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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 20, 2000
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
THE TITAN CORPORATION
TITAN CAPITAL TRUST
(Exact name of registrant as specified in its charter)
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DELAWARE 8711 95-2588754
DELAWARE 8711 33-090339
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
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3033 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121-1199
(858) 552-9500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------
NICHOLAS J. COSTANZA
GENERAL COUNSEL
THE TITAN CORPORATION
3033 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121-1199
(858) 552-9500
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES TO:
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BARBARA L. BORDEN, ESQ. GREG A. NOEL, ESQ.
MATTHEW T. BROWNE, ESQ. HOWARD LIBERSON, ESQ.
COOLEY GODWARD LLP SKADDEN, ARPS, SLATE, MEAGHER & FLOM
4365 EXECUTIVE DRIVE, SUITE 1100 300 S. GRAND AVENUE
SAN DIEGO, CA 92121 LOS ANGELES, CA 90071-3144
(858) 550-6000 (213) 687-5000
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Approximate date of commencement of proposed sale to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
5 3/4% Convertible Preferred Securities,
Remarketable Term Income Deferrable Equity
Securities ("HIGH TIDES") of Titan Capital
Trust(2).......................................... 5,000,000 $50 $250,000,000 $66,000
5 3/4% Convertible Senior Subordinated Debentures
due 2030 of The Titan Corporation................. (3) (3) (3) (3)
Common Stock, par value $.01 per share, of The
Titan Corporation................................. (4) (4) (4) (4)
Guarantee of the HIGH TIDES by The Titan
Corporation....................................... (5) (5) (5) (5)
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee in
accordance with Rule 457(o) under the Securities Act and exclusive of
accrued interest and dividends, if any.
(FOOTNOTES CONTINUED ON FOLLOWING PAGE)
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
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(2) 4,000,000 HIGH TIDES were issued by Titan Capital Trust on February 9, 2000
and an additional 1,000,000 HIGH TIDES were issued by Titan Capital Trust on
February 16, 2000, in offerings exempt from registration under Rule 144A of
the Securities Act of 1933. Pursuant to a Registration Rights Agreement
dated February 9, 2000 among The Titan Corporation, Titan Capital Trust and
Credit Suisse First Boston Corporation, The Titan Corporation and Titan
Capital Trust are obligated to file this Registration Statement to permit
registered resales of the HIGH TIDES and related securities by holders
thereof.
(3) $257,732,000 in aggregate principal amount of The Titan Corporation's 5 3/4%
Convertible Senior Subordinated Debentures due 2030 (the "Debentures") were
issued and sold to Titan Capital Trust on February 9, 2000 and February 16,
2000 in connection with the issuance by Titan Capital Trust of the HIGH
TIDES. The Debentures may be distributed by Titan Capital Trust, under
certain circumstances, to holders of the HIGH TIDES for no additional
consideration. Pursuant to Rule 457(i) of the Securities Act, no
registration fee is attributable to the Debentures registered hereby.
(4) The HIGH TIDES are exchangeable for the Debentures, which are convertible
into The Titan Corporation's common stock, par value $.01 per share (the
"Common Stock"), at an initial conversion rate of 1.0076 shares of Common
Stock for each HIGH TIDES (or a total of 5,038,000 shares of Common Stock
for all of the HIGH TIDES), subject to adjustment under certain
circumstances. Pursuant to Rule 457(i) of the Securities Act, no
registration fee is attributable to the Common Stock registered hereby.
(5) No separate consideration was received for the Guarantee. Pursuant to
Rule 457(n) under the Securities Act, no registration fee is payable with
respect to the Guarantee.
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SUBJECT TO COMPLETION, DATED , 2000
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES, IN
ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
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5,000,000 HIGH TIDES(SM)
TITAN CAPITAL TRUST
5 3/4% CONVERTIBLE PREFERRED SECURITIES
REMARKETABLE TERM INCOME DEFERRABLE EQUITY SECURITIES (HIGH TIDES)(SM)*
(LIQUIDATION AMOUNT $50 PER EACH OF THE HIGH TIDES)
GUARANTEED TO THE EXTENT DESCRIBED HEREIN BY,
AND CONVERTIBLE INTO COMMON STOCK OF,
[LOGO]
THE TITAN CORPORATION
----------------
The 5 3/4% Convertible Preferred Securities, Remarketable Term Income
Deferrable Equity Securities (HIGH TIDES(sm)) represent undivided preferred
beneficial ownership interests in the assets of Titan Capital Trust, a
subsidiary trust of The Titan Corporation. The Titan Corporation owns all the
common securities issued by the trust. The trust was formed for the sole purpose
of issuing the common securities and the HIGH TIDES and using the proceeds to
purchase the 5 3/4% Convertible Senior Subordinated Debentures Due 2030 from The
Titan Corporation.
Specific terms of the HIGH TIDES, including their payment, conversion,
redemption, remarketing and subordination features, are described in this
prospectus. This prospectus also describes specific terms of the debentures that
The Titan Corporation issued to Titan Capital Trust, the common stock of The
Titan Corporation that is issuable upon conversion of the HIGH TIDES, and the
guarantee by The Titan Corporation relating to the HIGH TIDES.
The HIGH TIDES, and the debentures, common stock and guarantee referred to
in the preceding sentence, may be offered and sold from time to time pursuant to
this prospectus by the holders of those securities or by their transferees,
pledgees, donees or successors, all of which we refer to as selling holders. The
securities may be sold by the selling holders directly to purchasers or through
agents, underwriters or dealers. If required, the names of any agents,
underwriters or dealers involved in the sale of the securities, and the agent's
commission, dealer's purchase price or underwriter's discount, if any, will be
provided in supplements to this prospectus. The selling holders will receive all
of the net proceeds from the sale of the securities and will pay all
underwriting discounts and selling commissions, if any, applicable to any sale.
We are responsible for the payment of all other expenses incident to the offer
and sale of the securities. The selling holders and any broker-dealers, agents
or underwriters that participate in the distribution of the securities may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933,
and any commission received by them and any profit on the resale of the
securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act of 1933.
The Titan Corporation's common stock is traded on The New York Stock
Exchange under the symbol "TTN." The common stock registered pursuant to the
registration statement of which this prospectus is a part has been listed on The
New York Stock Exchange.
------------------------
INVESTING IN THE HIGH TIDES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 14.
------------------------
*The terms Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES)(sm) and HIGH TIDES are registered service marks of Credit Suisse First
Boston Corporation.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
The date of this prospectus is , 2000.
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TABLE OF CONTENTS
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PAGE
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Where You Can Find More Information.... 3
Cautionary Statement About Forward-
Looking Statements................... 4
Summary................................ 5
Risk Factors........................... 14
Use of Proceeds........................ 18
Titan Capital Trust.................... 19
The Remarketing........................ 20
Description of HIGH TIDES.............. 27
Description of Convertible Senior
Subordinated Debentures.............. 47
Description of the Guarantee........... 56
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PAGE
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Relationship Among the HIGH TIDES, the
Convertible Senior Subordinated
Debentures and the Guarantee......... 58
Description of Capital Stock........... 60
Certain United States Federal Income
Tax Consequences..................... 66
Certain ERISA Considerations........... 71
Registration Rights.................... 73
Selling Holders........................ 75
Plan of Distribution................... 78
Legal Matters.......................... 79
Experts................................ 79
</TABLE>
------------------------
AS USED IN THIS PROSPECTUS, (a) THE "INDENTURE" MEANS THE INDENTURE, BETWEEN
THE TITAN CORPORATION AND WILMINGTON TRUST COMPANY, AS TRUSTEE (THE "DEBENTURE
TRUSTEE") RELATING TO THE DEBENTURES, (b) THE "DECLARATION" MEANS THE AMENDED
AND RESTATED DECLARATION OF TRUST RELATING TO THE TRUST AMONG THE TITAN
CORPORATION, AS DEPOSITOR (THE "DEPOSITOR"), WILMINGTON TRUST COMPANY, AS
PROPERTY TRUSTEE (THE "PROPERTY TRUSTEE") AND AS DELAWARE TRUSTEE (THE "DELAWARE
TRUSTEE"), THE INDIVIDUALS NAMED AS ADMINISTRATIVE TRUSTEES THEREIN (THE
"ADMINISTRATIVE TRUSTEES" AND, COLLECTIVELY WITH THE PROPERTY TRUSTEE AND THE
DELAWARE TRUSTEE, THE "TRUSTEES") AND THE HOLDERS FROM TIME TO TIME OF UNDIVIDED
BENEFICIAL INTERESTS IN THE ASSETS OF THE TRUST, (c) THE "GUARANTEE" MEANS THE
PREFERRED SECURITIES GUARANTEE AGREEMENT BETWEEN THE TITAN CORPORATION AND
WILMINGTON TRUST COMPANY, AS GUARANTEE TRUSTEE (THE "GUARANTEE TRUSTEE"),
(d) THE "COMMON SECURITIES" MEANS THE COMMON SECURITIES ISSUED BY THE TRUST,
(e) THE "TRUST SECURITIES" MEANS THE HIGH TIDES AND THE COMMON SECURITIES,
(f) THE "COMMON STOCK" MEANS THE COMMON STOCK OF THE TITAN CORPORATION, PAR
VALUE $.01 PER SHARE, (g) THE "DEBENTURES" MEANS THE CONVERTIBLE SENIOR
SUBORDINATED DEBENTURES DUE 2030 FROM THE TITAN CORPORATION, (h) THE "TRUST"
MEANS TITAN CAPITAL TRUST AND (i) EXCEPT AS OTHERWISE INDICATED HEREIN, "WE,"
"OUR," "OURS," "US" AND "TITAN" REFER TO THE TITAN CORPORATION AND ITS
SUBSIDIARIES, EXCLUDING THE TRUST.
------------------------
2
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission, or SEC. Our SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the SEC located at 7 World Trade Center, Suite 1300, New
York, New York 10048 and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. You may obtain information on the operation of the SEC's public
reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. We also
file information with The New York Stock Exchange. These reports, proxy
statements and other information may be read and copied at 30 Broad Street, New
York, New York 10005.
The SEC allows us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings we make with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934, or Exchange Act,
until the offering is completed:
- Titan's Form 10-K for the fiscal year ended December 31, 1999, which was
filed on March 30, 2000, including information incorporated by reference
in the Form 10-K from its definitive proxy statement for the 2000 annual
meeting of stockholders, which was filed on April 4, 2000;
- Titan's Current Reports on Form 8-K which were filed on January 6, 2000,
January 24, 2000, February 3, 2000, February 4, 2000, February 8, 2000,
March 9, 2000, March 20, 2000 and March 31, 2000; and
- Titan's amendments to its Current Reports on Form 8-K filed November 2,
1999 and December 22, 1999, which were filed on January 19, 2000 and
January 24, 2000, its amendment to its Current Report on Form 8-K filed
January 24, 2000, which was filed on January 28, 2000, and its amendment
to its Current Report on Form 8-K filed March 9, 2000, which was filed on
April 17, 2000.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
The Titan Corporation
3033 Science Park Road
San Diego, CA 92121-1199
(858) 552-9500
Attention: Cheryl L. Barr, Assistant General Counsel and Assistant
Secretary
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, or Securities Act, covering the securities described in
this prospectus. This prospectus does not contain all of the information
included in the registration statement, some of which is contained in exhibits
to the registration statement. The registration statement, including the
exhibits, can be read at the SEC web site or at the SEC offices referred to
above. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.
3
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CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus or incorporated by
reference into this prospectus are forward-looking statements within the meaning
of Section 27A of the Securities Act and Section 21E of the Exchange Act and are
subject to the safe harbor created by the Securities Litigation Reform Act of
1995. These forward-looking statements can generally be identified as such
because the context of the statement will include words such as "may," "will,"
"intends," "plans," "believes," "anticipates," "expects," "estimates,"
"potential," "continue," or "opportunity," the negative of these words or words
of similar import. Similarly, statements that describe our future plans,
objectives or goals are also forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties which could cause
actual results to differ materially from those anticipated as of the date of
this prospectus. The risks and uncertainties include:
- the trust's inability to make distributions on the HIGH TIDES if we are
unable to make interest payments on the debentures due to a default on our
indebtedness under our credit facility or any secured debt we have in
addition to that indebtedness, or otherwise;
- our structure as a holding company, which limits our ability to access the
cash flows and assets of our subsidiaries;
- the possibility that you may have to pay taxes on interest prior to your
receipt of distributions from the trust; and
- other risks identified from time to time in the documents that we file
with the SEC, including the risk factors identified in our Form 10-K for
the year ended December 31, 1999, which is incorporated by reference in
this prospectus.
The forward-looking statements included herein are only made as of the date
of this prospectus and we undertake no obligation to publicly update such
forward-looking statements to reflect subsequent events or circumstances.
4
<PAGE>
SUMMARY
THIS SUMMARY HIGHLIGHTS INFORMATION CONTAINED ELSEWHERE OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. THIS SUMMARY IS NOT COMPLETE AND DOES NOT CONTAIN
ALL OF THE INFORMATION THAT YOU SHOULD CONSIDER BEFORE INVESTING IN THE HIGH
TIDES. YOU SHOULD CAREFULLY READ THIS ENTIRE PROSPECTUS, INCLUDING THE "RISK
FACTORS" SECTION, AND THE DOCUMENTS WE HAVE REFERRED YOU TO, INCLUDING THE
DOCUMENTS INCORPORATED HEREIN BY REFERENCE, BEFORE MAKING AN INVESTMENT IN THE
HIGH TIDES.
THE TITAN CORPORATION
Our principal executive offices are located at 3033 Science Park Road, San
Diego, California 92121-1199 and our telephone number is (858) 552 -9500. Our
Internet web site address on the world wide web is www.titan.com. The contents
of our web site are not part of this prospectus.
For a description of our business, please see our Form 10-K for the year
ended December 31, 1999, which is incorporated by reference in this prospectus.
The description of our business contained in our Form 10-K for the year ended
December 31, 1999 will be updated and superseded by later filings we make with
the SEC that are incorporated by reference in this prospectus. You should
carefully read this entire prospectus and the documents incorporated by
reference in this prospectus before making an investment decision in the HIGH
TIDES.
TITAN CAPITAL TRUST
Titan Capital Trust is a recently created Delaware business trust. We own
all of the common securities of the trust. The trust was formed solely to issue
the HIGH TIDES and common securities, the proceeds of which were used by the
trust to purchase the debentures. We have irrevocably, fully and unconditionally
guaranteed all of the trust's obligations under the HIGH TIDES on a subordinated
basis to the extent that the trust has funds available to meet such obligations.
The trust's principal executive offices and telephone number are the principal
executive offices and telephone number of Titan.
For financial reporting purposes, we treat the trust as one of our
subsidiaries. Accordingly, we include the accounts of the trust in our
consolidated financial statements. We present the HIGH TIDES as a separate line
item in our consolidated balance sheet entitled "Company obligated mandatorily
redeemable convertible preferred securities of a subsidiary trust whose sole
assets are senior subordinated debentures of Titan," and we include appropriate
disclosures about the HIGH TIDES in the notes to our consolidated financial
statements. For financial reporting purposes, we will record distributions
payable on the HIGH TIDES as a financing charge to earnings in our consolidated
statement of operations.
5
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SECURITIES TO BE REGISTERED
The HIGH TIDES were originally issued and sold to the initial purchasers,
Credit Suisse First Boston Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation. The initial purchasers simultaneously sold the HIGH
TIDES in transactions exempt from the registration requirements of the
Securities Act to persons reasonably believed by them to be qualified
institutional buyers as defined in Rule 144A under the Securities Act. The trust
used all of the proceeds of the issuance of the HIGH TIDES and of its concurrent
sale of common securities to us to purchase the debentures.
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ISSUER................................. Titan Capital Trust, a Delaware business trust and our
subsidiary. Substantially all the assets of the trust
consist of debentures issued by us. We own all of the
outstanding common securities of the trust.
SECURITIES............................. 5,000,000 HIGH TIDES, $257,732,000 in aggregate principal
amount of the debentures, 5,038,000 shares of common stock
issuable upon conversion of the HIGH TIDES (subject to
adjustment under certain circumstances described in this
prospectus) and the guarantee relating to the HIGH TIDES.
DISTRIBUTIONS.......................... Distributions accrue on the HIGH TIDES from the date of
original issuance (February 9, 2000) at the applicable
rate applied to the stated liquidation amount of $50 per
HIGH TIDES. The applicable rate is 5 3/4% per annum from
the date of original issuance to, but excluding the reset
date. The reset date is any date (a) not later than
February 15, 2005, or the final reset date, or, if the day
is not a business day, the next succeeding business day,
and (b) not earlier than 70 business days prior to
February 15, 2005, as may be determined by the remarketing
agent, in its sole discretion. On or after the reset date,
the applicable rate will be the term rate established by
the remarketing agent based on the outcome of the
remarketing. Subject to the distribution deferral
provisions described below, the trust will pay those
distributions quarterly in arrears on each February 15,
May 15, August 15 and November 15, commencing May 15,
2000. Because distributions on the HIGH TIDES constitute
interest for U.S. federal income tax purposes, corporate
holders of the HIGH TIDES will not be entitled to a
dividends-received deduction.
DISTRIBUTION DEFERRAL PROVISIONS....... The trust's ability to pay distributions on the HIGH TIDES
is solely dependent on its receipt of interest payments
from us on the debentures. We can, on one or more
occasions, defer the interest payments due on the
debentures for up to 20 consecutive quarters unless an
event of default under the debentures has occurred and is
continuing. However, we cannot defer interest payments
beyond the (a) maturity date of the debentures, which is
February 15, 2030, and (b) in the case of a deferral
period that begins prior to the reset date, the reset
date. If we defer interest payments on the debentures, the
trust will also defer distributions on the HIGH TIDES. The
trust will be able to pay distributions on the HIGH TIDES
only if and to the extent it receives interest payments
from us on the debentures.
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6
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During any deferral period, distributions will continue to
accumulate quarterly at an annual rate of 5 3/4% of the
liquidation amount of $50 per HIGH TIDES. Also, the
deferred distributions will themselves accrue additional
distributions at an annual rate of 5 3/4% to the extent
permitted by law. The trust will send you written notice
of a deferral of distributions on the HIGH TIDES not later
than 10 days prior to the record date for the related HIGH
TIDES distribution. During any period in which we defer
interest payments on the debentures, in general we cannot:
- declare or pay any dividend or distribution on our
capital stock;
- redeem, purchase, acquire or make a liquidation payment
on any of our capital stock;
- make any interest, principal or premium payment on, or
repurchase or redeem any of our debt securities that
rank equally with or junior to the debentures; or
- make any payment on any guarantee by Titan of the debt
securities of any of our subsidiaries if the guarantee
ranks equally with or junior to the debentures.
If an interest payment deferral occurs, you will continue
to recognize interest income for U.S. federal income tax
purposes in advance of your receipt of any corresponding
cash distribution. If you convert your HIGH TIDES during
any interest payment deferral period, you will not receive
any cash payment for any deferred distributions.
CONVERSION INTO COMMON STOCK........... On or prior to the tender notification date, you may
convert each HIGH TIDES into shares of common stock of
Titan at the initial rate of 1.0076 shares of common stock
for each HIGH TIDES (equivalent to an initial conversion
price of $49.625 per share of common stock). The last
reported sale price of Titan's common stock on The New
York Stock Exchange on April 19, 2000 was $40.00 per
share.
On and after the reset date, each HIGH TIDES may, at the
trust's option and subject to the results of remarketing,
become nonconvertible or convertible into a different
number of shares of common stock. The conversion price and
conversion ratio in effect at any time shall hereafter be
referred to as the applicable conversion price and the
applicable conversion ratio, each of which will be subject
to adjustment in certain circumstances.
In connection with any conversion of the HIGH TIDES, the
property trustee of the trust will exchange those HIGH
TIDES for debentures having a principal amount equal to
the stated liquidation amount of $50 per HIGH TIDES
exchanged. The conversion agent will then immediately
convert the debentures into Titan common stock. We will
not issue any fractional shares of common stock as a
result of the conversion. Instead, we will pay the
fractional interest in cash based on the then current
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7
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market value of our common stock. Also we will not issue
any additional shares of our common stock upon conversion
of the HIGH TIDES to pay for any accrued but unpaid
distributions on the HIGH TIDES at the time of conversion.
MATURITY............................... The HIGH TIDES do not have a stated maturity. However, the
trust must redeem the HIGH TIDES upon the repayment or
redemption, in whole or in part, of the debentures. The
debentures will mature on February 15, 2030, unless
earlier redeemed. Upon redemption of the debentures on
February 15, 2030, the trust will redeem the HIGH TIDES
at their liquidation amounts plus accrued and unpaid
distributions.
REMARKETING............................ The remarketing agent has agreed to use its best efforts
to remarket all HIGH TIDES tendered for remarketing. The
remarketing agent will establish the following, all of
which will be effective as of the reset date:
- the term rate per annum at which distributions will
accrue on the HIGH TIDES;
- the number of shares of common stock, if any, into
which HIGH TIDES may be converted; and
- the price, manner and time, if any, at which the HIGH
TIDES may be redeemed at our option, prior to the
stated maturity date of the debentures.
The reset date is any date (a) not later than
February 15, 2005, or the final reset date, or, if the day
is not a business day, the next succeeding business day,
and (b) not earlier than 70 business days prior to
February 15, 2005, as may be determined by the remarketing
agent, in its sole discretion.
