, if the Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934 in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company,
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(3) transmit within 30 days after the filing thereof with the Trustee, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act, such summaries of any information, documents and reports required to be
filed by the Company pursuant to paragraphs (1) and (2) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER AND SALES
Section 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:
(1) either the Company shall be the continuing or successor Person, or the
Person (if other than the Company) formed by such consolidation or into which
the Company is merged or which acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an entirety
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and shall
expressly
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assume, by an indenture (or indentures, if at such time there is more than one
Trustee) supplemental hereto, executed and delivered to the Trustee, in form
reasonably satisfactory to the Trustee, the due and punctual payment of the
principal of, any premium and interest on and any Additional Amounts with
respect to all the Outstanding Securities and the performance of every
obligation in this Indenture and the Outstanding Securities on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing; and
(3) either the Company or the successor Person shall have delivered to the
Trustee an Officers' Certificate stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with and an Opinion of Counsel to the effect
that, if a supplemental indenture is required as aforesaid, such supplemental
indenture complies with this Article and that the conditions precedent provided
in clause (1) and (3) of this Section 801 relating to such transaction have been
complied with.
Section 802. Successor Person Substituted for Company.
Upon any consolidation by the Company with or merger of the Company into
any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety to any Person in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and thereafter, except in
the case of a lease, the predecessor Person shall be released from all
obligations and covenants under this Indenture, the Securities and the Coupons.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders of Securities or Coupons, the Company
(when authorized by or pursuant to a Board Resolution) and the Trustee, at any
time and from time to time, may enter into one or more indentures supplemental
hereto, in form reasonably satisfactory to the Trustee, for any of the following
purposes:
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(1) to evidence the succession of another Person to the Company, and the
assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the Holders
of all or any series of Securities (as shall be specified in such supplemental
indenture or indentures) or to surrender any right or power herein conferred
upon the Company; or
(3) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of, any premium or
interest on or any Additional Amounts with respect to Securities, to permit
Bearer Securities to be issued in exchange for Registered Securities, to permit
Bearer Securities to be exchanged for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided any such action shall not adversely affect the
interests of the Holders of Securities of any series or any Coupons appertaining
thereto in any material respect; or
(4) to establish the form or terms of Securities of any series and any
Coupons appertaining thereto as permitted by Sections 201 and 301; or
(5) to evidence and provide for the acceptance of appointment hereunder by
a successor Trustee with respect to the Securities of one or more series and to
add to or change any of the provisions of this Indenture as shall be necessary
to provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, pursuant to the requirements of Section 609; or
(6) to cure any ambiguity or to correct or supplement any provision herein
which may be defective or which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not adversely affect the interests of
the Holders of Securities of any series then Outstanding or any Coupons
appertaining thereto in any material respect; or
(7) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or
(8) to add any additional Events of Default with respect to all or any
series of Securities (as shall be specified in such supplemental indenture); or
(9) to supplement any of the provisions of this Indenture to such extent
as shall be necessary to permit or facilitate the defeasance and discharge of
any series of Securities pursuant to Article Four, provided that any such action
shall not adversely affect the interests of any Holder of a Security of such
series and any Coupons appertaining thereto or any other Security or Coupon in
any material respect; or
(10) to secure the Securities; or
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(11) to make provisions with respect to conversion or exchange rights of
Holders of Securities of any series; or
(12) to amend or supplement any provision contained herein or in any
supplemental indenture or in any Securities (which amendment or supplement may
apply to one or more series of Securities or to one or more Securities within
any series as specified in such supplemental indenture or indentures), provided
that such amendment or supplement does not apply to any Outstanding Security
issued prior to the date of such supplemental indenture and entitled to the
benefits of such provision.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company (when authorized by or pursuant to a Board Resolution), and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of the Securities of such series or
of modifying in any manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such supplemental
indenture, without the consent of the Holder of each Outstanding Security
affected thereby, shall
(1) change the Stated Maturity of the principal of, or any premium or
installment of interest on or any Additional Amounts with respect to, any
Security, or reduce the principal amount thereof or the rate (or modify the
calculation of such rate) of interest thereon or any Additional Amounts with
respect thereto, or any premium payable upon the redemption thereof or
otherwise, or change the obligation of the Company to pay Additional Amounts
pursuant to Section 1004 (except as contemplated by Section 801(1) and permitted
by Section 901(1)), or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502 or the amount
thereof provable in bankruptcy pursuant to Section 504, or change the Place of
Payment where or the Currency in which the principal of, any premium or interest
on, or any Additional Amounts with respect to any Security is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date or, in the case of repayment at the option of the Holder, on or
after the date for repayment), in each case as such Stated Maturity, Redemption
Date or date for repayment may be extended in accordance with the terms of such
Security or any Coupon appertaining thereto, or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
reduce the requirements of Section 1504 for quorum or voting, or
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(3) modify any of the provisions of Article Sixteen or the definition of
"Senior Indebtedness" in a manner adverse to the Holders of Securities, or
(4) modify any of the provisions of this Section, Section 513 or Section
1006, except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent of
the Holder of each Outstanding Security affected thereby, or
(5) make any change that adversely affects the right, if any, to convert
or exchange any Security for Common Stock or other securities in accordance with
its terms.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which shall have been included expressly and solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect to
such covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
As a condition to 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 Trustee shall be entitled to
receive, and (subject to Sections 315(a) through 315(d) of the Trust Indenture
Act) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Section 904. 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 a Security theretofore or thereafter authenticated and delivered hereunder
and of any Coupon appertaining thereto shall be bound thereby.
Section 905. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture
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may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
Section 906. Effect on Senior Indebtedness.
No supplement indenture shall directly or indirectly modify or eliminate
the provisions of Article Sixteen or the definition of "Senior Indebtedness" in
any manner which might terminate or impair the subordination of the Securities
to Senior Indebtedness without the prior written consent of the Holders of the
Senior Indebtedness.
Section 907. 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.
ARTICLE TEN
COVENANTS
Section 1001. Payment of Principal, Premium, Interest and Additional
Amounts.
The Company covenants and agrees for the benefit of the Holders of the
Securities of each series that it will duly and punctually pay the principal of,
any premium and interest on and any Additional Amounts with respect to the
Securities of such series in accordance with the terms thereof, any Coupons
appertaining thereto and this Indenture. Any interest due on any Bearer
Security on or before the Maturity thereof, and any Additional Amounts payable
with respect to such interest, shall be payable only upon presentation and
surrender of the Coupons appertaining thereto for such interest as they
severally mature.
Section 1002. Maintenance of Office or Agency.
The Company shall maintain in each Place of Payment for any series of
Securities an Office or Agency where Securities of such series (but not Bearer
Securities, except as otherwise provided below, unless such Place of Payment is
located outside the United States) may be presented or surrendered for payment,
where Securities of such series may be surrendered for registration of transfer
or exchange, where Securities of such series that are convertible or
exchangeable may be surrendered for conversion or exchange, and where notices
and demands to or upon the Company in respect of the Securities of such series
relating thereto and this Indenture may be served. If Securities of a series
are issuable as Bearer Securities, the Company shall maintain, subject to any
laws or regulations applicable thereto, an Office or Agency in a Place of
Payment for such series which is located outside the United States where
Securities of such series and any Coupons appertaining thereto may be presented
and surrendered for payment; provided, however, that if the Securities of such
series are listed on the London Stock Exchange or the Luxembourg Stock Exchange
or any other stock exchange located outside the United States and such stock
exchange shall so require, the Company shall maintain a Paying
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Agent in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as the Securities of such series are
listed on such exchange. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such Office or
Agency. If at any time the Company shall fail to maintain any such required
Office or Agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, except that Bearer Securities of such
series and any Coupons appertaining thereto may be presented and surrendered for
payment at the place specified for the purpose with respect to such Securities
as provided in or pursuant to this Indenture, and the Company hereby appoints
the Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
Except as otherwise provided in or pursuant to this Indenture, no payment
of principal, premium, interest or Additional Amounts with respect to Bearer
Securities shall be made at any Office or Agency in the United States or by
check mailed to any address in the United States or by transfer to an account
maintained with a bank located in the United States; provided, however, if
amounts owing with respect to any Bearer Securities shall be payable in Dollars,
payment of principal of, any premium or interest on and any Additional Amounts
with respect to any such Security may be made at the Corporate Trust Office of
the Trustee or any Office or Agency designated by the Company in the Borough of
Manhattan, The City of New York, if (but only if) payment of the full amount of
such principal, premium, interest or Additional Amounts at all offices outside
the United States maintained for such purpose by the Company in accordance with
this Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions.
The Company may also from time to time designate one or more other Offices
or Agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an Office or Agency
in each Place of Payment for Securities of any series for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other Office or
Agency. Unless otherwise provided in or pursuant to this Indenture, the Company
hereby designates as the Place of Payment for each series of Securities the
Borough of Manhattan, The City of New York, and initially appoints the Corporate
Trust Office of the Trustee in the Borough of Manhattan, The City of New York as
the Company's Office or Agency in the Borough of Manhattan, The City of New York
for such purpose and as Security Registrar. The Company may subsequently
appoint a different Office or Agency in the Borough of Manhattan, The City of
New York and a different Security Registrar for the Securities of any series.
Section 1003. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it shall, on or before each due date of the
principal of, any premium or interest on, or any Additional Amounts with respect
to any of the Securities of such series, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum in the Currency or
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Currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay the principal or any premium, interest or Additional Amounts
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and shall promptly notify the Trustee of any
failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it shall, on or prior to each due date of the principal of, or any
premium or interest on, or any Additional Amounts with respect to any Securities
of such series, deposit with any Paying Agent a sum (in the Currency or
Currencies described in the preceding paragraph) sufficient to pay the principal
or any premium, interest or Additional Amounts so becoming due, such sum to be
held in trust for the benefit of the Persons entitled thereto, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of any
failure so to act.
The Company shall cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent shall:
(1) hold all sums held by it for the payment of the principal of, any
premium or interest on or any Additional Amounts with respect to Securities of
such series in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as provided in or
pursuant to this Indenture;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities of such series) in the making of any payment of
principal, any premium or interest on or any Additional Amounts with respect to
the Securities of such series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same terms as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such sums.
Except as otherwise provided herein or pursuant hereto, any money deposited
with the Trustee or any Paying Agent, or then held by the Company, in trust for
the payment of the principal of, any premium or interest on or any Additional
Amounts with respect to any Security of any series or any Coupon appertaining
thereto and remaining unclaimed for two years after such principal or such
premium or interest or Additional Amount shall have become due and payable shall
be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security or any
Coupon appertaining
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thereto shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease; provided, however, that the Trustee or
such Paying Agent, before being required to make any such repayment, may, not
later than 30 days after the Company's request for such repayment, at the
expense of the Company cause to be published once, in an Authorized Newspaper in
each Place of Payment for such series or to be mailed to Holders of Registered
Securities of such series, or both, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication or mailing nor shall it be later than two years
after such principal and any premium or interest or Additional Amounts shall
have become due and payable, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 1004. Additional Amounts.
If any Securities of a series provide for the payment of Additional
Amounts, the Company agrees to pay to the Holder of any such Security or any
Coupon appertaining thereto Additional Amounts as provided in or pursuant to
this Indenture or such Securities. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of or any premium or
interest on, or in respect of, any Security of any series or any Coupon or the
net proceeds received on the sale or exchange of any Security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established hereby or pursuant
hereto to the extent that, in such context, Additional Amounts are, were or
would be payable in respect thereof pursuant to such terms, and express mention
of the payment of Additional Amounts (if applicable) in any provision hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made.
Except as otherwise provided in or pursuant to this Indenture or the
Securities of any series, if the Securities of a series provide for the payment
of Additional Amounts, at least 10 days prior to the first Interest Payment Date
with respect to such series of Securities (or if the Securities of such series
shall not bear interest prior to Maturity, the first day on which a payment of
principal is made), and at least 10 days prior to each date of payment of
principal or interest if there has been any change with respect to the matters
set forth in the below-mentioned Officers' Certificate, the Company shall
furnish to the Trustee and the principal Paying Agent or Paying Agents, if other
than the Trustee, an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and premium,
if any, or interest, if any, on the Securities of such series shall be made to
Holders of Securities of such series or the Coupons appertaining thereto who are
United States Aliens without withholding for or on account of any tax,
assessment or other governmental charge described in the Securities of such
series. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or Coupons, and the Company
agrees to pay to the Trustee or such Paying Agent the Additional Amounts
required by the terms of such Securities. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless against, any
loss, liability or expense reasonably incurred without
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negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers' Certificate
furnished pursuant to this Section.
Section 1005. Corporate Existence.
Subject to Article Eight, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence of the Company.
Section 1006. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Section 1005, inclusive, with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series, by Act of such Holders, either shall waive such compliance in such
instance or generally shall have waived compliance with such term, provision or
condition, but no such waiver shall extend to or affect such term, provision or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
Section 1007. Company Statement as to Compliance.
The Company shall deliver to the Trustee, within 120 days after the end of
each fiscal year, a written statement (which need not be contained in or
accompanied by an Officers' Certificate) signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company, stating whether or not, to his or her knowledge, the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture and if the Company shall be in default, specifying
all such defaults and the nature and status thereof of which he or she may have
knowledge.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 1101. Applicability of Article.
Redemption of Securities of any series at the option of the Company as
permitted or required by the terms of such Securities shall be made in
accordance with the terms of such Securities and (except as otherwise provided
herein or pursuant hereto) this Article.
Section 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
or pursuant to a Board Resolution or an Officers' Certificate. In case of any
redemption at the election of the Company of less than all of the Securities of
any series, the Company shall, at least 60 days
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prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities of such series to be redeemed and, in the
event that the Company shall determine that the Securities of any series to be
redeemed shall be selected from Securities of such series having the same issue
date, interest rate or interest rate formula, Stated Maturity and other terms
(the "Equivalent Terms"), the Company shall notify the Trustee of such
Equivalent Terms.
Section 1103. Selection by Trustee of Securities to be Redeemed.
If less than all of the Securities of any series are to be redeemed or if
less than all of the Securities of any series with Equivalent Terms are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee from the Outstanding
Securities of such series or from the Outstanding Securities of such series with
Equivalent Terms, as the case may be, not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions of the principal amount of
Registered Securities of such series; provided, however, that no such partial
redemption shall reduce the portion of the principal amount of a Security of
such series not redeemed to less than the minimum denomination for a Security of
such series established herein or pursuant hereto.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal of such Securities which has been or is to be redeemed.
Unless otherwise specified in or pursuant to this Indenture or the
Securities of any series, if any Security selected for partial redemption is
converted or exchanged for Common Stock or other securities in part before
termination of the conversion or exchange right with respect to the portion of
the Security so selected, the converted or exchanged portion of such Security
shall be deemed (so far as may be) to be the portion selected for redemption.
Securities which have been converted or exchanged during a selection of
Securities to be redeemed shall, unless otherwise directed by the Company, be
treated by the Trustee as Outstanding for the purpose of such selection.
Section 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106,
not less than 30 nor more than 60 days prior to the Redemption Date, unless a
shorter period is specified in the Securities to be redeemed, to the Holders of
Securities to be redeemed. Failure to give notice by mailing in the manner
herein provided to the Holder of any Registered Securities designated for
redemption as a whole or in part, or any defect in the notice to any such
Holder,
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shall not affect the validity of the proceedings for the redemption of any other
Securities or portion thereof.
Any notice that is mailed to the Holder of any Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice which
relates to such Security shall state that on and after the Redemption Date, upon
surrender of such Security, the Holder of such Security will receive, without
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that, on the Redemption Date, the Redemption Price shall become due
and payable upon each such Security or portion thereof to be redeemed, and, if
applicable, that interest thereon shall cease to accrue on and after said date,
(6) the place or places where such Securities, together (in the case of
Bearer Securities) with all Coupons appertaining thereto, if any, maturing after
the Redemption Date, are to be surrendered for payment of the Redemption Price
and any accrued interest and Additional Amounts pertaining thereto,
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities of
any series, if any, surrendered for redemption must be accompanied by all
Coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing Coupon or Coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee and any
Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on the Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
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(10) in the case of Securities of any series that are convertible or
exchangeable into Common Stock or other securities, the conversion or exchange
price or rate, the date or dates on which the right to convert or exchange the
principal of the Securities of such series to be redeemed will commence or
terminate, as applicable, and the place or places where such Securities may be
surrendered for conversion or exchange, and
(11) the CUSIP number or the Euroclear or the Cedel reference numbers of
such Securities, if any (or any other numbers used by a Depository to identify
such Securities).
A notice of redemption published as contemplated by Section 106 need not
identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
Section 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit, with respect
to the Securities of any series called for redemption pursuant to Section 1104,
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money in the applicable Currency sufficient to pay the Redemption Price of,
and (except if the Redemption Date shall be an Interest Payment Date, unless
otherwise specified pursuant to Section 301 for or in the Securities of such
series) any accrued interest on and Additional Amounts with respect thereto, all
such Securities or portions thereof which are to be redeemed on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities shall cease to bear interest and the Coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
Coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with,
unless otherwise provided in or pursuant to this Indenture, any accrued and
unpaid interest thereon and Additional Amounts with respect thereto to but
excluding the Redemption Date; provided, however, that, except as otherwise
provided in or pursuant to this Indenture or the Bearer Securities of such
series, installments of interest on Bearer Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable only upon presentation and
surrender of Coupons for such interest (at an Office or Agency located outside
the United States except as otherwise provided in Section 1002), and provided,
further, that, except as otherwise specified in or pursuant to this Indenture or
the Registered Securities of such series, installments of interest on Registered
Securities whose Stated Maturity
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is on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the Regular Record Dates therefor according to their terms
and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant Coupons maturing after the Redemption Date, such Security may
be paid after deducting from the Redemption Price, or, at the option of the
Company, after payment to the Trustee for the benefit of the Company of, an
amount equal to the face amount of all such missing Coupons, or the surrender of
such missing Coupon or Coupons may be waived by the Company and the Trustee if
there be furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to the Trustee or any Paying Agent any such
missing Coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that any interest or Additional Amounts represented
by Coupons shall be payable only upon presentation and surrender of those
Coupons at an Office or Agency for such Security located outside of the United
States except as otherwise provided in Section 1002.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and any premium, until paid, shall bear
interest from the Redemption Date at the rate prescribed therefor in the
Security or, if no rate is prescribed therefor in the Security, at the rate of
interest, if any, borne by such Security.
Section 1107. Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at any Office or Agency for such Security (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing) and the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Registered Security or Securities of the
same series, containing identical terms and provisions, of any authorized
denomination as requested by such Holder in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Security in global form is so surrendered, the Company shall
execute, and the Trustee shall authenticate and deliver to the U.S. Depository
or other Depository for such Security in global form as shall be specified in
the Company Order with respect thereto to the Trustee, without service charge, a
new Security in global form in a denomination equal to and in exchange for the
unredeemed portion of the principal of the Security in global form so
surrendered.
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ARTICLE TWELVE
SINKING FUNDS
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series, except as otherwise permitted or
required in or pursuant to this Indenture or any Security of such series issued
pursuant to this Indenture.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of such series is herein referred to as an "optional sinking
fund payment". If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series and this Indenture.
Section 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company may, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of any series to be made pursuant to the
terms of such Securities, (1) deliver Outstanding Securities of such series
(other than any of such Securities previously called for redemption or any of
such Securities in respect of which cash shall have been released to the
Company), together in the case of any Bearer Securities of such series with all
unmatured Coupons appertaining thereto, and (2) apply as a credit Securities of
such series which have been redeemed either at the election of the Company
pursuant to the terms of such series of Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, provided that such Securities have not been previously so credited.
Such Securities shall be received and credited for such purpose by the Trustee
at the Redemption Price specified in such Securities for redemption through
operation of the sinking fund and the amount of such sinking fund payment shall
be reduced accordingly. If as a result of the delivery or credit of Securities
of any series in lieu of cash payments pursuant to this Section 1202, the
principal amount of Securities of such series to be redeemed in order to exhaust
the aforesaid cash payment shall be less than $100,000, the Trustee need not
call Securities of such series for redemption, except upon Company Request, and
such cash payment shall be held by the Trustee or a Paying Agent and applied to
the next succeeding sinking fund payment, provided, however, that the Trustee or
such Paying Agent shall at the request of the Company from time to time pay over
and deliver to the Company any cash payment so being held by the Trustee or such
Paying Agent upon delivery by the Company to the Trustee of Securities of that
series purchased by the Company having an unpaid principal amount equal to the
cash payment requested to be released to the Company.
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Section 1203. Redemption of Securities for Sinking Fund.
Not less than 75 days prior to each sinking fund payment date for any
series of Securities, the Company shall deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 1202, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the Company shall thereupon be obligated to pay the amount therein specified.
Not less than 60 days before each such sinking fund payment date the Trustee
shall select the Securities to be redeemed upon such sinking fund payment date
in the manner specified in Section 1103 and cause notice of the redemption
thereof to be given in the name of and at the expense of the Company in the
manner provided in Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
Section 1301. Applicability of Article.
Securities of any series which are repayable at the option of the Holders
thereof before their Stated Maturity shall be repaid in accordance with the
terms of the Securities of such series. The repayment of any principal amount of
Securities pursuant to such option of the Holder to require repayment of
Securities before their Stated Maturity, for purposes of Section 309, shall not
operate as a payment, redemption or satisfaction of the indebtedness represented
by such Securities unless and until the Company, at its option, shall deliver or
surrender the same to the Trustee with a directive that such Securities be
cancelled. Notwithstanding anything to the contrary contained in this Section
1301, in connection with any repayment of Securities, the Company may arrange
for the purchase of any Securities by an agreement with one or more investment
bankers or other purchasers to purchase such Securities by paying to the Holders
of such Securities on or before the close of business on the repayment date an
amount not less than the repayment price payable by the Company on repayment of
such Securities, and the obligation of the Company to pay the repayment price of
such Securities shall be satisfied and discharged to the extent such payment is
so paid by such purchasers.
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ARTICLE FOURTEEN
SECURITIES IN FOREIGN CURRENCIES
Section 1401. Applicability of Article.
Whenever this Indenture provides for any distribution to Holders of
Securities of any series in which not all of such Securities are denominated in
the same Currency, in the absence of any provision to the contrary in or
pursuant to this Indenture or the Securities of such series, any amount in
respect of any Security denominated in a Currency other than Dollars shall be
treated for any such distribution as that amount of Dollars that could be
obtained for such amount on such reasonable basis of exchange and as of the
record date with respect to Registered Securities of such series (if any) for
such distribution (or, if there shall be no applicable record date, such other
date reasonably proximate to the date of such distribution) as the Company may
specify in a written notice to the Trustee or, in the absence of such written
notice, as the Trustee may determine.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
Section 1501. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities of any series may be called at any time
and from time to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent, waiver or other Act
provided by this Indenture to be made, given or taken by Holders of Securities
of such series.
Section 1502. Call, Notice and Place of Meetings.
(1) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, The City of New York, or, if
Securities of such series have been issued in whole or in part as Bearer
Securities, in London or in such place outside the United States as the Trustee
shall determine. Notice of every meeting of Holders of Securities of any
series, setting forth the time and the place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given, in the
manner provided in Section 106, not less than 21 nor more than 180 days prior to
the date fixed for the meeting.
(2) In case at any time the Company (by or pursuant to a Board Resolution)
or the Holders of at least 10% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed notice of or made
the first publication of the notice of such meeting within 21 days after receipt
of such request
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(whichever shall be required pursuant to Section 106) or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities of such series in the amount above specified, as the
case may be, may determine the time and the place in the Borough of Manhattan,
The City of New York, or, if Securities of such series are to be issued as
Bearer Securities, in London for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in clause (1) of this Section.
Section 1503. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities of any
series, a Person shall be (1) a Holder of one or more Outstanding Securities of
such series, or (2) a Person appointed by an instrument in writing as proxy for
a Holder or Holders of one or more Outstanding Securities of such series by such
Holder or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the Persons
entitled to vote at such meeting and their counsel, any representatives of the
Trustee and its counsel and any representatives of the Company and its counsel.
Section 1504. Quorum; Action.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of at least 66-2/3% in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote 66-2/3% in principal amount of the Outstanding Securities of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(1), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the
Outstanding Securities of such series which shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted only by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 902, any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of at least 66-2/3% in principal amount of
the Outstanding Securities of a series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of at least
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66-2/3% in principal amount of the Outstanding Securities of that series; and
provided, further, that, except as limited by the proviso to Section 902, any
resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other Act which this Indenture expressly provides may
be made, given or taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Securities of a series
may be adopted at a meeting or an adjourned meeting duly reconvened and at which
a quorum is present as aforesaid by the affirmative vote of the Holders of such
specified percentage in principal amount of the Outstanding Securities of such
series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the Coupons
appertaining thereto, whether or not such Holders were present or represented at
the meeting.
Section 1505. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(1) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of such series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(2) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(2), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(3) At any meeting, each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of Securities of
such series held or represented by him; provided, however, that no vote shall be
cast or counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding. If
the Securities of such series are issuable in minimum denominations of less than
$1,000, then a Holder of such a Security in a principal amount of less than
$1,000 shall be entitled to a fraction of one vote which is equal to the
fraction that the principal amount of such
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Security bears to $1,000. The chairman of the meeting shall have no right to
vote, except as a Holder of a Security of such series or proxy.
(4) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
Section 1506. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in triplicate of all votes cast at the meeting. A record, at least in
triplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN
SUBORDINATION OF SECURITIES
Section 1601. Agreement to Subordinate.
The Company, for itself, its successors and assigns, covenants and agrees,
and each Holder of Securities by his acceptance thereof, likewise covenants and
agrees, that the payment of the principal of (and premium, if any) and interest,
if any, on, and Additional Amounts, if any, in respect of each and all of the
Securities is hereby expressly subordinated, to the extent and in the manner
hereinafter set forth, in right of payment to the prior payment in full of all
Senior Indebtedness.
Section 1602. Distribution on Dissolution, Liquidation and Reorganization;
Subrogation of Securities.