The remarketing agent will use its best efforts to
establish the term rate, term conversion price and ratio
and term call provisions most favorable to us consistent
with the remarketing of all HIGH TIDES tendered at a reset
price equal to 101% of the liquidation amount of the HIGH
TIDES.
At least 30 business days but not more than 90 business
days prior to the final reset date, the trust will send a
remarketing notice to you stating whether it intends to
remarket the HIGH TIDES as securities that either will be
convertible into common stock or nonconvertible. All HIGH
TIDES you own will be deemed tendered for remarketing
unless you deliver an irrevocable notice to the contrary
to the tender agent prior to the tender notification date.
The tender agent will promptly remit the irrevocable
notice to the remarketing agent prior to the tender
notification date. The tender notification date is a date
no earlier than 10 business days following the remarketing
notice date, or a shorter period as shall be agreed to by
the remarketing agent.
If no HIGH TIDES are tendered for remarketing, the
remarketing will not take place, and the remarketing agent
will set the term rate, term conversion price and ratio
and term call
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8
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<TABLE>
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provisions in a manner consistent with the remarketing
notice in the manner that it believes, in its sole
discretion, would result in a price per HIGH TIDES equal
to 101% of the liquidation amount of the HIGH TIDES were a
remarketing actually to occur.
If any HIGH TIDES are tendered for remarketing, the
remarketing agent will commence a convertible remarketing
or a nonconvertible remarketing. In either case, an
initial remarketing will proceed according to instructions
set forth in the remarketing notice. The initial
remarketing will fail if:
- despite using its best efforts, the remarketing agent
is unable to establish a term rate less than or equal to
the maximum rate, which is a rate equal to the treasury
rate plus 10%, during the initial remarketing period;
- the remarketing agent is excused from its obligations
because of the failure by us or the trust to satisfy
certain conditions or the occurrence of certain market
events specified in the remarketing agreement;
- there is no remarketing agent on the first day of the
initial remarketing period; or
- prior to the initial remarketing termination date, term
provisions are established by the remarketing agent,
but the remarketing agent is unable to sell one or more
HIGH TIDES tendered for remarketing because of the
occurrence of certain market events specified in the
remarketing agreement.
In the event of an initial failed remarketing, the
remarketing agent will commence a final remarketing. This
final remarketing will be a convertible remarketing if the
initial remarketing was a nonconvertible remarketing and
vice versa. If the remarketing agent is still not able to
establish a term rate less than or equal to the maximum
rate during the final remarketing period or upon the
failure by us or the trust to satisfy certain conditions
or the occurrence of certain market events specified in
the remarketing agreement, the final remarketing will
fail. In the event of a failed final remarketing, the HIGH
TIDES will remain outstanding as convertible securities at
a term rate equal to the treasury rate plus 10% per annum
and with a term conversion price equal to 105% of the
average closing price of our common stock for the five
consecutive trading days after the final failed
remarketing termination date. In the event of a failed
final remarketing, all outstanding HIGH TIDES will be
redeemable by us, in whole or in part, at any time on or
after the third anniversary of the reset date at a
redemption price equal to 100% of the aggregate
liquidation amount thereof, plus accrued and unpaid
distributions thereon.
If the remarketing agent is able to establish a term rate
less than or equal to the maximum rate during the initial
remarketing period or the final remarketing period, as the
case may be, new
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<TABLE>
<S> <C>
holders will deliver the reset price for the remarketed
HIGH TIDES, and the term provisions will become effective
on the reset date.
If for any reason term provisions are established by the
remarketing agent but the remarketing agent is unable to
sell one or more HIGH TIDES tendered for remarketing, the
remarketing agent will be obligated, subject to some
conditions, to purchase the HIGH TIDES for the reset
price.
REMARKETING AGENT...................... Credit Suisse First Boston Corporation has agreed to act
as the initial remarketing agent, but may resign or be
replaced by us prior to the remarketing in accordance with
the remarketing agreement. The remarketing will be done
without charge to the holders of HIGH TIDES, but we will
pay the remarketing agent a fee equal to 1% of the
aggregate liquidation amount of the HIGH TIDES outstanding
on the reset date upon settlement of the transactions
contemplated by the remarketing.
OPTIONAL REDEMPTION.................... We may redeem the debentures:
- in whole or in part, at any time on or after
February 20, 2003 until but excluding the tender
notification date, at a redemption price equal to
101.44% of the principal amount of the debentures,
declining to 100% of the principal amount of the
debentures on or after February 20, 2004, plus any
accrued and unpaid interest; and
- after the reset date, in accordance with the term call
protections, if any, established in the remarketing or,
upon a failed final remarketing, on or after the third
anniversary of the reset date at a redemption price
equal to 100% of the principal amount of the
debentures, plus any accrued and unpaid interest.
Upon the redemption in whole or in part of the debentures,
the proceeds of the redemption shall be concurrently
applied to redeem, at the applicable redemption price, the
related HIGH TIDES and the trust's common securities
having an aggregate liquidation amount equal to the
aggregate principal amount of debentures redeemed.
TAX EVENT OR INVESTMENT COMPANY EVENT
REDEMPTION OR DISTRIBUTION........... Upon the occurrence of specified tax changes affecting the
trust's taxable status or the deductibility of interest on
the debentures or changes in the law causing the trust to
be considered an investment company, we will cause the
trustees to dissolve and liquidate the trust and, after
satisfaction of liabilities of creditors of the trust,
distribute the debentures to you. In limited
circumstances, we may redeem the debentures in whole, but
not in part, at a price equal to the principal amount of
the debentures plus accrued and unpaid interest, in lieu
of distributing the debentures. Upon the occurrence of
certain changes in the tax laws, we may also cause the
HIGH TIDES to
</TABLE>
10
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<TABLE>
<S> <C>
remain outstanding and pay additional amounts due on the
debentures as a result of the change.
EFFECT OF REDEMPTION................... Each of the terms "stated maturity price," "initial
redemption price," "term redemption price," if applicable,
and "tax event redemption price" are referred to as a
redemption price. Upon the repayment or redemption of the
debentures, the trust will concurrently redeem, on a pro
rata basis, at the applicable redemption price, the HIGH
TIDES and common securities having a liquidation amount
equal to the principal amount of the repaid or redeemed
debentures. If an event of default exists under the
debentures or the declaration of trust that governs the
trust, the HIGH TIDES will receive a preference over the
trust's common securities.
LIQUIDATION AMOUNT..................... If the trust is liquidated and the debentures are not
distributed to you, you will generally be entitled to
receive, after satisfaction of liabilities to creditors of
the trust as required by applicable law, $50 per HIGH
TIDES plus accrued and unpaid distributions on each HIGH
TIDES you hold.
GUARANTEE.............................. We will irrevocably guarantee, on a subordinated basis and
to the extent set forth in this prospectus, the payment of
the following:
- distributions on the HIGH TIDES to the extent of
available trust funds;
- the amount payable upon redemption of the HIGH TIDES to
the extent of available trust funds; and
- generally, the liquidation amount of the HIGH TIDES to
the extent of trust funds available for distribution to
you.
The guarantee will be unsecured and subordinate only to
all of our indebtedness under our credit facility and any
secured debt we have in addition to that indebtedness. Our
guarantee is effectively junior to the debt and other
liabilities of our subsidiaries, and as a result, funds
may not be available for payment under the guarantee.
Effectively, we have, through the guarantee, the
debentures, the indenture governing the debentures and the
trust's declaration of trust, taken together, fully,
irrevocably and unconditionally guaranteed all of the
trust's obligations under the HIGH TIDES. No single
document standing alone or operating in conjunction with
fewer than all of the other documents constitutes a full
guarantee. It is only the combined operation of these
documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the trust's
obligations under the HIGH TIDES.
LIQUIDATION OF THE TRUST............... We, as holder of the trust's common securities, have the
right at any time to dissolve the trust, subject to
specified conditions. If we dissolve the trust, after
satisfaction of liabilities to creditors of the trust, we
will distribute to you debentures having a principal
amount equal to the liquidation amount of the HIGH TIDES
you hold or, in limited circumstances, an amount equal to
the
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11
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<TABLE>
<S> <C>
liquidation amount per HIGH TIDES plus accumulated and
unpaid distributions to the date of payment.
VOTING RIGHTS.......................... Except in limited circumstances or as required by law, you
do not have any voting rights, unless an event of default
with respect to the debentures occurs and is continuing or
we default under the guarantee with respect to the HIGH
TIDES, in which case, you will be entitled, by majority
vote, to appoint an additional trustee of the trust or
remove the Delaware trustee or the property trustee.
RANKING................................ Generally, the trust will make payment on the HIGH TIDES
on a pro rata basis with its common securities. The
debentures will be unsecured and subordinate and junior in
right of payment only to all of our indebtedness under our
credit facility and any secured debt we have in addition
to that indebtedness. At March 31, 2000, we had
approximately $100.0 million of indebtedness outstanding
under our credit facility and not more than $14.4 million
of additional secured debt. The debentures are effectively
junior to the debt and other liabilities of our
subsidiaries, and as a result, funds may not be available
for payments due under the debentures. Our subsidiaries
are separate legal entities and have no obligations to
pay, or make funds available for the payment of, any
amount due on the debentures, the HIGH TIDES or the
guarantee.
FORM OF HIGH TIDES..................... The HIGH TIDES are represented by a global certificate
registered in the name of Cede & Co., as nominee for The
Depository Trust Company, or DTC. Beneficial interests in
the HIGH TIDES are evidenced by records maintained by DTC
or the participants in DTC. Except under limited
circumstances, HIGH TIDES in certificated form will not be
issued in exchange for the global certificate.
USE OF PROCEEDS........................ The selling holders will receive all of the net proceeds
for the resale of the securities. Neither we nor the trust
will receive any proceeds.
REGISTRATION RIGHTS.................... Under a registration rights agreement entered into in
connection with the initial offering and sale of the HIGH
TIDES to the initial purchasers, we and the trust have
agreed to use our best efforts to keep the shelf
registration statement of which this prospectus is a part
effective and useable (subject to certain exceptions) for
two years or such other period as shall be required under
Rule 144(k) of the Securities Act or such shorter period
ending when all the securities covered by the registration
statement have been sold.
ABSENCE OF MARKET FOR THE HIGH TIDES... The HIGH TIDES are a privately placed security for which
there is currently no public trading market. Although the
initial purchasers informed us in connection with the
initial offering and sale of the HIGH TIDES that they
intended to make a market in the HIGH TIDES, the initial
purchasers are not obligated to do so, and any market
making may be discontinued at any time
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<S> <C>
without notice. Accordingly, we cannot assure you as to
the development or liquidity of any market for the HIGH
TIDES.
TRADING................................ Our common stock is listed on The New York Stock Exchange
under the symbol "TTN." The common stock issuable upon
conversion of the HIGH TIDES has been listed on The New
York Stock Exchange.
</TABLE>
FINANCIAL RATIOS
The following table sets forth our consolidated ratio of earnings to fixed
charges and the ratio of our combined fixed charges and preference dividends to
earnings for each of the periods presented:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------
1999
--------------------
1995 1996 1997 1998 ACTUAL PRO FORMA
-------- -------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Consolidated ratio of earnings to fixed charges.... 1.45 2.11 1.25 2.09 5.93 2.30
Ratio of combined fixed charges and preference
dividends to earnings............................ 0.80 0.55 0.92 0.54 0.18 0.45
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges and the ratio of our combined fixed charges and preference dividends to
earnings, earnings consist of income before income taxes plus fixed charges less
capitalized interest and "fixed charges" consist of interest expense (including
amortization of debt discount and expense), plus capitalized interest and the
estimated interest factor attributable to rentals. On February 25, 2000, we
acquired Advanced Communication Systems, Inc. In connection with the
acquisition, we used approximately $74 million of the proceeds from the initial
offering of the HIGH TIDES to repay existing indebtedness of Advanced
Communication Systems. The pro forma ratios above reflect our acquisition of
Advanced Communication Systems as if that acquisition had occurred on
January 1, 1999.
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RISK FACTORS
INVESTING IN THE HIGH TIDES INVOLVES RISK. IN ADDITION TO THE RISK FACTORS
DESCRIBED IN OUR FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999, WHICH ARE
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, YOU SHOULD CONSIDER CAREFULLY THE
RISK FACTORS DESCRIBED BELOW, AS WELL AS THE OTHER INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, BEFORE PURCHASING THE HIGH TIDES.
THE RISKS AND UNCERTAINTIES DESCRIBED BELOW AND INCORPORATED BY REFERENCE ARE
NOT THE ONLY RISKS WE FACE. ADDITIONAL RISKS AND UNCERTAINTIES NOT CURRENTLY
KNOWN TO US OR THAT WE CURRENTLY DEEM IMMATERIAL MAY IMPAIR OUR BUSINESS
OPERATIONS. IF ANY OF THE RISKS DESCRIBED BELOW OR INCORPORATED BY REFERENCE IN
THIS PROSPECTUS ACTUALLY OCCUR, OUR BUSINESS, RESULTS OF OPERATIONS AND
FINANCIAL CONDITION COULD BE MATERIALLY AND ADVERSELY AFFECTED, THE TRADING
PRICES OF THE HIGH TIDES AND OUR COMMON STOCK COULD DECLINE AND YOU MIGHT LOSE
ALL OR PART OF YOUR INVESTMENT.
RISKS RELATING TO OUR BUSINESS AND COMMON STOCK
Please see the risk factors described in our Form 10-K for the year ended
December 31, 1999, which is incorporated by reference in this prospectus, for
risks relating to our business and common stock. Those risk factors will be
updated and superseded by later filings we make with the SEC that are
incorporated by reference in this prospectus. You should carefully read this
entire prospectus and the documents incorporated by reference in this prospectus
before making an investment decision in the HIGH TIDES.
RISKS RELATING TO THE HIGH TIDES
THE TRUST MAY NOT BE ABLE TO MAKE DISTRIBUTIONS ON THE HIGH TIDES IF WE
DEFAULT ON OUR INDEBTEDNESS UNDER OUR CREDIT FACILITY OR ANY SECURED DEBT WE
HAVE IN ADDITION TO THAT INDEBTEDNESS BECAUSE OUR OBLIGATIONS TO PAY ON THE
DEBENTURES AND THE GUARANTEE ARE SUBORDINATED TO OUR PAYMENT OBLIGATIONS UNDER
THAT DEBT.
Because of the subordinated nature of the guarantee and the debentures, we:
- will not be permitted to make any payments of principal, including
redemption payments, or interest on the debentures if we default on our
indebtedness under our credit facility or any secured debt we have in
addition to that indebtedness;
- will not be permitted to make payments on the guarantee if we default on
any of our indebtedness under our credit facility or any secured debt we
have in addition to that indebtedness; and
- must pay all our indebtedness under our credit facility and any secured
debt we have in addition to that indebtedness before we make payments on
the guarantee or the debentures if we become bankrupt, liquidate or
dissolve.
The HIGH TIDES, the guarantee and the debentures do not limit our ability or
the ability of our subsidiaries to incur additional indebtedness, including
indebtedness that ranks senior to the debentures and the guarantee. As of March
31, 2000, we had approximately $100.0 million of indebtedness under our credit
facility and not more than $14.4 million of additional secured debt. Because the
trust will be able to pay amounts due on the HIGH TIDES only if we make payments
on the debentures, your ability to receive distributions may be affected by our
indebtedness. In addition, our credit facility prohibits payments of principal,
including redemption payments, on the debentures without the prior consent of
the lenders under that credit facility.
OUR ABILITY TO REPAY OUR DEBT DEPENDS ON THE PERFORMANCE OF OUR
SUBSIDIARIES.
We are a holding company and we conduct our operations primarily through our
subsidiaries. We have few assets of significance other than the capital stock of
our subsidiaries. Consequently, we are dependent upon dividends or other
intercompany transfers of funds from our direct and indirect subsidiaries to
meet our debt service obligations, including those related to the debentures,
the guarantee and the HIGH
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TIDES. Our subsidiaries are separate legal entities that have no obligation to
pay any amounts due under the HIGH TIDES, the debentures or the guarantee. Our
subsidiaries do not guarantee the payment of the HIGH TIDES or the debentures.
Furthermore, our subsidiaries are not obligated to make funds available to us,
and creditors of our subsidiaries will have a superior claim to our
subsidiaries' assets. As a result, your right to receive payment on the
debentures and the HIGH TIDES is effectively junior to our subsidiaries'
existing indebtedness and possibly to all of their future borrowings. In
addition, our subsidiaries' ability to make any payments to us will depend on
their earnings, the terms of their indebtedness, business and tax considerations
and legal restrictions. We also may publicly offer the common stock of our
subsidiaries from time to time to finance their growth. Any such offerings would
reduce our interests in those subsidiaries and could reduce our ability to make
payments on the debentures.
We cannot assure you that any of our subsidiaries will be able to pay
dividends or otherwise distribute funds to us in an amount sufficient to pay the
principal of or interest on the debentures.
THE DEFERRAL OF INTEREST PAYMENTS MAY HAVE TAX CONSEQUENCES TO YOU AND AN
ADVERSE EFFECT ON THE TRADING PRICE OF THE HIGH TIDES.
If no event of default under the indenture has occurred and is continuing,
we may defer the payment of interest on the debentures for a period not
exceeding 20 consecutive quarters. If we defer interest payments on the
debentures, the trust will defer quarterly distributions on the HIGH TIDES.
However, distributions will still accumulate quarterly and the deferred
distributions will themselves accrue additional distributions at the annual rate
of 5 3/4%, to the extent permitted by law. There is no limitation on the number
of times that we may elect to defer interest payments.
We have no current intention of deferring interest payments on the
debentures. If we exercise our right to defer interest payments in the future,
however, you will be required to include your pro rata share of original issue
discount accrued on the debentures in gross income as interest income for U.S.
federal income tax purposes, prior to the receipt of cash distributions related
to such income. In addition, if we defer payment of interest on the debentures
in the future, the HIGH TIDES may trade at a price that does not fully reflect
the value of deferred interest on the debentures. Our right to defer interest
payments on the debentures may mean that the market price of the HIGH TIDES may
be more volatile and could decrease relative to the market prices of other
securities that do not have this right.
IF YOU DO NOT ELECT TO KEEP YOUR HIGH TIDES UPON A REMARKETING NOTICE, YOUR
HIGH TIDES WILL NO LONGER BE OUTSTANDING AFTER A SUCCESSFUL REMARKETING.
If you do not notify the remarketing agent, your HIGH TIDES will no longer
be outstanding after a successful remarketing, and you will have no further
rights thereunder except to receive an amount equal to:
- from the proceeds of the remarketing, 101% of the aggregate liquidation
amount of the HIGH TIDES; plus
- from us, accrued and unpaid distributions on the HIGH TIDES up until, but
excluding, the reset date.
The remarketing agent agrees to use its best efforts to remarket all HIGH
TIDES tendered for remarketing. All HIGH TIDES will be considered tendered
unless the holder of HIGH TIDES gives irrevocable notice to the contrary to the
tender agent, which the tender agent will promptly remit to the remarketing
agent, before the tender notification date.
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<PAGE>
THE REMARKETING OF THE HIGH TIDES MAY NOT BE SUCCESSFUL AND THE TERMS OF THE
HIGH TIDES AFTER ANY REMARKETING ARE SUBJECT TO CHANGE.
The remarketing will have failed if:
- despite using its best efforts, the remarketing agent cannot establish a
term rate less than or equal to the maximum rate;
- the remarketing agent is excused from remarketing the HIGH TIDES because
of the failure by us to satisfy a condition in the remarketing agreement
or the occurrence of certain market events specified in the remarketing
agreement;
- there is no remarketing agent on the first day of the initial remarketing
period; or
- prior to the initial remarketing termination date, term provisions are
established by the remarketing agent, but the remarketing agent is unable
to sell one or more HIGH TIDES tendered for remarketing because of the
occurrence of certain market events specified in the remarketing
agreement.
If the initial remarketing fails, the remarketing agent will commence a
final remarketing during the final remarketing period. If the final remarketing
fails, then the HIGH TIDES will remain outstanding at a term rate equal to the
treasury rate plus 10% per annum and with a term conversion price equal to 105%
of the average closing price of our common stock for the five consecutive
trading days after the final failed remarketing termination date. In the event
of a failed final remarketing, all outstanding HIGH TIDES will be redeemable by
us, in whole or in part, at any time on or after the third anniversary of the
reset date at a redemption price equal to 100% of the aggregate liquidation
amount thereof, plus accrued and unpaid distributions thereon. If no HIGH TIDES
are tendered for remarketing, the remarketing will not take place, although the
remarketing will not be deemed to have failed. In that case, the remarketing
agent will set the term provisions according to the instructions contained in
the remarketing notice in the manner that it believes, in its sole discretion,
would result in a price per HIGH TIDES equal to 101% of the liquidation amount
if a remarketing were actually to occur.
AFTER THE RESET DATE, THE HIGH TIDES MAY NO LONGER BE CONVERTIBLE OR MAY BE
CONVERTIBLE INTO A FEWER NUMBER OF SHARES OF OUR COMMON STOCK.
Each HIGH TIDES is initially convertible, at the option of the holder, into
1.0076 shares of common stock, which may be adjusted in some circumstances. We
may choose to remarket the HIGH TIDES so that after the reset date the HIGH
TIDES will not be convertible into shares of common stock, or, each HIGH TIDES
will be convertible into a different number of shares of common stock.
THE TRUST MAY REDEEM THE HIGH TIDES WITHOUT YOUR CONSENT IF SPECIFIED TAX
CHANGES OCCUR.
Upon the occurrence of specified tax changes affecting the trust's taxable
status or the deductibility of interest on the debentures, we may either
dissolve and liquidate the trust and distribute the debentures to you or we may
redeem all of the debentures. If we redeem the debentures, the trust will use
the cash it receives from that redemption to redeem the HIGH TIDES and the
trust's common securities.
WE MAY CAUSE THE HIGH TIDES TO BE REDEEMED ON OR AFTER FEBRUARY 20, 2003
WITHOUT YOUR CONSENT.
We may redeem all or some of the debentures at our option at any time on or
after February 20, 2003 until but excluding the tender notification date.
Following the remarketing, we may redeem the debentures in accordance with the
term call protections, if any, established in the remarketing or, upon a failed
final remarketing, on or after the third anniversary of the reset date. You
should assume that we will exercise our redemption option if we are able to
refinance the debentures at a lower interest rate or if we conclude it is
otherwise in our interest to redeem the debentures. The trust will use the cash
it receives from the redemption of the debentures to redeem an equivalent amount
of HIGH TIDES and its common securities on a pro rata basis.
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DISTRIBUTION OF THE DEBENTURES TO YOU MAY HAVE ADVERSE TAX CONSEQUENCES FOR
YOU.
We may dissolve and liquidate the trust at any time. If that happens, the
trust will redeem the HIGH TIDES and its common securities by distributing the
debentures to you and to us, as the holder of the trust's common securities, on
a pro rata basis.
Under current U.S. federal tax laws, a distribution of debentures on the
dissolution of the trust would not be a taxable event to you. However, if there
is a change in the law and, for example, the trust is characterized for U.S.
federal income tax purposes as an association taxable as a corporation at the
time of its dissolution, the distribution of debentures would likely constitute
a taxable event to you.
THE DISTRIBUTION OF DEBENTURES UPON LIQUIDATION OF THE TRUST MAY HAVE AN
ADVERSE EFFECT ON TRADING PRICES.
We have the right to dissolve and liquidate the trust at any time. Although
we have no current intention of doing so, we anticipate that we would consider
exercising this right if the expenses associated with maintaining the trust are
substantially greater than we expect or for other business reasons. If we
exercise our right to dissolve and liquidate the trust, the trust will redeem
the HIGH TIDES and its common securities by distributing the debentures to you
and to us on a pro rata basis, unless an event of default under the debentures
has occurred and is continuing, in which case you will have priority over us.
We cannot predict the market prices for the debentures that the trust may
distribute to you. Accordingly the debentures that you receive on a
distribution, or the HIGH TIDES you hold pending a distribution, may trade at a
discount to the price that you paid to purchase the HIGH TIDES.
Because you may receive debentures, you should make an investment decision
with regard to the debentures in addition to the HIGH TIDES. You should
carefully review all the information regarding the debentures contained in this
prospectus.
WE GUARANTEE PAYMENTS ON THE HIGH TIDES ONLY IF THE TRUST HAS CASH
AVAILABLE.
If we fail to make payments on the debentures, the trust will not be able to
pay distributions, the redemption price or the liquidation amount of each HIGH
TIDES. In those circumstances, you will not be able to rely upon the guarantee
for payment of these amounts. Instead, if we are in default for payments under
the debentures, you may:
- rely on the property trustee for the trust to enforce the trust's rights
under the debentures; or
- directly sue us or seek other remedies to collect your share of payments
owed.
YOU HAVE LIMITED VOTING RIGHTS.
You will have limited voting rights relating generally to:
- the modification of the HIGH TIDES and our guarantee of the HIGH TIDES;
and
- the exercise of the trust's rights as holder of debentures.
You are not entitled to appoint, remove or replace the property trustee of
the trust or the Delaware trustee of the trust except upon the occurrence of
certain events. The property trustee, and the holders of all of the trust's
common securities may, subject to certain conditions, amend the declaration of
trust without your consent to:
- cure any ambiguity;
- make provisions of the declaration of trust not inconsistent with other
provisions of the declaration of trust;
- ensure that the trust will not be classified for U.S. federal income tax
purposes as an association subject to taxation as a corporation; or
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- ensure that the trust will be classified as a grantor trust.
THE HIGH TIDES AND THE DEBENTURES DO NOT HAVE AN ESTABLISHED MARKET.
There is no existing public trading market for the HIGH TIDES. We do not
intend to list the HIGH TIDES on a national securities exchange or automated
interdealer quotation system. Although the initial purchasers informed us and
the trust at the time of the initial offering and sale of the HIGH TIDES that
they intended to make a secondary market for the HIGH TIDES, they are not
obligated to do so and may discontinue making a secondary market for the HIGH
TIDES at any time without notice and for any reason. Accordingly, we cannot
assure you that an active trading market for the HIGH TIDES will develop or be
sustained. If a market were to develop, the HIGH TIDES could trade at prices
that may be higher or lower than their offering price depending upon many
factors, including:
- prevailing interest rates;
- our stock price;
- our operating results; and
- the market for similar securities.
RISKS RELATING TO OUR PROPOSED ACQUISITION OF AVERSTAR, INC.
THE EXPECTED COSTS OF THE ACQUISITION WILL BE SUBSTANTIAL.
On March 24, 2000, we entered into an agreement to acquire AverStar, Inc. We
estimate that we will incur primarily direct transaction costs of approximately
$11.6 million associated with the acquisition. These costs will be charged to
operations as incurred. This amount is a preliminary estimate only. There can be
no assurance that we will not actually incur charges in excess of this estimate.
SALES OF SUBSTANTIAL AMOUNTS OF OUR COMMON STOCK IN THE OPEN MARKET BY
AVERSTAR STOCKHOLDERS COULD DEPRESS OUR STOCK PRICE.
In connection with our acquisition of AverStar, AverStar stockholders will
receive shares of our common stock. If AverStar stockholders sell substantial
amounts of our common stock in the public market following the acquisition,
including shares issued upon the exercise of outstanding options, the market
price of our common stock could fall. These sales might also make it more
difficult for us to sell equity or equity-related securities at a time and price
that we otherwise would deem appropriate. Based on the number of outstanding
shares of AverStar common stock as of April 13, 2000, we will issue
approximately 2,851,684 shares of our common stock in the acquisition. In
addition, we will assume all outstanding options to purchase AverStar common
stock, which will be converted into options to acquire shares of our common
stock using the same exchange ratio which is applicable to AverStar common stock
in the acquisition. All of the shares of our common stock issued to stockholders
of AverStar, including those issued upon the exercise of options, will be freely
tradable without restrictions or further registration under the Securities Act
of 1933, unless they are issued to an "affiliate" of AverStar, as that term is
defined under the Securities Act, at the time the acquisition is submitted for
approval by AverStar stockholders. The term "affiliate" would generally include
directors, executive officers and some significant stockholders of AverStar.
USE OF PROCEEDS
The selling holders will receive all of the net proceeds of the resale of
the HIGH TIDES, the debentures, the common stock issuable upon conversion of the
HIGH TIDES and the guarantee. Neither we nor the trust will receive any of the
proceeds from the sale of any of those securities.
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TITAN CAPITAL TRUST
Titan Capital Trust is a statutory business trust created under Delaware law
on January 19, 2000 pursuant to a declaration of trust among the trustees and
Titan and a certificate of trust filed with the Delaware Secretary of State. The
declaration of trust was amended and restated in its entirety as of the date the
trust initially issued the HIGH TIDES. Unless the context requires otherwise,
"Titan," "we," "us," "our" or similar terms in this section refer solely to The
Titan Corporation and not the trust or any of our other consolidated
subsidiaries.
The trust's assets consist principally of the debentures, and payments under
the debentures are its sole revenue. The trust exists for the exclusive purposes
of:
- issuing the HIGH TIDES and the common securities representing undivided
beneficial ownership interests in the trust's assets;
- investing the gross proceeds of those securities in the debentures; and
- engaging in only those other activities necessary or incidental to those
purposes.
Titan directly acquired common securities of the trust in an aggregate
liquidation amount equal to 3% of the total capital of the trust. The trust will
generally make payments on the common securities on a pro rata basis with the
HIGH TIDES. However, if an event of default under the declaration of trust
occurs and is continuing, Titan's right to payment in respect of distributions
and payments upon liquidation, redemption and otherwise will be subordinated to
your rights.
Pursuant to the declaration of trust, the trust has four trustees, which we
refer to in this prospectus as declaration trustees:
- two of the trustees, referred to as administrative trustees, are officers
of Titan; and
- the third trustee is the property trustee and the fourth trustee is the
Delaware statutory trustee, each of which is Wilmington Trust Company.
In limited circumstances, the holders of a majority in aggregate stated
liquidation amount of the outstanding HIGH TIDES will be entitled to appoint one
additional trustee, referred to as the special trustee. The special trustee need
not be an officer or employee of or otherwise affiliated with Titan. Generally,
the special trustee will have the same rights, powers and privileges as the
administrative trustees.
The property trustee holds title to the debentures for your benefit and the
benefit of the holders of the trust's common securities. As the holder of the
debentures, the property trustee has the power to exercise all the rights,
powers and privileges granted to the holder of the debentures under the
indenture governing the debentures between Titan and Wilmington Trust Company,
as debenture trustee. In addition, the property trustee maintains exclusive
control of a segregated non-interest bearing bank account to hold all payments
made in respect of the debentures for your benefit and the benefit of the
holders of the trust's common securities.
Subject to your right to appoint a special trustee, we, as the direct or
indirect holder of all of the trust's common securities, have the right to
appoint, remove or replace any of the trustees and to increase or decrease the
number of trustees; provided, however, that during an event of default under the
indenture, the property trustee and the Delaware trustee may only be removed by
the holders of a majority in liquidation amount of the HIGH TIDES. However, the
number of trustees must always be at least two, one of which must be an
administrative trustee, and, unless otherwise required by applicable law, there
must always be a Delaware statutory trustee.
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THE REMARKETING
NOTICE OF REMARKETING; TENDER FOR SALE BY REMARKETING; RETENTION OF HIGH
TIDES
At least 30 business days but not more than 90 business days prior to the
final reset date, the trust will send to you a remarketing notice stating
whether it intends to remarket the HIGH TIDES as securities that either will be
convertible into common stock or nonconvertible. So that no holder of HIGH
TIDES, through inadvertence or otherwise, may fail to tender any HIGH TIDES for
sale in the remarketing, each outstanding HIGH TIDES you own will be deemed to
have been tendered for remarketing unless you have given irrevocable notice to
the contrary to the tender agent. The tender agent will promptly remit the
notice to the remarketing agent. The irrevocable notice, which may be telephonic
or written, must be delivered prior to 5:00 p.m., New York City time on the
tender notification date. The tender notification date is a business day no
earlier than 10 business days following the remarketing notice date, or a
shorter period as shall be agreed to by the remarketing agent. If you elect to
retain HIGH TIDES, your notice must state:
- the number of HIGH TIDES to be retained (which must be all of the HIGH
TIDES represented by the applicable certificate, unless such certificate
is a global HIGH TIDES certificate);
- the number of the certificate representing the HIGH TIDES not being
tendered (unless such certificate is a global HIGH TIDES certificate); and
- the number of HIGH TIDES represented by such certificate (unless such
certificate is a global HIGH TIDES certificate).
Any transferee of a HIGH TIDES is bound to the terms of any such notice
which has been given relating to the transferred HIGH TIDES.
Any failure by you to give timely notice of an election to retain all or any
part of your HIGH TIDES will constitute an irrevocable tender for sale in the
remarketing of all the HIGH TIDES you hold. On and after the reset date, the
terms of all HIGH TIDES, whether or not tendered for remarketing, will be
modified by the term provisions, as the same shall be established by the
remarketing agent.
If the HIGH TIDES are not held by DTC or its nominee in the form of one or
more global HIGH TIDES, certificates representing remarketed HIGH TIDES will be
issued to the purchasers thereof, irrespective of whether the certificates
formerly representing such HIGH TIDES have been delivered to the tender agent.
If you do not duly give notice that you will retain your HIGH TIDES, your rights
with respect to the HIGH TIDES will cease upon the successful remarketing of the
HIGH TIDES, except your right to receive an amount equal to:
- from the proceeds of the remarketing, 101% of the aggregate liquidation
amount of the HIGH TIDES; plus
- from us, any accrued and unpaid distributions on the HIGH TIDES to, but
excluding, the reset date (upon surrender of the certificate representing
the HIGH TIDES to the tender agent properly endorsed for transfer, in the
case of a holder other than DTC, which has taken physical delivery of a
HIGH TIDES certificate) but without any additional interest thereon (and
the certificate will cease to represent outstanding HIGH TIDES).
If no HIGH TIDES are tendered for remarketing, the remarketing will not take
place, although the remarketing will not be deemed to have failed. Under these
circumstances, the remarketing agent will set the term provisions in a manner
consistent with the remarketing notice that it believes, in its sole discretion,
would result in a price per HIGH TIDES equal to 101% of the liquidation amount
thereof were a remarketing actually to occur.
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THE REMARKETING PROCESS
The remarketing agent has agreed to use its best efforts to remarket all
HIGH TIDES tendered for remarketing in accordance with the remarketing
agreement. The remarketing agent will establish, effective beginning on the
reset date:
- the term rate per annum at which distributions will accrue on the HIGH
TIDES;
- the term conversion ratio and price, which determine the number of shares
of common stock, if any, into which each HIGH TIDES may be converted; and
- the term call protections, which are the price, manner and time, if any,
at which the HIGH TIDES may be redeemed.
In this prospectus, we refer to the term rate, the term conversion ratio and
price and the term call protections as the term provisions.
The remarketing agent will use its best efforts to establish the term
provisions most favorable to us consistent with the successful remarketing of
all HIGH TIDES tendered at a price equal to 101% of the aggregate liquidation
amount. The remarketing agent may purchase HIGH TIDES tendered for remarketing,
but it shall not be obligated to purchase any HIGH TIDES except to the extent
expressly provided under the remarketing agreement.
The remarketing will be done without charge to the holders of the HIGH
TIDES, but we shall be obligated to pay the remarketing agent fees for its
services. Neither we nor any of our affiliates will be permitted to submit
orders for or purchase tendered HIGH TIDES in the remarketing.
In establishing the term provisions during the remarketing, the remarketing
agent will take into account the following remarketing conditions:
- short-term and long-term market interest rates and indices of the
short-term and long-term interest rates;
- market supply and demand for short-term and long-term securities;
- yield curves for short-term and long-term securities comparable to the
HIGH TIDES;
- industry and financial conditions which may affect the HIGH TIDES;
- the number of HIGH TIDES to be remarketed;
- the number of potential purchasers;
- the number of shares of common stock, if any, into which the HIGH TIDES
will be convertible;
- the current ratings by nationally recognized statistical rating
organizations of our long-term subordinated debt and of other outstanding
capital securities of the trust, including the HIGH TIDES and the common
securities; and
- the length and type of call protections, if any.
We currently have no intention of causing the applicable conversion price on
the reset date to be less than 100% of the fair market value of the common stock
on the reset date.
If any HIGH TIDES are tendered for remarketing, on the business day
following the tender notification date, the remarketing agent will commence a
convertible remarketing or a nonconvertible remarketing, as the case may be, in
accordance with the remarketing agreement and pursuant to the instructions set
forth in the remarketing notice. The remarketing agent will determine, and upon
request make available to interested persons, non-binding indications of the
term provisions based upon
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then-current remarketing conditions. The remarketing agent will solicit and
receive orders from prospective investors to purchase tendered HIGH TIDES. The
remarketing agent will continue using its best efforts to remarket the HIGH
TIDES as described above, adjusting the non-binding indications of the term
provisions as necessary to establish the term conditions most favorable to us
consistent with remarketing all HIGH TIDES tendered at a price equal to 101% of
the aggregate liquidation amount until the remarketing is completed or is deemed
to have failed for any of the reasons set forth under "--Effect of a Failed
Remarketing."
If the remarketing agent determines that the remarketing has not failed, the
remarketing agent will promptly communicate the term provisions to the tender
agent. The initial remarketing termination date is the tenth business day
following the tender notification date, or a shorter period as shall be agreed
to by the remarketing agent. The tender agent will communicate the term
provisions to the declaration trustees, the debenture trustee, the trust, the
paying agent, us and each holder, if any, which timely elected not to tender all
of its HIGH TIDES for remarketing, by written notice or by telephone promptly
confirmed by telecopy or other writing. On the reset date, new holders will
tender the reset price for the tendered HIGH TIDES as set forth below under
"--Settlement" and the term provisions will become effective.
EFFECT OF A FAILED REMARKETING
The initial remarketing will fail if:
- despite using its best efforts the remarketing agent is unable to
establish, prior to the initial remarketing termination date, a term rate
that is less than or equal to the treasury rate plus 10% per annum, which
we refer to in this prospectus as the maximum rate;
- the remarketing agent is excused from remarketing the HIGH TIDES because
of the failure by us or the trust to satisfy a condition in the
remarketing agreement or the occurrence of certain market events specified
in the remarketing agreement;
- there is no remarketing agent on the first day of the initial remarketing
period; or
- prior to the initial remarketing termination date, term provisions are
established by the remarketing agent, but the remarketing agent is unable
to sell one or more HIGH TIDES tendered for remarketing because of the
occurrence of certain market events specified in the remarketing
agreement.
If the initial remarketing fails because the remarketing agent was not able
to establish a term rate less than or equal to the maximum rate, the remarketing
agent will commence a final remarketing during the period beginning on the
business day following the initial remarketing termination date and ending on
the date which is 10 business days later, or a shorter period as shall be agreed
to by the remarketing agent. The final remarketing will be a convertible
remarketing if the initial remarketing was a nonconvertible remarketing and vice
versa.
If the remarketing agent is able to establish a term rate less than or equal
to the maximum rate during the final remarketing period, it shall promptly
communicate the term provisions to the tender agent, who will communicate the
term provisions to the declaration trustees, the trust, the paying agent, us and
each holder, if any, which timely elected not to tender all of its HIGH TIDES
for remarketing, by written notice or by telephone promptly confirmed by
telecopy or other writing. On the reset date, new holders will tender the reset
price for the tendered HIGH TIDES as set forth below under "--Settlement" and
the term provisions will become effective.
If despite using its best efforts, the remarketing agent is still not able
to establish a term rate less than or equal to the maximum rate prior to the
expiration of the final remarketing period or the remarketing agent is excused
from remarketing the securities because of the failure by us or the trust to
satisfy a condition in the remarketing agreement or the occurrence of certain
market events, the final remarketing
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will fail. In addition, if term provisions are established by the remarketing
agent but the remarketing agent is unable to sell one or more HIGH TIDES
tendered for remarketing because of the occurrence of certain market events
specified in the remarketing agreement, then the final remarketing will fail. In
the event of a failed final remarketing, the term rate shall be a rate equal to
the treasury rate plus 10% per annum, and the term conversion price will be
equal to 105% of the average closing price of our common stock for the five
consecutive trading days after the final failed remarketing termination date. In
the event of a failed final remarketing, all outstanding HIGH TIDES will be
redeemable by us, in whole or in part, at any time on or after the third
anniversary of the reset date at a redemption price equal to 100% of the
aggregate liquidation amount thereof, plus accrued and unpaid distributions
thereon. There can be no assurance that all of the HIGH TIDES tendered will be
remarketed.
If for any reason term provisions are established by the remarketing agent
but the remarketing agent is unable to sell one or more HIGH TIDES tendered for
remarketing, the remarketing agent will be obligated, subject to some
conditions, to purchase the HIGH TIDES for the reset price.
The term "treasury rate" means (A) the yield, under the heading which
represents the average for the week immediately prior to the date of
calculation, appearing in the most recently published statistical release
designated H.15(519) or any successor publication which is published weekly by
the Federal Reserve and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the remaining
life (if no maturity is within three months before or after the remaining life,
yields for the two published maturities most closely corresponding to the
remaining life shall be determined and the treasury rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (B) if such release, or any successor release, is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the comparable treasury issue, calculated using a price for the
comparable treasury issue (expressed as a percentage of its principal amount)
equal to the comparable treasury price for the reset date. The treasury rate
shall be calculated on the third business day preceding the reset date.
The term "comparable treasury issue" means the United States Treasury
security selected by the quotation agent as having a maturity comparable to the
remaining life that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining life. If no United
States Treasury security has a maturity which is within a period from three
months before to three months after the reset date, the two most closely
corresponding United States Treasury securities shall be used as the comparable
treasury issue, and the rate being calculated shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
The term "comparable treasury price" means (A) the arithmetic mean of five
reference treasury dealer quotations for the reset date, after excluding the
highest and lowest such reference treasury dealer quotations, or (B) if the
quotation agent obtains fewer than five reference treasury dealer quotations,
the arithmetic mean of all the reference treasury dealer quotations.
The term "quotation agent" means Credit Suisse First Boston Corporation and
its successor provided, however, that if the foregoing shall cease to be a
primary United States Government securities dealer in The City of New York we
shall substitute therefor another primary treasury dealer.