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Upon any distribution of assets of the Company upon any dissolution,
winding up, liquidation or reorganization of the Company, whether in bankruptcy,
insolvency, reorganization or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Company or otherwise (subject to the power of a court of competent
jurisdiction to make other equitable provision reflecting the rights conferred
in this Indenture upon the Senior Indebtedness and the holders thereof with
respect to the Securities and the holders thereof by a lawful plan of
reorganization under applicable bankruptcy law):
(a) the holders of all Senior Indebtedness shall be entitled to
receive payment in full of the principal thereof (and premium, if any) and
interest due thereon (or to have such payment duly provided for) before
the Holders of the Securities are entitled to receive any payment upon the
principal (or premium, if any) or interest, if any, on, or Additional
Amounts, if any, in respect of the indebtedness evidenced by the
Securities; and
(b) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the Holders
of the Securities or the Trustee would be entitled except for the
provisions of this Article Sixteen 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 Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have
been issued, ratably according to the aggregate amounts remaining unpaid on
account of the principal of (and premium, if any) and interest on the
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by the Trustee or the
Holders of the Securities before all Senior Indebtedness is paid in full or
such payment is duly provided for, such payment or distribution shall be
paid over, upon written notice to the Trustee, to the holders of such
Senior Indebtedness or their representative or representatives or to the
trustee or trustees under any indenture under which any instruments
evidencing any of such Senior Indebtedness may have been issued, ratably as
aforesaid, for application to payment of all Senior Indebtedness remaining
unpaid until all such Senior Indebtedness shall have been paid in full or
such payment duly provided for, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness (or such payment
having been duly provided for), the Holders of the Securities shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to Senior Indebtedness until the principal of (and premium, if any)
and
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interest, if any, on, and Additional Amounts, if any, in respect of the
Securities shall be paid in full and no such payments or distributions to the
Holders of the Securities of cash, property or securities otherwise
distributable to the holders of Senior Indebtedness shall, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities be deemed to be a payment by the Company to or on
account of the Securities. It is understood that the provisions of this Article
Sixteen are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness, on the other hand. Nothing contained in this Article
Sixteen or elsewhere in this Indenture or in the Securities is intended to or
shall impair, as between the Company, its creditors other than the holders of
Senior Indebtedness, and the Holders of the Securities, the obligation of the
Company, which is unconditional and absolute, to pay to the Holders of the
Securities the principal of (and premium, if any) and interest, if any, on, and
Additional Amounts, if any, in respect of the Securities as and when the same
shall become due and payable in accordance with their terms, or to affect the
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of Senior Indebtedness, nor shall anything herein or in
the Securities prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article Sixteen of the
holders of Senior Indebtedness in respect of cash, property or securities of the
Company received upon the exercise of any such remedy. Upon any payment or
distribution of assets of the Company referred to in this Article Sixteen, the
Trustee, subject to the provisions of Section 601, shall be entitled to rely
upon a certificate of the liquidating trustee or agent or other person making
any distribution to the Trustee for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness 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 Sixteen.
The Trustee, however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness. The Trustee shall not be liable to any such
holder if it shall pay over or distribute to or on behalf of Holders of
Securities or the Company moneys or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article Sixteen.
If the Trustee or any Holder of Securities does not file a proper claim or
proof of debt in the form required in any proceeding referred to above prior to
30 days before the expiration of the time to file such claim in such proceeding,
then the holder of any Senior Indebtedness is hereby authorized, and has the
right, to file an appropriate claim or claims for or on behalf of such Holder of
Securities.
Section 1603. No Payment on Securities in Event of Default on Senior
Indebtedness.
No payment by the Company on account of principal of, or premium, if any,
sinking funds, if any, or interest, if any, on, or Additional Amounts, if any,
in respect of the Securities shall be made if there shall have occurred and be
continuing (i) a default in the payment when due of principal of, premium, if
any, sinking funds, if any, or interest, if any on any Senior Indebtedness of
the Company and any applicable grace period with respect to such default shall
have ended without such default having been cured or waived or ceasing to exist
or (ii) an event
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of default with respect to any Senior Indebtedness of the Company resulting in
the acceleration of the maturity thereof without such acceleration having been
rescinded or annulled.
Section 1604. Payments on Securities Permitted.
Nothing contained in this Indenture or in any of the Securities shall (a)
affect the obligation of the Company to make, or prevent the Company from
making, at any time except as provided in Sections 1602 and 1603, payments of
principal of (or premium, if any) or interest, if any, on, or Additional Amounts
or sinking fund payments, if any, with respect to the Securities or (b) prevent
the application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of (or premium, if any) or interest,
if any, on, or Additional Amounts, if any, in respect of the Securities, unless
the Trustee shall have received at its Corporate Trust Office written notice of
any event prohibiting the making of such payment more than two Business Days
prior to the date fixed for such payment.
Section 1605. Authorization of Holders to Trustee to Effect Subordination.
Each Holder of Securities by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination as provided in this Article Sixteen and appoints
the Trustee his attorney-in-fact for any and all such purposes.
Section 1606. Notices to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities pursuant to this Article Sixteen. Failure
to give such notice shall not affect the subordination of the Securities to
Senior Indebtedness. Notwithstanding the provisions of this Article Sixteen or
any other provisions of this Indenture, neither the Trustee nor any Paying Agent
(other than the Company) shall be charged with knowledge of the existence of any
Senior Indebtedness or of any event which would prohibit the making of any
payment of moneys to or by the Trustee or such Paying Agent, unless and until
the Trustee or such Paying Agent shall have received (in the case of the
Trustee, at its Corporate Trust Office) written notice thereof from the Company
or from the holder of any Senior Indebtedness or from the trustee for any such
holder, together with proof satisfactory to the Trustee of such holding of
Senior Indebtedness or of the authority of such trustee; provided, however, that
if at least two Business Days prior to the date upon which by the terms hereof
any such moneys may become payable for any purpose (including, without
limitation, the payment of either the principal of (or premium, if any) or
interest, if any, on any Security) the Trustee shall not have received with
respect to such moneys the notice provided for in this Section 1606, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such moneys and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date. The Trustee shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such a
notice has been given by a holder of
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Senior Indebtedness or a trustee on behalf of any such holder. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to participate in any payment or distribution
pursuant to this Article Sixteen, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person (or the amount of Senior Indebtedness as
to which such Person is trustee), 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 Sixteen and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
Section 1607. Trustee as Holder of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Sixteen in respect of any Senior Indebtedness at any
time held by it to the same extent as any other holder of Senior Indebtedness
and nothing in this Indenture shall be construed to deprive the Trustee of any
of its rights as such holder.
Nothing in this Article Sixteen shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 606.
Section 1608. Modifications of Terms of Senior Indebtedness.
Any renewal or extension of the time of payment of any Senior Indebtedness
or the exercise by the holders of Senior Indebtedness of any of their rights
under any instrument creating or evidencing Senior Indebtedness, including,
without limitation, the waiver of default thereunder, may be made or done all
without notice to or assent from the Holders of the Securities or the Trustee.
To the extent permitted by applicable law, no compromise, alteration,
amendment, modification, extension, renewal or other change of, or waiver,
consent or other action in respect of, any liability or obligation under or in
respect of any Senior Indebtedness, or any of the terms, covenants or conditions
of any indenture or other instrument under which any Senior Indebtedness is
outstanding, shall in any way alter or affect any of the provisions of this
Article Sixteen or of the Securities relating to the subordination thereof.
Section 1609. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article Sixteen, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
person making such payment or distribution, delivered to the Trustee or to the
Holders of Securities, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
81
<PAGE>
and other indebtedness 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 Sixteen.
* * * * *
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
82
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed, all
as of the day and year first above written.
CNF TRANSPORTATION INC.
By________________________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By________________________________________________
Name:
Title:
83
<PAGE>
Exhibit 4(L)
================================================================================
CNF TRUST I
______________
AMENDED AND RESTATED DECLARATION
OF TRUST
______________
Dated as of June 11, 1997
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I INTERPRETATION AND DEFINITION................................ 1
Section 1.1 Definitions................................... 1
ARTICLE II TRUST INDENTURE ACT.......................................... 9
Section 2.1 Trust Indenture Act; Application.............. 9
Section 2.2 List of Holders of Securities................. 10
Section 2.3 Reports by the Institutional Trustee.......... 10
Section 2.4 Periodic Reports to Institutional Trustee..... 11
Section 2.5 Evidence of Compliance with
Conditions Precedent.......................... 11
Section 2.6 Events of Default; Waiver..................... 11
Section 2.7 Event of Default; Notice...................... 13
ARTICLE III ORGANIZATION................................................. 14
Section 3.1 Name.......................................... 14
Section 3.2 Office........................................ 14
Section 3.3 Purpose....................................... 14
Section 3.4 Authority..................................... 14
Section 3.5 Title to Property of the Trust................ 15
Section 3.6 Powers and Duties of the Regular Trustees..... 15
Section 3.7 Prohibition of Actions by the Trust
and the Trustees.............................. 18
Section 3.8 Legal Title to the Debentures................. 18
Section 3.9 Certain Duties and Responsibilities of
the Institutional Trustee..................... 21
Section 3.10 Certain Rights of Institutional Trustee....... 22
Section 3.11 Delaware Trustee.............................. 25
Section 3.12 Execution of Documents........................ 26
Section 3.13 Not Responsible for Recitals or Issuance
of Securities................................. 26
Section 3.14 Duration of Trust............................. 26
Section 3.15 Mergers....................................... 26
ARTICLE IV SPONSOR...................................................... 28
Section 4.1 Sponsor's Purchase of Common Securities....... 28
Section 4.2 Responsibilities of the Sponsor............... 28
ARTICLE V TRUSTEES..................................................... 29
Section 5.1 Number of Trustees............................ 29
Section 5.2 Delaware Trustee.............................. 29
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
Section 5.3 Institutional Trustee; Eligibility............ 30
Section 5.4 Certain Qualifications of Regular Trustees
and Delaware Trustee Generally................ 31
Section 5.5 Regular Trustees.............................. 31
Section 5.6 Delaware Trustee.............................. 31
Section 5.7 Appointment, Removal and Resignation
of Trustees................................... 31
Section 5.8 Vacancies among Trustees...................... 33
Section 5.9 Effect of Vacancies........................... 33
Section 5.10 Meetings...................................... 33
Section 5.11 Delegation of Power........................... 34
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business........................ 34
ARTICLE VI DISTRIBUTIONS................................................ 35
Section 6.1 Distributions................................. 35
ARTICLE VII ISSUANCE OF SECURITIES....................................... 35
Section 7.1 General Provisions Regarding Securities....... 35
Section 7.2 Execution and Authentication.................. 36
Section 7.3 Form and Dating............................... 36
Section 7.4 Paying Agent and Conversion Agent............. 37
ARTICLE VIII TERMINATION OF TRUST......................................... 37
Section 8.1 Termination of Trust.......................... 37
ARTICLE IX TRANSFER OF INTERESTS........................................ 39
Section 9.1 Transfer of Securities........................ 39
Section 9.2 Transfer of Certificates...................... 39
Section 9.3 Deemed Security Holders....................... 40
Section 9.4 Book Entry Interests.......................... 40
Section 9.5 Notices to Clearing Agency.................... 41
Section 9.6 Appointment of Successor Clearing Agency...... 41
Section 9.7 Definitive Trust Preferred Security
Certificates.................................. 41
Section 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates.................................. 42
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS............................... 43
Section 10.1 Liability..................................... 43
Section 10.2 Exculpation................................... 43
Section 10.3 Fiduciary Duty................................ 44
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
Section 10.4 Indemnification............................... 45
Section 10.5 Outside Business.............................. 47
ARTICLE XI ACCOUNTING................................................... 48
Section 11.1 Fiscal Year................................... 48
Section 11.2 Certain Accounting Matters.................... 48
Section 11.3 Banking....................................... 49
Section 11.4 Withholding................................... 49
ARTICLE XII AMENDMENTS AND MEETINGS...................................... 49
Section 12.1 Amendments.................................... 49
Section 12.2 Meetings of the Holders of Securities;
Action by Written Consent..................... 52
ARTICLE XIII REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE................................. 53
Section 13.1 Representations and Warranties of
Institutional Trustee......................... 53
Section 13.2 Representations and Warranties
of Delaware Trustee........................... 54
ARTICLE XIV MISCELLANEOUS................................................ 55
Section 14.1 Notices....................................... 55
Section 14.2 Governing Law................................. 56
Section 14.3 Intention of the Parties...................... 56
Section 14.4 Headings...................................... 56
Section 14.5 Successors and Assigns........................ 56
Section 14.6 Partial Enforceability........................ 56
Section 14.7 Counterparts.................................. 57
</TABLE>
iii
<PAGE>
<TABLE>
<C> <S> <C>
ANNEX I TERMS OF SECURITIES I-1
EXHIBIT A-I FORM OF TRUST PREFERRED SECURITY CERTIFICATE Al-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE A2-l
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of Trust Indenture Act Section of
of 1939, as amended Declaration
<S> <C>
310(a)................................... 5.3(a)
310(b)................................... 5.3(c)
310(c)................................... Inapplicable
311(c)................................... Inapplicable
312(a)................................... 2.2(a)
312(b)................................... 2.2(b)
313...................................... 2.3
314(a)................................... 2.4; 3.6(j)
314(b)................................... Inapplicable
314(c)................................... 2.5
314(d)................................... Inapplicable
314(f)................................... Inapplicable
315(a)................................... 3.9(b)
315(c)................................... 3.9(a)
315(d)................................... 3.9(a)
316(a)................................... 2.6
316(c)................................... 3.6(e)
317(b)................................... 3.8(h)
317(b)................................... 3.8(h)
</TABLE>
* This Cross-Reference table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CNF TRUST I
June 11, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of June 11, 1997, by the Trustees (as defined herein), the Sponsor
(as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust (as defined herein) to be issued pursuant to
this Declaration;
WHEREAS, certain trustees and the Sponsor established CNF Trust I (the
"Trust"), a trust under the Business Trust Act (as defined herein) pursuant to a
Trust Agreement, dated as of May 6, 1997 (the "Original Declaration") and a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on May 6, 1997, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain Debentures (as defined herein) of the
Sponsor;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITION
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1, and capitalized terms
1
<PAGE>
used in this Declaration and defined in the preamble above have the respective
meanings assigned to them in such preamble;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time and
include all Annexes and Exhibits hereto, which Annexes and Exhibits are
expressly incorporated by reference in and made a part of this Declaration;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Base Indenture" means the Indenture dated as of June 11, 1997,
between the Company and the Debenture Trustee.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. C. Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
2
<PAGE>
"Certificate" means a Common Security Certificate or a Trust Preferred
Security Certificate.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Trust Preferred Securities and in whose name or in the name of a nominee
of that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of the Trust Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means June 11, 1997.
"CNF Common Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Article VII of the Supplemental Indenture, shares
issuable on conversion of the Convertible Debentures shall include only shares
of the class designated as the common stock of the Company on the date of the
Supplemental Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided, however, that if at any time
there shall be more than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission or any
successor thereto.
"Common Security" has the meaning specified in Section 7.1
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of June 11, 1997 of the Sponsor in respect of the Common
Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
3
<PAGE>
"Company" means CNF Transportation Inc. until a successor Person shall
have become the "Company" (as defined in the Indenture) pursuant to the
applicable provisions of the Indenture, and thereafter the "Company" shall mean
such successor Person, and any other obligor upon the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officer, director, shareholder,
member, partner, employee, representative or agent of any Regular Trustee; or
(d) any officer, employee or agent of the Trust or its Affiliates; provided that
the term "Company Indemnified Person" shall not include any Fiduciary
Indemnified Person.
"Conversion Agent" has the meaning specified in Section 7.4.
"Convertible Debentures" has the same meaning as the term
"Debentures."
"Corporate Trust Office" means either (A) the principal corporate
trust office of the Institutional Trustee at which at any particular time its
corporate trust business shall be administered, which office at the date of
original execution of this Declaration is located at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust Services
Division, or (B) for purposes of Section 7.4 hereof (and any similar provisions
of this Declaration concerning the office or agency where Securities may be
presented or surrendered for payment, surrendered for registration of transfer
or exchange, or surrendered for conversion), "Corporate Trust Office" means the
principal corporate trust office of the Trustee in the Borough of Manhattan, The
City of New York at which at any particular time its corporate trust business
shall be administered in the City of New York, which office at the date of the
original execution of this Declaration is located at c/o First Chicago Trust
Company of New York, Attn: Corporate Trust Department, 14 Wall Street, 8th
Floor, Window 2, New York, New York 10005; provided that, for purposes of any
request, demand, authorization, direction, notice, consent, waiver or act of
Holders or other document or notice provided or permitted by this Declaration to
be made upon, given or furnished to, or filed with, the Institutional Trustee.
"Corporate Trust Office" means any office referred to in clause (A) or (B) of
this paragraph.
"Covered Person" means: (a) any officer, director, trustee,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Trustee" means The First National Bank of Chicago, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the 5% Convertible Subordinated Debentures due June
1, 2012 to be issued by the Company pursuant to the Indenture; a form of the
certificate evidencing the Debentures appears as Exhibit A to the Supplemental
Indenture.
4
<PAGE>
"Declaration" means this Amended and Restated Declaration of Trust, as
the same may be further amended or supplemented from time to time in accordance
with its terms.
"Declaration Event of Default" has the same meaning as the term "Event
of Default."
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Trust Preferred Security Certificates" has the meaning set
forth in Section 9.4.
"Direct Action" has the meaning specified in Section 6(b) of Annex I
hereto.
"Dissolution Tax Opinion" has the meaning set forth in Section 4(c) of
Annex I hereto.
"Distribution" has the meaning set forth in Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default," as used in this Declaration (including Annex I and
the Exhibits hereto) and the certificates evidencing the Securities, means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Exchange Act" means the Securities Exchange Act of 1934 as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Certificate" has the meaning set forth in Section 9.4.
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Base Indenture as supplemented by the
Supplemental Indenture, and as the same may be further amended or supplemented
from time to time in accordance with its terms.
5
<PAGE>
"Indenture Event of Default" means an "Event of Default" as defined in
the Supplemental Indenture.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Section 4 of
Annex I hereto.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in
Section 3.8(c).
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount" of the Securities means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Trust Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"No Recognition Opinion" has the meaning set forth in Section 4 of
Annex I hereto.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by an Authorized Officer of such Person, provided that, with
respect to any Officer's Certificate to be delivered by the Regular Trustees,
such certificate shall be signed by two Regular Trustees or, if at the time
there is only one Regular Trustee, such Regular Trustee. 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 Certificate has read
the covenant or condition and the definitions relating thereto;
6
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of
Additional Securities (as defined in the Underwriting Agreement).
"Paying Agent" has the meaning specified in Sections 3.8(h) and 7.4.
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Redemption Tax Opinion" has the meaning set forth in Section 4 of
Annex I hereto.
"Registrar" has the meaning set forth in Section 7.4 hereof.
"Regular Trustee" has the meaning set forth in Section 5.1(b).
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice president, any assistant vice president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
7
<PAGE>
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Trust Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Trust Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Section 4 of Annex I
hereto.
"Sponsor" means the Company or any successor entity in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
5.7(b).
"Successor Entity" has the meaning set forth in Section 3.15(b).
"Successor Institutional Trustee" has the meaning set forth in
Section 5.7(b).
"Successor Securities" has the meaning set forth in Section
3.15(b).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Supplemental Indenture" means the First Supplemental Indenture dated
as of June 11, 1997 between the Company and the Debenture Trustee pursuant to
which the Debentures are to be issued.
"Tax Event" has the meaning set forth in Section 4 of Annex I hereto.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Trust Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
8
<PAGE>
"Trust" means CNF Trust I, a Delaware statutory business trust, until
a successor shall have become such pursuant to the applicable provisions of this
Declaration, and thereafter "Trust" shall mean such successor Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement dated as of June 11, 1997, between the Sponsor and the First
National Bank of Chicago, as guarantee trustee.
"Trust Preferred Security" has the meaning specified in Section 7.1.
"Trust Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Trust Preferred Security substantially in the form of
Exhibit A-1.
"Underwriting Agreement" means the Underwriting Agreement dated June
5, 1997, among the Company, the Trust and the underwriters named therein for the
offering and sale of Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
9
<PAGE>
(b) The Institutional Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
Section 2.2 List of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list, in such form as the
Institutional Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date. provided
that neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee; provided, however, that so long
as the Institutional Trustee or an Affiliate of the Institutional Trustee is the
Registrar no such list shall be required to be furnished. The Institutional
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity) provided that the
Institutional Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee
shall provide to the Holders of the Trust Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
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Section 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as may be 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.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(l) may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Trust
Preferred Securities may, by vote, on behalf of the Holders of all of the Trust
Preferred Securities, waive any past Event of Default in respect of the Trust
Preferred Securities and its consequences, provided that, if the underlying
Indenture 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 (x) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the Debentures (a "Super Majority") or (y) each holder
of Debentures affected thereby to be waived under the Indenture, then the
Event of Default under the Declaration may only be waived by the vote of,
in the case of (x) above, Holders of Trust Preferred Securities
representing at least such specified percentage of the aggregate
liquidation amount of the outstanding Trust Preferred Securities or, in the
case of (y) above, each Holder of outstanding Trust Preferred Securities
affected thereby.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Trust Preferred Securities arising therefrom shall be deemed to have been cured,
for every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Trust
Preferred Securities or impair any right consequent there on. Any waiver by the
Holders of the Trust Preferred Securities of an Event of Default with respect to
the Trust Preferred Securities shall also be deemed to constitute a waiver by
the Holders of the Common Securities of any such Event of Default with respect
to the Common Securities for all purposes of this Declaration without any
further act, vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Indenture
Event of Default:
(i) is not waivable under the Indenture, 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 2.6(b), the
Event of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of (x) a Super Majority or
(y) each holder of Debentures affected thereby 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 2.6(b),
the Event of Default under the Declaration may only be waived by the vote
of, in the case of clause (x) above, Holders of Common Securities
representing at least such specified percentage of the aggregate
liquidation amount of the outstanding Common Securities or, in the case of
clause (y) above, each holder of outstanding Common Securities affected
thereby;
provided further, 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 Trust Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default with respect to the Trust Preferred
Securities have been so cured, waived or otherwise eliminated, the Institutional
Trust will be deemed to be acting solely on behalf of the Holders of the Trust
Preferred Securities and only the Holders of the Trust Preferred Securities will
have the right to direct the Institutional Trustee in accordance with the terms
of the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of Section 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act and
such Section 316(a)(1)(A) and 316(a)(l)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as
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permitted by the Trust Indenture Act. Subject to the foregoing provisions of
this Section 2.6(b), 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.
(c) A waiver of an Indenture Event of Default by the Institutional
Trustee at the direction of the Holders of the Trust Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Institutional
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Indenture Event of Default with respect to the Debentures, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Institutional Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Institutional Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge
of any default with respect to the Debentures except:
(i) a default with respect to the Debentures under (A)
Section 501(1) of the Base Indenture, as amended and restated by Section
2.9(c) of the Supplemental Indenture, or (B) Section 501(2) of the Base
Indenture; or
(ii) any default with respect to the Debentures as to which
the Institutional Trustee shall have received written notice or of which a
Responsible Officer of the Institutional Trustee charged with the
administration of the Declaration shall have actual knowledge.
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ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "CNF Trust I" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities and the other Trustees. The Trust's activities may be conducted under
the name of the Trust or any other name deemed advisable by the Regular
Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o CNF
Transportation Inc., 3240 Hillview Avenue, Palo Alto, California 94304. On ten
Business Days' written notice to the Holders of Securities and the other
Trustees, the Regular Trustees may designate another principal office.
3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, [convenient] or incidental thereto. The Trust shall not
borrow money, issue securities other than the Securities, issue debt, make
investments other than in the Debentures or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
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Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
shall not have legal title to any part of the assets of the Trust, but shall
have an undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Trust Preferred Securities and the Common
Securities in accordance with this Declaration; provided, however, that the
Trust may issue no more than one series of Trust 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 Securities, and the issuance
of Securities shall be limited to a simultaneous issuance of both Trust
Preferred Securities and Common Securities on the Closing Date and the Option
Closing Date, if any;
(b) in connection with the issue and sale of the Trust Preferred
Securities, at the direction of the Sponsor, to:
(i) file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Trust Preferred Securities;
(ii) file any documents prepared by the Sponsor, or take any
acts as determined by the Sponsor to be necessary in order to qualify or
register all or part of the Trust Preferred Securities in any State in
which the Sponsor has determined to qualify or register such Trust
Preferred Securities for sale;
(iii) file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Trust
Preferred Securities;
(iv) file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Trust Preferred Securities and, if
deemed necessary or appropriate by the Regular Trustees, the guarantee of
the Sponsor in respect of the Trust Preferred Securities under Section
12(b) or 12(g) of the Exchange Act; and
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(v) enter into the Underwriting Agreement providing for the
sale of the Trust Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Trust Preferred Securities and the Common Securities; provided, however, that
the Regular Trustees shall cause legal title to the Debentures to be held of
record in the name of the Institutional Trustee for the benefit of the Holders
of the Trust Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall not be required to give such notice unless any Regular Trustee shall have
obtained actual knowledge of the occurrence of a Special Event; and provided,
further, that the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any Ministerial
Action in relation to a Special Event;
(e) subject to Section 2(c) of Annex I hereto, to establish a record
date with respect to all actions to be taken hereunder that require a record
date be established, including and with respect to, for the purposes of Section
316 (c) of the Trust Indenture Act, Distributions, voting rights, redemptions
and exchanges, and to issue relevant notices to the Holders of Trust Preferred
Securities and Holders of Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Institutional Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
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(m) to give prompt written notice to the Holders of the Securities of
any notice received from the Sponsor of its election to defer payments of
interest on the Debentures by extending the interest payment period under the
Indenture, and the Regular Trustee shall give such notice;
(n) to execute all documents, certificates, agreements or
instruments, perform all duties and powers, and do all things for and on behalf
of the Trust in all matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Trust Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to conduct the affairs of and to operate the Trust and to take
any action, not inconsistent with this Declaration or with applicable law, that
the Regular Trustees determine in their discretion to be necessary or desirable
in carrying out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the Sponsor to ensure that the
Debentures will be treated as indebtedness of the Sponsor for United States
federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
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Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the
Institutional Trustee) shall cause the Trust not to, engage in any activity
other than as required or authorized by this Declaration. In particular, the
Trust shall not and the Trustees (including the Institutional Trustee) shall
cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership to or beneficial interest in the Trust other than the Securities;
or
(vii) other than as provided in this Declaration, (A) direct
the time, method and place of exercising any trust or power conferred upon
the Debenture Trustee with respect to the Debentures, (B) waive any past
default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures
shall be due and payable, or (D) consent to any amendment, modification or
termination of the Indenture or the Debentures where such consent shall be
required unless the Trust shall have received an opinion of counsel to the
effect that such modification will not cause more than an insubstantial
risk that for United States federal income tax purposes the Trust will not
be classified as a grantor trust.
Section 3.8 Legal Title to the Debentures.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee (in its capacity as such) in
trust for the benefit of the Holders of the Securities. The right, title and
interest of the Institutional Trustee to the Debentures shall
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vest automatically in each Person who may hereafter be appointed as
Institutional Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee). The Trust
and the Institutional Trustee shall not convert any Debentures held by either of
them except pursuant to a notice of conversion delivered to the Conversion Agent
by a Holder of Trust Securities.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds made
in respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Institutional Trustee Account and make payments to the
Holders of the Trust Preferred Securities and Holders of the Common
Securities from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained with a
banking institution (which may be the Institutional Trustee) the rating on
whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Trust Preferred Securities by a "nationally recognized
statistical rating organization," as that term is defined for purposes of
Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Trust Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or accelerated or mature;
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as shall be necessary or appropriate to effect
the distribution of the Debentures to Holders of Securities upon the
occurrence of certain Special Events; and
(iv) take such ministerial action as may be requested by the
Regular Trustees in connection with the winding up of the affairs of or
liquidation of the Trust in accordance with this Declaration and the
preparation, execution and filing of a certificate of cancellation or other
appropriate certificates with the
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Secretary of State of the State of Delaware and other appropriate
governmental authorities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default of which a Responsible
Officer of the Institutional Trustee has actual knowledge or the Institutional
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act. The Holders of a Majority in liquidation amount 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 Institutional Trustee
or to direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration, including the right to direct the Institutional
Trustee to exercise the remedies available to it as a holder of the Debentures.
If the Institutional Trustee fails to enforce its rights under the Debentures, a
Holder of Trust Preferred Securities, to the fullest extent permitted by law,
may institute a legal proceeding directly against the Company to enforce the
Institutional Trustee's rights under the Debentures without first instituting
any legal proceeding against the Institutional Trustee or any other Person;
provided further, that, if an Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay principal
of, premium, if any, or interest on the Debentures on the date such principal,
premium or interest, as the case may be, is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Trust Preferred Securities
may directly institute a proceeding for enforcement of payment to such Holder
directly of the principal of, premium, if any, or interest on the Debentures
having a principal amount equal to the aggregate liquidation amount of the Trust
Preferred Securities of such Holder (a "Direct Action") on or after the
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respective due date specified in the Debentures or the Indenture.
Notwithstanding any payments made to such Holder by the Company, in connection
with such Direct Action, the Company shall remain obligated to pay the principal
of, premium, if any, or interest on such Debentures, and the Company shall be
subrogated to the rights of such Holder of Trust Preferred Securities to the
extent of any payment made by the Company to such Holder of Trust Preferred
Securities in such Direct Action. Except as provided in the preceding sentences
of this paragraph, the Holders of Trust Preferred Securities shall have no right
or power to exercise directly any other remedy available to the holders of the
Debentures.
(f) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of Securities pursuant to the
terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 5.7.
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(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons
(each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time
and a successor Paying Agent or additional Paying Agents may be appointed at any
time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Declaration and no implied covenants or obligations shall be read
into this Declaration against the Institutional Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Institutional Trustee has actual
knowledge, the Institutional Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions of this
Declaration and the Institutional Trustee shall not
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be liable except for the performance of such duties and obligations as
are specifically set forth in this Declaration, and no implied
covenants or obligations shall be read into this Declaration against
the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Institutional Trustee and conforming to the
requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that the repayment of such funds or liability is not
reasonably assured to it under the terms of this Declaration or indemnity
reasonably satisfactory to the Institutional Trustee against such risk or
liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Institutional Trustee Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Institutional Trustee under this Declaration and the Trust
Indenture Act;
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(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or assessments
levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in
writing with the Sponsor, and money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to the
Institutional Trustee Account maintained by the Institutional Trustee
pursuant to Section 3.8(c)(i) and except to the extent otherwise required
by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional
Trustee be liable for any default or misconduct of the Regular Trustees or
the Sponsor.
Section 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) a direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Institutional Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
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(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion; such
counsel may be counsel to the Sponsor or any of its Affiliates, and may
include any of its employees; and the Institutional Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder, unless such Holder shall have
provided to the Institutional Trustee security and indemnity, reasonably
satisfactory to the Institutional Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Institutional Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Institutional
Trustee, provided, that nothing contained in this Section 3.10(a)(vi) shall
be taken to (a) require the Holders of Securities to offer such indemnity
in the event such Holders direct the Institutional Trustee to take any
action it is empowered to take under this Declaration following an Event of
Default or (b) relieve the Institutional Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Institutional Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion. report, notice, request,
direction, consent, order, bond, debenture, note other evidence of
indebtedness or other paper or document, but the Institutional Trustee in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys and the
Institutional Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the Securities,
and the signature of the Institutional Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party
shall be required to inquire as to the authority of the Institutional
Trustee to so act or as to its
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compliance with any of the terms and provisions of this Declaration, both
of which shall be conclusively evidenced by the Institutional Trustee's or
its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Institutional Trustee (i) may request written
instructions from the Holders of the Securities which instructions may only
be given by the Holders of the same proportion in liquidation amount of the
Securities as would be entitled to direct the Institutional Trustee under
the terms of the Securities in respect of such remedy, right or action,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Institutional Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
this Section 3.11, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Trustees described in this Declaration (except as
required under the Business Trust Act). Except as set forth in this Section
3.11, the Delaware Trustee shall be a Trustee for the sole and limited purpose
of fulfilling the requirements of Section 3807 of the Business Trust Act that
the Trust have at least one trustee with a principal place of business in
Delaware. The duties of the Delaware Trustee shall be limited to (a) accepting
legal process served on the Trust in the State of Delaware and (b) the
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execution of any certificates required to be filed with the Delaware Secretary
of State which the Delaware Trustee is required to execute under Section 3811 of
the Business Trust Act.
Section 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act or applicable
law, any Regular Trustee is authorized to execute on behalf of the Trust any
documents that the Regular Trustees have the power and authority to execute or
to cause the Trust to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article 8
hereof, shall have existence until the date specified in Section 8.1(a)(vii)
hereof.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Section
3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State of the United
States; provided that:
(i) if the Trust is not the survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Trust Preferred Securities
other securities having substantially the same terms as the Trust
Preferred Securities (the "Successor Securities") so long
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as the Successor Securities rank the same as the Trust Preferred
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) if the Trust is not the survivor, the Sponsor expressly
acknowledges or appoints a trustee of the Successor Entity that possesses
the same powers and duties as the Institutional Trustee as the holder of
the Debentures;
(iii) the Trust Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
another organization on which the Trust Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Trust Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization (as defined in Section 3.8 above);
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such Holders'
interests in the new entity, if any);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of the Holders' interest in the new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the Successor
Entity, if any, will be required to register as an Investment Company;
and
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(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor Entity) will
be treated as a grantor trust for United States federal income tax
purposes; and
(viii) if the Trust is not the survivor, the Sponsor
guarantees the obligations of such Successor Entity under the Successor
Securities at least to the extent provided by the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other Person
or permit any other Person to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date and on any Option Closing Date the Sponsor will
purchase the Common Securities issued by the Trust, in an amount equal to at
least 3% of the capital of the Trust, at the same time as the Trust Preferred
Securities are sold.
Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by, and execute on behalf of, the Trust
with the Commission a registration statement on Form S-3 in relation to the
Trust Preferred Securities and the Trust Preferred Securities Guarantee,
including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Trust Preferred Securities and
the Trust Preferred Securities Guarantee and to do any and all such acts, other
than actions which must be taken by the Trust, and advise the Trust of actions
it must take, and prepare for filing and execute any documents to be executed
and filed by the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States;
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(c) to prepare for filing by, and execute on behalf of, the Trust an
application to the New York Stock Exchange, Inc. or any other national stock
exchange or the Nasdaq National Market for listing upon notice of issuance of
any Trust Preferred Securities and, if deemed necessary or advisable by the
Sponsor, the Trust Preferred Securities Guarantee;
(d) to prepare for filing by, and execute on behalf of, the Trust
documents or instruments to be delivered to DTC relating to the Trust Preferred
Securities;
(e) to prepare for filing with the Commission by, and execute on
behalf of, the Trust a registration statement on Form 8-A relating to the
registration of the Trust Preferred Securities and, if deemed necessary or
advisable by the Sponsor, the Trust Preferred Securities Guarantee under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto; and
(f) to negotiate the terms of, and execute on behalf of the Trust,
the Underwriting Agreement providing for the sale of the Trust Preferred
Securities.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two; provided further that (1) one Trustee shall satisfy
the requirements of Section 5.2; (2) there shall be at least one Trustee who is
an employee or officer of, or is affiliated with the Sponsor (a "Regular
Trustee"); and (3) one Trustee shall be the Institutional Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets
the applicable requirements.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
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(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law; provided that, if the Institutional Trustee has its principal
place of business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Institutional Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
Section 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation or bank 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, bank or other
Person permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such 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 5.3(a)(ii), 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.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Institutional Trustee and the Holder of the Common Securities
(as if it were the obligor referred to in Section 310(b) of the Trust Indenture
Act) shall in all respects comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Trust Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be: The First National
Bank of Chicago.
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Section 5.4 Certain Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
Section 5.5 Regular Trustees.
The initial Regular Trustees shall be:
James R. Allen
Gary S. Cullen
Henry A. Schmitt
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6: and
(c) a Regular 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 purposes of signing any documents which the Regular Trustees
have power and authority to execute or cause the Trust to execute pursuant to
Section 3.6.
Section 5.6 Delaware Trustee.
The initial Delaware Trustee shall be: First Chicago Delaware Inc.
Section 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
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(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities voting
as a class at a meeting of the Holders of the Common Securities.
(b) (i) the Trustee that acts as Institutional Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Institutional
Trustee (a "Successor Institutional Trustee") has been an appointed and has
accepted such appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing signed by the Trustee and delivered to
the Sponsor and the Trust, which resignation shall take effect upon such
delivery or upon such later date as is specified therein; provided, however,
that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) Until a Successor Institutional Trustee has
been appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered to the
Trust, the Sponsor and the resigning Institutional Trustee; or
(B) Until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the
Holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee has
been appointed and has accepted such appointment by instrument executed by
such Successor Delaware Trustee and delivered to the Trust, the Sponsor and
the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee. as the case may be,
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if the Institutional Trustee or the Delaware Trustee delivers an instrument of
resignation in accordance with this Section 5.7.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
Section 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.7.
Section 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.7, the Regular Trustees in office,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
Section 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by
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facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of notice
of such meeting except where a Regular Trustee attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Regular Trustees may be taken at a meeting
by vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees. In the event there is only one Regular Trustee, any and all
action of such Regular Trustee shall be evidenced by a written consent of such
Regular Trustee.
Section 5.11 Delegation of Power.
(a) Any Regular 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
3.6; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any Person succeeding to all or substantially
all the corporate trust business of the Institutional Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Institutional Trustee
or the Delaware Trustee, as the case may be, hereunder, provided such Person
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; provided, however, such successor shall notify the Sponsor and
the Trust promptly of its succession.
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ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable
terms of the relevant Holder's Securities. Distributions shall be made on the
Trust Preferred Securities and the Common Securities in accordance with the
preferences set forth in their respective terms. If and to the extent that the
Sponsor makes a payment of interest (including Compounded Interest (as defined
in the Indenture) and Additional Interest (as defined in the Indenture)),
premium and/or principal on the Debentures held by the Institutional Trustee
(the amount of any such payment being a "Payment Amount"), the Institutional
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Trust Preferred Securities") and one class of convertible common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities"). The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Trust Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Trust Preferred Securities as provided in
this Declaration, the Trust Preferred Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder or a Trust
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
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Section 7.2 Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Trust Preferred Securities and
the Common Securities for the Trust by manual or facsimile signature. Unless
otherwise determined by the Trust, such signature shall, in the case of Common
Securities, be a manual signature.
A Trust Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Institutional Trustee.
The signature shall be conclusive evidence that the Trust Preferred Security has
been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Trust Preferred Securities for
original issue.
The Institutional Trustee may appoint, with the consent of the Regular
Trustees, an authenticating agent acceptable to the Trust to authenticate Trust
Preferred Securities. An authenticating agent may authenticate Trust Preferred
Securities whenever the Institutional Trustee may do so. Each reference in this
Declaration to authentication by the Institutional Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Institutional Trustee to deal with the Company or an Affiliate of the Company.
Section 7.3 Form and Dating.
The Trust Preferred Securities and the Institutional Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. Certificates may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. The Securities may have
letters, numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange or quotation system
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form reasonably acceptable to
the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 or A-2 to the Institutional Trustee in
writing. Each Trust Preferred Security Certificate shall be dated the date of
its authentication. The terms and provisions of
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the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Institutional Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
Section 7.4 Paying Agent and Conversion Agent.
In the event that the Trust Preferred Securities are not in book-entry
only form, the Trust shall maintain in the Borough of Manhattan, City of New
York, State of New York, an office or agency where the Trust Preferred
Securities may be presented for payment ("Paying Agent") and a Registrar (as
defined below) and a Conversion Agent (as defined below). The Trust shall
maintain a Paying Agent, an office or agency where Securities may be presented
for conversion ("Conversion Agent") and an office or agency where Securities may
be presented for registration of transfer or exchange ("Registrar"). The
Registrar shall keep a register of the Trust Preferred Securities and of the
transfer and exchange thereof. The Trust may appoint the Paying Agent,
Registrar and the Conversion Agent and may appoint one or more additional paying
agents, one or more additional registrars and one or more additional conversion
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent, the term "Registrar" includes any
additional registrar, and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar or
Conversion Agent without prior notice to any Holder. The Trust shall notify the
Institutional Trustee in writing of the name and address of any Agent not a
party to this Declaration. If the Trust fails to appoint or maintain another
entity as Paying Agent, Registrar or Conversion Agent, the Institutional Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar or Conversion Agent. The Trust shall act as Paying Agent, Registrar
and Conversion Agent for the Common Securities. The Paying Agent, Registrar and
Conversion Agent shall be entitled to the rights and protections extended to the
Institutional Trustee when acting in such capacity.
The Trust initially appoints the Institutional Trustee, acting through
its Corporate Trust Office in The City of New York, as Conversion Agent,
Registrar and Paying Agent for the Trust Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
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(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; upon receipt by the Trust of the
consent of the Holders of at least a Majority in liquidation amount of the
outstanding Securities voting together as a single class to dissolve the
Trust and file a certificate of cancellation with respect thereto, or the
revocation of the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been
paid to the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance with
the terms of the Securities and, after satisfaction of liabilities of
creditors (whether by payment or reasonable provision for payment), when
all of the Debentures held by the Institutional Trustee shall have been
distributed to the Holders of Securities in exchange for all of the
Securities;
(vi) upon the conversion of all outstanding Trust Preferred
Securities into CNF Common Stock or other cash, securities or property, as
the case may be;
(vii) the expiration of the term of the Trust on June 1,
2017; or
(viii) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), after satisfaction of liabilities of creditors
(whether by payment or reasonable provision for payment), the Trustees shall
file a certificate of cancellation with the Secretary of State of the State of
Delaware and the Trust shall terminate.
(c) The provisions of Article 10 shall survive the termination of the
Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Where Trust Preferred Securities are presented to a Registrar
with a request to register the transfer thereof or to exchange them for an equal
number of Trust Preferred Securities represented by different certificates, the
Registrar shall register the transfer or make the exchange. To permit
registrations of transfers and exchanges, the Trust shall issue and the
Institutional Trustee shall authenticate certificates for the Trust Preferred
Securities at the Registrar's request. Securities may only be transferred, in
whole or in part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. Any transfer or purported
transfer of any Security not made in accordance with this Declaration shall be
null and void.
(b) Subject to this Article IX, Trust Preferred Securities shall be
freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to
register under the Investment Company Act or the transferee would become an
Investment Company required to register under the investment Company Act.
Section 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer or exchange, or for
conversion or redemption, shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar and Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer or exchange, or for
redemption or conversion, shall be
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canceled by the Regular Trustees (in the case of Common Securities) or by the
Institutional Trustee (in the case of Trust Preferred Securities). A transferee
of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
The Regular Trustees will not be required to register the transfer of
or exchange any Securities during the period beginning at the opening of
business 15 days before the selection of any Securities to be redeemed (unless
all of the outstanding Securities are called for redemption) and ending at the
close of business on the day of that selection or register the transfer of or
exchange any Securities, or portions thereof, called for redemption, except the
unredeemed portion of any Security being redeemed in part. In the event that any
Securities are not held in book-entry form, Holders will be required to
surrender certificates evidencing such Securities to a Paying Agent or
Conversion Agent in order to receive payments due upon redemption or in order to
convert such Securities, respectively.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, to the extent permitted by applicable law, shall not be bound to
recognize any equitable or other claim to or interest in such Certificate or in
the Securities represented by such Certificate on the part of any Person,
whether or not the Trust shall have actual or other notice thereof.
Section 9.4 Book Entry Interests.
Unless otherwise specified in the terms of the Trust Preferred
Securities, the Trust Preferred Securities Certificates, on original issuance,
will be issued in the form of one or more fully registered, global Trust
Preferred Security Certificates (each a "Global Certificate"), to be delivered
to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Trust Preferred Security
Beneficial Owner will receive a definitive Trust Preferred Security Certificate
representing such Trust Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Trust Preferred Security Certificates (the
"Definitive Trust Preferred Security Certificates") have been issued to the
Trust Preferred Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global
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Certificates and receiving approvals, votes or consents hereunder) as the Holder
of the Trust Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Trust Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict
with any other provisions of this Declaration, the provisions of this Section
9.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Preferred Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants, including receiving and transmitting payments of Distributions on
the Global Certificates to such Clearing Agency Participants. DTC will make book
entry transfers among the Clearing Agency Participants; provided, that solely
for the purposes of determining whether the Holders of the requisite amount of
Trust Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Trust Preferred Security Certificates have
not been issued, the Trustees may conclusively rely on, and shall be protected
in relying on, any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Trust Preferred Security
Beneficial Owners' votes or assigning the right to vote on any matter to any
other Persons either in whole or in part.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Trust Preferred
Security Holders is required under this Declaration, unless and until Definitive
Trust Preferred Security Certificates shall have been issued to the Trust
Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular
Trustees shall give all such notices and communications specified herein to be
given to the Trust Preferred Security Holders to the Clearing Agency, and shall
have no notice obligations to the Trust Preferred Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities, the
Regular Trustees may, in their sole discretion, appoint a successor Clearing
Agency with respect to such Trust Preferred Securities.
Section 9.7 Definitive Trust Preferred Security Certificates.
If:
(a) the Clearing Agency notifies the Trust that it is unwilling or
unable to continue as Clearing Agency for the Global Certificates or if at any
time the Clearing Agency ceases to be a clearing agency registered as such under
the Exchange Act and no successor Clearing Agency shall have been appointed
within 90 days of such notification or of the Trust becoming aware of the
Clearing Agency's ceasing to be so registered, as the case may be; or
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(b) the Regular Trustees elect, in their sole discretion but after
consultation with the Sponsor, to terminate the book entry system through the
Clearing Agency with respect to the Trust Preferred Securities, and any Regular
Trustee executes and delivers to the Institutional Trustee an order to the
effect that the Global Certificates will be exchangeable for Definitive Trust
Preferred Securities Certificates; or
(c) an Event of Default has occurred and is continuing,
then:
(d) Definitive Trust Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Trust Preferred Securities; and
(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Trust Preferred Security Certificates to be delivered to Trust
Preferred Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely on
and shall be protected in relying on, said instructions of the Clearing Agency.
The Definitive Trust Preferred Security Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by the execution thereof by any
Regular Trustee, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which Trust Preferred Securities may be listed, or to
conform to usage.
Section 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or, in the case of Trust Preferred Securities, the Institutional
Trustee, and if the Regular Trustees and, in the case of Preferred Securities,
the Institutional Trustee shall receive evidence to their satisfaction of the
destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee and the
Regular Trustees such security or indemnity as may be required by them to keep
each of them and the Sponsor harmless, then, in the absence of notice that such
Certificate shall have been acquired by a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver or, in the case of
Trust Preferred Securities, any Regular Trustee shall execute and the
Institutional Trustee shall authenticate and deliver, in exchange for, or in
lieu of, any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Institutional Trustee or the Regular
Trustees
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may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith and any other
expenses (including the fees and expenses of the Institutional Trustee)
connected therewith. Any duplicate Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF
SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Company shall be liable for all of the debts and obligations
of the Trust (other than with respect to the Securities) to the extent not
satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Trust Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct (except as otherwise provided, in the case of the Institutional
Trustee, in the Trust Indenture Act) with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities, the Indemnified Person shall resolve
such conflict of interest, take such action or provide such terms,
considering in each case the relative interest of each party (including its
own interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority
the Indemnified Person shall be entitled to consider such interests and
factors as
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it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
Section 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by reason of the fact that
he is or was a Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust
and except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such Company Indemnified Person is
fairly and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement
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of an action without admission of liability) in defense of any action, suit or
proceeding referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be indemnified, to the
full extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met the
applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 10.4(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Sponsor as authorized in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Regular Trustees so directs, by
independent legal counsel in a written opinion or (iii) the Common Security
Holder of the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is made,
such Company Indemnified Person acted in bad faith or in a manner that such
Company Indemnified Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe his
conduct was unlawful. In no event shall any advance be made in instances where
the Regular Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to the
Trust or its Common or Trust Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking indemnification
and advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Sponsor or Trust Preferred
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Sponsor and each Company Indemnified Person
who serves in such capacity at any time while
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this Section 10.4(a) is in effect. Any repeal or modification of this Section
10.4(a) shall not affect any rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Sponsor would
have the power to indemnify him against such liability under the provisions of
this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 10.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify, to the fullest extent permitted
by law, (i) the Institutional Trustee, (ii) the Delaware Trustee, (iii) the
Paying Agent, (iv) the Conversion Agent, (v) any Affiliate of the Institutional
Trustee, and the Delaware Trustee, and (vi) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee, the Paying Agent, the
Conversion Agent and the Delaware Trustee (each of the Persons in (i) through
(vi) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 10.4(b) shall survive the
satisfaction and discharge of this Declaration or the resignation or removal of
the Delaware Trustee or the Institutional Trustee, as the case may be.
Section 10.5 Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and
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to such independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the
Delaware Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books, records and supporting
documents, which shall reflect in detail, each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting in
compliance with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for the United States
federal income tax purposes. The financial statements of the Trust for each of
its Fiscal Years shall be audited in accordance with generally accepted auditing
standards by a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities and the other Trustees, within 90 days after
the end of each Fiscal Year of the Trust, annual financial statements of the
Trust, including a balance sheet of the Trust as of the end of such Fiscal Year,
and the related statement of income or loss for such Fiscal Year.
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
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(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
Section 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by any of the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
Section 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by the Regular Trustees (or, if there
are more than two Regular Trustees a majority of the Regular Trustees) and
together with:
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(i) if the amendment affects the rights, powers, duties,
obligations or immunities of the Institutional Trustee, the Institutional
Trustee;
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware Trustee;
and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Sponsor, the Sponsor.
(b) no amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers' Certificate
from each of the Trust and the Sponsor that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the terms of the
Securities);
(ii) unless, in the case of any proposed amendment which affects
the rights, powers, duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms of the
Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the Trust to be classified for purposes of United
States federal income taxation as other than a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
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(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(c) at such time after the Trust has issued any Securities that
remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c) and this Section 12.1 shall not be amended
without the consent of all of the Holders of the Securities;
(e) Article 4 shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the Holders of the Common Securities under Article
5 to increase or decrease the number of and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration and the
Securities may be amended without the consent of the Holders of the Securities
to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration or make any other provisions with respect to matters or
questions arising under this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) modify, eliminate or add to any provisions of this
Declaration to the extent deemed necessary or advisable by any of the
Regular Trustees to ensure that the Trust will be classified for United
States federal income tax purposes as a grantor trust or to ensure that the
Trust will not be required to register as an Investment Company under the
Investment Company Act; and
(v) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders.
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Section 12.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange or quotation system or market
on which the Trust Preferred Securities are listed or admitted for trading. The
Regular Trustees shall call a meeting of the Holders of such class if directed
to do so by the Holders of at least 10% in liquidation amount of the Securities
of such class. Such direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of Securities calling a
meeting shall specify in writing the Security Certificates held by the Holders
of Securities exercising the right to call a meeting and only those Securities
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange or quotation system or
market on which the Trust Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such action
at a meeting at which all Holders of Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders of Securities entitled to
vote who have not consented in writing. The Regular Trustees may specify
that any written ballot submitted to the Security Holders for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of
11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be
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revocable at the pleasure of the Holder of Securities executing it. Except
as otherwise provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law of the
State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders of
the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the Regular
Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms
of the Securities, the Trust Indenture Act or the listing rules of any
stock exchange or quotation system or market on which the Trust Preferred
Securities are then listed or trading, otherwise provides, the Regular
Trustees, in their sole discretion, shall establish all other provisions
relating to meetings of Holders of Securities, including notice of the
time, place or purpose of any meeting at which any matter is to be voted on
by any Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum requirements,
voting in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing, with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
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reorganization, moratorium, insolvency and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of the Declaration.
Section 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing, with full power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware. The Delaware Trustee satisfies for
the Trust the requirements set forth in Section 3807(a) of the Business Trust
Act.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
CNF Trust I
c/o CNF Transportation Inc.
3240 Hillview Avenue
Palo Alto, California 94304
Attention: Chief Financial Officer
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
First Chicago Delaware Inc.
300 King Street
Wilmington, DE 19801
Attention: Michael J. Majchrzak
(c) if given to the Institutional Trustee, at the mailing address set
forth below (or such other address as the Institutional Trustee may give notice
of to the Holders of the Securities):
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
CNF Transportation Inc.
3240 Hillview Avenue
Palo Alto, California 94304
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Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, delivered by overnight courier, telecopied with receipt confirmed (by
telephone or otherwise) 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 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
Section 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
Section 14.4 Headings.
The Table of Contents, Cross-Reference Table and headings contained in
this Declaration are inserted for convenience of reference only and do not
affect the interpretation of this Declaration or any provision hereof.
Section 14.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
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Section 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such 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 undersigned have caused these presents to be
executed as of the day and year first above written.
-----------------------------------------------
James R. Allen, as Regular Trustee
-----------------------------------------------
Gary S. Cullen, as Regular Trustee
-----------------------------------------------
Henry A. Schmitt, as Regular Trustee
First Chicago Delaware Inc.,
as Delaware Trustee
By:
--------------------------------------------
Name:
Title:
The First National Bank of Chicago,
as Institutional Trustee
By:
--------------------------------------------
Name:
Title:
CNF TRANSPORTATION INC.,
as Sponsor
By:
--------------------------------------------
Name:
Title:
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ANNEX I
TERMS OF
$2.50 TRUST PREFERRED SECURITIES
$2.50 COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of June 11, 1997 of which this Annex I constitutes a part (as amended
from time to time, the "Declaration"), the designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Trust Preferred
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration):
1. Designation and Number.
(a) Trust Preferred Securities. 2,500,000 Trust Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of One Hundred and Twenty-Five Million Dollars ($125,000,000), and a
liquidation amount with respect to the assets of $50 per Trust Preferred
Security, are hereby designated for the purposes of identification only as
"$2.50 Term Convertible Securities, Series A" (the "Trust Preferred
Securities"). The Trust Preferred Security Certificates evidencing the Trust
Preferred Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the rules
of any stock exchange or quotation system on which the Trust Preferred
Securities are listed or quoted or as may be permitted by Section 7.3 of the
Declaration.
(b) Common Securities. 77,320 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of Three
Million, Eight Hundred and Sixty-Six Thousand Dollars ($3,866,000), and a
liquidation amount with respect to the assets of the Trust of $50 per common
security, are hereby designated for the purposes of identification only as
"$2.50 Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be in the form of Exhibit A-
2 to the Declaration, with such changes and additions thereto or deletions
therefrom as may
<PAGE>
be required by ordinary usage, custom or practice or as may be permitted by
Section 7.3 of the Declaration.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 5% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Institutional Trustee. To the extent permitted by applicable law,
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate. The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Institutional Trustee and to
the extent the Institutional Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed on the basis of a 360-
day year of twelve 30-day months, and for any period of less than a full
calendar month, the actual number of days elapsed in such 30-day month.