The term "reference treasury dealer" means (A) the quotation agent and
(B) any other primary treasury dealer selected by the debenture trustee after
consultation with us.
The term "reference treasury dealer quotations" means, with respect to each
reference treasury dealer and the reset date, the arithmetic mean, as determined
by the debenture trustee, of the bid and asked prices for the comparable
treasury issue (expressed in each case as a percentage of its principal
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amount) quoted in writing to the debenture trustee by such reference treasury
dealer at 5:00 p.m., New York City time, on the third business day preceding the
reset date.
The term "remaining life" means the period beginning on the reset date and
ending at February 15, 2030.
SETTLEMENT
Settlement of transactions in connection with the remarketing will take
place on the reset date, or such date as the remarketing agent may, in its sole
discretion, determine, or as otherwise required by applicable law. Payments in
respect of the tendered HIGH TIDES in an amount equal to the proceeds of the
remarketing will be made by the tender agent (but only to the extent in fact
received by the tender agent) on the date in the manner described under
"Description of HIGH TIDES--Depositary Procedures," but, in the case of a holder
(other than DTC) which has taken physical delivery of a certificate representing
its HIGH TIDES, the payment shall be made only upon surrender to the tender
agent by 2:30 p.m. New York City time on the reset date (or any succeeding date)
of the certificate representing the HIGH TIDES, properly endorsed for transfer.
Neither we, the trust, the declaration trustees, the tender agent and
(except to the extent provided above) the remarketing agent will be obligated to
provide or advance funds to make payment to the holders of HIGH TIDES tendered
in the remarketing.
PURCHASES BY US AND OUR AFFILIATES
While we, or an affiliate, may from time to time purchase, hold, or sell
HIGH TIDES, neither we nor any of our affiliates may purchase any HIGH TIDES on
the reset date or submit orders in the remarketing, and the remarketing agent
has agreed that it will not knowingly remarket any HIGH TIDES to us or any of
our affiliates.
TENDER AGENT
Tenders of HIGH TIDES in the remarketing will be made to the tender agent,
and the tender agent will pay to the prior holders thereof the proceeds of the
remarketing, provided the tender agent receives the amount from the remarketing
agent. The tender agent will be the property trustee or, in the event of the
distribution of debentures to the holders of HIGH TIDES prior to the reset date,
the debenture trustee.
TERMINATION OF THE TRUST
If the trust is for any reason dissolved and liquidated prior to the reset
date and the debentures are distributed to the holders of HIGH TIDES and common
securities, the remarketing will proceed as described in this prospectus except
that the debentures rather than the HIGH TIDES will be remarketed by the
remarketing agent, the debenture trustee rather than the property trustee will
be the tender agent and the descriptions of the remarketing of the HIGH TIDES in
this prospectus will apply with such changes as are necessary to the remarketing
of debentures. Accordingly, in such an event, without limiting the generality of
the foregoing statements:
- the debentures instead of the HIGH TIDES will be deemed to have been
tendered for remarketing absent timely notice to the contrary, provided
that any notice duly and timely given in respect of the tender for
remarketing of any HIGH TIDES will apply to the debentures distributed in
respect thereof;
- the debentures instead of the HIGH TIDES will be remarketed by the
remarketing agent;
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- the remarketing agent will use its best efforts to establish the term
provisions most favorable to us consistent with the successful remarketing
of all debentures tendered at a price equal to 101% of the principal
amount of the debentures; and
- subject to the proviso in the first bullet point above, a holder of
debentures which has not duly given notice by the tender notification date
that it will retain its debentures will cease to have any further rights
with respect to the debentures upon the successful remarketing of the
debentures, except the right of the holder to receive an amount equal to
(1) from the proceeds of the remarketing, 101% of the principal amount of
the debentures, plus (2) from us, any accrued but unpaid interest on the
debentures to, but excluding, the reset date (upon surrender of the
certificate representing the debentures to the tender agent properly
endorsed for transfer, in the case of a holder other than DTC, which has
taken physical delivery of a debenture certificate) but without any
additional interest thereon (and any such certificate will cease to
represent outstanding debentures).
If the debentures are accelerated, redeemed or otherwise prepaid on or prior
to the reset date, the remarketing will not take place.
THE REMARKETING AGENT
We will use our best efforts to assure that, at all times prior to and
including the reset date, an investment bank, broker, dealer or other
organization which, in our judgment, is qualified to remarket HIGH TIDES and to
establish the term provisions is acting as remarketing agent, provided that if
we fail to appoint a successor upon the resignation or removal of the
remarketing agent reasonably promptly or if a successor fails to accept such
appointment, a successor having such qualifications may be appointed by the
holders of at least 25% in aggregate liquidation amount of the outstanding HIGH
TIDES. Credit Suisse First Boston Corporation has agreed to act as the initial
remarketing agent but may resign or be replaced by us, in accordance with the
terms of the remarketing agreement. The remarketing agent may authorize any
broker-dealer to assist in the remarketing.
The remarketing agreement among us, the trust, the tender agent and the
remarketing agent provides that the remarketing agent will receive fees from us
for the remarketing equal to 1% of the aggregate liquidation amount of
outstanding HIGH TIDES on the reset date upon settlement of the transactions
contemplated by the remarketing. In addition to these fees we will reimburse the
remarketing agent for all out-of-pocket expenses reasonably incurred in
connection with the performance of its duties. In the event that both the
initial remarketing and the final remarketing fail, we shall not be required to
pay any fees to, or reimburse any out-of-pocket expense of, the remarketing
agent. The remarketing will be done without charge to the holders of the HIGH
TIDES.
We have agreed in the remarketing agreement to indemnify the remarketing
agent against some liabilities arising out of or in connection with its duties,
or to contribute to payments which the remarketing agent may be required to make
in respect thereof.
The remarketing agent may resign and be relieved from its duties under the
remarketing agreement on a date specified in a notice in writing delivered to us
and to the trust. The remarketing agent's resignation will not become effective
until at least 30 days after delivery of the notice. The successor remarketing
agent must be an investment bank, broker, dealer or other organization which, in
our judgment, is qualified to remarket the HIGH TIDES and establish the term
provisions and which accepts its appointment by executing a written instrument
of acceptance to us and the tender agent. The holders of a majority in aggregate
liquidation amount of the outstanding HIGH TIDES may remove the remarketing
agent for cause. The tender agent will send notice to you of the resignation or
removal of the remarketing agent and the appointment of a successor remarketing
agent. If there is no remarketing agent on the first day of the initial
remarketing period, the remarketing will fail and the HIGH TIDES will remain
outstanding on the terms described in this prospectus under "--Effect of a
Failed Remarketing."
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The remarketing agreement provides that the remarketing agent will not be
obligated to remarket HIGH TIDES if:
- in the remarketing agent's judgment there is a material misstatement or
omission in any (a) disclosure document provided by us or the trust in
connection with the remarketing or (b) document publicly disclosed
(including in a filing pursuant to the Securities Exchange Act of 1934) by
or on behalf of us or the trust, unless in each case the remarketing agent
is satisfied that such misstatement or omission has been properly
corrected;
- we have failed to have a registration statement for the HIGH TIDES
declared effective on or prior to the tender notification date or such
registration statement does not remain effective through and including the
reset date, unless we have provided to the remarketing agent an opinion of
counsel, experienced in matters relating to securities law, (a) that
registration of the HIGH TIDES under the Securities Act is not necessary
for their sale or (b) that such registration statement need not become
effective until the date the initial remarketing period is required to
commence under the remarketing agreement and the remarketing agent
consents to such delay; or
- either we or the trust fails to satisfy conditions customary in an
offering.
Broker-dealers, if any, which obtain purchasers for the HIGH TIDES will be
paid a commission or fee by the remarketing agent based upon the remarketing fee
described above and the number of HIGH TIDES sold. Broker-dealers will enter
into broker-dealer agreements with the remarketing agent, which will provide for
their participation in the remarketing and will require them to follow certain
private placement procedures. The identity of the broker-dealers, if any, which
will participate in the remarketing has not yet been determined. The remarketing
agent will have the right to select broker-dealers at any time prior to the
reset date. No broker-dealer will be obligated to purchase the HIGH TIDES.
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DESCRIPTION OF HIGH TIDES
Pursuant to the terms of the declaration of trust, the administrative
trustees on behalf of the trust issued the HIGH TIDES and the common securities
in fully registered form without interest coupons. The HIGH TIDES represent
preferred undivided beneficial ownership interests in the assets of the trust,
and the holders of the HIGH TIDES are entitled to a preference over us, as the
holder of the trust's common securities, in limited circumstances with respect
to distributions and amounts payable on redemption of the HIGH TIDES and the
trust's common securities or dissolution and liquidation of the trust, as well
as other benefits as described in the declaration of trust. See "--Subordination
of Common Securities." The declaration of trust is qualified under and is
subject to and governed by the Trust Indenture Act. This summary of the
provisions of the HIGH TIDES, the trust's common securities and the declaration
of trust is subject to, and is qualified in its entirety by reference to, all
the provisions of the declaration of trust, including the definitions of certain
terms. Unless the context requires otherwise, "Titan," "we," "us," "our" or
similar terms in this section refer solely to The Titan Corporation and not the
trust or any of our other consolidated subsidiaries.
GENERAL
The trust will make payments on the HIGH TIDES on a pro rata basis with its
common securities except as described under "--Subordination of Common
Securities." The guarantee has been executed by us for your benefit and provides
for a guarantee on a subordinated basis with respect to the HIGH TIDES but does
not guarantee payment of distributions or amounts payable on redemption of the
HIGH TIDES or on dissolution and liquidation of the trust when the trust does
not have funds on hand available to make those payments. See "Description of the
Guarantee."
Credit Suisse First Boston Corporation has agreed to act as initial
remarketing agent with respect to the HIGH TIDES and is referred to herein as
the remarketing agent. The remarketing agent will be paid fees for its services
and may resign or be replaced by us under certain circumstances. The remarketing
agent may also be removed at any time for cause by the holders of a majority of
the aggregate liquidation amount of HIGH TIDES outstanding. See "The
Remarketing--The Remarketing Agent."
DISTRIBUTIONS
Distributions commenced to accrue on the HIGH TIDES from the date of their
original issuance (February 9, 2000) at the applicable rate of the stated
liquidation amount of $50 per HIGH TIDES. Subject to the deferral rights
described below, the trust will pay the distributions quarterly in arrears on
each February 15, May 15, August 15 and November 15, each referred to as a
distribution date, commencing May 15, 2000, to the person in whose name each
HIGH TIDES is registered at the close of business on the first day of the month
of the applicable distribution date. The first day of the month of any
distribution date shall be the record date for such distribution date.
The reset date is any date (1) not later than February 15, 2005, or, if the
day is not a business day, the next succeeding business day, and (2) not earlier
than 70 business days prior to February 15, 2005, as may be determined by the
remarketing agent, in its sole discretion. If the reset date is prior to the
record date for the immediately following distribution date, then distributions
and additional amounts, if any, accrued from and after the reset date to but
excluding the immediately following distribution date shall be paid on such
distribution date to the person in whose name each HIGH TIDES is registered on
the relevant record date, subject to our right to initiate a deferral period. If
the reset date is on or after the record date for the immediately following
distribution date, then (1) distributions and additional amounts, if any,
accrued from and after the record date to but excluding the reset date shall be
paid on the immediately following distribution date to the person in whose name
each HIGH TIDES is registered on the relevant record date and (2) distributions
and additional amounts, if any, accrued from and after the reset date to but
excluding the immediately following distribution date shall be paid on the
second distribution date immediately
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following the reset date to the person in whose name each HIGH TIDES is
registered on the relevant record date for such second distribution date,
subject in each case to our right to initiate a deferral period. The applicable
rate will be the initial rate of 5 3/4% per annum from the date of original
issuance of the HIGH TIDES to but excluding the reset date, subject to increase
in the case of a registration default. See "Registration Rights". From the reset
date, the applicable rate will be the term rate established by the remarketing
agent to be effective on the reset date. On the reset date, the remarketing
agent will notify the declaration trustees, the trust, the debenture trustee,
the paying agent, us and the holders, if any, which elected not to tender all
their HIGH TIDES for remarketing of the term provisions, including the term
rate. The notification must be made by written notice or by telephone promptly
confirmed by telecopy or other writing. See "The Remarketing."
The amount of distributions payable for any period will be computed based on
the number of days elapsed in a 360-day year of twelve 30-day months. If any
distribution date is not a business day, the trust will pay distributions
payable on that date on the next succeeding day that is a business day, except
if such business day is in the next succeeding calendar year, such distributions
will be made on the immediately preceding business day. No additional
distributions or other payments in respect of any such delay will accrue because
of this change in the distribution date. Distributions that the trust does not
pay on the applicable distribution date will accrue additional distributions on
the amount of the accrued distributions, to the extent permitted by law, at the
applicable rate compounded quarterly from the relevant distribution date. As
used in this prospectus, the term "distribution" includes quarterly
distributions, additional distributions on quarterly distributions not paid on
the applicable distribution date and special distributions upon certain tax
events, as applicable. See "Description of Convertible Senior Subordinated
Debentures--Additional Amounts." As used in this prospectus, a "business day"
means any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York are authorized or required by law or
executive order to remain closed, or a day on which the corporate trust office
of the property trustee or the debenture trustee is closed for business.
So long as no event of default under the debentures has occurred and is
continuing, we have the right to defer the payment of interest on the debentures
at any time or from time to time for a period not exceeding 20 consecutive
quarters. However, no deferral period may extend beyond (1) the maturity of the
debentures whether at the stated maturity or by declaration of acceleration,
call for redemption or otherwise and (2) in the case of a deferral period
beginning prior to the reset date, the reset date. We have agreed, among other
things, not to declare or pay any dividend on our capital stock, subject to
certain exceptions, during any deferral period. See "Description of Convertible
Senior Subordinated Debentures--Option to Extend Interest Payment Date." As a
consequence of any deferral election, the trust will defer quarterly
distributions on the HIGH TIDES during the deferral period. Deferred
distributions to which you are entitled will accumulate additional distributions
at the applicable rate, compounded quarterly from the relevant payment date for
distributions during any deferral period, to the extent permitted by applicable
law.
See "Description of Convertible Senior Subordinated Debentures--Option to
Extend Interest Payment Date" and "Certain United States Federal Income Tax
Consequences--Interest Income" for a more detailed discussion of the terms and
conditions affecting our right to defer the payment of interest on the
debentures.
We have no current intention of exercising our right to defer payments of
interest on the debentures.
The trust's revenues available for distribution to you will be limited to
payments under the debentures. See "Description of Convertible Senior
Subordinated Debentures--General." If we do not make interest payments on the
debentures, the property trustee will not have funds available to pay
distributions on the HIGH TIDES. We have guaranteed the payment of
distributions, if and to the extent the trust has funds legally available for
the payment of those distributions on a limited basis as set forth under
"Description of the Guarantee."
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CONVERSION RIGHTS
GENERAL. You may convert your HIGH TIDES at any time prior to 5:00 p.m.,
New York City time, on or prior to the tender notification date and, in the
event of a convertible remarketing or a failed final remarketing, from and after
the reset date to and including February 15, 2030 (except that you may convert
HIGH TIDES called for redemption by us at any time prior to 5:00 p.m., New York
City time, on the relevant redemption date), at your option and in the manner
described below, into shares of our common stock. On or prior to the tender
notification date, you may convert each HIGH TIDES, pursuant to the initial
conversion ratio, into 1.0076 shares of our common stock (equivalent to an
initial conversion price of $49.625 per share of common stock). On and after the
reset date, the trust has the option to make each HIGH TIDES, subject to the
results of the remarketing, become convertible into a different number of shares
of common stock or nonconvertible. See "The Remarketing." The conversion ratio
and the equivalent conversion price in effect at any given time are referred to
in this prospectus as the applicable conversion ratio and the applicable
conversion price, respectively, and will be subject to adjustment as described
under "--Conversion Price Adjustments" below. The trust has covenanted in the
declaration of trust not to convert debentures held by it except pursuant to a
notice of conversion delivered to the property trustee, as conversion agent, by
you.
If you wish to exercise your conversion right, you must deliver an
irrevocable conversion notice, together, if the HIGH TIDES are in certificated
form, with the certificated security, to the conversion agent who will, on your
behalf, exchange the HIGH TIDES for a like amount of debentures and immediately
convert the debentures into shares of our common stock. You may obtain copies of
the required form of the conversion notice from the conversion agent.
If you are the record holder of HIGH TIDES at the close of business on a
distribution record date, you will be entitled to receive the distribution
payable on your HIGH TIDES on the corresponding distribution date even if you
convert your HIGH TIDES after the distribution record date but prior to the
distribution date. Except as provided in the immediately preceding sentence,
neither we nor the trust will make, or be required to make, any payment,
allowance or adjustment for accrued and unpaid distributions, whether or not in
arrears, on converted HIGH TIDES, even if you convert your HIGH TIDES during a
deferral period. We will make no payment or allowance for distributions on our
shares of common stock issued upon conversion, except to the extent that those
shares of common stock are held of record on the record date for any
distributions. We will deem each conversion to have been effected immediately
prior to the close of business on the day on which the trust received the
related conversion notice.
We will not issue any fractional shares of our common stock as a result of
conversion. Instead, we will pay fractional interest in cash based on the
closing price of our common stock at the time of conversion.
CONVERSION PRICE ADJUSTMENTS--GENERAL. The applicable conversion price of
the HIGH TIDES will be adjusted, without duplication, upon the happening of the
following events:
- the payment of dividends and other distributions payable exclusively in
our common stock on our common stock;
- the issuance to all holders of our common stock of rights or warrants;
- subdivisions and combinations of our common stock;
- the payment of dividends and other distributions to all holders of our
common stock consisting of evidences of our indebtedness, securities or
capital stock, cash or assets, except for those rights or warrants
referred to in the second bullet clause above and dividend and
distributions paid exclusively in cash;
- the payment to holders of our common stock in respect of a tender or
exchange offer, other than an odd-lot offer, by us or any of our
subsidiaries for our common stock at a price in excess of 110% of
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the current market price of our common stock as of the trading day next
succeeding the last date tenders or exchanges may be made pursuant to the
tender or exchange offer; and
- the payment of dividends and other distributions on our common stock paid
exclusively in cash, excluding:
- cash dividends that do not exceed the per share amount of the smallest
of the immediately four preceding quarterly cash dividends, as adjusted
to reflect any of the events described above; and
- cash dividends the per share amount of which, together with the
aggregate per share amount of any other cash dividends paid within the
12 months preceding the date of payment of such cash dividends, does
not exceed 12 1/2% of the current market price of our common stock as
of the trading day immediately preceding the date of declaration of the
dividend.
We may, at our option, make reductions in the applicable conversion price as
our board of directors deems advisable to avoid or diminish any income tax to
our common stockholders or rights to purchase our common stock resulting from
any dividend or distribution of stock or rights to acquire stock or from any
event treated similarly for federal income tax purposes. See "Certain United
States Federal Income Tax Consequences--Adjustment of Conversion Price."
The applicable conversion price will not be adjusted:
- upon the issuance of any shares of our common stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on securities of Titan and the investment of additional
optional amounts in shares of our common stock under any plan;
- upon the issuance of any shares of our common stock or options or rights
to purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of Titan; or
- upon the issuance of any shares of our common stock pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible
security outstanding as of the date the HIGH TIDES were first issued.
No adjustment in the applicable conversion price will be required unless the
adjustment would require an increase or decrease of at least 1% of the
applicable conversion price. If the adjustment is not made because the
adjustment does not change the applicable conversion price by more than 1%, then
the adjustment that is not made will be carried forward and taken into account
in any future adjustment. Except as specifically described above, the applicable
conversion price will not be subject to adjustment in the case of the issuance
of any of our common stock, or securities convertible into or exchangeable for
our common stock.
CONVERSION PRICE ADJUSTMENTS--MERGER, CONSOLIDATION OR SALE OF ASSETS OF
TITAN. If we are a party to a transaction which results in our common shares
being converted into the right to receive, or being exchanged for, securities,
cash or other property of a third party, the conversion price may be adjusted as
described below. The following are examples of company transactions which may
result in an adjustment to the conversion price:
- merger;
- consolidation;
- sale of all or substantially all of our assets;
- recapitalization or reclassification of our common shares; or
- any compulsory share exchange.
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If we are a party to any company transaction, in each case, as a result of
which shares of our common stock will be converted into the right to receive
other securities, cash or other property, we will ensure that lawful provision
is made as part of the terms of the company transaction so that the holder of
each HIGH TIDES then outstanding will have the right thereafter to convert the
HIGH TIDES only into:
- in the case of any company transaction other than a company transaction
involving a Common Stock Fundamental Change, the kind and amount of
securities, cash and other property receivable upon the consummation of
the company transaction by a holder of that number of shares of our common
stock into which a HIGH TIDES was convertible immediately prior to the
company transaction; or
- in the case of a company transaction involving a Common Stock Fundamental
Change, common stock of the kind received by holders of our common stock;
but in each case after giving effect to any adjustment discussed below relating
to a Fundamental Change if the company transaction constitutes a Fundamental
Change.
The holders of HIGH TIDES will have no voting rights with respect to any
company transaction.
In the case of any company transaction involving a Fundamental Change, the
applicable conversion price will be adjusted immediately before the Fundamental
Change as follows:
- in the case of a Non-Stock Fundamental Change, the applicable conversion
price of the HIGH TIDES will become the lower of:
- the applicable conversion price immediately prior to the Non-Stock
Fundamental Change, but after giving effect to any other prior
adjustments; and
- the result obtained by multiplying the greater of the relevant price or
the then applicable reference market price by the optional redemption
ratio (the product is referred to as the "adjusted relevant price" or
the "adjusted reference market price," as the case may be); and
- in the case of a Common Stock Fundamental Change, the applicable
conversion price of the HIGH TIDES immediately prior to the Common Stock
Fundamental Change, but after giving effect to any other prior
adjustments, will be adjusted by multiplying the applicable conversion
price by a fraction of which the numerator will be the Purchaser Stock
Price and the denominator will be the relevant price.
However, in the event of a Common Stock Fundamental Change in which:
- 100% of the value of the consideration received by a holder of our common
stock is common stock of the successor, acquirer or other third party (and
cash, if any, is paid only with respect to any fractional interests in the
common stock resulting from the Common Stock Fundamental Change); and
- all our common stock will have been exchanged for, converted into, or
acquired for common stock (and cash with respect to fractional interests)
of the successor, acquirer or other third party;
the applicable conversion price of the HIGH TIDES immediately prior to the
Common Stock Fundamental Change will be adjusted by multiplying the applicable
conversion price by a fraction of which the numerator will be one and the
denominator will be the number of shares of common stock of the successor,
acquirer or other third party received by a holder of one share of our common
stock as a result of the Common Stock Fundamental Change.
In the absence of the adjustments to the applicable conversion price in the
event of a company transaction involving a Fundamental Change, in the case of a
company transaction each HIGH TIDES would become convertible into the
securities, cash, or other property receivable by a holder of the number of
shares of our common stock into which each HIGH TIDES was convertible
immediately prior to the
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company transaction. Thus, in the absence of the Fundamental Change provisions,
a company transaction could substantially lessen or eliminate the value of the
conversion privilege associated with the HIGH TIDES. For example, if a company
were to acquire Titan in a cash merger, each HIGH TIDES would become convertible
solely into cash and would no longer be convertible into securities whose value
would vary depending on the future prospects of Titan and other factors.
In Non-Stock Fundamental Change transactions, the foregoing conversion price
adjustments are designed to increase the amount of securities, cash or other
property into which you may convert each HIGH TIDES. In a Non-Stock Fundamental
Change transaction in which the initial value received per share of our common
stock (measured as described in the definition of relevant price) is lower than
the then applicable conversion price of a HIGH TIDES but greater than or equal
to the reference market price, the applicable conversion price will be adjusted
with the effect that you will be able to convert each HIGH TIDES into
securities, cash or other property of the same type received by the holders of
our common stock in the transaction with the applicable conversion price
adjusted as though the initial value had been the adjusted relevant price. In a
Non-Stock Fundamental Change transaction in which the initial value received per
share of our common stock (measured as described in the definition of relevant
price) is lower than both the applicable conversion price of a HIGH TIDES and
the reference market price, the applicable conversion price will be adjusted as
described above but calculated as though the initial value had been the adjusted
reference market price.
In Common Stock Fundamental Change transactions, the foregoing adjustments
are designed to provide in effect that:
- where our common stock is converted partly into common stock and partly
into other securities, cash or property, you will be able to convert each
HIGH TIDES solely into a number of shares of common stock determined so
that the initial value of those shares (measured as described in the
definition of Purchaser Stock Price) equals the value of the shares of our
common stock into which each HIGH TIDES was convertible immediately before
the transaction (measured as aforesaid); and
- where our common stock is converted solely into common stock, you will be
able to convert each HIGH TIDES into the same number of shares of common
stock receivable by a holder of the number of shares of our common stock
into which each HIGH TIDES was convertible immediately before the
transaction.
The term "closing price" of any security on any day means the last reported
sale price of the security on that day, or in case no sale takes place on that
day, the average of the closing bid and asked prices in each case on the
principal national securities exchange on which the securities are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc. or any successor national automated interdealer
quotation system (the "NNM") or, if the securities are not listed or admitted to
trading on any national securities exchange or quoted on the NNM, the average of
the closing bid and asked prices of the security in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected by Titan for
that purpose.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value, as determined in good faith by our board of
directors, of the consideration received by holders of our common stock consists
of common stock that for each of the ten consecutive trading days immediately
prior to and including the entitlement date has been admitted for listing or
admitted for listing subject to notice of issuance on a national securities
exchange or quoted on the NNM; provided, however, that a Fundamental Change will
not be a Common Stock Fundamental Change unless either:
- we continue to exist after the occurrence of the Fundamental Change and
the outstanding HIGH TIDES continue to exist as outstanding HIGH TIDES; or
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- not later than the occurrence of the Fundamental Change, the outstanding
debentures are converted into or exchanged for debentures of a corporation
succeeding to our business, which debentures have terms substantially
similar to those of our debentures.
The term "entitlement date" means the record date for determination of the
holders of our common stock entitled to receive securities, cash or other
property in connection with a Non-Stock Fundamental Change or a Common Stock
Fundamental Change or, if there is no record date, the date upon which holders
of our common stock will have the right to receive those securities, cash or
other property.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with a company transaction pursuant to which all or
substantially all of our common stock will be exchanged for, converted into,
acquired for or constitute solely the right to receive securities, cash or other
property (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise). However, in the case of a company transaction involving more than
one transaction or event, for purposes of adjustment of the applicable
conversion price, the Fundamental Change will be deemed to have occurred when
substantially all of our common stock is exchanged for, converted into, or
acquired for or constitute solely the right to receive securities, cash, or
other property, but the adjustment will be based upon the highest weighted
average per share consideration that a holder of our common stock could have
received in the transactions or events as a result of which more than 50% of all
outstanding shares of our common stock will have been exchanged for, converted
into, or acquired for or constitute solely the right to receive securities, cash
or other property.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "optional redemption ratio" means a fraction of which the numerator
will be $50 and the denominator will be the then current optional redemption
price or, on or prior to February 20, 2003 and at any time after the reset date
at which the HIGH TIDES are not redeemable at our option, an amount per HIGH
TIDES determined by us in our sole discretion, after consultation with a
nationally recognized investment banking firm, to be the equivalent of the
hypothetical redemption price that would have been applicable if the HIGH TIDES
had been redeemable during that period.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the closing prices for the common stock
received in the Common Stock Fundamental Change for the ten consecutive trading
days prior to and including the entitlement date, as adjusted in good faith by
us to appropriately reflect any of the events referred to in the six bullet
clauses of the first paragraph under "--Conversion Price Adjustments--General."
The term "reference market price" will initially mean, on the date the trust
originally issues the HIGH TIDES, $26.875 (which is an amount equal to 66 2/3%
of the last reported sale price for our common stock on The New York Stock
Exchange on February 3, 2000). In the event of any adjustment to the applicable
conversion price from such date to, but excluding the reset date, other than as
a result of a Non-Stock Fundamental Change, the trust will also adjust the
reference market price so that the ratio of the reference market price to the
applicable conversion price after giving effect to any adjustment will be the
same as the ratio of $26.875 to the initial conversion price. If the HIGH TIDES
are convertible into common stock on and after the reset date, the reference
market price on the reset date will be an amount equal to 66 2/3% of the closing
price of the common stock on the reset date and, in the event of any adjustment
to the applicable conversion price from the reset date and thereafter, other
than as a result of a Non-Stock Fundamental Change, the reference market price
shall also be adjusted so that the ratio of the reference market price to the
applicable conversion price after giving effect to any such adjustment shall
always be the same as the ratio of the closing price of the common stock on the
reset date to the term conversion price.
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The term "relevant price" means:
- in the case of a Non-Stock Fundamental Change in which the holder of our
common stock receives only cash, the amount of cash received by the holder
of one share of our common stock; and
- in the event of any other Non-Stock Fundamental Change or any Common Stock
Fundamental Change, the average of the daily closing prices for our common
stock during the ten consecutive trading days prior to and including the
entitlement date, in each case as adjusted in good faith by us to
appropriately reflect any of the events referred to in the six bullet
clauses of the first paragraph under "--Conversion Price
Adjustments--General."
REDEMPTION
Upon the repayment in full of the debentures at their stated maturity or a
redemption in whole or in part of the debentures (other than following any
distribution of the debentures to you and the holders of the trust's common
securities), the property trustee will apply the proceeds from the repayment or
redemption to redeem, on a pro rata basis, a like amount of HIGH TIDES and the
trust's common securities, on the redemption date, in an amount per HIGH TIDES
or common security, as applicable, equal to the applicable redemption price. The
redemption price will be equal to:
- the liquidation amount of each HIGH TIDES plus any accrued and unpaid
distributions in the case of (A) the repayment of the debentures at their
stated maturity or (B) the redemption of the debentures in certain limited
circumstances upon the occurrence of a tax event;
- in the case of an optional redemption on or after February 20, 2003, but
prior to, and excluding, the tender notification date, the initial
redemption price as set forth under "Description of Convertible Senior
Subordinated Debentures--Redemption--Optional Redemption";
- in the case of an optional redemption after the reset date, in accordance
with the term call protections, if any, established in the remarketing;
and
- in the case of an optional redemption after a failed final remarketing,
100% of the liquidation amount of the HIGH TIDES being redeemed, plus
accrued and unpaid distributions.
REDEMPTION PROCEDURES
The trust will redeem its HIGH TIDES and common securities at the applicable
redemption price with the proceeds from the contemporaneous repayment or
redemption of the debentures. The trust will redeem its HIGH TIDES and common
securities and will pay the applicable redemption price on each redemption date
only to the extent that it has funds on hand available for the payment of the
redemption price. See also "--Subordination of Common Securities."
If the trust gives a notice of redemption in respect of the HIGH TIDES,
then, by 10:00 a.m., New York City time, on the redemption date, to the extent
funds are available, with respect to the HIGH TIDES held in global form, the
property trustee will deposit irrevocably with DTC funds sufficient to pay the
applicable redemption price and will give DTC irrevocable instructions and
authority to pay the applicable redemption price to you. See "--Depositary
Procedures."
If the HIGH TIDES are no longer in book-entry form, the property trustee, to
the extent funds are available, will irrevocably deposit with the paying agent
for the HIGH TIDES funds sufficient to pay the applicable redemption price and
will give the paying agent irrevocable instructions and authority to pay the
redemption price to the holders of the HIGH TIDES upon surrender of their
certificates evidencing the HIGH TIDES. See "--Payment and Paying Agency."
Distributions payable on or prior to the redemption date for any HIGH TIDES
called for redemption will be paid to holders of HIGH TIDES as of the relevant
record dates for the related distribution. If the
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trust has given notice of redemption and deposited funds as required, then upon
the date of the deposit, all of your rights will cease, except your right to
receive the applicable redemption price, but without interest on the redemption
price, and the HIGH TIDES will cease to be outstanding.
If any redemption date is not a business day, then payment of the applicable
redemption price payable on that 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 delay. However, if that business day falls in the next calendar year, the
payment will be made on the immediately preceding business day. In the event
that the trust or, pursuant to the guarantee described in "Description of the
Guarantee," we improperly withhold or refuse to make payment of the applicable
redemption price, then distributions on HIGH TIDES will continue to accrue at
the then applicable rate, from the redemption date originally established by the
trust to the date the redemption price is actually paid. Under these
circumstances, the actual payment date will be the date fixed for redemption for
purposes of calculating the redemption price.
Subject to applicable law, we or our subsidiaries may at any time and from
time to time purchase outstanding HIGH TIDES by tender, in the open market or by
private agreement except as provided under "The Remarketing--Purchases by Us and
Our Affiliates."
If we desire to consummate an optional redemption, we must send a notice to
each holder of HIGH TIDES and the trust's common securities at its registered
address in accordance with the notice procedures set forth under "Description of
Convertible Senior Subordinated Debentures--Redemption--Optional Redemption." We
must mail any notice of a tax event redemption at least 30 days but not more
than 60 days before the redemption date to you. We need not provide notice of
repayment at the stated maturity of the debentures.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If a tax event occurs and is continuing, we will cause the trustees to
dissolve and liquidate the trust and, after satisfaction of liabilities of
creditors of the trust, cause debentures to be distributed to you and us, as
holder of the common securities, on a pro rata basis, in liquidation of the
trust within 90 days following the occurrence of the tax event. However, the
liquidation and distribution will be conditioned on:
- the trustees' receipt of an opinion of a nationally recognized independent
tax counsel, reasonably acceptable to the trustees, experienced in such
matters (a "No Recognition Opinion"), which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that you
will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such liquidation and distribution of
debentures; and
- Titan being unable to avoid such tax event within such 90-day period by
taking some ministerial action or pursuing some other reasonable measure
that, in our sole judgment, will have no adverse effect on us, the trust
or you and will involve no material cost.
Furthermore, if (1) a nationally recognized independent tax counsel,
reasonably acceptable to the trustees, experienced in such matters provides an
opinion (the "Redemption Tax Opinion") to us that, as a result of a tax event,
there is more than an insubstantial risk that we would be precluded from
deducting the interest on the debentures for U.S. federal income tax purposes,
even after the debentures were distributed to you upon liquidation of the trust
as described above, or (2) such tax counsel informs the trustees that it cannot
deliver a No Recognition Opinion, we will have the right, upon not less than 30
nor more than 60 days' notice and within 90 days following the occurrence and
continuation of the tax event, to redeem the debentures, in whole, but not in
part, for cash, for the principal amount plus accrued and unpaid interest and,
following such redemption, the trust will redeem all the HIGH TIDES at the
aggregate liquidation amount of the HIGH TIDES plus accrued and unpaid
distributions. However, if at the time there is available to us or the trust the
opportunity to eliminate, within such 90-day period, the tax event by taking
some ministerial action or pursuing some other reasonable measure that, in our
sole
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judgment, will have no adverse effect on us, the trust or you and will involve
no material cost, we or the trust will pursue that measure in lieu of
redemption. See "--Mandatory Redemption." In addition to the foregoing options,
we will also have the option of causing the HIGH TIDES to remain outstanding and
pay additional amounts on the debentures. See "Description of Convertible Senior
Subordinated Debentures--Additional Amounts."
The term "tax event" means the receipt by the property trustee of an opinion
of a nationally recognized independent tax counsel to us, reasonably acceptable
to the trustees, experienced in such matters (a "Dissolution Tax Opinion") to
the effect that as a result of:
- any amendment to or change (including any announced prospective change
(which will not include a proposed change), provided that a tax event will
not occur more than 90 days before the effective date of any prospective
change) in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority of the United States or
any political subdivision;
- any judicial decision or official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action"); or
- any amendment to or change in the administrative position or
interpretation of any Administrative Action or judicial decision that
differs from the theretofore generally accepted position, in each case, by
any legislative body, court, governmental agency or regulatory body,
irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective or such Administrative
Action or decision is announced, in each case, on or after the date of
original issuance of the debentures or the issue date of the HIGH TIDES in
which there is more than an insubstantial risk that one of the following
will occur:
- if the debentures are held by the property trustee, (1) the trust is,
or will be within 90 days of the date of such opinion, subject to U.S.
federal income tax with respect to interest accrued or received on the
debentures or subject to more than a DE MINIMIS amount of other taxes,
duties or other governmental charges as determined by counsel, or
(2) any portion of interest payable by us to the trust (or original
issue discount accruing) on the debentures is not, or within 90 days of
the date of such opinion will not be, deductible by us in whole or in
part for U.S. federal income tax purposes; or
- with respect to debentures which are no longer held by the property
trustee, any portion of interest payable by us (or original issue
discount accruing) on the debentures is not, or within 90 days of the
date of such opinion will not be, deductible by us in whole or in part
for U.S. federal income tax purposes.
If an investment company event occurs and is continuing, we will cause the
trustees to dissolve and liquidate the trust and, after satisfaction of
liabilities of creditors of the trust, cause a like amount of the debentures to
be distributed to you in liquidation of the trust within 90 days following the
occurrence of the investment company event.
An investment company event occurs if there is a change in law or regulation
or a written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority to the
effect that the trust is or will be considered an "investment company" required
to be registered under the Investment Company Act of 1940, as amended. In order
to be an investment company event, the change in law must be effective on or
after February 3, 2000.
The distribution by us of the debentures will effectively result in the
cancellation of the HIGH TIDES.
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LIQUIDATION OF THE TRUST AND DISTRIBUTION OF CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES
We, as the holder of the trust's outstanding common securities, will have
the right at any time including, without limitation, upon the occurrence of a
tax event or an investment company event, to dissolve the trust and, after
satisfaction of liabilities of creditors of the trust as provided by applicable
law, cause a like amount of the debentures to be distributed to you and the
holders of the trust's common securities upon liquidation of the trust. However,
we may not dissolve the trust during the period beginning on the business day
following a tender notification date and ending on the reset date (other than
upon the occurrence of a tax event or an investment company event). In addition,
the declaration trustees shall have received a No Recognition Opinion prior to
the dissolution of the trust.
The trust will automatically dissolve upon the first to occur of:
(A) our bankruptcy, dissolution or liquidation;
(B) the distribution of a like amount of the debentures to the holders of
the HIGH TIDES and the trust's common securities if we, as depositor,
have given our written direction to the property trustee to dissolve the
trust (which direction is optional and, except as described above, wholly
within our discretion, as depositor);
(C) redemption of all the HIGH TIDES and the trust's common securities as
described under "--Mandatory Redemption" above;
(D) conversion of all outstanding HIGH TIDES and the trust's common
securities as described under "--Conversion Rights" above;
(E) expiration of the term of the trust; or
(F) entry of an order for the dissolution of the trust by a court of
competent jurisdiction.
If an early dissolution occurs as described in clause (A), (B), (E) or
(F) above, the declaration trustees will liquidate the trust as expeditiously as
they determine to be possible by distributing, after satisfaction of liabilities
to the creditors of the trust as provided by applicable law, to you and the
holders of the trust's common securities a like amount of the debentures, unless
the distribution would not be practical. In that event, you and the holders of
the trust's common securities will be entitled to receive out of the trust's
assets available for distribution to holders, after satisfaction of liabilities
to the trust's creditors as provided by applicable law, an amount equal to, in
the case of holders of HIGH TIDES, the aggregate liquidation amount of the HIGH
TIDES plus accrued and unpaid distributions, to the date of payment (that amount
being the "liquidation distribution"). If 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 trust will pay the amounts
directly payable by it on the HIGH TIDES on a pro rata basis. We, as the holder
of the trust's common securities, will be entitled to receive distributions upon
any liquidation on a pro rata basis with you, except that if an event of default
under the debentures has occurred and is continuing, the HIGH TIDES will have a
priority over the trust's common securities with respect to any of those
distributions. See "--Subordination of Common Securities."
If we do not redeem the debentures prior to maturity, the trust is not
dissolved and liquidated and the debentures are not distributed to you and the
holders of the trust's common securities, the HIGH TIDES will remain outstanding
until the repayment of the debentures at their final stated maturity and the
distribution of the liquidation distribution to you.
On and after the liquidation date fixed for any distribution of debentures
to you and the holders of the trust's common securities:
- the trust will no longer deem the HIGH TIDES to be outstanding;
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- DTC or its nominee, as the record holder of the HIGH TIDES, will receive a
registered global certificate or certificates representing the debentures
to be delivered upon the distribution with respect to HIGH TIDES held by
DTC or its nominee; and
- the trust will deem any certificates representing HIGH TIDES not held by
DTC or its nominee to represent debentures having a principal amount equal
to the liquidation amount of the HIGH TIDES and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid distributions on the
HIGH TIDES until those certificates are presented to us or our agent for
cancellation, whereupon we will issue to the holder, and the debenture
trustee will authenticate, a certificate representing the debentures.
We cannot assure you as to the market prices for the HIGH TIDES or the
debentures that you may receive in exchange for the HIGH TIDES and/or the
trust's common securities if a dissolution and liquidation of the trust were to
occur. Accordingly, the HIGH TIDES that you may purchase, or the debentures that
you may receive on dissolution and liquidation of the trust, may trade at a
discount to the price that you originally paid to purchase the HIGH TIDES.
SUBORDINATION OF COMMON SECURITIES
Payment of distributions on, and the redemption price of, the HIGH TIDES and
the trust's common securities generally shall be made on a pro rata basis to the
holders of HIGH TIDES and the trust's common securities. The trust will base
those payments on the liquidation amount of the HIGH TIDES and the trust's
common securities. If on any distribution date or redemption date any event of
default under the indenture has occurred and is continuing or an event of
default under the declaration of trust has occurred and is continuing, then the
trust will not pay any distribution on, or applicable redemption price of, any
of the trust's common securities, and the trust will not make any other payment
on account of the redemption, liquidation or other acquisition of the trust's
common securities, unless:
- all accrued and unpaid distributions on all of the outstanding HIGH TIDES
are paid in cash for all distribution periods ending on or prior to any
payment on the common securities, or
- in the case of payment of the applicable redemption price, the full amount
of the redemption price on all of the outstanding HIGH TIDES then called
for redemption shall have been paid or provided for, and all funds
available to the property trustee will first be applied to the payment in
full in cash of all distributions on, or the applicable redemption price
of, the HIGH TIDES then due and payable.