(b) Distributions on the Securities will be cumulative, will accumulate
from June 11, 1997, and will be payable quarterly in arrears, on June 1,
September 1, December 1 and March 1 of each year (each a "Distribution payment
date") commencing on September 1, 1997, when, as and if available for payment,
and except as otherwise described below. So long as the Company shall not be in
default in the payment of interest on the Debentures, the Company has the right
under the Indenture to defer payments of interest on the Debentures by extending
the interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period"), during which
Extension Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall last beyond the maturity date of the
Debentures or end on other than a Distribution payment date. As a consequence
of such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Company may further extend such Extension Period; provided
that such Extension Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or extend beyond the
maturity of the Debentures or end on other than a Distribution payment date. If
Distributions are deferred as aforesaid, the deferred accumulated Distributions
and, to the extent permitted by applicable law, accrued and unpaid
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interest thereon shall be payable to Holders as they appear on the books and
records of the Trust at the close of business on the record date for the
Distribution payment date upon which such Extension Period terminates. Upon the
termination of any Extension Period and the payment of all amounts then due on
the Debentures, the Company may commence a new Extension Period, subject to the
above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust at the close of business on
the relevant record dates. While the Trust Preferred Securities remain in book-
entry only form, the relevant record dates shall be one Business Day prior to
the relevant payment dates, which payment dates correspond to the interest
payment dates on the Debentures. The relevant record dates for the Common
Securities shall be the same record date as for the Trust Preferred Securities.
If the Trust Preferred Securities shall not continue to remain in book-entry
only form, the relevant record dates for the Trust Preferred Securities shall be
selected by the Regular Trustees and shall be at least one Business Day prior to
the relevant payment dates (provided that such record dates must conform to the
rules of any securities exchange or quotation system on which the Trust
Preferred Securities are listed or quoted). Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Company having failed to make a payment under the Debentures,
will cease to be payable to the Person in whose name such Securities are
registered on the relevant record date, and such defaulted Distributions will
instead be payable to the Person in whose name such Securities are registered at
the close of business on the special record date or other specified date
determined in a like manner as provided in Section 307 of the Base Indenture.
If any date on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distributions payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into CNF Common Stock pursuant to the terms of the
Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities (including, without limitation, any interest
accrued thereon) or on account of accumulated and unpaid dividends on the shares
of CNF Common Stock issued upon conversion, or be required to be made; provided,
however, that if a
3
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Security is surrendered for conversion after the close of business on any record
date for payment of a Distribution and before the opening of business on the
corresponding payment date (other than a Security or portion of a Security
called for redemption on a redemption date occurring after such record date and
prior to such payment date), then, notwithstanding such conversion, the
Distribution payable on such payment date will be paid in cash to the Person in
whose name the Security is registered at the close of business on such record
date, and (other than a Security or a portion of a Security called for
redemption on a redemption date occurring after such record date and on or prior
to such payment date) when so surrendered for conversion, the Security must be
accompanied by payment in cash of an amount equal to the Distribution payable on
such payment date.
(e) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), then the Holders
of the Securities will be entitled to receive out of the assets of the Trust
available for distributions after satisfaction of liabilities to creditors an
amount equal to the aggregate of the stated liquidation amount of $50 per
Security plus accumulated and unpaid Distributions thereon to but excluding the
date of payment (such amount being the "Liquidation Distribution"), unless, such
liquidation, dissolution, winding-up or termination occurs in connection with a
Special Event in which, in accordance with Section 4(c), Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accumulated
and unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis, except that if a
Declaration Event of Default has occurred and is continuing, the Trust Preferred
Securities shall have a preference over the Common Securities with regard to
such Liquidation Distribution.
4
<PAGE>
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, whether at
maturity or upon redemption (either at the option of the Sponsor or pursuant to
a Tax Event as described below), upon acceleration or otherwise, the proceeds
from such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
per Security equal to the redemption price of the Debentures, together with
accrued and unpaid Distributions thereon to but excluding the date of the
redemption, payable in cash; provided, however, that , except in the case of a
redemption upon maturity of the Debentures, Holders will be given not less than
30 nor more than 60 days' notice of such redemption.
(b) If fewer than all the outstanding Securities are to be so redeemed, the
Common Securities and the Trust Preferred Securities will be redeemed Pro Rata
and the Trust Preferred Securities to be redeemed will be as described in
Section 4(g) below.
(c) If, at any time, a Tax Event or an Investment Company Event (each, as
defined below, a "Special Event") shall occur and be continuing, the Regular
Trustees may, with the prior written consent of the Company, unless the
Debentures are redeemed in the circumstances described in this Section 4(c),
dissolve the Trust with the result that Debentures with an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the Coupon Rate of, and accrued and unpaid interest equal to
accumulated and unpaid Distributions on, Securities outstanding at such time
shall be distributed to the Holders of the Securities in liquidation of such
Holders' interests in the Trust on a Pro Rata basis, within 90 days following
the occurrence of such Special Event (the "90 Day Period"); provided, however,
that in the case of the occurrence of a Tax Event, as a condition of such
dissolution and distribution, the Regular Trustees shall have received an
opinion of nationally recognized independent tax counsel experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect the Holders of
the Securities will not recognize any gain or loss for United States federal
income tax purposes as a result of such dissolution and distribution of
Debentures; and, provided, further, that if at the time there is available to
the Trust the opportunity to eliminate, within such 90 Day Period, the Special
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure which in the sole
judgment of the Company
5
<PAGE>
has or will cause no adverse effect on the Trust, the Company or the Holders of
the Securities and will involve no material cost, the Trust will pursue such
ministerial action in lieu of dissolution. Furthermore, if in the case of the
occurrence of a Tax Event, (i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting
interest on the Debentures for United States federal income tax purposes on a
current accrual basis (by reason of deferral, disallowance or otherwise) even if
the Debentures were distributed to the Holders of the Securities in liquidation
of such Holders' interests in the Trust as described above or (ii) the Regular
Trustees shall have been informed by such tax counsel that a No Recognition
Opinion cannot be delivered to the Trust, the Company shall have the right, upon
not less than 30 nor more than 60 days' notice, to redeem the Debentures, in
whole or in part for cash, at a redemption price equal to 100% of the principal
amount thereof plus accrued and unpaid interest thereon to but excluding the
redemption date, within 90 days following the occurrence of such Tax Event, and
promptly following such redemption, the Securities will be redeemed by the Trust
at a redemption price equal to the liquidation amount of such Securities plus
accumulated and unpaid Distributions thereon to but excluding the redemption
date, provided, however, that if at the time there is available to the Company
or the Trust the opportunity to eliminate, within such 90-day period, the Tax
Event by taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure which in the sole
judgment of the Company has or will cause no adverse effect on the Trust, the
Company or the Holders of the Securities and will involve no material cost, the
Company or the Trust will pursue such ministerial action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel experienced in such matters
(a "Dissolution Tax Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective change) in, the
laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, (b) any amendment to, or
change in, an interpretation or application of any such laws or regulations by
any legislative body, court or governmental or regulatory agency or authority
(including the enactment of any legislation and the publication of any judicial
decision or regulatory determination) or (c) any official interpretation or
pronouncement by any legislative body, court or governmental or regulatory
agency or authority that provides for a position with respect to such laws or
regulations that differs from the theretofore generally accepted position, which
amendment or change is enacted, promulgated, issued or
6
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announced or which interpretation or pronouncement is issued or announced, in
each case, on or after June 5, 1997 (collectively, a "Change in Tax Law"), there
is more than an insubstantial risk 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 interest accrued or received on the Debentures, (ii) the Trust is, or
will be within 90 days of the date thereof, subject to more than a de minimis
amount of other taxes, duties or other governmental charges or (iii) interest
(including original issue discount) payable by the Company to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be, deductible
by the Company for United States federal income tax purposes on a current
accrual basis (by reason of deferral, disallowance or otherwise).
"Investment Company Event" means that each of the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel
experienced in such matters to the effect that, as a result of the occurrence of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, which change is enacted, promulgated, issued or becomes
effective on or after June 5, 1997 (a "Change in 1940 Act Law"), there is more
than an insubstantial risk that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution of
Debentures upon dissolution of the Trust, (i) the Securities will no longer be
deemed to be outstanding, (ii) The Depository Trust Company (the "Depository")
or its nominee (or any successor Clearing Agency or its nominee), as the record
Holder of any Global Certificates, will receive a registered global certificate
or certificates representing the Debentures to be delivered upon such
distribution, and (iii) any certificates representing Securities not held by the
Clearing Agency or its nominee will be deemed to represent Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accumulated and unpaid Distributions on, such Securities until
such certificates are presented to the Company or its agent for transfer,
reissuance or exchange.
(d) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been or contemporaneously
are paid (or such payment is duly provided for) on all Securities for all
quarterly Distribution periods terminating on or before the date of redemption.
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(e) If the Debentures are distributed to Holders of the Securities upon
dissolution of the Trust, as described in Section 4(c) above, the Company will
use its reasonable best efforts to have the Debentures listed on the New York
Stock Exchange or on such other national securities exchange or similar
organization as the Trust Preferred Securities were listed or quoted immediately
prior to the distribution of the Debentures.
(f) Notice of any redemption of Securities, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(f), a Redemption/Distribution Notice shall be deemed
to be given on the day such notice is first mailed by first-class mail, postage
prepaid, or by such other means suitable to assure delivery of such written
notice, to Holders of Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Securities at the address of each such Holder
appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(g) In the event that fewer than all the outstanding Securities are to be
redeemed, the Securities to be redeemed shall be redeemed Pro Rata from each
Holder of Trust Preferred Securities and Common Securities, it being understood
that, in respect of Trust Preferred Securities registered in the name of and
held of record by the Clearing Agency or its nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency Participant (or
Person on whose behalf such nominee holds such securities) in accordance with
the procedures applied by such agency or nominee.
(h) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are to be redeemed or otherwise to be paid at stated maturity, upon
acceleration or otherwise (which notice will be irrevocable), then (A) while the
Trust Preferred Securities are in book-entry form, with respect to the Trust
Preferred Securities, provided that the Company has paid the Institutional
Trustee a sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, on the redemption date the Institutional Trustee
will deposit irrevocably with the Clearing
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Agency or its nominee funds sufficient to pay the applicable redemption price
with respect to the Trust Preferred Securities, together with accumulated and
unpaid Distributions on the Trust Preferred Securities to be redeemed to but
excluding the date of redemption, and will give the Clearing Agency irrevocable
instructions and authority to pay the redemption price to the Holders of such
Trust Preferred Securities, and (B) with respect to Trust Preferred Securities
issued in definitive form and Common Securities, provided that the Company has
paid the Institutional Trustee a sufficient amount of cash in connection with
the related redemption or maturity of the Debentures, the Institutional Trustee
will pay, upon surrender to a Paying Agent of certificates evidencing such
Securities to be redeemed, the relevant redemption price, together with
accumulated and unpaid Distributions on the Securities to be redeemed to but
excluding the date of redemption, to the Holders of such Securities by check
mailed to the address of the relevant Holder appearing on the books and records
of the Trust on the redemption date or, at the option of the Trust, by wire
transfer to an account in the United States appropriately designated by the
Holder entitled to such payment not less than 15 days (unless shorter notice is
acceptable to the Regular Trustees) prior to the corresponding redemption date;
provided that Distributions on Securities which shall have become due and
payable on a payment date on or prior to the relevant redemption date shall be
payable to the Holders of such Securities registered as such at the close of
business on the relevant record date pursuant to Section 2(c) hereof. If a
Redemption/Distribution Notice shall have been given and funds deposited as
required, then on the date fixed for such redemption, Distributions will cease
to accumulate on the Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will cease, except the right
of the Holders of such Securities to receive the redemption price and
accumulated and unpaid Distributions thereon to but excluding the date of
redemption, but without interest on such redemption price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be registered
the transfer of any Securities that have been so called for redemption. If any
date fixed for redemption of Securities is not a Business Day, then payment of
the redemption price payable on such date will be made on the next succeeding
day that is a Business Day (without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day. If
payment of the redemption price in respect of any Securities is improperly
withheld or refused and not paid either by the Trust or by the Company pursuant
to the relevant Guarantee, Distributions on such Securities will continue to
accumulate at the Coupon Rate from the original redemption date to the actual
date of payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the redemption price.
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(i) Upon surrender of a Security that is to be redeemed in part, the Trust
shall execute (and, in the case of Trust Preferred Securities, the Institutional
Trustee shall authenticate) and deliver to the Holder, without service charge to
the Holders, a new Security or Securities equal in principal amount to the
unredeemed portion of the Security surrendered.
(j) Redemption/Distribution Notices shall be sent by the Regular Trustees
on behalf of the Trust to (A) in respect of the Trust Preferred Securities, the
Clearing Agency or its nominee if the Global Certificates have been issued or,
if Definitive Trust Preferred Security Certificates have been issued, to the
Holder thereof, and (B) in respect of the Common Securities to the Holders
thereof.
(k) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market, by private agreement or
otherwise.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to the
close of business on June 1, 2012 (or, in the case of Securities called for
redemption, prior to the close of business on the Business Day prior to the
redemption date), at their option, to cause the Conversion Agent to convert
Securities, on behalf of the converting Holders, into shares of CNF Common Stock
in the manner described herein on and subject to the following terms and
conditions:
(a) The Securities will be convertible at the office of the Conversion
Agent into fully paid and nonassessable shares of CNF Common Stock pursuant
to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debentures held by the Trust on the basis
of one Security per $50 principal amount of Debentures, and immediately
convert such amount of Debentures into fully paid and nonassessable shares
of CNF Common Stock at an initial conversion price of $40.00 per share of
CNF Common Stock (which is equivalent to an initial conversion rate of 1.25
shares of CNF Common Stock per $50 principal amount of Debentures), subject
to certain adjustments set forth in Sections 7.3 and 7.4 of the
Supplemental Indenture ( such initial conversion price, as the same may be
so adjusted from time to time, the "Conversion Price").
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(b) In order to convert Securities into CNF Common Stock the Holder shall
submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated
form, with such certificates. The Conversion Request shall (i) set forth
the number of Securities to be converted and the name or names, if other
than the Holder, in which the shares of CNF Common Stock should be issued
and (ii) direct the Conversion Agent (a) to exchange such Securities for a
portion of the Debentures held by the Trust (at the rate of exchange
specified in the preceding paragraph) and (b) to immediately convert such
Debentures on behalf of such Holder, into CNF Common Stock at the then
applicable Conversion Price. The Conversion Agent shall notify the Trust
of the Holder's election to exchange Securities for a portion of the
Debentures held by the Trust and the Institutional 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. The Conversion Agent shall thereupon notify the Company of the
Holder's election to convert such Debentures into shares of CNF Common
Stock. If a Security is surrendered for conversion after the close of
business on any record date for payment of a Distribution and before the
opening of business on the corresponding payment date (other than any
Security or portion of a Security called for redemption on a redemption
date occurring after such record date and prior to such payment date),
then, notwithstanding such conversion, the Distribution payable on such
payment date will be paid in cash to the Person in whose name the Security
is registered at the close of business on such record date, and (other than
a Security or a portion of a Security called for redemption on a redemption
date occurring after such record date and on or prior to such payment date)
when so surrendered for conversion, the Security must be accompanied by
payment in cash of an amount equal to the Distribution payable on such
payment date. Except as provided above, neither the Trust nor the Company
will make, or be required to make, any payment, allowance or adjustment
upon any conversion on account of any accumulated and unpaid Distributions
on the Securities (including, without limitation, any interest accrued
thereon) surrendered for conversion, or on account of any accumulated and
unpaid dividends on the shares of CNF Common Stock issued upon such
conversion. Securities shall be deemed to have been converted immediately
prior to the close of business on the day on which a Notice of Conversion
relating to such Securities, together with the certificates evidencing such
Securities if required as specified above, is received by the Trust in
accordance with the foregoing provision (the "Conversion Date").
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The Person or Persons entitled to receive CNF Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes as the
record holder or holders of such CNF Common Stock at such time. As
promptly as practicable on or after the Conversion Date, CNF shall issue
and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of CNF Common Stock issuable
upon such conversion, together with the cash payment (determined as
provided in the Supplemental Indenture), if any, in lieu of any fraction of
any share to the Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the notice of conversion and the
Conversion Agent shall distribute such certificate or certificates and cash
to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints the Person
serving as Conversion Agent under the Declaration as "Conversion Agent" for
the purpose of effecting the conversion of Securities in accordance with
this Section. In effecting the conversion and transactions described in
this Section, the Conversion Agent shall be acting as agent of the Holders
of Securities directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange Securities from time
to time for Debentures held by the Trust in connection with the conversion
of such Securities in accordance with this Section and (ii) to convert all
or a portion of the Debentures into CNF Common Stock and thereupon to
deliver such shares of CNF Common Stock in accordance with the provisions
of this Section and to deliver to the Trust a new Debenture or Debentures
for any resulting unconverted principal amount.
(d) No fractional shares of CNF Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid in
cash (determined as provided in the Supplemental Indenture) by the Company
to the Conversion Agent as provided in the Indenture.
(e) The Company shall at all times reserve and keep available out of its
authorized and unissued CNF Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of CNF Common Stock as shall from time to
time be issuable upon the conversion of all the Debentures then
outstanding. Notwithstanding the foregoing, the Company shall be entitled
to deliver upon conversion of Debentures, shares of CNF Common Stock
reacquired and held in the treasury of the Company (in lieu of the issuance
of authorized and unissued shares of CNF Common Stock), so long as any such
treasury shares
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are free and clear of all liens, charges, security interests or
encumbrances. Any shares of CNF Common Stock issued upon conversion of the
Debentures shall be duly authorized, validly issued and fully paid and
nonassessable. The Trust shall deliver the shares of CNF Common Stock
received upon conversion of the Debentures to the converting Holder free
and clear of all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of the Company and the
Trust shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as
may be required by law, and shall comply with all applicable requirements
as to registration or qualification of CNF Common Stock (and all
requirements to list CNF Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Company
to lawfully issue CNF Common Stock to the Trust upon conversion of the
Debentures and the Trust to lawfully deliver CNF Common Stock to each
Holder upon conversion of the Securities.
(f) The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of CNF Common Stock on conversion of
Debentures and the delivery of the shares of CNF Common Stock by the Trust
upon conversion of the Securities, provided that the Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of CNF Common Stock
in a name other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless and until
the Person requesting such issue has paid to the Trust the amount of any
such tax, or has established to the satisfaction of the Trust that such tax
has been paid.
(g) Nothing in the preceding paragraph (f) shall limit the requirement of
the Trust to withhold taxes pursuant to the terms of the Securities or as
set forth in this Annex I to the Declaration or to the Declaration itself
or otherwise require the Institutional Trustee or the Trust to pay any
amounts on account of such withholdings.
6. Voting Rights - Trust Preferred Securities.
(a) Except as provided under Sections 6(b) and 8 and as otherwise required
by law (including, without limitation, the Delaware Business Trust Act or the
Trust Indenture Act) and the Declaration, the Holders of the Trust Preferred
Securities will have no voting rights.
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(b) Subject to Section 2.6 of the Declaration and to the requirements set
forth in this paragraph, the Holders of a Majority in aggregate liquidation
amount of the outstanding Trust Preferred Securities, voting separately as a
class, have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Institutional Trustee, or exercising
any trust or power conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional Trustee, as holder
of the Debentures, to (i) exercise the remedies available under the Indenture
with respect to the Debentures, (ii) waive any past default and its consequences
that is waivable under Section 513 of the Indenture, or (iii) exercise any right
to rescind or annul a declaration that the principal of and interest on all the
Debentures shall be due and payable; provided, however, that, if an Indenture
Event of Default has occurred and is continuing with respect to the Debentures,
then the Holders of 25% in aggregate liquidation amount of the outstanding Trust
Preferred Securities, voting separately as a class, may direct the Institutional
Trustee, as holder of the Debentures, to declare the principal of and interest
on the Debentures to be due and payable immediately; and provided further that
where a consent or other action under the Indenture with respect to the
Debentures would require the consent or act of (x) holders of Debentures
represent ing a specified percentage greater than a majority in principal amount
of the outstanding Debentures (a "Super Majority") or (y) each holder of
outstanding Debentures affected thereby, no consent or act shall be given or
taken by the Institutional Trustee without the prior consent of, in the case of
clause (x) above, Holders of outstanding Trust Preferred Securities representing
at least such specified percentage of the aggregate liquidation amount of the
Trust Preferred Securities then outstanding or, in the case of clause (y) above,
each Holder of Trust Preferred Securities affected thereby. The Institutional
Trustee shall notify all holders of the Securities of any notice of default
received from the trustee under the Indenture (the "Debt Trustee") with respect
to the Debentures. Except with respect to directing the time, method and place
of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debt Trustee as set forth above, the Institutional Trustee shall
not take any action in accordance with the directions of the Holders of the
Trust Preferred Securities under this paragraph including, without limitation,
any of the actions described in clauses (i), (ii) or (iii) above) unless each
Trustee has obtained an opinion of nationally recognized tax counsel experienced
in such matters to the effect that after such action, the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes and that each Holder of Trust Preferred Securities will be treated as
owning an undivided beneficial interest in the Debentures. If the Institutional
Trustee fails to enforce its rights under the Debentures, a Holder of Trust
Preferred Securities, to the fullest extent permitted by law, may institute a
legal proceeding directly against the Company to enforce the
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Institutional Trustee's rights under the Debentures without first instituting
any legal proceeding against the Institutional Trustee or any other Person.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal or premium, if any, on the Debentures on the date such
interest or principal or premium, if any, is otherwise payable (or in the case
of redemption, on the redemption date), then a Holder of Trust Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Trust Preferred Securities of such Holder (a "Direct Action") on or after
the respective due date specified in or pursuant to the Debentures or the
Indenture. Notwithstanding any payments made under the Declaration to such
Holder by the Company in connection with such Direct Action, the Company shall
remain obligated to pay the principal of and premium, if any, and interest on
such Debentures, and the Company shall be subrogated to the rights of such
Holder of Trust Preferred Securities under the Declaration to the extent of any
payment made by the Company to such Holder of Trust Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Trust Preferred Securities shall have no right or power to exercise directly any
other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Trust Preferred Securities may be
given at a separate meeting of Holders of Trust Preferred Securities convened
for such purpose, at a meeting of all of the Holders of Trust Preferred
Securities or pursuant to written consent. The Regular Trustees will cause a
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 of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Trust Preferred Securities will be
required for the Trust to redeem and cancel Trust Preferred Securities or to
distribute the Debentures in accordance with the Declaration.
Notwithstanding that Holders of Trust Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the Trust
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Preferred Securities that are owned at such time by the Company or any entity
directly or indirectly controlling or controlled by, or under direct common
control with the Company, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if they were not
outstanding.
A waiver of an Indenture Event of Default with respect to the Debentures
will constitute a waiver of the corresponding Event of Default under the
Declaration.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), (c) and 8 and as otherwise
required by law (including, without limitation, the Delaware Business Trust Act
and the Trust Indenture Act) and the Declaration, the Holders of the Common
Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in accordance with
Article V of the Declaration, to vote to appoint, remove or replace any Trustee
or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Trust Preferred Securities has been cured, waived,
or otherwise eliminated and subject to the requirements of the second to last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the outstanding Common Securities, voting separately as a class, have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institution al Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 513 of the Indenture, or (iii) exercise any right to rescind or
annul a declaration that the principal of and interest on all the Debentures
shall be due and payable; provided, however, that if an Event of Default has
-------- -------
occurred and is continuing, the Holders of 25% of the aggregate liquidation
amount of the Securities then outstanding, voting separately as a class, may
direct the Institutional Trustee as holder of the Debentures to declare the
principal of and interest on the Debentures to be immediately due and payable;
and provided, further, where a consent or action under the Indenture with
-------- -------
respect to the Debentures would require the consent or act of (x) holders of
Debentures representing a specified percentage greater than a majority in
principal amount of the outstanding Debentures (a "Super Majority") or (y) each
holder of Debentures affected thereby, no consent
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or act shall be given or taken by the Institutional Trustee without the prior
consent or act of, in the case of clause (x) above, Holders of Common Securities
represent ing at least such specified percentage of the aggregate liquidation
amount of the Common Securities then outstanding or, in the case of clause (y)
above, each Holder of Common Securities affected thereby. Pursuant to this
Section 7(c), the Institutional Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the Trust Preferred
Securities. Except with respect to directing the time, method and place of
conducting a proceeding for a remedy available to the Institutional Trustee or
the Debt Trustee as set forth above, the Institutional Trustee shall not take
any action in accordance with the directions of the Holders of the Common
Securities under this paragraph, including without limitation, any of the
actions described in clauses (i), (ii) or (iii) above unless each Trustee has
obtained an opinion of nationally recognized tax counsel experienced in such
matters to the effect that after such action, the Trust will not be classified
as other than a grantor trust for United States federal income tax purposes and
that each Holder of Securities will be treated as owning an undivided beneficial
interest in the Debentures. If the Institutional Trustee fails to enforce its
rights under the Declaration, any Holder of Common Securities, to the fullest
extent permitted by law, may institute a legal proceeding directly against the
Company to enforce the Institutional Trustee's rights under the Debentures,
without first instituting a legal proceeding against the Institutional Trustee
or any other Person.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities or pursuant to written consent. The
Regular Trustees will cause a notice of any meeting at which Holders of Common
Securities are entitled to vote, or of any matter upon which action by written
consent of such Holders is to be taken, to be mailed to each Holder of record of
Common Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Declaration.
8. Amendments to Declaration and Indenture.
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(a) In addition to any requirements under Section 12.1 of the Declaration,
if any proposed amendment to the Declaration provides for, or the Regular
Trustees otherwise propose to effect, (i) any action that would adversely affect
the powers, preferences or special rights of the Securities, whether by way of
amendment to the Declaration or otherwise, or (ii) the dissolution, winding-up
or termination of the Trust other than as described in Section 8.1 of the
Declaration, then the Holders of outstanding Securities voting together as a
single class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the outstanding
Securities affected thereby voting together as a single class; provided, that,
if any amendment or proposal referred to in clause (i) above would adversely
affect only the Trust Preferred Securities or only the Common Securities, then
only the affected class will be entitled to vote on such amendment or proposal
and such amendment or proposal shall not be effective except with the approval
of a Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Institutional Trustee as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture or the Debentures, the
Institutional Trustee shall request the written direction of the Holders of the
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Securities voting together as a single
class; provided, however, that where a consent under the Indenture would require
the consent of the holders of greater than a majority in aggregate principal
amount of the Debentures (a "Super Majority"), the Institutional Trustee may
only give such consent at the direction of the Holders of at least the
proportion in liquidation amount of the Securities which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding; provided, further, that the Institutional Trustee shall be under no
obligation to take any such action in accordance with the directions of the
Holders of the Securities under this Section 8(b) unless each Trustee has
obtained an opinion of nationally recognized tax counsel experienced in such
matters to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.