If an event of default occurs under the declaration of trust resulting from
an event of default under the indenture, the trust will deem us, as holder of
the trust's common securities, to have waived any right to act with respect to
any event of default under the declaration of trust until the effect of all
events of default with respect to the HIGH TIDES have been cured, waived or
otherwise eliminated. Until all events of default under the declaration of trust
with respect to the HIGH TIDES have been so cured, waived or otherwise
eliminated, the property trustee will act solely on your behalf and not on our
behalf as holder of the trust's common securities, and only you will have the
right to direct the property trustee to act on your behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "event of default" under the
declaration of trust (whatever the reason for the event of default and whether
it is voluntary or involuntary or is 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):
- the occurrence of an event of default under the indenture (see
"Description of Convertible Senior Subordinated Debentures--Debenture
Events of Default");
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- the trust's default in the payment of any distribution when it becomes due
and payable, and continuation of the default for a period of 30 days
(subject to the deferral of any due date in the case of a deferral
period);
- the trust's default in the payment of any redemption price of any HIGH
TIDES or common security of the trust when it becomes due and payable;
- default in the performance, or breach, in any material respect, of any
covenant or warranty of the declaration trustees in the declaration of
trust (other than a covenant or warranty, a default in the performance of
which or the breach of which is addressed in the second or third bullet
points above), and continuation of the default or breach for a period of
60 days after the holders of at least 25% in aggregate liquidation amount
of the outstanding HIGH TIDES have given, by registered or certified mail,
to the defaulting trustee or trustees a written notice specifying the
default or breach and requiring it to be remedied and stating that the
notice is a "Notice of Default" under the declaration of trust; or
- the occurrence of a bankruptcy or insolvency with respect to the property
trustee and the failure by us to appoint a successor property trustee
within 60 days of those events.
Within ten business days after the occurrence of any payment event of
default actually known to the property trustee, the property trustee will
transmit notice of the payment event of default to you, the administrative
trustees and us, as depositor, unless the event of default has been cured or
waived. Titan, as depositor, and the administrative trustees are required to
file annually with the property trustee a certificate as to whether or not we
and they are in compliance with all the conditions and covenants applicable to
us and them under the declaration of trust.
If an event of default under the indenture or an event of default under the
declaration of trust has occurred and is continuing, the HIGH TIDES will have a
preference over the trust's common securities. See "--Liquidation of the Trust
and Distribution of Convertible Senior Subordinated Debentures" and
"--Subordination of Common Securities."
REMOVAL OF TRUSTEES
Unless an event of default under the indenture has occurred and is
continuing, we, as the holder of the trust's common securities, may remove any
declaration trustee, other than a special trustee, at any time. If an event of
default under the indenture has occurred and is continuing, the holders of a
majority in liquidation amount of the outstanding HIGH TIDES may remove the
property trustee and the Delaware statutory trustee. In no event will you have
the right to vote to appoint, remove or replace the administrative trustees,
which voting rights are vested exclusively in us as the holder of the trust's
common securities. No resignation or removal of the Delaware statutory trustee
or the property trustee and no appointment of a successor trustee will be
effective until the acceptance of appointment by the successor trustee in
accordance with the provisions of the declaration of trust.
MERGER OR CONSOLIDATION OF TRUSTEES
Any successor to the property trustee or the Delaware trustee by merger,
conversion or consolidation or which otherwise succeeds to that trustee's
corporate trust business will take the place of that trustee under the
declaration of trust if the successor otherwise is qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The trust may not merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other person, except as described below or as
otherwise set forth in the declaration of trust. The trust may, with the consent
of the administrative trustees but without your consent and the consent of the
property trustee or the Delaware
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statutory trustee, merge with or into, consolidate, amalgamate or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, a trust organized as such under the laws of any state if:
- the successor entity either (1) expressly assumes all of the trust's
obligations with respect to the HIGH TIDES or (2) substitutes for the HIGH
TIDES other successor securities having substantially the same terms as
the HIGH TIDES so long as the successor securities rank the same as the
HIGH TIDES rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise;
- we expressly appoint a trustee of the successor entity possessing the same
powers and duties as the property trustee as the holder of the debentures;
- the successor securities are listed or traded, or any successor securities
will be listed or traded upon notification of issuance, on any national
securities exchange, national automated quotation system or other
organization on which the HIGH TIDES are then listed or traded, if any;
- the transaction does not cause the HIGH TIDES, including any successor
securities, to be downgraded by any nationally recognized statistical
rating organization;
- the transaction does not adversely affect the rights, preferences and
privileges of the holders of the HIGH TIDES, including any successor
securities, in any material respect;
- the successor entity has a purpose substantially identical and limited to
the purpose of the trust;
- prior to the transaction, we receive an opinion from independent counsel
to the trust experienced in such matters to the effect that:
- the transaction does not adversely affect the limited liability of the
holders of the HIGH TIDES and common securities, including any
successor securities;
- following the transaction neither the trust nor the successor entity
will be required to register as an investment company under the
Investment Company Act; and
- following the transaction, the trust or the successor entity will
continue to be treated as a grantor trust for U.S. federal income tax
purposes.
- we or any permitted successor or assignee owns all of the common
securities of the successor entity and guarantees the obligations of the
successor entity under the successor securities at least to the extent
provided by the guarantee relating to the HIGH TIDES; and
- the transaction is not a taxable event for you.
Notwithstanding the general provisions described above, the trust will not,
except with the consent of holders of 100% in aggregate liquidation amount of
the HIGH TIDES and the trust's common securities, 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 other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it, if the
transaction would cause the trust or the successor entity to be classified as
other than a grantor trust for U.S. federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
The holders of HIGH TIDES have only the voting rights described below and
under "Description of the Guarantee--Amendments and Assignment" plus any voting
rights required by law and the declaration of trust.
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In addition to your rights with respect to the enforcement of payments by us
to the trust of principal of or interest on the debentures as described under
"Description of Convertible Senior Subordinated Debentures--Debenture Events of
Default," if either of the following events occurs:
- an event of default under the indenture occurs and is continuing; or
- we default under the guarantee with respect to the HIGH TIDES;
then the holders of the HIGH TIDES, acting as a single class, will be
entitled by a vote of a majority in aggregate stated liquidation amount of the
outstanding HIGH TIDES to appoint a special trustee which shall be called an
appointment event. Any holder of HIGH TIDES, other than Titan or any of our
affiliates, will be entitled to nominate any person to be appointed as special
trustee. Not later than 30 days after the right to appoint a special trustee
arises, the declaration trustees will convene a meeting of the holders of HIGH
TIDES for the purpose of appointing a special trustee. If the declaration
trustees fail to convene that meeting within the 30-day period, the holders of
not less than 10% of the aggregate stated liquidation amount of the outstanding
HIGH TIDES will be entitled to convene the meeting. The provisions of the
declaration of trust relating to the convening and conduct of the meetings of
the holders will apply with respect to the meeting. Any special trustee so
appointed will cease to be a special trustee if the appointment event pursuant
to which the special trustee was appointed and all other appointment events
cease to be continuing. Notwithstanding the appointment of any special trustee,
we will retain all rights under the indenture, including the right to defer
payments of interest by extending the interest payment period as described under
"Description of Convertible Senior Subordinated Debentures--Option to Extend
Interest Payment Date." If such an extension occurs, there will be no event of
default under the indenture and, consequently, no event of default for failure
to make any scheduled interest payment during the deferral period on the date
originally scheduled.
We, along with the property trustee and the administrative trustees, may
amend the declaration of trust from time to time without your consent:
- to cure any ambiguity;
- to correct or supplement any provision in the declaration of trust that
may be inconsistent with any other provision;
- to make any other provisions with respect to ministerial matters or
questions arising under the declaration of trust, which will not be
inconsistent with the other provisions of the declaration of trust; or
- to modify, eliminate or add to any provisions of the declaration of trust
if necessary to ensure that the trust will not be taxable as a corporation
or will be classified for U.S. federal income tax purposes as a grantor
trust at all times that any HIGH TIDES or the trust's common securities
are outstanding or to ensure that the trust will not be required to
register as an investment company under the Investment Company Act.
However, no such action may be taken in connection with the first three
bullet clauses above unless the action will not adversely affect in any material
respect the interests of any holder of HIGH TIDES or the trust's common
securities. Any amendments of the declaration of trust will become effective
when notice of the amendment is given to you and the holders of the trust's
common securities.
We, along with the property trustee and the administrative trustees, may
amend the declaration of trust with:
- the consent of holders representing not less than a majority (based upon
liquidation amounts) of the outstanding HIGH TIDES; and
- receipt by the declaration trustees of an opinion of counsel to the effect
that the amendment or the exercise of any power granted to the trustees in
accordance with the amendment will not affect the
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trust's status as a grantor trust for U.S. federal income tax purposes or
the trust's exemption from status as an investment company under the
Investment Company Act.
In addition, without the consent of each holder of HIGH TIDES and the
trust's common securities, no amendment may:
- change the amount or timing of any distribution on the HIGH TIDES or the
trust's common securities or otherwise adversely affect the amount of any
distribution required to be made in respect of the HIGH TIDES or the
trust's common securities as of a specified date; or
- restrict the right of a holder of HIGH TIDES or the trust's common
securities to institute suit for the enforcement of any payment on or
after such date.
So long as any debentures are held by the trust, the declaration trustees
will not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture, or execute any trust
or power conferred on the property trustee with respect to the debentures;
- waive any past default that is waivable under the indenture governing the
debentures;
- exercise any right to rescind or annul a declaration that the principal of
all the debentures is due and payable; or
- give a required consent to any amendment, modification or termination of
the indenture or the debentures;
unless, in each case, they first obtain the approval of the holders of a
majority in aggregate liquidation amount of all outstanding HIGH TIDES. When the
indenture requires the consent of each holder of debentures, the property
trustee cannot give its consent without the prior consent of each holder of the
HIGH TIDES.
The declaration trustees will not revoke any action previously authorized or
approved by a vote of the holders of the HIGH TIDES except by subsequent vote of
those holders. The property trustee will notify each holder of HIGH TIDES of any
notice of default with respect to the debentures. In addition to obtaining the
foregoing approvals of the holders of the HIGH TIDES, prior to taking any of the
foregoing actions, the property trustee will obtain an opinion of counsel
experienced in those matters to the effect that the action will not affect the
trust's status as a grantor trust for U.S. federal income tax purposes on
account of the action.
Any required approval of holders of HIGH TIDES may be given either at a
properly convened meeting of those holders or by a written consent without prior
notice. The administrative trustees must notify holders of HIGH TIDES of any
meeting.
Neither your vote nor your consent is required for the trust to redeem and
cancel or remarket the HIGH TIDES in accordance with the declaration of trust or
to distribute the debentures in accordance with the declaration of trust and the
terms of the HIGH TIDES and the trust's common securities.
Notwithstanding that you are entitled to vote or consent under any of the
circumstances described above, any of the HIGH TIDES that are owned by us, the
declaration trustees or any affiliate of Titan or any declaration trustees,
will, for purposes of such vote or consent, be treated as if they were not
outstanding.
EXPENSES AND TAXES
We will pay all of the costs, expenses or liabilities of the trust, other
than obligations of the trust to pay to the holders of any HIGH TIDES or common
securities the amounts due to the holders under the terms of those securities.
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FORM, BOOK-ENTRY PROCEDURES AND TRANSFER
The HIGH TIDES were issued in the form of one fully registered global HIGH
TIDES certificate. The global HIGH TIDES certificate was deposited upon issuance
with the property trustee as custodian for DTC, and registered in the name of
DTC or its nominee, in each case for credit to an account of a direct or
indirect participant in DTC as described below.
Except as set forth below, the global HIGH TIDES certificate may be
transferred, in whole but not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the global HIGH TIDES
certificate may not be exchanged for HIGH TIDES in certificated form except in
the limited circumstances described below. See "--Certificated HIGH TIDES." In
addition, a transfer of beneficial interests in the global HIGH TIDES
certificate will be subject to the applicable rules and procedures of DTC and
its direct or indirect participants which may change from time to time.
DEPOSITARY PROCEDURES
DTC has advised us that it is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its participating
organizations and to facilitate the clearance and settlement of transactions in
those securities between its participants through electronic book-entry changes
to accounts of its participants, thereby eliminating the need for physical
movement of certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Indirect access to DTC's system is also available to other
indirect participants such as banks, brokers, dealers and trust companies that
clear through or maintain a custodial relationship with a participant, either
directly or indirectly. Persons who are not participants may beneficially own
securities held by or on behalf of DTC only through the participants or the
indirect participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the participants and indirect participants. DTC has
also advised us and the trust that, pursuant to procedures established by it:
- upon deposit of the global HIGH TIDES certificate, DTC credited the
accounts of participants designated by Credit Suisse First Boston with
portions of the principal amount of the global HIGH TIDES certificate; and
- ownership of such interests in the global HIGH TIDES certificate will be
shown on, and the transfer of such ownership interests will be effected
only through, records maintained by DTC, with respect to the participants,
or by the participants and the indirect participants, with respect to
other owners of beneficial interests in the global HIGH TIDES certificate.
Investors in the global HIGH TIDES certificate may hold their interests in
the global HIGH TIDES certificate directly through DTC, if they are participants
in DTC, or indirectly through organizations which are participants in DTC's
system. All interests in the global HIGH TIDES certificate will be subject to
the procedures and requirements of DTC. The laws of some states require that
certain persons take physical delivery in certificated form of certain
securities, such as the HIGH TIDES, that they own.
Consequently, the ability to transfer beneficial interests in the global
HIGH TIDES certificate to those persons will be limited to that extent. Because
DTC can act only on behalf of participants, which in turn act on behalf of
indirect participants and certain banks, the ability of a person having
beneficial interests in a global HIGH TIDES certificate to pledge those
interests to persons or entities that do not participate in the DTC system, or
otherwise take actions in respect of those interests, may be affected by the
lack of a physical certificate evidencing those interests. For certain other
restrictions on the transferability of the HIGH TIDES, see "--Certificated HIGH
TIDES."
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Except as described below, owners of beneficial interests in the global HIGH
TIDES certificate will not be entitled to have HIGH TIDES registered in their
names, and they will not receive or be entitled to receive physical delivery of
HIGH TIDES in certificated form and will not be considered the registered owners
or holders thereof under the declaration of trust for any purpose.
Payments in respect of the global HIGH TIDES certificate registered in the
name of DTC or its nominee will be payable by the property trustee to DTC or its
nominee as the registered holder under the declaration of trust by wire transfer
in immediately available funds on each distribution date. Under the terms of the
declaration of trust, the property trustee will treat the persons in whose names
the HIGH TIDES, including the global HIGH TIDES certificate, are registered as
the owners of the global HIGH TIDES certificate for the purpose of receiving
payments and for any and all other purposes.
Consequently, neither the property trustee nor any agent of the property
trustee has or will have any responsibility or liability for:
- any aspect of DTC's records or any participant's or indirect participant's
records relating to, or payments made on account of, beneficial ownership
interests in the global HIGH TIDES certificate, or for maintaining,
supervising or reviewing any of DTC's records or any participant's or
indirect participant's records relating to the beneficial ownership
interests in the global HIGH TIDES certificate; or
- any other matter relating to the actions and practices of DTC or any of
its participants or indirect participants.
DTC has advised us and the trust that its current practice, upon receipt of
any payment in respect of securities such as the HIGH TIDES, is to credit the
accounts of the relevant participants with the payment on the payment date, in
amounts proportionate to their respective holdings in liquidation amount of
beneficial interests in the global HIGH TIDES certificate, as shown on the
records of DTC, unless DTC has reason to believe it will not receive payment on
the payment date. Payments by the participants and the indirect participants to
the beneficial owners of HIGH TIDES represented by a global HIGH TIDES
certificate held through the participants will be governed by standing
instructions and customary practices and will be the responsibility of the
participants or the indirect participants and will not be the responsibility of
DTC, the property trustee or the trust. Neither the trust nor the property
trustee will be liable for any delay by DTC or any of its participants in
identifying the beneficial owners of the HIGH TIDES, and the trust and the
property trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee for all purposes.
Interests in the global HIGH TIDES certificate will trade and settle
according to the rules and procedures of DTC and its participants. Transfers and
settlements between participants in DTC will be effected in accordance with
DTC's procedures.
DTC has advised us and the trust that it will take any action permitted to
be taken by you, including the presentation of HIGH TIDES for exchange as
described below, only at the direction of one or more participants to whose
account with DTC interests in the global HIGH TIDES certificate are credited and
only in respect of the portion of the aggregate liquidation amount of the HIGH
TIDES represented by the global HIGH TIDES certificate as to which the
participant or participants has or have given such direction. However, if there
is an event of default under the declaration of trust, DTC reserves the right to
exchange the global HIGH TIDES certificate for HIGH TIDES in certificated form
and to distribute those HIGH TIDES to its participants.
So long as DTC or its nominee is the registered owner of the global HIGH
TIDES certificate, DTC or the nominee, as the case may be, will be considered
the sole owner or holder of the HIGH TIDES represented by the global HIGH TIDES
certificate for all purposes under the declaration of trust.
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Neither DTC nor its nominee will consent or vote with respect to the HIGH
TIDES. Under its usual procedures, DTC would mail an omnibus proxy to the trust
as soon as possible after the record date. The omnibus proxy assigns the
consenting or voting rights of DTC or its nominee to those participants to whose
accounts the HIGH TIDES are credited on the record date (identified in a listing
attached to the omnibus proxy).
The information in this section concerning DTC and its book-entry system has
been obtained from sources that we and the trust believe to be reliable, but
neither we nor the trust takes responsibility for the accuracy of the
information.
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the global HIGH TIDES certificate among participants in DTC, it
is under no obligation to perform or to continue to perform those procedures,
and those procedures may be discontinued at any time. Neither the trust nor the
property trustee will have any responsibility for the performance by DTC or its
participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
CERTIFICATED HIGH TIDES
The HIGH TIDES represented by the global HIGH TIDES certificate will be
exchangeable for certificated HIGH TIDES in definitive form of like tenor as the
HIGH TIDES in denominations of U.S. $50 and integral multiples of $50 if:
- DTC notifies us or the trust that it is unwilling or unable to continue as
depositary for the global HIGH TIDES certificate, or if at any time DTC
ceases to be a clearing agency registered under the Exchange Act;
- we or the administrative trustees in our or their sole discretion at any
time determine that the global HIGH TIDES certificate shall be so
exchangeable; or
- an event of default under the declaration of trust has occurred and is
continuing.
Any of the HIGH TIDES that are exchangeable pursuant to the preceding
sentence are exchangeable for certificated HIGH TIDES issuable in authorized
denominations and registered in the names as DTC directs. Subject to the
foregoing, the global HIGH TIDES certificate is not exchangeable, except for a
global HIGH TIDES certificate of the same aggregate denomination to be
registered in the name of DTC or its nominee.
PAYMENT AND PAYING AGENCY
Payments in respect of the HIGH TIDES held in global form will be made to
DTC. DTC will make payments on the HIGH TIDES by crediting the relevant account
at DTC on the applicable distribution dates. If any HIGH TIDES are not held by
DTC, then the paying agent will mail checks to the registered holders at their
addresses as shown on its register. The paying agent will initially be the
property trustee. The paying agent may resign as paying agent upon 30 days'
written notice to the property trustee, the administrative trustees and us. If
the property trustee resigns as paying agent, the administrative trustees will
appoint another entity to act as paying agent.
The property trustee has informed the trust that so long as it serves as
paying agent for the HIGH TIDES, it anticipates that information regarding
distributions on the HIGH TIDES, including payment date, record date and
redemption information, will be made available through Wilmington Trust Company,
care of Corporate Trust Administration, 1100 North Market Street, Wilmington, DE
19890.
REGISTRAR AND CONVERSION AGENT
The property trustee will act as the initial paying agent, registrar and
conversion agent for the HIGH TIDES.
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The administrative trustees may designate additional or substitute paying
agents and registrars at any time. Registration of transfers of certificated
HIGH TIDES will be effected without charge by or on behalf of the trust, but
upon payment (with the giving of such indemnity as the administrative trustees
may require) in respect of any tax or other government charges that may be
imposed in connection with any transfer or exchange. The trust will not be
required to register the transfer or exchange of certificated HIGH TIDES during
the period beginning at the opening of business 15 days before any selection of
certificated HIGH TIDES to be redeemed and ending at the close of business on
the day of that selection or register the transfer or exchange of any
certificated HIGH TIDES, or portion thereof, called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than during the occurrence and continuance of an
event of default, is required to perform only the duties that are specifically
set forth in the declaration of trust. During the existence of an event of
default, the property trustee is required to exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or her
own affairs. Subject to this provision, the property trustee has no obligation
to exercise any of its powers under the declaration of trust at the request of
any holder of HIGH TIDES or the trust's common securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that it might
incur by doing so.
MISCELLANEOUS
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the trust in such a way that:
- the trust will not be deemed to be an investment company required to be
registered under the Investment Company Act or classified as an
association taxable as a corporation or partnership for U.S. federal
income tax purposes;
- would cause the trust to be classified for U.S. federal income tax
purposes as a grantor trust; and
- the debentures will be treated as Titan's indebtedness for United States
federal income tax purposes.
The administrative trustees are authorized to take any lawful action
consistent with the trust's certificate of trust and the declaration of trust,
that the administrative trustees determine in their discretion to be necessary
or desirable for those purposes, as long as their actions do not materially
adversely affect the interests of the holders of the HIGH TIDES or the trust's
common securities.