9. Pro Rata.
A reference in these terms of the Securities to any distribution,
redemption or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant
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Holder in relation to the aggregate liquidation amount of all Securities
outstanding unless, in relation to a payment, an Event of Default under the
Declaration has occurred and is continuing, in which case any funds available to
make such payment shall be paid first to each Holder of the Trust Preferred
Securities pro rata according to the aggregate liquidation amount of Trust
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Trust Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Trust Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
10. Ranking.
The Trust Preferred Securities rank pari passu and payment thereon shall be
made Pro Rata with the Common Securities except that, where an Event of Default
occurs and is continuing, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Trust Preferred Securities.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Trust Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Trust Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive or similar rights to
subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
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The Sponsor will provide a copy of the Declaration, the Trust Preferred
Securities Guarantee or the Common Securities Guarantee (as may be appropriate),
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
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EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITY CERTIFICATE
[IF THE TRUST PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
This Trust Preferred Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Trust Preferred Security is exchangeable for Trust Preferred Securities
registered in the name of a Person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Trust Preferred Security (other than a transfer of this Trust Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or to a successor Depositary or its nominee) may be registered except in limited
circumstances.
Unless this Trust Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Trust Preferred Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
The Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
Certificate Number: P-________ Number of Trust Preferred Securities:________
CUSIP NO. 12612V205
Certificate Evidencing Trust Preferred Securities
of
CNF Trust I
$2.50 Term Convertible Securities, Series A
(liquidation amount $50 per Trust Preferred Security)
1
<PAGE>
CNF Trust I, a statutory business trust created 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 undivided
beneficial interests in the assets of the Trust designated the $2.50 Term
Convertible Securities, Series A (liquidation amount $50 per Trust Preferred
Security) (the "Trust Preferred Securities"). The Trust Preferred Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Trust Preferred Securities
represented hereby are issued and shall in all respects be subject to the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of June 11, 1997, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Trust Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Trust Preferred Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Trust Preferred Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal place
of business.
Reference is hereby made to select provisions of the Trust Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Trust Preferred Securities
as evidence of indirect beneficial ownership in the Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Trust Preferred Securities shall not be entitled
to any benefit under the Declaration or be valid or obligatory for any purpose.
2
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
CNF TRUST I
By:______________________
Name:
Title: Regular Trustee
3
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Preferred Security Certificates referred to in the
within-mentioned Declaration.
Dated: __________________
The First National Bank of Chicago,
as Institutional Trustee
By: __________________________
Authorized Signatory
4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Trust Preferred Security will be fixed at a
rate per annum of 5% (the "Coupon Rate") of the stated liquidation amount of $50
per Trust Preferred Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Distributions in
arrears for more than one quarter will (to the extent permitted by applicable
law) bear interest thereon compounded quarterly at the Coupon Rate. The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full calendar month, the actual number of days elapsed in
such 30-day month.
Except as otherwise described below, Distributions on the Trust Preferred
Securities will be cumulative, will accumulate from June 11, 1997, and will be
payable quarterly in arrears on June 1, September 1, December 1 and March 1 of
each year, commencing on September 1, 1997, which payment dates shall correspond
to the interest payment dates on the Debentures, to Holders of record at the
close of business on the regular record dates for such Distributions which shall
be the close of business on the Business Day next preceding the relevant
Distribution payment dates unless otherwise provided in or pursuant to the
Declaration. The Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period"), provided that no Extension Period shall last beyond the
maturity of the Debentures or end on other than a Distribution payment date and,
as a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Company may further extend such Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters or extend
beyond the maturity of the Debentures or end on other than a Distribution
payment date. If Distributions are deferred as aforesaid, the deferred
accumulated Distributions and, to the extent permitted by applicable law,
accrued and unpaid interest thereon shall be payable to Holders as they appear
on the books and records of the Trust at the close of business on the regular
record
5
<PAGE>
date for the Distribution payment date upon which such Extension Period
terminates. Upon the termination of any Extension Period and the payment of all
amounts then due, the Company may commence a new Extension Period, subject to
the above requirements.
The Trust Preferred Securities shall be redeemable as provided in the
Declaration.
The Trust Preferred Securities shall be convertible into shares of CNF
Common Stock, through (i) the exchange of Trust Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into CNF Common Stock, in the manner and according to the terms set forth in the
Declaration.
6
<PAGE>
CONVERSION REQUEST
To: The First National Bank of Chicago, the Conversion Agent for CNF
Trust I
The undersigned owner of these Trust Preferred Securities hereby
irrevocably exercises the option to convert these Trust Preferred Securities, or
the portion below designated, into CNF Common Stock (as defined in the
Declaration referred to below) in accordance with the terms of the Amended and
Restated Declaration of Trust, dated as of June 11, 1997 (as amended from time
to time, the "Declaration"), by Henry A. Schmitt, James R. Allen and Gary S.
Cullen, as Regular Trustees, First Chicago Delaware Inc., as Delaware Trustee,
The First National Bank of Chicago, as Institutional Trustee, CNF Transportation
Inc. as Sponsor, and the holders, from time to time, of undivided beneficial
interests in the Trust (as defined in the Declaration). Pursuant to the
aforementioned exercise of the option to convert these Trust Preferred
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Trust Preferred Securities for
a portion of the Debentures (as that term is defined in the Declaration) held by
the Trust (at the rate of exchange specified in or determined pursuant to the
terms of the Trust Preferred Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debentures on behalf of the undersigned, into
CNF Common Stock (at the then applicable conversion price specified in or
determined pursuant to the terms of the Trust Preferred Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a Person (as defined in the
Declaration) other than the under signed, the undersigned will pay all transfer
taxes payable with respect thereto.
Date: _________________, ______
Number of Trust Preferred Securities to be
converted:________________________________
7
<PAGE>
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of CNF Common Stock are to be
issued, along with the address or addresses and social security or other
identifying number of such Person or Persons
_________________________ _________________________________
_________________________ _________________________________
_________________________ _________________________________
_________________________ _________________________________
_________________________ _________________________________
_________________________ _________________________________
____________________________
Sign your name exactly as it appears on the face
of this Trust Preferred Security certificate (for
conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
_________________________ _________________________________
_________________________ _________________________________
_________________________ _________________________________
Signature Guarantee:* _____________________________________________
- ---------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
8
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust
Preferred Security Certificate to:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
agent to transfer this Trust Preferred Security Certificate on the books of
the Trust. The agent may substitute another to act for him or her.
Date: ______________________________________
9
<PAGE>
Signature: _________________________________
(Sign exactly as your name appears on the face of this Trust Preferred Security
Certificate)
Signature Guarantee*_______________________________________________
- -----------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
10
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
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 AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
REGISTRATION OR AN EFFECTIVE REGISTRATION STATEMENT. THIS CERTIFICATE IS NOT
TRANSFERABLE EXCEPT IN THE LIMITED CIRCUMSTANCES AS DESCRIBED IN THE DECLARATION
(AS DEFINED BELOW):
Certificate Number: C-______ Number of Common Securities: __________
Certificate Evidencing Common Securities
of
CNF Trust I
$2.50 Common Securities
(liquidation amount $50 per Common Security)
CNF Trust I, a statutory business trust created under the laws of the State of
Delaware (the "Trust"), hereby certifies that _______ (the "Holder") is the
registered owner of _________________________________________ (_______) common
securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the $2.50 Common Securities (liquidation amount
$50 per Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of June 11,
1997, as the same may be amended from
1
<PAGE>
time to time (the "Declaration"), including the designation of the terms of the
Common Securities as set forth in Annex I to the Declaration. Capitalized terms
used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Common Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Reference is hereby made to select provisions of the Common Securities set
forth on the reverse hereof, which select provisions shall for all purposes have
the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
Dated: CNF Trust I
By:_______________________
Name:
Title: Regular Trustee
2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at a rate per
annum of 5% (the "Coupon Rate") of the stated liquidation amount of $50 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Institutional Trustee. Distributions in arrears for more than
one quarter will (to the extent permitted by applicable law) bear interest
thereon compounded quarterly at the Coupon Rate. The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the Institutional Trustee
and to the extent the Institutional Trustee has funds available therefor. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months, and for any period shorter than a full
calendar month, the actual number of days elapsed in such 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accumulate from June 11, 1997 and will be payable
quarterly in arrears on June 1, September 1, December 1 and March 1 of each
year, commencing on September 1, 1997, which payment dates shall correspond to
the interest payment dates on the Debentures, to Holders of record at the close
of business on the regular record dates for such Distributions which shall be
the close of business on the Business Day next preceding the relevant
Distribution payment dates unless otherwise provided in or pursuant to the
Declaration. The Company has the right under the Indenture to defer payments of
interest on the Debentures by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
an "Extension Period"), provided that no Extension Period shall last beyond the
maturity of the Debentures or end on other than a Distribution payment date and,
as a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Company may further extend such Extension
Period; provided that such Extension Period together with all such previous and
further extensions thereof may not exceed 20 consecutive quarters or extend
beyond the maturity of the Debentures or end on other than a Distribution
payment date. If Distributions are deferred as aforesaid, the deferred
accumulated Distributions and, to the extent permitted by applicable law,
accrued and unpaid interest thereon shall be payable to Holders as they appear
on the books and records of the Trust at the close of business on the regular
record date for the
3
<PAGE>
Distribution payment date upon which such Extension Period terminates. Upon the
termination of any Extension Period and the payment of the amounts then due, the
Company may commence a new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of CNF Common
Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into CNF Common
Stock, in the manner and according to the terms set forth in the Declaration.
4
<PAGE>
CONVERSION REQUEST
To: The First National Bank of Chicago, the Conversion Agent for CNF
Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into CNF Common Stock (as defined in the Declaration referred to
below) in accordance with the terms of the Amended and Restated Declaration of
Trust dated as of June 11, 1997 (as amended from time to time, the
"Declaration"), by Henry A. Schmitt, James R. Allen and Gary S. Cullen, as
Regular Trustees, First Chicago Delaware Inc., as Delaware Trustee, The First
National Bank of Chicago, as Institutional Trustee, CNF Transportation Inc., as
Sponsor, and the holders, from time to time, of undivided beneficial interests
in the Trust (as defined in the Declaration). Pursuant to the aforementioned
exercise of the option to convert these Common Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
to (i) exchange such Common Securities for a portion of the Debentures (as that
term is defined in the Declaration) held by the Trust (at the rate of exchange
specified in or determined pursuant to the terms of the Common Securities set
forth as Annex I to the Declaration) and (ii) immediately convert such
Debentures on behalf of the undersigned into CNF Common Stock (at the then
applicable conversion price specified in or determined pursuant to the terms of
the Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a Person (as defined in the
Declaration) other than the under signed, the undersigned will pay all transfer
taxes payable with respect thereto.
Date: _______________, ______
Number of Common
Securities to be
converted: _______
5
<PAGE>
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of CNF Common Stock are to be
issued, along with the address or addresses and social security or other
identifying number of such Person or Persons
________________________ __________________________________
________________________ __________________________________
________________________ __________________________________
________________________ __________________________________
___________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including Zip Code, and Social
Security or Other Identifying Number
________________________ __________________________________
________________________ __________________________________
________________________ __________________________________
Signature Guarantee: * ____________________________________________
- ----------------
* Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
6
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert assignee's social security or tax identification number)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________
_________________________________________________________________
agent to transfer this Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _______________________________
Signature: __________________________
7
<PAGE>
(Sign exactly as your name appears on the face of this Common Security
Certificate)
Signature Guarantee: * ________________________________________________
_______________
* Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
8
<PAGE>
Exhibit 4(m)
----------------------------------------------------------------------
CNF Trust I
------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
------------------
Dated as of June 11, 1997
----------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PREFERRED SECURITIES GUARANTEE AGREEMENT......................... 1
ARTICLE I DEFINITIONS AND INTERPRETATION......................... 2
Section 1.1 Definitions and Interpretation................. 2
ARTICLE II TRUST INDENTURE ACT................................... 5
Section 2.1 Trust Indenture Act; Application............... 5
Section 2.2 Lists of Holders of Securities................. 5
Section 2.3 Reports by the Preferred Guarantee Trustee..... 6
Section 2.4 Periodic Reports to Preferred Guarantee
Trustee........................................ 6
Section 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
Section 2.6 Events of Default; Waiver...................... 7
Section 2.7 Event of Default; Notice....................... 7
Section 2.8 Conflicting Interests.......................... 7
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE......................................... 8
Section 3.1 Powers and Duties of the Preferred Guarantee
Trustee........................................ 8
Section 3.2 Certain Rights of Preferred Guarantee Trustee.. 10
Section 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee................. 13
ARTICLE IV PREFERRED GUARANTEE TRUSTEE.................... 13
Section 4.1 Preferred Guarantee Trustee; Eligibility....... 13
Section 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee.................... 14
ARTICLE V GUARANTEE.............................................. 15
Section 5.1 Guarantee...................................... 15
Section 5.2 Waiver of Notice and Demand.................... 15
Section 5.3 Obligations Not Affected....................... 15
Section 5.4 Rights of Holders.............................. 17
Section 5.5 Guarantee of Payment........................... 17
Section 5.6 Subrogation.................................... 17
Section 5.7 Independent Obligations........................ 18
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VI LIMITATION OF TRANSACTIONS;
SUBORDINATION.................................. 18
Section 6.1 Limitation of Transactions..................... 18
Section 6.2 Ranking........................................ 19
ARTICLE VII TERMINATION.................................... 19
Section 7.1 Termination.................................... 19
ARTICLE VIII INDEMNIFICATION................................ 20
Section 8.1 Exculpation.................................... 20
Section 8.2 Indemnification................................ 20
ARTICLE IX MISCELLANEOUS.................................. 21
Section 9.1 Successors and Assigns......................... 21
Section 9.2 Amendments..................................... 21
Section 9.3 Notices........................................ 21
Section 9.4 Benefit........................................ 22
Section 9.5 Governing Law.................................. 22
</TABLE>
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of June 11, 1997, is executed and delivered by
CNF Transportation Inc., a Delaware corporation (the "Guarantor"), and The First
National Bank of Chicago, as trustee (the "Preferred Guarantee Trustee"), for
the benefit of the Holders (as defined herein) from time to time of the TECONS
(as defined herein) of CNF Trust I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of June 11, 1997, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing preferred securities, having an aggregate liquidation amount of
$110,000,000 ($125,000,000 if the Underwriters' over-allotment option is
exercised in full) designated the $2.50 Term Convertible Securities, Series A
(the "TECONS").
WHEREAS, as incentive for the Holders to purchase the TECONS, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth in this Preferred Securities Guarantee, to pay to the Holders of the
TECONS the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined in the Declaration
referred to below), except that if an Event of Default (as defined in the
Indenture (as defined herein)) with respect to the Debentures, has occurred and
is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to the
rights of Holders of TECONS to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
TECONS, which purchase the Guarantor hereby agrees shall benefit
<PAGE>
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee have the same meaning when used
in this Preferred Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person; provided, however, that the Authorized Officer
2
<PAGE>
signing an Officers' Certificate given pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"Base Indenture" means the Indenture dated as of June 11, 1997 between
the Company and The First National Bank of Chicago, as trustee.
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of June 11, 1997 of the Sponsor in respect of the Common
Securities.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at One First National Plaza,
Chicago, Illinois 60670.
"Covered Person" means any Holder or beneficial owner of TECONS.
"Declaration Event of Default" means an Event of Default as defined in
the Declaration.
"Guarantee Event of Default" means (i) the failure of the Guarantor to
perform any of its payment or other obligations under this Preferred Securities
Guarantee or (ii) the failure of the Guarantor to deliver CNF Common Stock upon
an appropriate election by any Holder of TECONS to convert such TECONS into
shares of CNF Common Stock.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the TECONS, to the extent not paid or made
by the Issuer: (i) any accumulated and unpaid Distributions which are required
to be paid on such TECONS to the extent the Issuer shall have funds available
therefor, (ii) the redemption price (the "Redemption Price"), and all
accumulated and unpaid Distributions to but excluding the date of redemption to
the extent the Issuer has funds available therefor, with respect to any TECONS
called for redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in connection
with the conversion of all of the TECONS into CNF Common Stock, the redemption
of all outstanding TECONS or the distribution of Debentures to the Holders in
3
<PAGE>
exchange for TECONS as provided in the Declaration) or in connection with any
transaction permitted pursuant to Section 3.15 of the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accumulated and unpaid
Distributions on the TECONS to but excluding the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution"). If an Event of
Default (as defined in the Indenture) with respect to the Debentures has
occurred and is continuing, the rights of holders of the Common Securities to
receive payments under the Common Securities Guarantee Agreement are
subordinated to the rights of Holders of TECONS to receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any TECONS; provided, however, that, in determining whether
the holders of the requisite percentage of TECONS have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Subordinated Indenture dated as of June 11,
1997, between the Guarantor (the "Debenture Issuer") and The First National Bank
of Chicago, as trustee, as supplemented by the First Supplemental Indenture
dated as of June 11, 1997, between the Debenture Issuer and The First National
Bank of Chicago, as trustee, as the same may be further amended or supplemented
from time to time in accordance with its terms.
"List of Holders" shall have the meaning assigned thereto in Section
2.2(a) hereof.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the TECONS or, except as provided by the Trust
Indenture Act, a vote by Holder(s) of TECONS, voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to but excluding the date upon which the voting percentages are
determined) of all outstanding TECONS.
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"Preferred Guarantee Trustee" means The First National Bank of
Chicago, until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Securities" means the Common Securities and the TECONS.
ARTICLE II TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
Section 2.2 Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the TECONS
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("List of Holders") as of such date, (i) within 14 days after each record date
for payment of Distributions, as of such record date, and (ii) at any other time
within 30 days of receipt by the Guarantor of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Preferred Guarantee Trustee, provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor or in the event that the Preferred Guarantee Trustee is
the Registrar under the Declaration. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List of
Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by the Preferred Guarantee Trustee.
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the TECONS 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 Preferred Guarantee
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
Section 2.4 Periodic Reports to Preferred Guarantee Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
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Section 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
The Holders of a Majority in liquidation amount of TECONS may, by
vote, on behalf of the Holders of all of the TECONS, waive any past Guarantee
Event of Default and its consequences. Upon such waiver, any such Guarantee
Event of Default shall cease to exist, and any Guarantee Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Guarantee Event of Default or impair any right
consequent thereon.
Section 2.7 Guarantee Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Guarantee Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders of the TECONS, notices of all such Events
of Default, unless such defaults have been cured before the giving of such
notice, provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the TECONS.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Guarantee Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
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Section 2.8 Conflicting Interests.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the TECONS, and
the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of TECONS exercising his or her rights
pursuant to Section 5.4(b) or to a Successor Preferred Guarantee Trustee on
acceptance by such Successor Preferred Guarantee Trustee of its appointment to
act as Successor Preferred Guarantee Trustee. The right, title and interest of
the Preferred Guarantee Trustee shall automatically vest in any Successor
Preferred Guarantee Trustee, 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 Preferred Guarantee Trustee.
(b) If an Guarantee Event of Default actually known to a
Responsible Officer of the Preferred Guarantee Trustee has occurred and is
continuing, the Preferred Guarantee Trustee shall (and the Guarantor
acknowledges that the Preferred Guarantee Trustee shall) enforce this Preferred
Securities Guarantee for the benefit of the Holders of the TECONS.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Guarantee 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 Preferred Securities Guarantee, and no implied
covenants shall be read into this Preferred Securities Guarantee against the
Preferred Guarantee Trustee. In case an Guarantee Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) and is actually
known to a Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Preferred Securities Guarantee, and use the same degree of care and skill
in its
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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 Preferred Securities Guarantee shall
be construed to relieve the Preferred 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 Guarantee Event of Default
and after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express provisions of this
Preferred Securities Guarantee, and the Preferred Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Preferred Securities
Guarantee, and no implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred 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 Preferred Guarantee Trustee and
conforming to the requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
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(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a Majority
in liquidation amount of the TECONS relating to the time, method and place
of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee, or exercising any trust or power conferred upon the
Preferred Guarantee Trustee under this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred 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
Preferred 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 Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
Section 3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering
or omitting any action hereunder, the Preferred
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Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Preferred Securities Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Preferred Guarantee Trustee
such security and indemnity, reasonably satisfactory to the Preferred
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Preferred Guarantee Trustee.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such
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further inquiry or investigation into such facts or matters as it may see
fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Preferred Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the TECONS, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Preferred Guarantee Trustee
(i) may request instructions from the Holders of a Majority in liquidation
amount of the TECONS, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and (iii)
shall be protected in conclusively relying on or acting in accordance with
such instructions.
(xi) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed with due care by it hereunder.
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(xii) The Preferred Securities Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred 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 Preferred 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 Preferred Guarantee Trustee shall be construed to be
a duty.
Section 3.3 Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or other Person permitted by
the Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate
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trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
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 Person 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 Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and 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 Preferred Guarantee
Trustee.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
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appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued and owing to the Preferred Guarantee Trustee to the date of such
termination, removal or resignation.
ARTICLE V GUARANTEE
Section 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (except to the extent paid, and without
duplication of amounts paid, by the Issuer), as and when due, regardless of any
defense, right of set-off or counterclaim that the Issuer may have or assert.
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 Issuer to pay such amounts to the Holders.
Section 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
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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 Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the TECONS to be performed or
observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the TECONS or the extension of time
for the performance of any other obligation under, arising out of, or in
connection with, the TECONS (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the TECONS, or any
action on the part of the Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the TECONS;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
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(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 to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
Section 5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the
TECONS have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or to direct the exercise of any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of TECONS may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder of TECONS may directly institute a proceeding against the
Guarantor for enforcement of this Preferred Securities Guarantee for such
payment.
Section 5.5 Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
Section 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of the
Holders of TECONS against the Issuer in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
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however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
Section 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the TECONS, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions.
So long as any TECONS remain outstanding, if there shall have occurred
and be continuing any Guarantee Event of Default or any Declaration Event of
Default, then (a) the Guarantor shall not declare or pay any dividend on, or
make any distributions with respect to, or redeem, purchase or acquire, or make
a liquidation payment with respect to, any of its capital stock (other than (A)
(i) purchases or acquisitions of shares of the Guarantor's capital stock (or
capital stock equivalents) in connection with the satisfaction by the Guarantor
of its obligations under any officers, directors or employee benefit plans (or
any options or other instruments issued thereunder) or the satisfaction by the
Guarantor of its obligations pursuant to any contract or security requiring the
Guarantor to purchase shares of the Guarantor's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Guarantor's capital stock (or
capital stock equivalents) from officers, directors or employees of the
Guarantor or its subsidiaries pursuant to employment agreements or upon
termination of employment or retirement, (iii) as a result of a
reclassification, combination or subdivision of the Guarantor's capital stock or
the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the
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Guarantor's capital stock, (iv) dividends or distributions of shares of common
stock on common stock, (v) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions of
such capital stock or any security being converted or exchanged into such
capital stock, (vi) dividends or distributions on, or redemptions, purchases or
acquisitions of, or liquidation payments with respect to, the Guarantor's Series
B Cumulative Convertible Preferred Stock, (vii) purchases or other acquisitions
of common stock in connection with a dividend reinvestment or other similar
plan, or (viii) any dividend or distribution of capital stock (or capital stock
equivalents) in connection with the implementation of a stockholders rights
plan, or the issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, or (B) guarantee
payments made with respect to any of the foregoing), (b) the Guarantor shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities issued by the Guarantor which rank pari
passu with or junior to the Debentures and (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than pursuant to this
Preferred Securities Guarantee or the Common Securities Guarantee Agreement).
Section 6.2 Ranking.
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor except any liabilities that
may be pari passu expressly by their terms, (ii) pari passu in right of payment
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor, if any, and 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, and (iii) senior to the Guarantor's common stock.
ARTICLE VII TERMINATION
Section 7.1 Termination.
This Preferred Securities Guarantee shall terminate (i) upon full
payment of the redemption price of all TECONS, together with all accumulated and
unpaid Distributions thereon to but excluding the date of redemption, (ii) upon
the conversion of the TECONS into CNF Common Stock or other securities or
property as provided in the Declaration or upon the distribution of the
Debentures to the Holders of all of the TECONS or (iii) upon full payment of the
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amounts payable in accordance with the Declaration upon liquidation of the
Issuer. Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of TECONS must restore payment of any sums paid under the TECONS
or under this Preferred Securities Guarantee.
ARTICLE VIII INDEMNIFICATION
Section 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage, liability, expense or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of TECONS might properly be
paid.
Section 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with
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the exercise or performance of any of its powers or duties hereunder. The
provisions of this Section 8.2 shall survive the termination of this Preferred
Securities Guarantee or the resignation or removal of the Preferred Guaranteed
Trustee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 501(6) or
Section 501(7) of the Base Indenture, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for services are
intended to constitute expenses of administration under any applicable federal
or state bankruptcy, insolvency or other similar law.
ARTICLE IX MISCELLANEOUS
Section 9.1 Successors and Assigns.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the TECONS then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity permitted by Section
801 of the Base Indenture or any sale, transfer or lease of the Guarantor's
assets to another entity permitted by Section 801 of the Base Indenture, the
Guarantor may not assign its rights or delegate its obligations under this
Preferred Securities Guarantee without the prior approval of the holders of at
least a Majority in liquidation amount of the TECONS then outstanding. Upon any
consolidation by the Guarantor with or merger of the Guarantor into any other
Person or any conveyance, transfer or lease of the properties and assets of the
Guarantor substantially as an entirety to any Person in accordance with Section
801 of the Base Indenture, the successor Person formed by such consolidation or
into which the Guarantor is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Guarantor under this Preferred Securities Guarantee with
the same effect as if such successor Person had been named as the Guarantor
herein; and thereafter, except in the case of a lease, the predecessor Person
shall be released from all obligations and covenants under this Preferred
Securities Guarantee.
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Section 9.2 Amendments.
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no vote or consent of Holders will
be required), this Preferred Securities Guarantee may be amended only with the
prior approval of the Holders of at least a Majority in liquidation amount of
all the outstanding TECONS. The provisions of Section 12.2 of the Declaration
with respect to meetings of Holders of the Securities apply to the giving of
such approval. For purposes of this Preferred Securities Guarantee, any change
which only eliminates or limits any of the dividends, distributions,
redemptions, purchases, acquisitions or liquidation payments which the Guarantor
is permitted to make pursuant to subclauses (A) or (B) of clause (a) of Section
6.1 shall be deemed not to materially adversely affect the rights of Holders.
Section 9.3 Notices.
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders of
the TECONS):
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attn: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the TECONS):
CNF Transportation Inc.
3240 Hillview Avenue
Palo Alto, California 94304
Attn: Chief Financial Officer
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(c) If given to any Holder of TECONS, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
Section 9.4 Benefit.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the TECONS and, subject to Section 3.1(a), is not separately
transferable from the TECONS.
Section 9.5 Governing Law.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
CNF TRANSPORTATION, INC.,
as Guarantor
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Guarantee Trustee
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
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Exhibit 4(N)
- --------------------------------------------------------------------------------
CNF TRANSPORTATION INC.