You and the holders of the trust's common securities have no preemptive or
similar rights.
The trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
GOVERNING LAW
The declaration of trust and the HIGH TIDES are governed by and construed in
accordance with the laws of the State of Delaware.
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DESCRIPTION OF CONVERTIBLE SENIOR SUBORDINATED DEBENTURES
We issued convertible senior subordinated debentures under an indenture
between us and Wilmington Trust Company, as debenture trustee. The indenture has
been qualified under and will be subject to and governed by the Trust Indenture
Act. This summary of certain terms and provisions of the debentures and the
indenture is not complete. For a complete description of the debentures, we
encourage you to read the indenture. Unless the context requires otherwise,
"Titan," "we," "us," "our" or similar terms in this section refer solely to The
Titan Corporation and not the trust or any of our other consolidated
subsidiaries.
GENERAL
Concurrently with the issuance of the HIGH TIDES and the trust's common
securities, the trust invested the proceeds from issuing those securities in our
5 3/4% Convertible Senior Subordinated Debentures due February 15, 2030.
Interest commenced to accrue on the debentures from the date of their original
issuance, at the applicable rate of the principal amount thereof. Subject to the
deferral rights described below and our right to set special record dates for
payment of defaulted interest, the trust will make those payments quarterly in
arrears on each February 15, May 15, August 15 and November 15, commencing
May 15, 2000 to the person in whose name each debenture is registered, at the
close of business on the first day of the month of the applicable interest
payment date. The first day of the month of any interest payment date shall be
the record date for such interest payment date.
If the reset date is prior to the record date for the immediately following
interest payment date, then interest and additional amounts, if any, accrued
from and after the reset date to but excluding the immediately following
interest payment date shall be paid on such interest payment date to the person
in whose name each debenture is registered on the relevant record date, subject
to our right to initiate a deferral period. If the reset date is on or after the
record date for the immediately following interest payment date, then
(1) interest and additional amounts, if any, accrued from and after the record
date to but excluding the reset date shall be paid on the immediately following
interest payment date to the person in whose name each debenture is registered
on the relevant record date and (2) interest and additional amounts, if any,
accrued from and after the reset date to but excluding the immediately following
interest payment date shall be paid on the second interest payment date
immediately following the reset date to the person in whose name each debenture
is registered on the relevant record date for such second interest payment date,
subject in each case to our right to initiate a deferral period. The applicable
rate will be 5 3/4% per annum from the date of original issuance of the HIGH
TIDES to, but excluding, the reset date. From the reset date, the applicable
rate will be the term rate established by the remarketing agent to be effective
on the reset date.
We anticipate that, until the dissolution and liquidation of the trust, each
debenture will be registered in the name of the property trustee and held by the
property trustee for the benefit of the holders of the HIGH TIDES and the
trust's common securities. The amount of interest payable for any period will be
computed on the basis of the number of days elapsed in a 360-day year of twelve
30-day months.
If any interest payment date is not a business day, then payment will be
made on the next succeeding business day, except if such business day is in the
next succeeding calendar year, such payment will be made on the immediately
preceding business day. No additional interest or other payment will accrue
because of this change in the payment date. Accrued interest that is not paid on
the applicable interest payment date will bear additional interest on the amount
of interest that is not paid (to the extent permitted by law), compounded
quarterly from the relevant interest payment date. The term "interest" as used
herein will include quarterly payments, interest on quarterly interest payments
not paid on the applicable interest payment date and additional amounts
described in "--Additional Amounts."
If the trust distributes the debentures to you, the description of the
remarketing of the HIGH TIDES and your conversion rights in this prospectus will
apply, with such changes as are necessary, to the
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remarketing or conversion of the debentures. See "The Remarketing" and
"Description of HIGH TIDES--Conversion Rights."
Unless we previously redeem or repurchase the debentures in accordance with
the indenture, they will mature on February 15, 2030. See
"--Redemption--Repayment at Maturity; Redemption of Convertible Senior
Subordinated Debentures."
The debentures will be unsecured and will rank junior and subordinate in
right of payment to all of our Secured Debt. Our right to participate in any
distribution of assets of any of our subsidiaries upon the subsidiary's
liquidation or reorganization or otherwise (and thus the ability of holders of
the HIGH TIDES to benefit indirectly from the distribution) is subject to the
prior claims of creditors of the subsidiary, except to the extent that we may
ourselves be recognized as a creditor of the subsidiary. Accordingly, the
debentures will be subordinated to all of our Secured Debt and effectively
subordinated to all existing and future liabilities of our subsidiaries. Our
subsidiaries are separate legal entities and have no obligations to pay, or make
funds available for the payment of, any amounts due on the debentures, the HIGH
TIDES or the guarantee of the HIGH TIDES. Therefore, holders of debentures
should look only to our assets for payments on the debentures. The indenture
governing the debentures does not limit the incurrence or issuance of other
secured or unsecured debt of Titan, whether under the indenture, our existing
credit agreement, or any other existing agreement or other indenture or any
other debt instrument or agreement that we may enter into in the future or
otherwise. See "Risk Factors--Risks Relating to the HIGH TIDES" and
"--Subordination."
OPTION TO EXTEND INTEREST PAYMENT DATE
If we are not in default under the indenture governing the debentures, we
have the right to defer the payment of interest on the debentures at any time or
from time to time for a period not exceeding 20 consecutive quarters with
respect to each deferral period. We may not, however, defer the payment of
interest beyond (1) the maturity of the debentures whether at the stated
maturity or by declaration of acceleration, call for redemption or otherwise and
(2) in the case of a deferral period beginning prior to the reset date, the
reset date. At the end of a deferral period, we must pay all interest then
accrued and unpaid on the debentures (together with interest thereon accrued at
an annual rate equal to the applicable rate compounded quarterly from the
relevant interest payment date, to the extent permitted by applicable law).
During a deferral period and for so long as the debentures remain outstanding,
interest will continue to accrue and holders of debentures, and holders of the
HIGH TIDES while HIGH TIDES are outstanding, will be required to accrue interest
income in the form of original issue discount for U.S. federal income tax
purposes. See "Certain United States Federal Income Tax Consequences--Interest
Income."
During any deferral period, we may not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock (which includes common and preferred stock) other than stock
dividends paid by us which consist of stock of the same class as that on
which the dividend is being paid;
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities that rank PARI PASSU with
or junior in interest to the debentures; or
- make any guarantee payments with respect to any guarantee by us of the
debt securities of any of our subsidiaries if such guarantee expressly
ranks pari passu with or junior in interest to the debentures, other than,
in each case as applicable:
- dividends or distributions in our capital stock;
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- any declaration of a dividend in connection with the implementation of
a stockholders' rights plan, or the issuance of stock under a
stockholders' right plan in the future, or the redemption or repurchase
of any rights pursuant thereto;
- payments under the guarantee of the HIGH TIDES or the trust's common
securities;
- purchases or acquisitions of shares of our common stock in connection
with the satisfaction by us of our obligations under any employee
benefit plan or the exercise of any repurchase rights under any
employee benefit plan or any other contractual obligation, other than a
contractual obligation ranking expressly by its terms PARI PASSU with
or junior to the debentures;
- the purchase of fractional shares resulting from a reclassification of
our capital stock or the exchange or conversion of one class or series
of our capital stock for another class or series of our capital stock;
or
- the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of the capital stock
or the security being converted or exchanged.
A deferral period will terminate upon the payment by us of all interest then
accrued and unpaid on the debentures, together with interest accrued thereon at
an annual rate equal to the applicable rate, compounded quarterly, to the extent
permitted by applicable law. Prior to the termination of any deferral period, we
may further extend the deferral period. However, the further deferral cannot
cause the deferral period to exceed 20 consecutive quarters or to extend beyond
(1) the maturity of the debentures whether at the stated maturity or by
declaration of acceleration, call for redemption or otherwise and (2) in the
case of a deferral period beginning prior to the reset date, the reset date.
Upon the termination of any deferral period, and subject to the foregoing
limitations, we may elect to begin a new deferral period. We need not pay any
interest during a deferral period, except at the end of the deferral period. We
must give the property trustee and the debenture trustee notice of our election
of any deferral period at least ten days prior to the record date for the
distributions on the HIGH TIDES that would have been payable except for the
election to begin or extend the deferral period. The debenture trustee will give
notice of our election to begin or extend a new deferral period to the holders
of the debentures. There is no limitation on the number of times that we may
elect to begin a deferral period.
We have no current intention of exercising our right to defer payments of
interest on the debentures.
REDEMPTION
REPAYMENT AT MATURITY; REDEMPTION OF CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES.
We must repay the debentures at their stated maturity on February 15, 2030
unless earlier redeemed. The circumstances in which we may, or we are required
to, redeem the debentures prior to their stated maturity are described below.
Upon the repayment in full at maturity or redemption, in whole or in part, of
the debentures, other than following the distribution of the debentures to the
holders of the HIGH TIDES and the trust's common securities, the trust will
concurrently apply the proceeds from the repayment or redemption to redeem, at
the applicable redemption price, a like amount of HIGH TIDES and its common
securities. See "Description of HIGH TIDES--Mandatory Redemption."
OPTIONAL REDEMPTION
We will have the right to redeem the debentures (1) in whole or in part, at
any time on or after February 20, 2003 until, but excluding, the tender
notification date, upon not less than 20 nor more than 60 days' notice, at a
redemption price as set forth below, equal to the following prices per $50
principal
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amount of debentures plus any accrued but unpaid interest on the portion being
redeemed, if redeemed during the 12 month period up to but excluding
February 20:
<TABLE>
<CAPTION>
PRICE PER $50
PRINCIPAL
PERIOD AMOUNT
- ------ -------------
<S> <C>
2004...................... $50.72
2005...................... $50.00
</TABLE>
(2) after the reset date (except in the event of a failed final remarketing), in
accordance with the term call protections, if any, established in the
remarketing; and (3) in whole or in part, at any time on or after the third
anniversary of the reset date following a failed final remarketing at a
redemption price equal to 100% of the then outstanding aggregate principal
amount of the debentures to be redeemed, plus any accrued and unpaid interest on
the portion being redeemed. The term "term redemption price" means any
redemption price established in the remarketing. The initial redemption price
and the term redemption price are each referred to as an optional redemption
price. The remarketing agent will establish term call protections, if any, in
the remarketing that when taken together with the term rate and the term
conversion ratio and price, if any, result in a price per HIGH TIDES equal to
101% of the liquidation amount thereof. However, we may not, at any time, redeem
the debentures for a price less than the aggregate principal amount thereof plus
any accrued and unpaid interest thereon.
In the event of any redemption in part, we will not be required to:
- issue, register the transfer of or exchange any debenture during a period
beginning at the opening of business 15 days before the date of mailing of
a notice of redemption of debentures selected for redemption and ending at
the close of business on the day of such mailing; and
- register the transfer of or exchange any debentures so selected for
redemption, in whole or in part, except the unredeemed portion of any
debenture being redeemed in part.
In no event will we optionally redeem the debentures during a deferral
period. Accordingly, prior to optionally redeeming the debentures, all interest
accrued and unpaid (together, in the case of a deferral period, with interest
thereon, to the extent permitted by law) to the interest payment date
immediately preceding the optional redemption date will be paid in full.
TAX EVENT REDEMPTION
We may also, under limited circumstances within 90 days of the occurrence
and continuation of tax event, redeem the debentures in whole, but not in part,
at the aggregate principal amount of the debentures, plus any accrued and unpaid
interest. See "Description of HIGH TIDES--Tax Event or Investment Company Event
Redemption or Distribution."
If we are permitted to consummate a tax event redemption and we desire to do
so, we must cause a notice to be mailed to each holder of HIGH TIDES and each
holder of debentures at least 30 days but not more than 60 days before the
redemption date. In the event of a tax event redemption, you may convert your
HIGH TIDES, or debentures, if applicable, called for redemption into our common
stock at the applicable conversion ratio prior to 5:00 p.m., New York City time,
on the applicable redemption date.
ADDITIONAL AMOUNTS
If (A) the property trustee is the sole holder of all the debentures and
(B) the trust is required to pay additional sums equal to any additional taxes,
duties, assessments or other governmental charges as a result of a tax event, we
will pay as additional amounts on the debentures those amounts as required so
that the distributions payable by the trust in respect of the HIGH TIDES and its
common securities will not be reduced as a result of any of those additional
sums.
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RESTRICTIONS ON PAYMENTS
If (A) there has occurred and is continuing an event of default under the
indenture, (B) we are in default with respect to our payment of any obligations
under the guarantee of the HIGH TIDES or (C) we have given notice of our
election of a deferral period as provided in the indenture and have not
rescinded that notice, or the deferral period is continuing, we will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital
stock (which includes common and preferred stock) other than stock
dividends paid by us which consist of stock of the same class as that on
which the dividend is being paid;
- make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any of our debt securities that rank PARI PASSU with
or junior in interest to the debentures; or
- make any guarantee payments with respect to any guarantee by us of the
debt of any of our subsidiaries if such guarantee expressly ranks PARI
PASSU with or junior in interest to the debentures in each case, other
than, in each case as applicable:
- dividends or distributions in our common stock;
- any declaration of a dividend in connection with the implementation of
a stockholders' rights plan, or the issuance of stock under a
stockholders' rights plan in the future, or the redemption or
repurchase of any rights pursuant thereto;
- payments under the guarantee of the HIGH TIDES;
- purchases or acquisitions of shares of our common stock in connection
with the satisfaction by us of our obligations under any employee
benefit plan or any other contractual obligation, other than a
contractual obligation ranking expressly by its terms PARI PASSU with
or junior in interest to the debentures;
- the purchase of fractional shares resulting from a reclassification of
our capital stock or the exchange or conversion of one class or series
of our capital stock for another class or series of our capital stock;
or
- the purchase of fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of the capital stock
or the security being converted or exchanged.
MODIFICATION OF INDENTURE
We and the debenture trustee may amend the indenture from time to time
without the consent of the holders of debentures for several reasons, including
(1) to cure ambiguities, defects or inconsistencies, if such action does not
materially adversely affect the interest of the holders of debentures or the
holders of the HIGH TIDES so long as they remain outstanding; or (2) to qualify
or maintain the qualification of, the indenture under the Trust Indenture Act.
We and the debenture trustee may amend the indenture in other respects with
the consent of the holders representing not less than a majority in principal
amount of debentures. However, without the consent of each holder of the
outstanding debentures as affected, no amendment may:
- change the reset date or any date specified in the indenture on which
interest on, or the principal, together with any accrued and unpaid
interest, of the debentures is due and payable or the stated maturity of
the debentures;
- reduce the principal amount of the debentures;
- reduce the rate or extend the time of payment of interest on the
debentures;
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- reduce the percentage of principal amount of outstanding debentures the
consent of whose holders is required to amend, waive or supplement the
indenture; or
- have certain other effects as set forth in the indenture.
DEBENTURE EVENTS OF DEFAULT
Each of the following is an event of default with respect to the debentures:
- failure for 30 days to pay any interest on the debentures when due, except
in the case of permitted deferrals during a deferral period;
- failure to pay any principal or premium, if any, on the debentures when
due, whether at maturity, upon redemption, by declaration of acceleration
or otherwise;
- our continued failure for 60 days to observe or perform, in any material
respect, certain other covenants contained in the indenture after written
notice to us from the debenture trustee or the holders of at least 25% in
aggregate outstanding principal amount of the debentures;
- failure to issue and deliver shares of our common stock upon an election
by a holder of debentures to convert its debentures;
- certain events of bankruptcy, insolvency or reorganization of Titan or any
of its significant subsidiaries; or
- the voluntary or involuntary dissolution, winding-up or termination of the
trust, except in connection with the distribution of the debentures to the
holders of HIGH TIDES and the trust's common securities in liquidation of
the trust, the redemption of all of the HIGH TIDES and the trust's common
securities or certain mergers, consolidations or amalgamations, each as
permitted by the declaration of trust.
The holders of a majority in aggregate outstanding principal amount of the
debentures have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the debenture trustee. The debenture
trustee or the holders of not less than 25% in aggregate outstanding principal
amount of the debentures may declare the principal due and payable immediately
upon an event of default described above. If the debenture trustee or the
holders of debentures fail to make the declaration, the holders of at least 25%
in aggregate liquidation amount of the HIGH TIDES will have the right to make
the declaration. The holders of a majority in aggregate outstanding principal
amount of the debentures may annul the declaration and waive the default if the
default (other than the non-payment of the principal of the debentures which has
become due solely by the acceleration) has been cured and a sum sufficient to
pay all matured installments of interest and principal due otherwise than by
acceleration has been deposited with the debenture trustee. If the holders of
debentures fail to annul the declaration and waive the default, the holders of a
majority in aggregate liquidation amount of the HIGH TIDES will have the right
to make a declaration and waive the default.
The holders of a majority in aggregate outstanding principal amount of the
debentures affected may, on behalf of the holders of all the debentures, waive
any past default, except:
- a default in the payment of principal of or premium, if any, or interest
on the debentures unless we have cured the default and deposited with the
debenture trustee an amount sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration; or
- a default under a provision under the indenture that cannot be modified or
amended without the consent of the holder of each outstanding debenture.
We are required to file annually with the debenture trustee a certificate as
to whether or not we are in compliance with all the conditions and covenants
applicable to us under the indenture.
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If an event of default under the indenture exists and the property trustee
holds the debentures, then the property trustee has the right to declare the
principal of and the interest on the debentures, and any other amounts payable
under the indenture, to be immediately due and payable and to enforce its other
rights as a creditor with respect to the debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF HIGH TIDES
If an event of default under the indenture exists and the event is
attributable to our failure to pay interest or principal on the debentures on
the date the interest or principal is due, you may institute a direct action
against us for payment. We may not amend the indenture to remove the foregoing
right to bring a direct action against us unless we have received the prior
written consent of the holders of all of the HIGH TIDES. If the right to bring a
direct action against us is removed, the trust may become subject to the
reporting obligations under the Exchange Act. Our payment to a holder of HIGH
TIDES in connection with a direct action will not affect our obligation to pay
the principal of and interest on the debentures. We will be subrogated to the
rights of the holder of the HIGH TIDES with respect to payments on the HIGH
TIDES to the extent of any payments made by us to the holder in any direct
action.
You will not be able to exercise directly any remedies, other than those set
forth in the preceding paragraph, available to the holders of the debentures
unless there was an event of default under the declaration of trust. See
"Description of HIGH TIDES--Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
We may not merge, consolidate, transfer or lease our properties and assets
substantially as an entirety to any person other than a wholly owned subsidiary,
and no person may merge, consolidate, or transfer or lease its properties and
assets substantially as an entirety to us, unless:
- in case we consolidate with or merge with or into another person or
convey, transfer or lease our properties and assets substantially as an
entirety to any person other than a wholly owned subsidiary, the successor
person is organized and validly existing under the laws of the United
States or any state of the United States or the District of Columbia, and
the successor person expressly assumes our obligations on the debentures
issued under the indenture and provides for conversion rights in
accordance with the indenture;
- immediately after giving effect to the transaction, no event of default
under the debentures and no event which, after notice or lapse of time or
both, would become an event of default under the debentures, exists;
- if at the time any HIGH TIDES are outstanding, the transaction is
permitted under the declaration of trust and the guarantee relating to the
HIGH TIDES, and does not give rise to any breach or violation of the
declaration of trust or the guarantee; and
- certain other conditions as prescribed in the indenture are met.
The general provisions of the indenture do not afford holders of the
debentures protection in the event of a highly leveraged or other transaction
involving us that may adversely affect holders of the debentures.
SUBORDINATION
All debentures issued under the indenture will be subordinate and junior in
right of payment only to all of our Secured Debt. Upon any payment or
distribution of our assets to creditors upon any liquidation, dissolution,
winding-up, assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency or similar proceedings relating to Titan, the holders of
any of our Secured Debt will first be entitled to receive payment of that debt
in full before the holders of debentures, or the property trustee (or
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any other person or entity) on behalf of the holders, will be entitled to
receive or retain any payment or distribution in respect of the debentures.
If the maturity of the debentures is accelerated, the holders of any of our
Secured Debt outstanding at the time of the acceleration will first be entitled
to receive payment of that debt in full (including any amounts due upon
acceleration) before the holders of the debentures will be entitled to receive
or retain any payment or distribution in respect of the debentures.
In the event that:
- we default in the payment of any principal of, premium, if any, interest
on, or any other amount with respect to, any of our Secured Debt when the
same becomes due and payable (a "payment default"), whether at maturity or
at a date fixed for prepayment or by declaration of acceleration or
otherwise; and
- such payment default continues beyond the period of grace, if any,
specified in the instrument evidencing such debt;
then, unless and until the default is cured or waived or ceases to exist or any
of our Secured Debt is paid in full, no direct or indirect payment or
distribution (in cash, property, securities, by set-off or otherwise) will be
made or agreed to be made for or in respect of the debentures, or in respect of
any redemption, repayment, retirement, purchase or other acquisition of any of
the debentures. We will also not be permitted to make or agree to make any such
payment or distribution if the maturity of any such debt has been accelerated
because of a default.