To
THE FIRST NATIONAL BANK OF CHICAGO
Trustee
---------------
FIRST SUPPLEMENTAL INDENTURE
---------------
Dated as of June 11, 1997
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
ARTICLE I DEFINITIONS................................................ 2
Section 1.1 Definition of Terms........................... 2
ARTICLE II GENERAL TERMS AND CONDITIONS OF
THE CONVERTIBLE DEBENTURES................................. 6
Section 2.1 Designation and Principal Amount.............. 6
Section 2.2 Maturity...................................... 7
Section 2.3 Form and Payment.............................. 7
Section 2.4 Global Debenture.............................. 8
Section 2.5 Interest...................................... 9
Section 2.6 Enforcement Rights............................ 10
Section 2.7 Other Terms of Convertible Debentures......... 11
Section 2.8 Limitation on Amendments...................... 12
Section 2.9 Events of Default............................. 12
ARTICLE III REDEMPTION OF THE CONVERTIBLE
DEBENTURES................................................. 14
Section 3.1 Special Event Redemption...................... 14
Section 3.2 Optional Redemption by Company................ 15
Section 3.3 No Sinking Fund............................... 16
ARTICLE IV EXTENSION OF INTEREST PAYMENT
PERIOD..................................................... 16
Section 4.1 Extension of Interest Payment
Period................................................... 16
Section 4.2 Notice of Extension........................... 17
Section 4.3 Limitation of Transactions.................... 18
ARTICLE V EXPENSES................................................... 19
Section 5.1 Payment of Expenses........................... 19
Section 5.2 Payment Upon Resignation or
Removal.................................................. 20
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE VI COVENANT TO LIST ON EXCHANGE............................... 20
Section 6.1 Listing on an Exchange......................... 20
ARTICLE VII CONVERSION OF CONVERTIBLE DE-
BENTURES................................................... 21
Section 7.1 Conversion Rights............................. 21
Section 7.2 Conversion Procedures......................... 21
Section 7.3 Conversion Price Adjustments.................. 24
Section 7.4 Adjustment of Conversion Price
Fundamental Change....................................... 34
Section 7.5 Notice of Certain Events...................... 39
Section 7.6 Company to Provide Stock...................... 40
Section 7.7 Employee Benefit Plans........................ 41
Section 7.8 Certain Additional Rights..................... 41
ARTICLE VIII FORM OF CONVERTIBLE DEBENTURE.............................. 42
Section 8.1 Form of Convertible Debenture................. 42
ARTICLE IX ORIGINAL ISSUE OF CONVERTIBLE
DEBENTURES................................................. 42
Section 9.1 Original Issue of Convertible
Debentures............................................... 42
ARTICLE X MISCELLANEOUS.............................................. 42
Section 10.1 Ratification of Indenture;
First Supplemental Indenture Controls......... 42
Section 10.2 Trustee Not Responsible for
Recitals................................................. 43
Section 10.3 Governing Law................................. 43
Section 10.4 Separability.................................. 43
Section 10.5 Counterparts.................................. 43
EXHIBIT A FORM OF CONVERTIBLE DEBENTURE
</TABLE>
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FIRST SUPPLEMENTAL INDENTURE, dated as of June 11, 1997 (the "First
Supplemental Indenture"), between CNF Transportation Inc., a Delaware
corporation (the "Company"), and The First National Bank of Chicago, as trustee
(the "Trustee") under the Indenture dated as of June 11, 1997 between the
Company and the Trustee (the "Base Indenture").
WHEREAS, the Company executed and delivered the Base Indenture to the
Trustee to provide for the future issuance of the Company's unsecured
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Base Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a new series of its Securities to be
known as its 5% Convertible Subordinated Debentures due June 1, 2012 (the
"Convertible Debentures"), the form and terms thereof to be as provided in the
Base Indenture and this First Supplemental Indenture;
WHEREAS, CNF Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public $110,000,000 aggregate liquidation amount
($125,000,000 if the Underwriters' over-allotment option is exercised in full)
of its $2.50 Term Convertible Securities, Series A (the "Trust Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $3,402,100
aggregate liquidation amount ($3,866,000 if the Underwriters' over-allotment
option is exercised in full) of its Common Securities, in $113,402,100 aggregate
principal amount of the Convertible Debentures ($128,866,000 if the
Underwriters' over-allotment option is exercised in full); and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized by the Company in all respects;
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NOW THEREFORE, in consideration of the purchase and acceptance of the
Convertible Debentures by the Holders thereof, and for the purpose of setting
forth, as provided in the Base Indenture, the form and terms of the Convertible
Debentures, the Company covenants and agrees with the Trustee as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definition of Terms.
For all purposes of the First Supplemental Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Base Indenture (as defined
below) and not defined in this First Supplemental Indenture have the same
meanings when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meaning assigned to
them in this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, whether directly or by reference therein, have the meanings
assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" or "GAAP" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of such computation;
(e) a reference to a Section or Article is to a Section or Article of
this First Supplemental Indenture unless otherwise expressly stated;
(f) the words "herein," "hereof," "hereto" and "hereunder" and other
words of similar import refer to this First Supplemental Indenture as a whole
and not to any particular Article, Section or other subdivision;
2
<PAGE>
(g) the word "or" is used inclusively (for example, the phrase "A or
B" means "A or B or both", not "either A or B but not both");
(h) the table of contents and headings are for convenience of
reference only and do not affect interpretation; and
(i) the following terms, as used in this First Supplemental
Indenture, have the meanings given to them in the Declaration:
(i) Business Day;
(ii) Clearing Agency;
(iii) Common Securities Guarantee;
(iv) Delaware Trustee;
(v) Dissolution Tax Opinion:
(vi) Distribution:
(vii) DTC;
(viii) Institutional Trustee;
(ix) Investment Company Event;
(x) No Recognition Opinion;
(xi) Redemption Tax Opinion;
(xii) Regular Trustees;
(xiii) Special Event;
(xiv) Tax Event;
(xv) Trust Preferred Securities Guarantee;
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(xvi) Trust Preferred Security Certificate; and
(xvii) Underwriting Agreement.
"Additional Interest" shall have the meaning set forth in Section
2.5.(c)
"Base Indenture" means the Base Indenture referred to in the first
paragraph of this instrument, as the same may be amended or supplemented from
time to time in accordance with its terms, but excluding this First Supplemental
Indenture.
"Closing Price" has the meaning specified in Section 7.4.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of the Base Indenture, and thereafter
"Company" shall mean such successor Person, and any other obligor upon the
Convertible Debentures.
"Compounded Interest" shall have the meaning specified in
Section 4.l.
"Conversion Agent" shall mean the Conversion Agent as defined in the
Declaration or, if the Convertible Debentures are distributed to holders of
Trust Securities pursuant to the Declaration, shall mean the Trustee for the
Convertible Debentures.
"Conversion Date" has the meaning specified in Section 7.2(a).
"Convertible Debentures" has the meaning specified in the recitals to
this instrument.
"Debentures" has the same meaning as the term "Convertible
Debentures."
"Declaration" means the Amended and Restated Declaration of Trust of
CNF Trust l, a Delaware statutory business trust, dated as of June 11, 1997, as
the same may be amended or supplemented from time to time in accordance with its
terms.
4
<PAGE>
"Deferred Interest" has the meaning specified in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Event of Default", when used with respect to the Convertible
Debentures, means an "Event of Default" as defined in Section 501 of the Base
Indenture after giving effect to the amendments and supplements to such
definition effected by Section 2.9 of this First Supplemental Indenture. The
term "Event of Default," as used in the Base Indenture with respect to the
Convertible Debentures, shall have the meaning set forth in this First
Supplemental Indenture.
"Extended Interest Payment Period" has the meaning specified in
Section 4.1.
"Final Maturity Date" has the meaning specified in Section 2.2.
"Global Debenture" has the meaning specified in Section 2.4.
"Indenture" means the Base Indenture, as amended and supplemented by
this First Supplemental Indenture.
"Non Book-Entry Trust Preferred Securities" has the meaning set forth
in Section 2.4.
"Notice of Conversion" has the meaning specified in Section 7.2(a).
"Optional Redemption Price" has the meaning specified in
Section 3.2.
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<PAGE>
"Trading Day" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
"Trust" means CNF Trust I, a Delaware statutory business trust, until
a successor shall have become such pursuant to the applicable provisions of the
Declaration, and thereafter "Trust" shall mean such successor Trust.
"Trust Securities" mean the Common Securities and the Trust Preferred
Securities.
"Trust Preferred Securities" has the meaning specified in the recitals
to this First Supplemental Indenture.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount.
There is hereby authorized a series of Securities designated the "5%
Convertible Subordinated Debentures due June 1, 2012," limited (except as
otherwise provided in paragraph (2) of Section 301 of the Base Indenture) in
aggregate principal amount to $113,402,100,plus such additional principal
amounts, not to exceed $15,463,900 in the aggregate, of Convertible Debentures
which may be issued from time to time in connection with the exercise of the
over-allotment option set forth in the Underwriting Agreement. The Convertible
Debentures shall be issued from time to time upon delivery to the Trustee of a
Company Order specifying the principal amount thereof to be so issued pursuant
to Section 303 of the Indenture. At the option of the Company, any Debentures
issued on an Option Closing Date (as defined in the Underwriting Agreement)
which occurs after the Closing Date (as defined in the Underwriting Agreement)
may be evidenced by a separate certificate or certificates ("Option
Certificates") and, anything in the Indenture to the contrary notwithstanding,
so long as such Option Certificates are held by the Institutional Trustee, such
Option Certificates and any certificates evidencing any Debentures issued in
exchange or transfer therefor shall bear a legend or other identification
indicating that they were issued on such Option Closing Date.
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<PAGE>
Section 2.2 Maturity.
The Final Maturity Date is June 1, 2012.
Section 2.3 Form and Payment.
Except as provided in Section 2.4, the Convertible Debentures shall be
issued in fully registered certificated form without coupons in denominations of
$50 in principal amount and integral multiples thereof. The Office or Agency of
the Company in the Borough of Manhattan The City of New York where Convertible
Debentures may be presented or surrendered for payment, surrendered for
registration of transfer or exchange and surrendered for conversion, and where
notices and demands to or upon the Company in respect of the Convertible
Debentures and the Indenture may be served, shall initially be the Corporate
Trust Office of the Trustee; provided, however, at the option of the Company,
interest on Convertible Debentures may be paid by mailing a check to the address
of the Person entitled thereto as such address shall appear in the Security
Register or by transfer to an account maintained by the payee with a bank
located in the United States appropriately designated by the Person entitled
thereto prior to the record date for the corresponding payment date.
Notwithstanding the foregoing, so long as the Holder of any Convertible
Debentures is the Institutional Trustee, the payment of the principal of and
premium, if any, and interest (including, to the extent permitted by law,
Compounded Interest and Additional Interest, if any) on, the Convertible
Debentures held by the Institutional Trustee will be made at such place and to
such account in the United States of America as may be designated by the
Institutional Trustee.
The certificates evidencing the Convertible Debentures shall be in
substantially the form set forth in Exhibit A hereto, with such changes therein
as may be approved by any officer of the Company executing (by manual or
facsimile signature) such certificates, such approval to be conclusively
evidenced by the execution thereof.
The Convertible Debentures shall initially be issuable in definitive
certificated form but, as described in Section 2.4 below, may be exchanged for
Global Debentures. If Global Debentures are issued, the initial Depository
shall be DTC or such successor Clearing Agency as may be selected by any officer
of the Company. Beneficial owners of interests in any Global Debenture may
exchange such interests for Convertible Debentures in definitive certificated
form only as specified in Section 305 of the Base Indenture.
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<PAGE>
Section 2.4 Global Debenture.
(a) In connection with a Dissolution Event,
(i) the Convertible Debentures in certificated form
may be presented to the Trustee by the Institutional Trustee in exchange
for a global Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Convertible Debentures (a
"Global Debenture"), to be registered in the name of the Depository, or its
nominee, and delivered by the Trustee to the Depository (or its custodian)
for crediting to the accounts of its participants pursuant to the
instructions of the Regular Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate principal
amount and deliver the same to the Trustee for authentication and delivery
in accordance with the Indenture. Payments on the Convertible Debentures
issued as a Global Debenture will be made to the Depository or its nominee;
and
(ii) if any Trust Preferred Securities are held in
non book-entry certificated form, any Trust Preferred Security Certificate
which represents Trust Preferred Securities other than Trust Preferred
Securities held by the Clearing Agency or its nominee ("Non Book-Entry
Trust Preferred Securities") will be deemed to represent beneficial
interests in the Global Debenture having an aggregate principal amount
equal to the aggregate liquidation amount of, an interest rate identical to
the Distribution rate of, and accrued and unpaid interest equal to
accumulated and unpaid Distributions on, the Non Book-Entry Trust
Preferred Securities until such Trust Preferred Security Certificates are
presented to the Security Registrar for transfer or reissuance at which
time such Trust Preferred Security Certificates will be cancelled and a
Debenture, registered in the name of the holder of the Trust Preferred
Security Certificate or the transferee of the holder of such Trust
Preferred Security Certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the Trust
Preferred Security Certificate cancelled, will be executed by the Company
and delivered to the Trustee for authentication and delivery in accordance
with the Indenture. On issue of such Convertible Debentures, Convertible
Debentures with
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<PAGE>
an equivalent aggregate principal amount that were presented by the
Institutional Trustee to the Trustee will be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depository or to the Depository by its nominee,
or to a successor Depository selected or approved by the Company or to a nominee
of such successor Depository.
Section 2.5 Interest.
(a) Each Convertible Debenture will bear interest on the unpaid
principal amount thereof at the rate of 5% per annum (the "Coupon Rate") from
June 11, 1997, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, payable quarterly (subject to deferral as
set forth in Article IV hereof) in arrears on June 1, September 1, December 1
and March 1 (each, an "Interest Payment Date") of each year, commencing
September 1, 1997, until the principal thereof becomes due and payable, and will
bear interest on any overdue principal thereof and, to the extent permitted by
applicable law, on any overdue premium, if any, and (without duplication) on any
overdue installment of interest thereon at the Coupon Rate compounded quarterly.
The interest so payable on any Interest Payment Date shall be paid to the Person
in whose name such Convertible Debenture or any Predecessor Security is
registered, subject to certain exceptions, at the close of business on the
Regular Record Date next preceding such Interest Payment Date, which, in respect
of (i) Convertible Debentures of which the Institutional Trustee is the Holder
and the related Trust Preferred Securities are in book-entry only form or (ii) a
Global Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing sentence,
if (i) the Convertible Debentures are held by the Institutional Trustee and the
Trust Preferred Securities are no longer in book-entry only form or (ii) any
Convertible Debentures are not represented by a Global Debenture, the Company
may select the Regular Record Dates for such interest installment which shall be
any date at least one Business Day before an Interest Payment Date (provided
that such Regular Record Dates conform to the rules of any securities exchange
on which the Trust Preferred Securities or the Debentures, as the case may be,
are listed).
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, the actual number of days elapsed in such 30-day
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month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, 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 such date.
(c) If at any time while the Institutional Trustee is the sole holder
of any Convertible Debentures, the Trust shall be required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any such case, the Company will pay as additional interest ("Additional
Interest") on the Convertible Debentures held by the Institutional Trustee, to
the extent permitted by applicable law, such additional amounts as shall be
required so that the net amounts received and retained by the Trust and the
Institutional Trustee after paying such taxes, duties, assessments or other
governmental charges will not be less than the amounts the Trust would have
received had no such taxes, duties, assessments or other governmental charges
been imposed.
Section 2.6 Enforcement Rights.
Subject to the requirements set forth in Section 6(b) of Annex I to
the Declaration as of the date hereof, the holders of Trust Preferred Securities
shall have the voting rights set forth in Section 6(b) of such Annex I, and,
subject to the requirements set forth in Section 7(c) of such Annex I, the
holders of Common Securities shall have the voting rights set forth in Section
7(c) of such Annex I, which provisions are incorporated by reference in and made
a part of this First Supplemental Indenture as if set forth in full herein. If
the Institutional Trustee fails to enforce its rights under the Convertible
Debentures, a holder of Trust Preferred Securities, to the extent permitted by
law, may institute a legal proceeding directly against the Company to enforce
the Institutional Trustee's rights under the Convertible Debentures without
first instituting any legal proceeding against the Institutional Trustee or any
other Person. Notwithstanding the foregoing, if a Declaration Event of Default
or Event of Default with respect to the Convertible Debentures has occurred and
is continuing and such event is attributable to the failure of the Company to
pay principal of, or premium, if any, or interest on the Convertible Debentures
on the date such principal, premium or interest is otherwise payable (or in the
case of redemption, on the Redemption Date), then the registered holder of the
Trust Preferred Securities may (and the
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Company hereby acknowledges that a registered holder of Trust Preferred
Securities may) directly institute a proceeding for enforcement of payment to
such holder of the principal of, or premium, if any, or interest on the
Convertible Debentures having a principal amount equal to the aggregate
liquidation amount of the Trust Preferred Securities of such holder (a "Direct
Action") on or after the respective due date specified in or pursuant to the
Convertible Debentures or the Indenture. Notwithstanding any payments made to
such holder of Trust Preferred Securities by the Company in connection with a
Direct Action, the Company shall remain obligated to pay the principal of, and
premium, if any, and interest on such Convertible Debentures, and the Company
shall be subrogated to the rights of such holder of Trust Preferred Securities
under the Declaration to the extent of any payment made by the Company to such
holder of Trust Preferred Securities in such Direct Action. Except as provided
in this Section 2.6, the holders of Trust Preferred Securities will not be able
to exercise any other remedy available to the holders of the Convertible
Debentures.
Section 2.7 Other Terms of Convertible Debentures.
(a) No Additional Amounts shall be payable on or with respect to the
Convertible Debentures.
(b) The Borough of Manhattan, The City of New York, shall be a Place
of Payment for the Convertible Debentures, and the Corporate Trust Office of the
Trustee is hereby designated as the initial Office or Agency in the Borough of
Manhattan, The City of New York with respect to the Convertible Debentures, and
the Trustee shall be the initial Security Registrar, Paying Agent and Conversion
Agent with respect to the Convertible Debentures.
(c) The Company shall not be obligated to redeem or purchase any of
the Convertible Debentures pursuant to any sinking fund or analogous provision
(other than pursuant to an optional redemption exercised by the Company) or at
the option of any Holder thereof.
(d) The Convertible Debentures shall not be subject to defeasance or
covenant defeasance under Section 402(2) or Section 402(3), respectively, of the
Base Indenture.
(e) For purposes of Section 901(6) of the Base Indenture, but solely
insofar as it relates to the Convertible Debentures, any supplemental indenture
which only eliminates or limits any of the dividends, distributions
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<PAGE>
redemptions, purchases, acquisitions or liquidation payments which the Company
is permitted to make pursuant to subclauses (A) or (B) of clause (a) of section
4.3 of this First Supplemental Indenture shall be deemed not to adversely affect
the interests of the Holders of the Securities of any series then Outstanding or
any Coupons appertaining thereto in any material respect, and any such
supplemental indenture may be entered into without the consent of any Holders of
any Securities or Coupons.
Section 2.8 Limitation on Amendments.
If the Trust or the Institutional Trustee holds the Convertible
Debentures, no supplemental indenture under Section 902 of the Base Indenture
which adds any provisions to or changes in any manner or eliminates any of the
provisions of the Indenture (including this First Supplemental Indenture)
relating to the Convertible Debentures or modifies in any manner the rights of
Holders of Convertible Debentures under the Indenture shall be effective as to
the Convertible Debentures until the registered holders of at least a majority
in liquidation amount of the Trust Securities then outstanding shall have
consented to such supplemental indenture in the manner provided in the
Declaration; provided that if the consent of the Holder of each Outstanding
Convertible Debentures is required, such supplemental indenture shall not be
effective until each Holder of outstanding Trust Securities shall have consented
to such supplemental indenture.
Section 2.9 Events of Default.
(a) The Events of Default specified in clauses (3) and (5) of Section
501 of the Base Indenture shall not be applicable to the Convertible Debentures
and, solely for purposes of the Convertible Debentures, shall be deemed to have
been deleted from the Indenture.
(b) The Events of Default specified in clauses (1) (as amended and
restated pursuant to paragraph (c) below), (2), (4), (6) and (7) of Section 501
of the Base Indenture shall constitute Events of Default with respect to the
Convertible Debentures.
(c) Solely for purposes of the Convertible Debentures, clause (l) of
Section 501 of the Base Indenture shall be deemed to have been amended and
restated to read in full as follows:
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"(l) default in the payment of any interest on the Convertible
Debentures (including any Additional Interest or Compounded Interest,
if any, in respect thereof), when the same shall become due and
payable, and continuance of such default for a period of 30 days,
provided that a valid extension of an interest payment period will not
constitute a default in the payment of any interest (including
Additional Interest or Compounded Interest, if any) for this purpose;
or".
(d) The following events shall also be deemed to constitute Events of
Default under the Indenture with respect to, but solely with respect to, the
Convertible Debentures:
(i) failure by the Company to deliver any shares of CNF Common Stock
upon an appropriate election by a registered holder of Debentures to
convert such Debentures, provided that such election is made in
accordance with applicable provisions of the Indenture; or
(ii) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with the distribution
of Convertible Debentures to holders of Trust Securities in
liquidation of the Trust upon the occurrence of a Special Event, upon
the redemption of all of the outstanding Trust Preferred Securities,
upon the conversion of all the outstanding Trust Preferred Securities,
or upon any consolidation, amalgamation, merger or conveyance,
transfer or lease of properties and assets of the Trust, each as
permitted by the Declaration.
(e) In the event that any accrued and unpaid interest on the
Convertible Debentures shall become due and payable upon acceleration pursuant
to Section 502 of the Base Indenture, then, to the extent permitted by law, all
accrued and unpaid Compounded Interest and Additional Interest, if any, shall,
to the extent permitted by applicable law, also become due and payable; and, in
the event that any such acceleration shall be rescinded and annulled in
accordance with Section 502 of the Base Indenture, then the acceleration of any
such Compounded Interest and Additional Interest also shall be rescinded and
annulled.
(f) The term "Event of Default," as used in the Indenture with
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respect to the Convertible Debentures, shall have the meaning specified in this
Supplemental Indenture after giving effect to the amendments and supplements to
such term effected by this Section 2.9.
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 3.1 Tax Event Redemption.
If a Tax Event has occurred and is continuing and:
(a) the Regular Trustees have received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax Opinion
that a No Recognition Opinion cannot be delivered to the Trust, then, the
Company shall have the right, upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures, to redeem the Convertible
Debentures, in whole or in part for cash, at a redemption price equal to 100% of
the principal amount thereof plus accrued and unpaid interest thereon
(including, to the extent permitted by applicable law, Compounded Interest and
Additional Interest, if any, to) to but excluding the date of such redemption,
within 90 days following the occurrence of such Tax Event (the "90-Day Period");
provided, however, that if at the time there is available to the Company or the
Trust the opportunity to eliminate, within such 90-Day Period, the Tax Event by
taking some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure which in the sole judgment of the
Company has or will cause no adverse effect on the Company, the Trust or the
holders of the Trust Securities and will involve no material costs, the Company
or the Trust will pursue such ministerial action in lieu of redemption.
(c) Anything in the Indenture to the contrary notwithstanding, in the
event that (i) a Tax Event shall have occurred as the result of any amendment,
change, interpretation or pronouncement of the type referred to in the
definition of "Tax Event" appearing in the Declaration and which amendment or
change is enacted, promulgated, issued or announced or which interpretation or
pronouncement is issued or announced, in each case, after the Closing Date but
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on or prior to any Option Closing Date, and (ii) the Company thereafter shall
elect to redeem Debentures in part pursuant to this Section 3.1, the Company
shall not be required to select the Debentures pro rata or in any other manner
specified in the Indenture, but may select the Debentures to be redeemed in such
manner as the Company in its sole discretion may elect including by selecting
for redemption, first, those Convertible Debentures issued on or after such
Option Closing Date.
Section 3.2 Optional Redemption by Company.
(a) Except as provided in Section 3.1, the Debentures shall not be
subject to redemption at the option of the Company prior to June 1, 2000.
(b) Subject to the provisions of Article Eleven of the Base
Indenture, the Company shall have the right to redeem the Convertible
Debentures, in whole or in part, from time to time, on or after June 1, 2000,
upon not less than 30 nor more than 60 days notice to the Holders of the
Convertible Debentures, at the following prices (expressed as percentages of the
principal amount of the Convertible Debentures), together (except as provided
below) with accrued and unpaid interest, including, to the extent permitted by
applicable law, Compounded Interest and Additional Interest, if any, to, but
excluding, the Redemption Date, if redeemed during the 12-month period beginning
June 1:
<TABLE>
Year Redemption Price
---- ----------------
<S> <C>
2000........................ 103.125%
2001........................ 102.500%
2002........................ 101.875%
2003........................ 101.250%
2004........................ 100.625%
</TABLE>
and 100% if redeemed on or after June 1, 2005. Notwithstanding the foregoing
provisions of this Section 3.2(b), if the Company shall redeem any Debentures
pursuant to Section 3.1 hereof on or after June 1, 2000, then the Redemption
Price of such Debentures shall be the Redemption Price set forth in Section 3.1
and not the Redemption Price set forth in this Section 3.2(b).
Without limitation to the second proviso to the first paragraph of
Section 1106 of the Base Indenture, if Convertible Debentures are redeemed on
any June 1, September 1, December 1 or March 1, accrued and unpaid interest
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which is due and payable on such Interest Payment Date shall be payable to the
Holders of record at the close of business on the relevant Regular Record Date.
So long as the Trust Securities are outstanding, the proceeds from the
redemption of the Convertible Debentures will be used to redeem Trust Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Convertible Debentures so redeemed.
The Redemption Price for the Convertible Debentures to be redeemed
shall be paid on the Redemption Date or at such earlier time as the Company
determines; provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price on the date such Redemption Price is to
be paid.
Section 3.3 Certain Limitations on Redemption.
(a) The Company may not redeem any Convertible Debentures unless all
accrued and unpaid interest thereon (including, to the extent permitted by law,
Compounded Interest and Additional Interest, if any) has been or is
contemporaneously paid (or duly provided for) for all quarterly interest payment
periods terminating on or prior to the date of notice of redemption.
(b) If a partial redemption of the Convertible Debentures would
result in the delisting of the Trust Preferred Securities from any national
securities exchange or national quotation system on which the Trust Preferred
Securities are then listed, the Company may only redeem the Convertible
Debentures in whole.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
Section 4.1 Extension of Interest Payment Period.
So long as no Event of Default with respect to the Convertible
Debentures under Section 501(l) of the Indenture, as amended by this First
Supplemental Indenture, shall have occurred and be continuing, the Company shall
have the right at any time and from time to time, during the term of the
Convertible Debentures, to defer payments of interest for successive periods not
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<PAGE>
exceeding 20 consecutive quarters for any such period (each, an "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable; provided that no Extended Interest Payment
Period may extend beyond the maturity of the Convertible Debentures or end on
other than an Interest Payment Date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 4.1, will bear interest thereon
at the Coupon Rate compounded quarterly for each quarter of the Extended
Interest Payment Period ("Compounded Interest"). At the end of the Extended
Interest Payment Period, the Company shall pay all accrued and unpaid interest
on the Convertible Debentures, including, to the extent permitted by law, any
Additional Interest and Compounded Interest (together, "Deferred Interest"), to
the Holders of record of the Convertible Debentures as they appear on the books
and records of the Company at the close of business on the Regular Record Date
for the Interest Payment Date upon which such Extended Interest Payment Period
terminates; provided that any Additional Interest shall be payable to the Trust
rather than to such Holders. Before the termination of any Extended Interest
Payment Period of less than 20 consecutive quarters, the Company may further
extend such period, provided that such period together with all such previous
and further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the maturity of the Convertible Debentures and end other than on
an Interest Payment Date. Upon the termination of any Extended Interest Payment
Period and upon the payment of all Deferred Interest then due, the Company may
commence a new Extended Interest Payment Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extended Interest
Payment Period, except at the end thereof, but the Company may prepay at any
time all or any portion of the interest accrued during an Extended Interest
Payment Period.
Section 4.2 Notice of Extension.
(a) If the Institutional Trustee is the sole Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Regular Trustees and the
Institutional Trustee notice of its selection of such Extended Interest Payment
Period one Business Day prior to the earlier of (i) the next succeeding date
Distributions on the Trust Securities are payable, or (ii) the date the Regular
Trustees are required to give notice to the New York Stock Exchange (or other
applicable self-regulatory organization) or to the holders of the Trust
Securities of the record date or the date such Distribution is payable.
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(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Convertible Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least ten Business Days prior to the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date upon which the Company is
required to give notice to the New York Stock Exchange or other applicable self-
regulatory organization or to Holders of the Convertible Debentures of the
record or payment date of such related interest payment.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
Section 4.3 Limitation of Transactions.
If the Company shall exercise its right to defer payment of interest
as provided in Section 4.1, then during the Extended Interest Payment Period (a)
the Company shall not declare or pay any dividend on, make any distributions
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than (A)(i) purchases or
acquisitions of shares of the Company's capital stock (or capital stock
equivalents) in connection with the satisfaction by the Company of its
obligations under any officers, directors or employee benefit plans (or any
options or other instruments issued thereunder) or the satisfaction by the
Company of its obligations pursuant to any contract or security requiring the
Company to purchase shares of the Company's capital stock (or capital stock
equivalents), (ii) purchases of shares of the Company's capital stock (or
capital stock equivalents) from officers, directors or employees of the Company
or its subsidiaries pursuant to employment agreements or upon termination of
employment or retirement, (iii) as a result of a reclassification, combination
or subdivision of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (iv) dividends or distributions of shares of
common stock on common stock, (v) 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 any security being converted or exchanged into such
capital stock, (vi) dividends or distributions on, or redemptions, purchases or
acquisitions of, or liquidation payments with respect to, the
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Company's Series B Cumulative Convertible Preferred Stock, (vii) purchases or
other acquisitions of common stock in connection with a dividend reinvestment or
other similar plan, or (viii) any dividend or distribution of capital stock (or
capital stock equivalents) in connection with the implementation of a
stockholders rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, or
(B) guarantee payments made with respect to any of the foregoing), (b) the
Company shall not make any payment of interest, principal or premium, if any, on
or repay, repurchase or redeem any debt securities issued by the Company that
rank pari passu with or junior to the Convertible Debentures and (c) the Company
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Common Securities Guarantee or the Trust Preferred Securities
Guarantee).
ARTICLE V
EXPENSES
Section 5.1 Payment of Expenses.
In connection with the offering, sale and issuance of the Convertible
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Convertible Debentures, shall:
(a) pay all fees, costs and expenses relating to the offering, sale
and issuance of the Convertible Debentures and the Trust Securities, including
compensation to the underwriters payable pursuant to the Underwriting Agreement
and compensation of the Trustee under the Indenture in accordance with the
provisions of Section 606 of the Base Indenture;
(b) be responsible for and pay all (and the Trust shall not be
required to pay any) costs, fees, expenses, debts and obligations of the Trust
(other than with respect to the Trust Securities) including, but not limited to,
costs, fees and expenses relating to the organization, maintenance and
dissolution of the Trust, the fees and expenses of the Institutional Trustee and
the Delaware Trustee, the costs and expenses relating to the operation of the
Trust, including without limitation, costs and expenses of accountants,
attorneys, statistical or bookkeeping services, expenses for printing and
engraving and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating,
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<PAGE>
travel and telephone and other telecommunications expenses and costs and
expenses incurred in connection wish the acquisition, financing, and disposition
of Trust assets;
(c) pay all (and the Trust shall not be obligated to pay any) costs,
fees and expenses related to the enforcement by the Institutional Trustee of the
rights of the holders of the Trust Preferred Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(e) pay any and all income taxes, duties and other governmental
charges and taxes (other than withholding taxes attributable to the Trust or its
assets) and all liabilities, costs and expenses with respect to such income
taxes, duties and other governmental charges and taxes of the Trust.
Section 5.2 Payment Upon Resignation or Removal.
Upon termination of this First Supplemental Indenture or the Base
Indenture or the removal or resignation of the Trustee pursuant to Section 608
of the Base Indenture, the Company shall pay to the Trustee all amounts owed to
such Trustee pursuant to Section 606 of the Base Indenture accrued to the date
of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.7 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, as the case may be, all amounts owed to the Delaware Trustee or the
Institutional Trustee, as the case may be, for their services as such pursuant
to the Declaration accrued to the date of such termination, removal or
resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
Section 6.1 Listing on an Exchange.
If the Convertible Debentures are to be distributed to the holders of
the Trust Preferred Securities issued by the Trust upon a Dissolution Event, the
Company will use its reasonable best efforts to list such Convertible Debentures
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<PAGE>
on the New York Stock Exchange, Inc. or on such other national securities
exchange or similar organization as the Trust Preferred Securities are then
listed.
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 7.1 Conversion Rights.
Subject to and upon compliance with the provisions of this Article
VII, the Convertible Debentures are convertible, at the option of the Holders,
at any time prior to the close of business on June 1, 2012 (or in the case of
Convertible Debentures called for redemption, prior to the close of business on
the Business Day prior to the corresponding Redemption Date), into shares of CNF
Common Stock at an initial conversion price of $40.00 per share of CNF Common
Stock, subject to adjustment as described in this Article VII. A Holder of
Convertible Debentures may convert any portion of the principal amount of the
Convertible Debentures (provided that such principal amount is $50 or an
integral multiple thereof) into that number of fully paid and nonassessable
shares of CNF Common Stock obtained by dividing the principal amount of the
Convertible Debentures to be converted by the Conversion Price in effect at the
close of business on the Conversion Date. All calculations under this Article
VII shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be, with one-half of a cent and 0.005 of a share being rounded
upwards to the nearest cent and 1/100th of a share, respectively.
Section 7.2 Conversion Procedures.
(a) In order to convert all or a portion of the Convertible
Debentures (provided that such principal amount is $50 or an integral multiple
thereof) the Holder thereof shall deliver to the Conversion Agent an irrevocable
notice of conversion in substantially the form appearing as part of Exhibit A
hereto or, in the case of a notice of conversion delivered by a holder of Trust
Securities, in substantially the form appearing in Exhibit A-1 or A-2, as the
case may be, of the Declaration (each, a "Notice of Conversion") setting forth
the principal amount of Convertible Debentures to be converted, together with
the name or names, if other than the Holder, in which the shares of CNF Common
Stock should be issued upon conversion and, if such Convertible Debentures are
definitive Convertible Debentures, surrender to the Conversion Agent the Con-
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<PAGE>
vertible Debentures to be converted, duly endorsed or assigned to the Company or
in blank. In addition, a holder of Trust Securities may exercise its right
under the Declaration to convert such Trust Securities into CNF Common Stock by
delivering to the Conversion Agent an irrevocable Notice of Conversion setting
forth the number of Trust Securities to be redeemed and the other information
called for by the preceding sentence and directing the Conversion Agent (i) to
exchange such Trust Securities for a portion of the Convertible Debentures held
by the Trust (at an exchange rate of $50 principal amount of Convertible
Debentures for each Trust Security) and (ii) to immediately convert such
Convertible Debentures, on behalf of such holder, into CNF Common Stock pursuant
to this Article VII and, if such Trust Securities are in definitive form,
surrendering to the Conversion Agent such Trust Securities, duly endorsed or
assigned to the Company or in blank. So long as any Trust Securities are
outstanding, the Trust shall not convert any Convertible Debentures except
pursuant to a Notice of Conversion delivered to the Conversion Agent by a holder
of Trust Securities.
If a Convertible Debenture is surrendered for conversion after the
close of business on any record date for payment of interest thereon and before
the opening of business on the corresponding payment date (other than a
Convertible Debenture or portion of a Convertible Debenture called for
redemption on a Redemption Date occurring after such record date and prior to
such payment date), then, notwithstanding such conversion, the interest payable
on such payment date will be paid in cash to the Person in whose name such
Convertible Debenture (or one or more Predecessor Securities) is registered at
the close of business on such record date, and (other than a Convertible
Debenture or a portion of a Convertible Debenture called for redemption on a
Redemption Date occurring after such record date and on or prior to such payment
date) when so surrendered for conversion, the Convertible Debenture must be
accompanied by payment of an amount in cash equal to the interest payable on
such payment date. Except as otherwise provided in the immediately preceding
sentence, in the case of any Convertible Debenture which is converted, interest
which would otherwise be due and payable after the date of conversion of such
Convertible Debenture shall not be payable, and the Company shall not make nor
be required to make any other payment, adjustment or allowance with respect to
accrued but unpaid interest on the Convertible Debentures being converted, which
shall be deemed to be paid in full. Each conversion shall be deemed to have
been effected immediately prior to the close of business on the day (the
"Conversion Date") on which the Notice of Conversion (together with, if required
by the preceding paragraph, certificates, duly endorsed or assigned to the
Company or in blank, evidencing the Trust Securities or Convertible Debentures,
as the case may be, being
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<PAGE>
surrendered for conversion) was received by the Conversion Agent from (x) a
holder of the Trust Securities effecting a conversion thereof pursuant to its
conversion rights under the Declaration or (y) if the Convertible Debentures
shall have been distributed to holders of Trust Securities following the
occurrence of a Special Event, when received by the Conversion Agent from the
Holder effecting the conversion thereof pursuant to its conversion rights under
the Indenture, as the case may be. The Person or Persons entitled to receive
the CNF Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such CNF Common Stock as of the
Conversion Date. As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed in the Notice of Conversion, a certificate or
certificates for the number of full shares of CNF Common Stock issuable upon
such conversion, together with the cash payment, if any, in lieu of any fraction
of any share to the Person or Persons entitled to receive the same. The
Conversion Agent shall deliver such certificate or certificates to such Person
or Persons.
(b) The Company's delivery upon conversion of the fixed number of
shares of CNF Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
maturity of the Convertible Debentures so converted and any unpaid interest
(including Compounded Interest) accrued on such Convertible Debentures at the
time of such conversion.
(c) No fractional shares of CNF Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the applicable Conversion Date,
or, if such day is not a Trading Day, on the next Trading Day, and the
Conversion Agent in turn will make such payment, if any, to the Holder of the
Convertible Debentures or the holder of the Trust Securities, as the case may
be, so converted.
(d) In the event of the conversion of any Convertible Debenture in
part only, a new Convertible Debenture or Convertible Debentures for the
unconverted portion thereof will be issued in the name of the Holder thereof
upon the cancellation thereof.
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(e) In effecting the conversion transactions described in this
Section 7.2, the Conversion Agent is acting as agent of the holders of Trust
Securities (in the exchange of Trust Securities for Convertible Debentures) and
as agent of the Holders of Convertible Debentures (in the conversion of
Convertible Debentures into CNF Common Stock), as the case may be. The
Conversion Agent is hereby authorized (i) to exchange Convertible Debentures
held by the Trust from time to time for Trust Securities in connection with the
conversion of such Trust Securities in accordance with this Article VII and (ii)
to convert all or a portion of the Convertible Debentures into CNF Common Stock
and thereupon to deliver such shares of CNF Common Stock in accordance with the
provisions of this Article VII and to deliver to the Person entitled thereto a
new Convertible Debenture or Convertible Debentures for any resulting
unconverted principal amount.
Section 7.3 Conversion Price Adjustments.
(a) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Company shall pay or make a dividend or
other distribution on CNF Common Stock in shares of CNF Common Stock, then
the Conversion Price in effect at the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced by multiplying
such Conversion Price by a fraction the numerator of which shall be the
number of shares of CNF Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator of which shall
be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such reduction to become
effective immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of this
subparagraph (i), the number of shares of CNF Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
(except to the extent such dividend or distribution is being made with
respect to such shares) but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of CNF Common
Stock. In the event that an adjustment is made pursuant to this
subparagraph (i) and, thereafter, the relevant distribution or divi-
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<PAGE>
dend is not made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if no such adjustment had
been made.
(ii) In case the outstanding shares of CNF Common Stock
shall be subdivided into a greater number of shares of CNF Common Stock,
then the Conversion Price in effect at the opening of business on the day
following the day upon which such subdivision becomes effective shall be
proportionately reduced, and, conversely, in case the outstanding shares of
CNF Common Stock shall be combined into a smaller amount of shares of CNF
Common Stock, then the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(iii) In case the Company shall issue rights or warrants
to all holders of CNF Common Stock entitling them (for a period expiring
within 45 days after the record date fixed for a distribution of such
rights or warrants) to subscribe for or purchase shares of CNF Common Stock
at a price per share less than the Current Market Price (as hereinafter
defined) per share (determined as provided in subparagraph (vii) below) of
CNF Common Stock on the date fixed for the determination of shareholders
entitled to receive such rights or warrants (other than pursuant to a
dividend reinvestment or similar plan), then the Conversion Price in effect
at the opening of business on the day following the date fixed for such
determination shall be reduced by multiplying such Conversion Price by a
fraction the numerator of which shall be the number of shares of CNF Common
Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of CNF Common Stock which the
aggregate of the offering price of the total number of shares of CNF Common
Stock so offered for subscription or purchase would purchase at such
Current Market Price and the denominator shall be the number of shares of
CNF Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares
25
<PAGE>
of CNF Common Stock so offered for subscription or purchase, such reduction
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
subparagraph (iii), the number of shares of CNF Common Stock at any time
outstanding shall not include shares held in the treasury of the Company
but shall include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of CNF Common Stock. The Company agrees not
to issue any rights or warrants in respect of shares of CNF Common Stock
held in the treasury of the Company. To the extent that shares of CNF
Common Stock are not delivered after the expiration or redemption by the
Company of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect had the
adjustments made in respect of the issuance of such rights or warrants been
made on the basis of delivery of only the number of shares of CNF Common
Stock actually delivered.
(iv) Subject to the second sentence of this subparagraph
(iv), in case the Company shall, by dividend or otherwise, distribute to
all holders of CNF Common Stock (A) shares of capital stock of the Company
(other than CNF Common Stock), (B) evidence of indebtedness of the Company
and/or (C) other assets (including securities, but excluding (l) any rights
or warrants referred to in subparagraph (iii) above, (2) any rights or
warrants to obtain capital stock of any Person other than the Company or
any subsidiary of the Company, (3) any dividends or distributions in
connection with the liquidation, dissolution or winding-up of the Company,
(4) any dividends or distributions payable solely in cash that may from
time to time be fixed by the Board of Directors and (5) any dividends or
distributions referred to in subparagraph (i) or (ii) above), then in each
case (unless the Company makes the election referred to in the next
sentence) the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price adjustment
contemplated by this subparagraph (iv) by a fraction the numerator of which
shall be the Current Market Price per share (determined as provided in
subparagraph (vii) below) of the CNF Common Stock on the date fixed for
payment of such distribution
26
<PAGE>
(the "Reference Date") less the fair market value on the Reference Date (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and shall be described in a statement filed with the
Trustee) of the portion of the shares of capital stock of the Company,
evidences of indebtedness or other assets so distributed (and for which an
adjustment to the Conversion Price has not been made previously pursuant to
the terms of this Article VII) applicable to one share of CNF Common Stock
and the denominator shall be such Current Market Price per share of the CNF
Common Stock, such adjustment to become effective immediately prior to the
opening of business on the day following the Reference Date. However, the
Company may elect, in its sole discretion, in lieu of the foregoing
adjustment, to make adequate provision so that each Holder of Debentures
shall have the right to receive upon conversion thereof the amount and kind
of shares of capital stock, evidences of indebtedness or other assets such
Holder would have received had such Holder converted such shares
immediately prior to the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect
if such dividend or distribution had not occurred. If the Board of
Directors determines the fair market value of any distribution for purposes
of this subparagraph (iv) by reference to the actual or when issued trading
market for any securities (including shares of capital stock or evidence of
indebtedness of the Company) comprising such distribution, it must in
doing so consider the price in such market over the period used in
computing the Current Market Price of the CNF Common Stock or, if shorter,
the portion of such period during which a trading market for such
securities existed. For purposes of this subparagraph (iv), any dividend
or distribution that includes both (x) any of the items described in
clauses (A), (B) or (C) of the first sentence of this subparagraph (iv) and
(y) CNF Common Stock or rights or warrants to subscribe for or purchase CNF
Common Stock of the type referred to in subparagraph (iii) shall be deemed
to be (1) a dividend or distribution of shares of capital stock of the
Company (other than CNF Common Stock), evidences of indebtedness of the
Company or other assets of the type referred to in clause (C) of the first
sentence of this subparagraph (iv) (making any Conversion Price reduction
required by this subparagraph (iv)) immediately
27
<PAGE>
followed by (2) a dividend or distribution of such CNF Common Stock or
rights or warrants to purchase CNF Common Stock of the type referred to in
subparagraph (iii) (making any further Conversion Price reduction required
by subparagraph (i) or (iii) of this Section 7.3(a)), except (A) the
Reference Date of such dividend or distribution as defined in this
subparagraph (iv) shall be substituted for "the date fixed for the
determination of shareholders entitled to receive such dividend or other
distribution", "the date fixed for the determination of shareholders
entitled to receive such rights or warrants" and "the date fixed for such
determination" within the meaning of subparagraphs (i) and (iii) of this
Section 7.3(a) and (B) any shares of CNF Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
subparagraph (i) of this Section 7.3(a).
(v) In case the Company shall, by dividend or otherwise,
at any time distribute cash to all holders of CNF Common Stock, excluding
(A) any cash dividends on CNF Common Stock to the extent that the aggregate
cash dividends per share of CNF Common Stock in any consecutive 12-month
period do not exceed the greater of (x) the amount per share of CNF Common
Stock of the cash dividends paid on the CNF Common Stock in the immediately
preceding 12-month period, to the extent that such dividends for the
immediately preceding 12-month period did not require an adjustment to the
Conversion Price pursuant to this subparagraph (v) (as adjusted to reflect
subdivisions or combinations of the CNF Common Stock) and (y) 15% of the
average of the daily Closing Prices (as hereinafter defined) of the CNF
Common Stock for the ten consecutive Trading Days immediately prior to the
date of declaration of such dividend and (B) any dividend or distribution
in connection with the liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary, or any redemption of Rights (as
defined in subparagraph (viii) below), (provided, however, that no
adjustment shall be made pursuant to this subparagraph (v) if such
distribution would otherwise constitute a Fundamental Change (as
hereinafter defined)) then, in each case (unless the Company makes the
election referred to in the proviso following this clause), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multi-
28
<PAGE>
plying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
subparagraph (v) by a fraction the numerator of which shall be the Closing
Price of a share of CNF Common Stock on the date fixed for the payment of
such distribution less the amount of cash so distributed (to the extent not
excluded as provided above) applicable to one share of CNF Common Stock,
and the denominator shall be such Closing Price of a share of CNF Common
Stock, such reduction to become effective immediately prior to the opening
of business on the day following the date fixed for the payment of such
distribution, provided, however, that the Company may elect, in its sole
discretion, in lieu of the foregoing adjustment, to make adequate provision
so that each Holder of Convertible Debentures shall thereafter have the
right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted such Convertible Debentures immediately
prior to the record date for such distribution of cash. If any adjustment
is required to be made as set forth in this subparagraph (v) as a result of
a distribution which is a dividend described in clause (A) of this
subparagraph (v), such adjustment will be based upon the amount by which
such distribution exceeds the amount of the dividend permitted to be
excluded pursuant to such clause (A) of this subparagraph (v). If an
adjustment is required to be made pursuant to this subparagraph (v) as a
result of a distribution which is not such a dividend, such adjustment
would be based upon the full amount of such distribution. In the event
that an adjustment is made pursuant to this subparagraph (v) and,
thereafter, the relevant distribution or dividend is not made, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if no such adjustment had been made.
(vi) In case of the consummation of a public tender
offer or public exchange offer (other than an odd lot tender offer) made by
the Company or any subsidiary of the Company for CNF Common Stock to the
extent that the cash and fair market value (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and shall
be described in a resolution of such Board) of any other consideration
included in such payment per share of CNF Common Stock at the last time
(the "Expiration Time") tenders or exchanges may be made pursu-
29
<PAGE>
ant to such tender or exchange offer (as amended if applicable) exceed (by
more than 10%, with any smaller excess being disregarded in computing the
adjustment to the Conversion Price provided in this subparagraph (vi)), the
first reported sale price (on the principal national securities exchange or
quotation system on which the CNF Common Stock is then traded) per share of
CNF Common Stock on the Trading Day next succeeding the Expiration Time,
then the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the Expiration Time by a fraction the numerator of which shall be
the number of shares of CNF Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the
first reported sale price (on such principal exchange or quotation system)
of the CNF Common Stock on the Trading Day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid and subject to the last sentence of this
paragraph) of the aggregate consideration payable to shareholders based on
the acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of all shares validly tendered or exchanged and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of CNF Common Stock outstanding (less any
Purchased Shares) at the Expiration Time and the first reported sale price
(on such principal exchange or quotation system) of the CNF Common Stock on
the Trading Day next succeeding the Expiration Time, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time. If an adjustment is required to be made as
set forth in this subparagraph (vi), the fair market value of the aggregate
consideration payable to shareholders referred to in clause (x) of the
preceding sentence shall be calculated by including only that portion of
such fair market value of such consideration per share of CNF Common Stock
which exceeds 110% of the first reported sale price (determined as
aforesaid) per share of CNF Common Stock on the Trading Day next succeeding
the Expiration Time.
(vii) For the purpose of any computation under this
Article VII, the "Current Market Price per share" of
30
<PAGE>
CNF Common Stock on any day shall be deemed to be the average of the daily
Closing Prices (as hereinafter defined) per share of CNF Common Stock for
the ten consecutive Trading Days ending on the earlier of the day in
question and, if applicable, the day before the "ex" date with respect to
the issuance or distribution requiring such computation; provided, however,
that if more than one event occurs that would require an adjustment
pursuant to subparagraphs (i) through (vi), inclusive, of this Section
7.3(a), the Board of Directors may make such adjustments to the Closing
Prices during such ten Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 7.3, in which case
any such determination by the Board of Directors shall be set forth in a
Board Resolution and shall be conclusive. For purposes of this paragraph,
the term "ex" date, (1) when used with respect to any issuance or
distribution, means the first date on which the CNF Common Stock trades
regular way on the New York Stock Exchange or on such successor principal
securities exchange as the CNF Common Stock may be listed or in the
relevant market from which the Closing Prices were obtained without the
right to receive such issuance or distribution, and (2) when used with
respect to any tender or exchange offer means the first date on which the
CNF Common Stock trades regular way on such principal securities exchange
or in such market after the Expiration Time of such offer.
(viii) No adjustment in the Conversion Price shall be
required pursuant to this Section 7.3(a) unless the adjustment would
require a change of at least l% in the Conversion Price then in effect;
provided, however, that any adjustments which by reason of this
-------- -------
subparagraph (viii) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. In addition, anything
herein to the contrary notwithstanding, no adjustment to the Conversion
Price will be required in connection with the issuance of rights or other
similar instruments ("Rights") pursuant to a shareholder rights plan or
similar plan or the repurchase or redemption of those rights or the
issuance of common stock, options or other securities under any officer,
director or employee benefit plan. Except as otherwise expressly provided
in subparagraph (iv) above, if any action pursuant to this Section 7.3
would require adjustment of the Conversion Price
31
<PAGE>
pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of the
adjustment that has the highest absolute value to the Holders of the
Convertible Debentures. All calculations shall be made to the nearest cent
(with 1/2 of a cent being rounded upward) or to the nearest 1/100th of a
share (with .005 of a share being rounded upward), as the case may be.
Notwithstanding anything to the contrary in this Article VII, the Company
from time to time may, to the extent permitted by law, reduce the
Conversion Price by any amount for any period of at least 20 Business Days,
in which case the Company shall give at least 15 days' notice of such
reduction to the holders of Securities and the Trustee. In addition, the
Company may, at its option, make such reductions in the Conversion Price
in addition to those set forth in this Article VII, as it considers to be
advisable in order to avoid or diminish any income tax to any holder of
shares of CNF Common Stock resulting from any dividend or distribution of
stock or issuance of rights or warrants to purchase or subscribe for stock
or from any event treated as such for income tax purposes or for any other
reasons. Except as otherwise provided in this Section 7.3(a), the
Conversion Price will not be adjusted for the issuance of CNF Common Stock
or any securities convertible into or exchangeable for CNF Common Stock or
carrying the right to purchase any of the foregoing.
(ix) In any case in which this Article VII provides that
an adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (A) issuing
to the holder of any Convertible Debentures converted after such record
date and before the occurrence of such event the additional shares of CNF
Common Stock or other securities, cash or property issuable upon such
conversion by reason of the adjustment required by such event over and
above the CNF Common Stock issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount in cash
in lieu of any fractional shares pursuant to this Article VII.
(x) For purposes of this Supplemental Indenture, "CNF
Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of
32
<PAGE>
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not subject to
redemption by the Company. However, subject to the provisions of this
Article VII, shares issuable on conversion of Convertible Debentures shall
include only shares of the class designated as the common stock of the
Company on the date of this First Supplemental Indenture or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to
redemption by the Company; provided, however, that if at any time there
shall be more than one such resulting class, the shares of each such class
then so issuable shall be substantially in the proportion which the total
number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all
such reclassifications.
(b) Whenever the Conversion Price is adjusted as herein provided:
(i) the Company shall compute the adjusted Conversion
Price and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted Conversion Price
and showing in reasonable detail the facts upon which such adjustment is
based, and such certificate shall forthwith be filed with the Trustee and,
if different, the transfer agent for the Trust Preferred Securities and the
Convertible Debentures; and
(ii) a notice stating the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of Trust
Preferred Securities and the Convertible Debentures at their last addresses
as they appear upon the stock transfer books of the Company and the Trust.
33
<PAGE>
Section 7.4 Adjustment of Conversion Price - Fundamental Change.
(a) In the event that the Company shall be a party to any transaction
or series of transactions constituting a Fundamental Change (including, without
limitation, (i) any recapitalization or reclassification of CNF Common Stock
(other than a change in par value or a change from par value to no par value or
from no par value to par value, or as a result of a subdivision or combination
of the CNF Common Stock); (ii) any consolidation or merger of the Company with
or into another corporation as a result of which holders of CNF Common Stock
shall be entitled to receive securities or other property or assets (including
cash) with respect to or in exchange for CNF Common Stock (other than a merger
which does not result in a reclassification, conversion, exchange or
cancellation of the outstanding CNF Common Stock); (iii) any sale or transfer of
all or substantially all of the assets of the Company; or (iv) any compulsory
share exchange) pursuant to which holders of CNF Common Stock shall be entitled
to receive other securities, cash or other property, then appropriate provision
shall be made so that the holder of each Convertible Debenture then outstanding
shall have the right thereafter to convert such Convertible Debenture only into
(A) if any such transaction does not constitute a Common Stock Fundamental
Change (as hereinafter defined), the kind and amount of the securities, cash or
other property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of CNF Common Stock issuable upon such conversion
of such Convertible Debenture immediately prior to such recapitalization,
reclassification, consolidation, merger, sale, transfer or share exchange,
after, in the case of a Non-Stock Fundamental Change (as hereinafter defined),
giving effect to any adjustment in the Conversion Price in accordance with
subparagraph (i) of Section 7.4(c), and (B) if any such transaction constitutes
a Common Stock Fundamental Change (as hereinafter defined), shares of common
stock of the kind received by holders of CNF Common Stock as a result of such
Common Stock Fundamental Change in an amount determined in accordance with
subparagraph (ii) of Section 7.4(c). The company formed by such consolidation
or resulting from such merger or which acquires such assets or which acquires
the CNF Common Stock, as the case may be, shall enter into a supplemental
indenture with the Trustee, reasonably satisfactory in form to the Trustee and
executed and delivered to the Trustee, the provisions of which shall establish
such right. Such supplemental indenture shall provide for adjustments which,
for events subsequent to the effective date of such supplemental indenture,
shall be as nearly equivalent as practicable to the relevant adjustments
provided for in this Article VII. The
34
<PAGE>
above provisions shall similarly apply to successive recapitalizations,
reclassifications, consolidations, mergers, sales, transfers or share exchanges.
(b) Notwithstanding any other provisions in this Article VII to the
contrary, if any Fundamental Change (as hereinafter defined) occurs, then the
Conversion Price in effect will be adjusted immediately after such Fundamental
Change as described below in Section 7.4(c). In addition, in the event of a
Common Stock Fundamental Change, each Convertible Debenture shall be convertible
solely into common stock of the kind received by holders of CNF Common Stock as
the result of such Common Stock Fundamental Change as more specifically provided
below in Section 7.4(c).
(c) For purposes of calculating any adjustment to be made pursuant to
this Article VII in the event of a Fundamental Change, immediately following
such Fundamental Change (and for such purposes a Fundamental Change shall be
deemed to occur on the earlier of (a) the occurrence of such Fundamental Change
and (b) the date, if any, fixed for determination of shareholders entitled to
receive the cash, securities, property or other assets distributable in such
Fundamental Change to holders of the CNF Common Stock):
(i) in the case of a Non-Stock Fundamental Change, the
Conversion Price per share of CNF Common Stock immediately following such
Non-Stock Fundamental Change shall be the lower of (A) the Conversion Price
in effect immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other adjustments effected pursuant to this Article
VII, and (B) the product obtained by multiplying the greater of the
Applicable Price (as hereinafter defined) or the then applicable Reference
Market Price (as hereinafter defined) by a fraction of which the numerator
shall be 100 and the denominator of which shall be the amount set forth
below based on the date on which such Non-Stock Fundamental Change occurs.
For the twelve month period beginning June 1:
<TABLE>
<CAPTION>
Year Denominator
---- -----------
<S> <C>
1997................ 105.000
1998................ 104.375
1999................ 103.750
2000................ 103.125
</TABLE>
35
<PAGE>
<TABLE>
<S> <C>
2001................ 102.500
2002................ 101.875
2003................ 101.250
2004................ 100.625
2005 and thereafter. 100.00;
</TABLE>
(ii) in the case of a Common Stock Fundamental Change,
the Conversion Price per share of CNF Common Stock immediately following the
Common Stock Fundamental Change shall be the Conversion Price in effect
immediately prior to such Common Stock Fundamental Change, but after giving
effect to any other adjustments effected pursuant to this Article VII,
multiplied by a fraction, the numerator of which is the Purchaser Stock Price
(as hereinafter defined) and the denominator of which is the Applicable Price;
provided, however, that in the event of a Common Stock Fundamental Change in
- -------- -------
which (A) 100% of the value of the consideration received by a holder of CNF
Common Stock is common stock of the successor, acquiror or other third party
(and cash, if any, paid with respect to any fractional interests in such common
stock resulting from such Common Stock Fundamental Change) and (B) all of the
CNF Common Stock shall have been exchanged for, converted into, or acquired for
common stock (and cash, if any, with respect to fractional interests) of the
successor, acquiror or other third party, the Conversion Price per share of CNF
Common Stock immediately following such Common Stock Fundamental Change shall be
the Conversion Price in effect immediately prior to such Common Stock
Fundamental Change divided by the number of shares of common stock of the
successor, acquiror, or other third party received by a holder of one share of
CNF Common Stock as a result of such Common Stock Fundamental Change.
(d) The following definitions shall apply to terms used in this
Article VII:
(i) "Applicable Price" means (A) in the event of a Non-
Stock Fundamental Change in which the holders of CNF Common Stock receive only
cash, the amount of cash receivable by a holder of one share of CNF Common
Stock; and (B) in the event of any other Fundamental Change, the average of the
Closing Prices (as defined herein) for one share of CNF Common Stock during the
ten Trading Days immediately prior to the record date for the determination of
the holders of CNF Common Stock entitled to receive cash, securities, property
or other assets in connection with such Fundamental Change or, if there is no
such record date, prior to the date upon
36
<PAGE>
which the holders of CNF Common Stock shall have the right to receive such cash,
securities, property or other assets.
(ii) "Closing Price" with respect to any securities on
any day shall mean the last reported sale price, regular way, on such day or, in
case no such sale takes place on such day, the average of the last reported
closing bid and asked prices on such day, regular way, in each case on the New
York Stock Exchange or, if such security is not listed or admitted to trading on
such Exchange, on the principal national securities exchange or quotation system
on which such security is quoted or listed or admitted to trading or, if not
quoted or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the date in question as reported by
the National Quotation Bureau Incorporated, or a similarly generally accepted
reporting service or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose or a price determined in good faith by the Board of
Directors.
(iii) "Common Stock Fundamental Change" means any
Fundamental Change in which more than 50% of the value (as determined in good
faith by the Board of Directors) of the consideration received by the holders of
CNF Common Stock pursuant to such transactions consists of shares of common
stock that, for the ten consecutive Trading Days immediately prior to such
Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on the
Nasdaq National Market; provided, however, that a Fundamental Change shall not
-------- -------
be a Common Stock Fundamental Change unless either (A) the Company continues to
exist after the occurrence of such Fundamental Change and the outstanding Trust
Preferred Securities continue to exist as outstanding Trust Preferred Securities
(or, if the Convertible Debentures have been distributed to holders of Trust
Securities following a Dissolution Event, the outstanding Convertible Debentures
continue to exist as outstanding Convertible Debentures), or (B) the outstanding
Trust Preferred Securities continue to exist as Trust Preferred Securities and
are convertible into shares of common stock of the successor to the Company (or,
if the Convertible Debentures have been distributed as aforesaid, the
outstanding Convertible Debentures continue to exist as Convertible Debentures
and are convertible into shares of common stock of the successor to the
Company).
37
<PAGE>
(iv) "Fundamental Change" means the occurrence of any
transaction or event or series of transactions or events pursuant to which
all or substantially all of the CNF Common Stock shall be exchanged for,
converted into, acquired for or constitutes solely the right to receive
cash, securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in the
-------- -------
case of any such series of transactions or events for purposes of
adjustment of the Conversion Price, such Fundamental Change shall be deemed
to have occurred when substantially all of the CNF Common Stock had been
exchanged for, converted into, or acquired for or constitutes solely the
right to receive cash, securities, property or other assets, but the
adjustment shall be based upon the consideration which the holders of CNF
Common Stock received in such transaction or event as a result of which
more than 50% of the CNF Common Stock shall have been exchanged for,
converted into, or acquired for or shall constitute solely the right to
receive cash, securities, property or other assets.
(v) "Non-Stock Fundamental Change" means any Fundamental
Change other than a Common Stock Fundamental Change.
(vi) "Purchaser Stock Price" shall mean, with respect to
any Common Stock Fundamental Change, the average of the Closing Prices for
one share of the common stock received by holders of CNF Common Stock in
such Common Stock Fundamental Change during the ten Trading Days
immediately prior to the record date for the determination of the holders
of CNF Common Stock entitled to receive such common stock or, if there is
no such record date, prior to the date upon which the holders of CNF Common
Stock shall have the right to receive such shares of common stock.
(vii) "Reference Market Price" shall initially mean
$21.00 and, in the event of any adjustment to the Conversion Price other
than as a result of a Fundamental Change, the Reference Market Price shall
also be adjusted so that the ratio of the Reference Market Price to the
Conversion Price after giving effect to any such adjustment shall always be
the same as the ratio of the initial Reference Market Price of $21.00 to
the initial Conversion Price of $40.00.
(e) In determining the amount and type of consideration received by a
holder of CNF Common Stock in the event of a Fundamental Change, consideration
received by a holder of CNF Common Stock pursuant to a statutory right of
appraisal will be disregarded.
38
<PAGE>
Section 7.5 Notice of Certain Events.
In case:
(i) the Company shall declare a dividend (or any other
distribution) on CNF Common Stock that would cause an adjustment to the
Conversion Price of the Convertible Debentures pursuant to Section 7.3
(including such an adjustment that would occur but for the terms of the
first sentence of Section 7.3(a)(viii) above); or
(ii) the outstanding shares of CNF Common Stock shall be
subdivided into a greater number of shares of CNF Common Stock or combined
into a smaller number of shares of CNF Common Stock; or
(iii) the Company shall authorize the granting to the
holders of CNF Common Stock generally of rights or warrants (for a period
expiring within 45 days after the record date fixed for a distribution of
such rights and warrants) to subscribe for or purchase any shares of the
Company's capital stock or other capital stock of any class or of any other
rights (excluding any Rights); or
(iv) of any reclassification of CNF Common Stock (other
than a subdivision or combination of the outstanding shares of CNF Common
Stock), or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the sale or transfer of all or substantially all
of the assets of the Company or a compulsory share exchange; or
(v) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then the Company shall (i) if any Trust Preferred Securities are outstanding,
cause to be filed with the transfer agent for the Trust Preferred Securities,
and, except in a case described in paragraph (i) above, shall cause to be
mailed to the holders of record of the Trust Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books of the Trust or
(ii) if the Debentures shall have been distributed to holders of the Trust
Securities in accordance with the terms of the Declaration following a
Dissolution Event, cause to be mailed to all Holders at their last addresses as
they shall appear in the Security Register, at least 15 days prior to the
applicable record or effective date hereinafter specified, a notice stating (A)
the date on which a record (if any) is to be taken for the purpose of such
39
<PAGE>
dividend, distribution, rights or warrants or, if a record is not to be taken,
the date as of which the holders of CNF Common Stock of record to be entitled to
such dividend, distribution, rights or warrants are to be determined or (B) the
date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of CNF Common
Stock of record shall be entitled to exchange their shares of CNF Common Stock
for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
Section 7.6 Company to Provide Stock.
The Company shall reserve, free from pre-emptive rights, out of its
authorized but unissued shares, sufficient shares to provide for the conversion
of the Convertible Debentures from time to time as such Convertible Debentures
are presented for conversion, provided, that nothing contained herein shall be
construed to preclude the Company from satisfying its obligations in respect of
the conversion of Convertible Debentures by delivery of repurchased shares of
CNF Common Stock which are held in the treasury of the Company.
If any shares of CNF Common Stock to be reserved for the purpose of
conversion of Convertible Debentures hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be validly issued or delivered upon conversion, then the Company
covenants that it will in good faith and as expeditiously as possible endeavor
to secure such registration or approval, as the case may be, provided, however,
that nothing in this Section 7.6 shall be deemed to affect in any way the
obligations of the Company to convert Convertible Debentures into CNF Common
Stock as provided in this Article VII.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the CNF Common Stock, the
Company will take all corporate action which may, in the Opinion of Counsel, be
necessary in order that the Company may validly and legally issue fully paid and
non-assessable shares of CNF Common Stock at such adjusted Conversion Price.
The Company covenants that all shares of CNF Common Stock which may be
issued upon conversion of Convertible Debentures will upon issue be fully paid
and non-assessable by the Company and free of pre-emptive rights.
40
<PAGE>
Section 7.7 Employee Benefit Plans.
Notwithstanding the provisions of this Article VII, the issuance of
any shares of CNF Common Stock or options or other securities pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date of this Supplemental Indenture or pursuant to any
present or future officer, director or employee benefit plan or program of the
Company shall not give rise to an adjustment in the Conversion Price pursuant to
this Article VII. There shall also be no adjustment of the Conversion Price (i)
in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article VII, (ii) as the result of the issuance of CNF Common Stock upon
conversion of the Trust Securities or the Convertible Debentures or (iii) as the
result of the issuance or redemption of Rights.
Section 7.8 Certain Additional Rights.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the CNF Common Stock referred to in Section 7.3(a)(iv) and (v)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 7.3(a)(iv)), the Holder of the Convertible Debentures,
upon the conversion thereof subsequent to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of CNF Common Stock into which the Convertible Debentures are converted,
the portion of the shares of CNF Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of CNF Common Stock; provided, however, that, at the election of
the Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors). If any conversion of Convertible Debentures
described in the immediately preceding sentence occurs prior to the payment date
for a distribution to holders of CNF Common Stock which the Holder of
Convertible Debentures so converted is entitled to receive in accordance with
the immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of CNF Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets to which such
Holder is so entitled, provided, that such due bill (a) meets any applicable
requirements of the principal national securities exchange or other principal
securities market on which the CNF Common Stock is then traded and (b) requires
41
<PAGE>
payment or delivery of such shares of CNF Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets no later than
the date of payment or delivery thereof to holders of shares of CNF Common Stock
receiving such distribution.
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
Section 8.1 Form of Convertible Debenture.
The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the form
attached hereto as Exhibit A. In addition, the Convertible Debentures shall
have the further terms as are set forth in the form of Debenture attached hereto
as Exhibit A:
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
Section 9.1 Original Issue of Convertible Debentures.
Convertible Debentures may upon execution of this First Supplemental
Indenture, be executed by the Company and delivered to the Trustee for
authentication, and the Trustee shall thereupon authenticate and make available
for delivery said Convertible Debentures to or upon the written order of the
Company, as provided in the Indenture.
ARTICLE X
MISCELLANEOUS
Section 10.1 Ratification of Indenture; First Supplemental Indenture
Controls.
The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental Indenture
shall be deemed part of the Indenture in the manner and to the extent herein and
therein provided. The provisions
42
<PAGE>
of this First Supplemental Indenture shall, insofar as pertains to the
Convertible Debentures, supersede the provisions of the Indenture to the extent
the Indenture is inconsistent herewith.
Section 10.2 Trustee Not Responsible for Recitals.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness thereof.
The Trustee makes no representation as to the validity or sufficiency of this
First Supplemental Indenture.
Section 10.3 Governing Law.
This First Supplemental Indenture shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made or instruments entered into and, in each case, performed in said State.
Section 10.4 Separability.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Convertible Debentures shall for any reason be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
First Supplemental Indenture or of the Convertible Debentures, but this First
Supplemental Indenture and the Convertible Debentures shall be construed as if
such invalid or illegal or unenforceable provision had never been contained
herein or therein.
Section 10.5 Counterparts.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
CNF TRANSPORTATION INC.
By:
------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:
------------------------
Name:
Title:
44
<PAGE>
FORM OF CONVERTIBLE DEBENTURE
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE CONVERTIBLE DEBENTURE IS TO BE A GLOBAL
DEBENTURE, INSERT THE FOLLOWING - -
This Debenture is a Global Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. This Convertible Debenture is exchangeable for
Convertible Debentures registered in the name of a Person other than the
Depository or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Convertible Debenture (other than a transfer
of this Convertible Debenture as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or to a successor Depository or its nominee) may be
registered except in limited circumstances.
Unless this Convertible Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Company or its agent for registration of transfer, exchange or
payment, and any Convertible Debenture issued is registered in the name of Cede
& Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.]
No.___ $___________
CNF Transportation Inc.
5% Convertible Subordinated Debenture due June 1, 2012
CNF Transportation Inc., a Delaware corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal sum of ______________
<PAGE>
_____ ($_______) on June 1, 2012, and to pay interest on said principal sum from
June 11, 1997, or from the most recent Interest Payment Date (as defined below)
to which interest has been paid or duly provided for, quarterly (subject to
deferral as set forth herein and in the Indenture referred to herein) in arrears
on June 1, September 1, December 1 and March 1 (each, an "Interest Payment
Date") of each year commencing September 1, 1997, at the rate of 5% per annum
until the principal hereof shall have become due and payable, and to pay
interest on any overdue principal hereof and, to the extent permitted by
applicable law, on any overdue premium, if any, and (without duplication) on any
overdue installment of interest hereon at the same rate per annum compounded
quarterly. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full calendar month will be computed on the basis of the actual number of days
elapsed in such 30-day month. In the event that any date on which interest is
payable on this Convertible Debenture is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture be paid to the Person
in whose name this Convertible Debenture (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest installment, which shall be the Business Day next preceding such
Interest Payment Date unless otherwise provided in or pursuant to the Indenture.
Any such interest installment which is payable but is not punctually paid or
duly provided for on any Interest Payment Date shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date by virtue
of having been such Holder and may be paid to the Person in whose name this
Convertible Debenture (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date to be fixed by the Trustee for
the payment of such Defaulted Interest,
2
<PAGE>
notice whereof shall be given to the registered Holders of the Convertible
Debentures not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Convertible Debentures may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Convertible Debenture shall be payable at the Office or Agency
of the Company maintained for that purpose in the coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the address of the Person
entitled thereto at such address as shall appear in the Security Register or by
transfer to an account maintained by the payee with a bank located in the United
States of America. Notwithstanding the foregoing, so long as the Holder of this
Convertible Debenture is the Institutional Trustee, the payment of the principal
of (and premium, if any) and interest on this Convertible Debenture will be made
at such place and to such account in the United States of America as may be
designated by the Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the
extent and in the manner provided in the Indenture, subordinate and junior in
right of payment to the prior payment in full of all Senior Indebtedness, and
this Convertible Debenture is issued subject to the provisions of the Indenture
with respect thereto. Each Holder of this Convertible Debenture, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
3
<PAGE>
This Convertible Debenture shall not be entitled to any benefit under the
Indenture or be valid or become obligatory for any purpose until the Certificate
of Authentication hereon shall have been signed by or on behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse side
hereof and such continued provisions shall for all purposes have the same effect
as though fully set forth at this place.
4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed under its corporate seal.
CNF Transportation Inc.
By:
------------------------
Name:
Title:
[Seal]
Attest:
- ------------------------
Name:
Title:
5
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:______________ The First National Bank
of Chicago, as Trustee
By:
-----------------------
Authorized Signatory
6
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of
Securities of the Company (herein sometimes referred to as the "Convertible
Debentures" or the "Debentures"), issued or to be issued in one or more series
under and pursuant to an indenture dated as of June 11, 1997, between the
Company and The First National Bank of Chicago, a national banking association,
as Trustee (the "Trustee", which term includes any successor trustee under the
Indenture with respect to the Convertible Debentures), as amended and
supplemented by the First Supplemental Indenture dated as of June 11, 1997,
between the Company and the Trustee (the indenture as so amended and
supplemented and as the same may be further amended or supplemented from time to
time in accordance with its terms, the "Indenture"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Debentures. By the terms of
the Indenture, the Securities are issuable thereunder in series that may vary as
to amount, date of maturity, rate of interest and in other respects as provided
in the Indenture. This series of Debentures is limited in aggregate principal
amount as specified in said First Supplemental Indenture.
If a Tax Event has occurred and is continuing, the Company shall have
the right to redeem the Debentures, in whole or in part, at a Redemption Price
equal to 100% of the principal amount thereof to be redeemed plus accrued and
unpaid interest thereon (including, to the extent permitted by law, Additional
Interest and Compounded Interest) to but excluding the date of such redemption,
on the terms, and subject to the conditions, set forth in the Indenture. In
addition, the Company shall have the right to redeem the Debentures, in whole or
in part, from time to time, on or after June l, 2000 at the applicable
Redemption Prices specified in the Indenture, together with accrued and unpaid
interest thereon (including, to the extent permitted by applicable law,
Additional Interest and Compounded Interest) to, but excluding, the Redemption
Date. Notwithstanding the foregoing, installments of interest whose Stated
Maturity is on or prior to a Redemption Date shall be payable to the Holders of
such Debentures (or one or more Prede-
7
<PAGE>
cessor Securities) registered as such at the close of business on the Regular
Record Date therefor according to their terms and the other provisions to the
Indenture.
In the event of redemption of this Convertible Debenture in part only,
a new Convertible Debenture or Convertible Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case an Event of Default with respect to the Convertible Debentures
shall have occurred and be continuing, the principal of all of the Convertible
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions provided
in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series
affected, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Securities of such series, subject to certain
limitations set forth in the Indenture. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series, on behalf of all of the Holders of the
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults thereunder. Any such
waiver (or consent) by the registered Holder of this Debenture (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such Holder
and upon all future Holders and owners of this Convertible Debenture and of any
Convertible Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture shall alter or impair the obligation
of the Company,
8
<PAGE>
which is absolute and unconditional, to pay the principal of and premium, if
any, and interest on this Convertible Debenture at the time and place and at the
rate and in the money herein prescribed.
Upon the terms and subject to the conditions set forth in the
Indenture, the Company shall have the right at any time during the term of the
Convertible Debentures and from time to time to defer payments of interest by
extending the interest payment period of such Convertible Debentures for one or
more periods (each, an "Extended Interest Payment Period"), so long as no
Extended Interest Payment Period shall exceed 20 consecutive quarters, extend
beyond the maturity date of the Convertible Debentures or end on other than an
Interest Payment Date, during which Extended Interest Payment Period no interest
shall be due and payable on the Convertible Debentures and at the end of which
period the Company shall pay all interest then accrued and unpaid thereon,
together with, to the extent permitted by law, Additional Interest, if any, and
Compounded Interest thereon. Before the termination of any such Extended
Interest Payment Period, the Company may further extend such Extended Interest
Payment Period, provided that such Extended Interest Payment Period together
with all such previous and further extensions thereof shall not exceed 20
consecutive quarters or extend beyond the maturity of the Debentures or end
other than on an Interest Payment Date. If interest payments are deferred as
aforesaid, the deferred accrued interest and, to the extent permitted by
applicable law, Additional Interest, if any, and Compounded Interest thereon
shall be payable to Holders of the Convertible Debentures as they appear on the
books and records of the Company at the close of business on the Regular Record
Date for the Interest Payment Date upon which such Extended Interest Payment
Period terminates. At the termination of any such Extended Interest Payment
Period and upon the payment of all accrued and unpaid interest and, to the
extent permitted by law, Additional Interest, if any, and Compounded Interest
thereon then due, the Company may commence a new Extended Interest Payment
Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Convertible Debenture is transferable by the Holder
hereof on the Security Register of the Company, upon surrender of this
9
<PAGE>
Convertible Debenture for registration of transfer at the Office or Agency
maintained for such purpose in the City and State of New York accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company or the Trustee duly executed by the registered Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Convertible
Debentures of authorized denominations and for the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax or other governmental
charge and any other expenses (including fees and expenses of the Trustee) that
may be imposed in relation thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee and any Paying Agent and
Security Registrar may deem and treat the Holder hereof as the absolute owner
hereof (whether or not this Convertible Debenture shall be overdue and
notwithstanding any notice of ownership or writing hereon made by anyone other
than the Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and premium, if any, and interest due hereon and
for all other purposes, and neither the Company nor the Trustee nor any Paying
Agent nor any Security Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium, if any, or interest on this Convertible Debenture, or for any claim
based hereon, or otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or director, past,
present or future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
The Holder of this Convertible Debenture has the right, exercisable at
any time prior to the close of business (New York time) on June 1, 2012 (or, in
the case of a Convertible Debenture called for redemption, prior
10
<PAGE>
to the close of business on the Business Day prior to the relevant Redemption
Date), to convert the principal amount thereof (or any portion thereof that is
an integral multiple of $50) into shares of CNF Common Stock at the initial
Conversion Price of $40.00 per share of CNF Common Stock, subject to adjustment
under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and
sign a conversion notice substantially in the form attached hereto, (b)
surrender the Convertible Debenture to the Trustee, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. If a Convertible Debenture is
surrendered for conversion after the close of business on any record date for
payment of interest and before the opening of business on the corresponding
payment date (other than a Convertible Debenture or portion thereof called for
redemption on a Redemption Date occurring after such record date and prior to
such payment date), then, notwithstanding such conversion, the interest payable
on such payment date will be paid in cash to the Person in whose name the
Convertible Debenture is registered at the close of business on such record
date, and (other than a Convertible Debenture or a portion of a Convertible
Debenture called for redemption on a redemption date occurring after such record
date and on or prior to such payment date) when so surrendered for conversion,
such Convertible Debenture must be accompanied by payment of an amount equal to
the interest payable on such payment date. The number of shares issuable upon
conversion of a Convertible Debenture is determined by dividing the principal
amount of the Convertible Debenture converted by the Conversion Price in effect
on the Conversion Date. No fractional shares will be issued upon conversion but
a cash adjustment will be made for any fractional interest pursuant to the
Indenture. The outstanding principal amount of any Convertible Debenture shall
be reduced by the portion of the principal amount thereof converted into shares
of CNF Common Stock.
The Convertible Debentures of this series 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, Convertible Debentures of
11
<PAGE>
this series are exchangeable for a like aggregate principal amount of
Convertible Debentures of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
All terms used in this Convertible Debenture that are defined in the
Indenture and not defined herein shall have the meanings assigned to them in the
Indenture.
THE CONVERTIBLE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR
INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE.
12
<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: CNF Transportation Inc.:
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into CNF Common Stock (as defined in the Indenture referred to in
this Convertible Debenture) in accordance with the terms of the Indenture 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 Portion of Convertible Debenture
to be converted ($50 or integral
multiple thereof)
$___________________
If a name or names other than
the undersigned, please indicate
in the spaces below the name or
names in which the shares of
Common Stock are to be issued,
along with the address or addresses
and social security or other
identifying number of such person
or persons
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
--------------------------------
13
<PAGE>
-------------------------------------
Sign your name exactly as it
appears on the face of this
Convertible Debenture
(for conversion only)
Please print or typewrite name
and address, including zip code
and social security or other
identifying number:
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Signature Guarantee*
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Trustee, which requirements include membership of
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Trustee in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
14
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Convertible Debenture to:
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
(Insert address and zip code of assignee)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
- ----------------------------------------------------------------
and irrevocably appoints __________________________________________________
_____________________________________________________ agent to transfer this
Convertible Debenture on the books of the Trust. The agent may substitute
another to act for him or her.
Date: _____________________
Signature: __________________
(Sign exactly as your name appears on the face of this Convertible Debenture)
Signature Guarantee*:
---------------------------------
*Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Trustee which requirements include membership of
participation in the Securities Transfer Agents Medallion
15
<PAGE>
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Trustee in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
16