The term "Credit Agreement" means the Senior Secured Credit Agreement dated
as of February 23, 2000, among us, as the borrower, the various financial
institutions from time to time that are parties thereto, as lenders, Credit
Suisse First Boston Corporation, as lead arranger and administrative agent,
First Union Securities, Inc., as co-arranger and syndication agent, and The Bank
of Nova Scotia, as documentation agent, as amended, and any other secured debt
facilities with banks or other institutional lenders providing for revolving
credit loans, term loans, working capital loans or letters of credit, in each
case, including any related notes, guarantees, collateral documents, swap
arrangements, instruments and agreements entered into in connection therewith,
and as such credit agreements and related documents may be amended, restated,
supplemented, renewed, replaced, refinanced or otherwise modified from time to
time whether or not with the same agent, lender or group of lenders and whether
with the same borrowers or guarantors.
The term "Secured Debt" means (1) Debt under the Credit Agreement and
(2) any other Debt that by its terms is secured by any lien, pledge, charge,
encumbrance, mortgage, deed of trust, hypothecation, assignment or security
interest with respect to assets having or intended to have a fair market value
at the time of the grant thereof (in the judgment of the board of directors, our
chief financial officer or other responsible agent or officer of Titan) equal to
not less than the amount of such Debt.
The term "Debt" means:
- the principal of, and premium and interest, if any, on indebtedness for
money borrowed;
- purchase money and similar obligations;
- obligations under capital leases;
- guarantees, assumptions or purchase commitments relating to, or other
transactions as a result of which we are responsible for the payment of
the indebtedness of others;
- renewals, extensions and refunding of any indebtedness;
- interest or obligations in respect of any indebtedness accruing after the
commencement of any insolvency or bankruptcy proceedings; and
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- obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity
contracts and similar arrangements.
The indenture places no limitation on the amount of debt, including Secured
Debt, that may be incurred by us. We expect from time to time to incur
additional indebtedness constituting Secured Debt. At March 31, 2000, we had
approximately $100.0 million of indebtedness under our Credit Agreement and not
more than $14.4 million of additional Secured Debt. The indenture also places no
limitation on the debt of our subsidiaries, which effectively ranks senior in
right of payment to the debentures.
REGISTRATION AND TRANSFER
The debentures will be represented by one or more global certificates
registered in the name of Cede & Co. as the nominee of DTC if, and only if,
distributed to the holders of the HIGH TIDES and the trust's common securities.
Until that time, the debentures will remain registered in the name of and held
by the property trustee. If the debentures are distributed to holders of the
HIGH TIDES and the trust's common securities, beneficial interests in the
debentures will be shown on, and transfers of debentures will be effected only
through, records maintained by participants in DTC. Except as described below,
debentures in certificated form will not be issued in exchange for the global
certificates.
A global security will be exchangeable for debentures in certificated form
registered in the names of persons other than Cede & Co. only if:
- DTC notifies us that it is unwilling or unable to continue as a depositary
for the global security and no successor depositary has been appointed, or
if at any time DTC ceases to be a "clearing agency" registered under the
Exchange Act, at a time when DTC is required to be so registered to act as
the depositary;
- we, in our sole discretion, determine that the global security will be so
exchangeable; or
- there has occurred and is continuing an event of default under the
indenture.
In the case of debentures issued in certificated form, the transfer of the
debentures will be registrable, and debentures will be exchangeable for
debentures of other denominations of a like aggregate principal amount, at the
corporate office of the debenture trustee in Wilmington, Delaware, or at the
offices of any paying agent or transfer agent appointed by us, provided that
payment of interest may be made at our option by check mailed to the address of
the persons entitled thereto or by wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of HIGH TIDES--Depositary Procedures." If
the debentures are distributed to the holders of the HIGH TIDES and the trust's
common securities upon the trust's termination, the form, book-entry and
transfer procedures with respect to the HIGH TIDES as described under
"Description of HIGH TIDES--Depositary Procedures," will apply to the debentures
with such changes to the details of the procedures as are necessary.
PAYMENT AND PAYING AGENTS
Payments on debentures held in global form will be made to DTC as the
depositary for the debentures. In the case of debentures issued in certificated
form, principal and interest payments on the debentures will be made at the
office or agency we maintain for that purpose in New York, New York, in the coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. However, at our option, payment
of interest may be made, except in the case of debentures that are held in
global form, by check mailed to each registered holder or by wire transfer.
Subject to our right to defer interest payments on the debentures, payment of
any interest on the debentures will be made to the person in whose name the
debentures are registered at the close of business on the record date for that
interest payment date, except in the case of defaulted interest.
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GOVERNING LAW
The indenture and the debentures are governed by and construed in accordance
with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The debenture trustee is subject to all the duties and responsibilities
specified with respect to an indenture trustee under the Trust Indenture Act.
Subject to those provisions, the debenture trustee is under no obligation to
exercise any of the powers vested in it by the indenture at the request of any
holder of debentures, unless offered reasonable indemnity by the holder against
the costs, expenses and liabilities that it might incur by doing so. The
debenture trustee is not required to expend or risk its own funds or otherwise
incur financial liability in the performance of its duties if the debenture
trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
DESCRIPTION OF THE GUARANTEE
When the HIGH TIDES were originally issued, we executed and delivered a
guarantee for the benefit of the holders of the HIGH TIDES. Wilmington Trust
Company acts as guarantee trustee under the guarantee. The guarantee is
qualified under the Trust Indenture Act. This summary of certain provisions of
the guarantee is not complete. For a complete description of the guarantee, we
encourage you to read the guarantee. The guarantee trustee holds the guarantee
for the benefit of the holders of the HIGH TIDES. Unless the context requires
otherwise, "Titan," "we," "us," "our" or similar terms in this section refer
solely to The Titan Corporation and not the trust or any of our other
consolidated subsidiaries.
GENERAL
Pursuant to the guarantee, we irrevocably agreed to make guarantee payments
to you, as and when due, regardless of any defense, right of set-off or
counterclaim that the trust may have or assert other than the defense of
payment. The guarantee covers the following payments with respect to the HIGH
TIDES, to the extent not paid by or on behalf of the trust:
- any accrued and unpaid distributions required to be paid on the HIGH
TIDES, to the extent that the trust has funds on hand available at that
time;
- the applicable redemption price of any HIGH TIDES called for redemption,
to the extent that the trust has funds on hand available at that time; and
- upon a voluntary or involuntary dissolution, winding up or liquidation of
the trust unless the debentures are distributed to you or all the HIGH
TIDES are redeemed, the lesser of:
- the liquidation distribution, to the extent the trust has funds
available at that time; or
- the amount of assets of the trust remaining available for distribution
to you upon liquidation of the trust after satisfaction of liabilities
to the trust's creditors as required by applicable law.
Our obligation to make a guarantee payment may be satisfied by direct
payment of the required amounts by us to you or by causing the trust to pay
those amounts to you.
The guarantee is an irrevocable guarantee on a subordinated basis of the
trust's obligations under the HIGH TIDES, but applies only to the extent that
the trust has funds sufficient to make the required payments. If we do not make
interest payments on the debentures held by the trust, the trust will not be
able to pay distributions on the HIGH TIDES and will not have funds legally
available for the distributions.
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The guarantee ranks subordinate and junior only in right of payment to all
of our Secured Debt. In addition, our obligations under the guarantee are
effectively subordinated to all existing and future liabilities of our
subsidiaries. The guarantee does not limit the incurrence or issuance of other
secured or unsecured debt by us or by our subsidiaries.
STATUS OF THE GUARANTEE
The guarantee constitutes our unsecured obligation and ranks subordinate and
junior only in right of payment to all of our Secured Debt in the same manner as
the debentures.
The guarantee constitutes a guarantee of payment and not of collection
(i.e., you may institute a legal proceeding directly against us to enforce your
rights under the guarantee without first instituting a legal proceeding against
any other person or entity). The guarantee is being held for your benefit. The
guarantee will not be discharged except in the circumstances described under
"--Termination of the Guarantee." The guarantee places no limitation on the
amount of debt, including Secured Debt, that may be incurred by us. We expect
from time to time to incur additional indebtedness constituting Secured Debt.
AMENDMENTS AND ASSIGNMENT
The guarantee may not be amended without the prior approval of the holders
of not less than a majority of the aggregate liquidation amount of the
outstanding HIGH TIDES, except that no approval is required for changes that do
not materially adversely affect your rights. The manner of obtaining such
approval will be as set forth under "Description of HIGH TIDES--Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
guarantee will bind our successors, assigns, receivers, trustees and
representatives and will inure to the benefit of the holders of the HIGH TIDES
then outstanding.
EVENTS OF DEFAULT
We will be in default under the guarantee if we do not make required
payments when due or if we fail to perform other obligations and we do not cure
our failure to perform within 60 days after we receive notice of our failure.
The holders of not less than a majority in aggregate liquidation amount of the
HIGH TIDES have the right:
- to direct the time, method and place of conducting any proceeding for any
remedy available to the guarantee trustee in respect of the guarantee; or
- to direct the exercise of any trust or power conferred upon the guarantee
trustee under the guarantee.
You may institute a legal proceeding directly against us to enforce your
rights under the guarantee without first instituting a legal proceeding against
the trust, the guarantee trustee or any other person or entity.
As guarantor, we are required to file annually with the guarantee trustee a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee undertakes to perform only those duties as are
specifically set forth in the guarantee, unless we are in default in performing
the guarantee. When we are in default under the guarantee, the guarantee trustee
must exercise the same degree of care and skill as a prudent person would
exercise or use in the conduct of his or her own affairs. Subject to this
provision, the guarantee trustee is under no obligation to exercise any of the
powers vested in it by the guarantee at the request of any holder of the HIGH
TIDES unless it is offered reasonable indemnity against the costs, expenses and
liabilities that it might incur by doing so.
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TERMINATION OF THE GUARANTEE
The guarantee will terminate as to you upon:
- full payment of the redemption price of the HIGH TIDES held by you and any
accrued and unpaid distributions;
- distribution of the debentures held by the trust to you;
- full payment of amounts payable under the declaration of trust upon the
trust's liquidation; or
- distribution of our common stock to you in respect of the conversion of
your HIGH TIDES into common stock.
The guarantee will terminate completely upon full payment of the amounts
payable in accordance with the declaration of trust. The guarantee will continue
to be effective or will be reinstated, as the case may be, if at any time any
holder of the HIGH TIDES must restore payment of any sums paid under the HIGH
TIDES or the guarantee.
GOVERNING LAW
The guarantee is governed by and construed in accordance with the laws of
the State of New York.
RELATIONSHIP AMONG THE HIGH TIDES, THE CONVERTIBLE
SENIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
We have irrevocably guaranteed payments of distributions and other amounts
due on the HIGH TIDES (to the extent the trust has funds available for the
payment of those distributions) as and to the extent set forth under
"Description of the Guarantee." Taken together, our obligations under the
debentures, the indenture, the declaration of trust and the guarantee, including
our obligation to pay the trust's costs, expenses and other liabilities (other
than the trust's obligations to the holders of the HIGH TIDES and its common
securities pursuant to the terms of those securities) provide in the aggregate,
a full, irrevocable and unconditional guarantee of all of the trust's
obligations under the HIGH TIDES. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes the full
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
trust's obligations under the HIGH TIDES and its common securities.
If and to the extent that we do not make payments on the debentures, the
trust will not pay distributions or other amounts due on the HIGH TIDES. The
guarantee does not cover payment of distributions when the trust does not have
sufficient funds to pay those distributions. In that event, your remedy is to
institute a direct action against us. Our obligations under the guarantee are
subordinate and junior only in right of payment to all of our Secured Debt.
Unless the context requires otherwise, "Titan," "we," "us," "our" or similar
terms in this section refer solely to The Titan Corporation and not the trust or
any of our other consolidated subsidiaries.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
debentures, the payments will be sufficient to cover distributions and other
payments due on the HIGH TIDES. This is primarily because:
- the aggregate principal amount or applicable redemption price of the
debentures will be equal to the sum of the aggregate liquidation amount or
applicable redemption price, as applicable, of the HIGH TIDES and the
trust's common securities;
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- the applicable rate and interest and other payment dates on the debentures
will match the distribution rate and distributions and other payment dates
for the HIGH TIDES;
- we will pay for all of the trust's costs, expenses and liabilities except
the trust's obligations to holders of HIGH TIDES and its common securities
pursuant to the terms of those securities; and
- the declaration of trust provides that the trust will not engage in any
activity that is not consistent with the limited purposes of the
declaration of trust.
We have the right to set off any payment we are otherwise required to make
under the indenture with and to the extent we have already made, or are
concurrently on the date of that payment making, any payment under the guarantee
used to satisfy the related payment of indebtedness under the indenture.
ENFORCEMENT RIGHTS OF HOLDERS OF HIGH TIDES
You may institute a legal proceeding directly against us to enforce your
rights under the guarantee without first instituting a legal proceeding against
the guarantee trustee, the trust or any other person or entity.
A default or event of default under any Secured Debt would not constitute a
default or event of default under the declaration of trust. However, in the
event of payment and certain other defaults under, or acceleration of, Secured
Debt, the subordination provisions of the indenture provide that no payments may
be made in respect of the debentures until the Secured Debt has been paid in
full or the payment or other default under any Secured Debt has been cured or
waived. Failure to make required payments on debentures would constitute an
event of default under the declaration of trust.
LIMITED PURPOSE OF THE TRUST
The HIGH TIDES evidence an undivided beneficial ownership interest in the
assets of the trust, and the trust exists for the sole purpose of issuing the
HIGH TIDES and the trust's common securities and investing the proceeds of the
HIGH TIDES and the trust's common securities in the debentures and engaging in
only those other activities necessary, convenient or incidental to those
purposes.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the trust involving the liquidation of the debentures, after satisfaction of the
liabilities of the creditors of the trust as required by applicable law, you and
the holders of the trust's common securities will be entitled to receive, out of
the trust's assets held, the liquidation distribution in cash. See "Description
of HIGH TIDES--Liquidation of the Trust and Distribution of Convertible Senior
Subordinated Debentures." If we become subject to any voluntary or involuntary
liquidation or bankruptcy, the property trustee, as holder of the debentures,
would be one of our subordinated creditors. The property trustee would be
subordinated in right of payment to all of our Secured Debt as set forth in the
indenture, but entitled to receive payment in full of principal and interest,
before any of our stockholders receive payments or distributions. We are the
guarantor under the guarantee and have agreed to pay for all of the trust's
costs, expenses and liabilities other than the trust's obligations to the
holders of its HIGH TIDES and common securities. Accordingly, in the event of
our liquidation or bankruptcy, the positions of a holder of HIGH TIDES and a
holder of debentures are expected to be substantially the same relative to our
other creditors and to our stockholders.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock as of March 31, 2000 consisted of:
- 100,000,000 shares of common stock, par value $.01 per share, of which
50,647,298 shares are issued and outstanding; and
- 2,500,000 shares of preferred stock, par value $1.00 per share, of which
1,068,102 shares have been designated as $1.00 cumulative convertible
preferred stock, of which 693,300 are issued and outstanding, and 250,000
shares have been designated as series A junior participating preferred
stock, none of which is issued and outstanding.
We have reserved for issuance under our 1990, 1994 and 1997 Stock Option
Plans and our 1996 Directors' Stock Option and Equity Participation Plan a total
of 3,125,000 shares of common stock of which 930,425 shares were covered by
outstanding options as of March 31, 2000. We also had approximately
510,000 shares of common stock issued and outstanding as of March 31, 2000 under
our Employee Stock Purchase Plan and approximately 900,000 shares of common
stock issued and outstanding as of March 31, 2000 under our Employee Stock
Ownership Plan.
Our annual meeting of stockholders is scheduled for May 30, 2000. We are
asking our stockholders to approve at that meeting an increase in our authorized
number of shares of common stock from 100,000,000 shares to 200,000,000 shares
and an increase in our authorized number of shares of preferred stock from
2,500,000 to 5,000,000 shares. If our stockholders approve the increase in our
number of shares of preferred stock, we will increase the number of shares of
our preferred stock that are designated as series A junior participating
preferred stock from 250,000 to 1,000,000 shares. We are also asking our
stockholders to approve at the annual meeting of stockholders our 2000 Employee
and Director Stock Option and Incentive Plan and our 2000 Employee Stock
Purchase Plan. We will reserve 4,000,000 shares of common stock under the 2000
Employee and Director Stock Option Plan and 1,500,000 shares of common stock
under the 2000 Employee Stock Purchase Plan if those plans are approved.
On March 24, 2000, we entered into an agreement to acquire AverStar, Inc.
The aggregate number of shares of our common stock that we will issue in
exchange for shares of AverStar common stock will be determined at the time of
the acquisition according to a formula contained in the acquisition agreement.
Based on the number of shares of AverStar common stock outstanding as of
April 13, 2000, we will issue approximately 2,851,684 shares of our common stock
in the acquisition. In addition, we will assume all outstanding options to
purchase AverStar common stock, which will be converted into options to acquire
shares of our common stock using the same exchange ratio which is applicable to
AverStar common stock in the acquisition.
The following summary describes the material terms of our capital stock and
stockholder rights plan. The description of capital stock and stockholder rights
plan is qualified by reference to our certificate of incorporation, as amended,
bylaws and stockholder rights plan.
COMMON STOCK
DIVIDENDS. Subject to the right of the holders of any class of preferred
stock, holders of shares of our common stock are entitled to receive dividends
that may be declared by our board of directors out of legally available funds.
No dividend may be declared or paid in cash or property on any share of any
class of common stock unless simultaneously the same dividend is declared or
paid on each share of that and every other class of common stock; provided,
that, in the event of stock dividends, holders of a specific class of common
stock shall be entitled to receive only additional shares of that class.
VOTING RIGHTS. Holders of our common stock are entitled to one vote for
each share held. Holders do not have cumulative voting rights.
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LIQUIDATION RIGHTS. Upon our liquidation, dissolution or winding-up, the
holders of our common stock are entitled to share ratably in all assets
available for distribution after payment in full to creditors and holders of our
preferred stock, if any.
OTHER PROVISIONS. The holders of our common stock are not entitled to
preemptive or similar rights.
PREFERRED STOCK
We are currently authorized to issue 2,500,000 shares of preferred stock,
par value $1.00 per share. Our board of directors, in its sole discretion, may
designate and issue one or more series of preferred stock from our authorized
and unissued shares of preferred stock. Subject to limitations imposed by law or
our amended and restated articles of incorporation, the board of directors is
empowered to determine:
- the designation of and the number of shares constituting a series of
preferred stock;
- the dividend rate, if any, for the series;
- the terms and conditions of any voting and conversion rights for the
series, if any;
- the number of directors, if any, which the series shall be entitled to
elect;
- the amounts payable on the series upon our liquidation, dissolution or
winding-up;
- the redemption prices and terms applicable to the series, if any; and
- the preferences and relative rights among the series of preferred stock.
Theses rights, preferences, privileges and limitations of preferred stock could
adversely affect the rights of holders of our common stock.
CUMULATIVE CONVERTIBLE PREFERRED STOCK
DIVIDENDS. Each share of cumulative convertible preferred stock accrues
dividends at the rate of $1.00 per share per annum.
VOTING RIGHTS. Holders of our cumulative convertible preferred stock are
entitled to one-third of one vote for each share held. Holders do not have
cumulative voting rights.
LIQUIDATION RIGHTS. Upon our liquidation, dissolution or winding-up, the
holders of our cumulative convertible preferred stock are entitled to a
liquidation preference of $20 per share plus any unpaid cumulative dividends
before any distribution to holders of our common stock.
CONVERSION RIGHTS. Each outstanding share of cumulative convertible
preferred stock is convertible into our common stock, at the option of the
holder, at a rate of two-thirds shares of common stock for each share of
cumulative convertible preferred stock.
REDEMPTION. Each share of cumulative convertible preferred stock is
redeemable, but only at our option, at a redemption price of $20 per share plus
any accrued and unpaid dividends.
OTHER PROVISIONS. The holders of our cumulative convertible preferred stock
are not entitled to preemptive or similar rights.
PREFERRED SHARE PURCHASE RIGHTS
Each outstanding share of our common stock has or will have attached to it
one preferred share purchase right, which we refer to as a right. Each right
entitles the registered holder of common stock to purchase from us, upon the
occurrence of specified events, one one-hundredth of a share of our series A
junior participating preferred stock, which we refer to as the participating
preferred shares, at a price of
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$42 per one one-hundredth of a participating preferred share, subject to
adjustment. The terms of the rights are set forth in a rights agreement dated as
of August 21, 1995 between us and American Stock Transfer and Trust Company, as
rights agent.
Until the distribution date described below, we will not issue separate
certificates evidencing the rights. Until that date, the rights will be
evidenced, with respect to any common stock certificate, by that common stock
certificate. The rights will detach from the common stock and a distribution
date will occur upon the earlier of the following dates:
- subject to the exceptions described below, the tenth day following a
public announcement that an "acquiring person," which, subject to the
exceptions listed in the following sentence, includes a person or "group"
of affiliated or associated persons, has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of our outstanding common
stock, or
- the tenth day following the commencement, or the first public announcement
by any person or group of an intention to commence, a tender offer or
exchange offer that would result in beneficial ownership by a person or
group of 15% or more of our outstanding common stock.
Our board of directors, with the concurrence of a majority of the continuing
directors, may postpone the distribution date by determining a later
distribution date before the time any person or group becomes an acquiring
person. Any board member who is not an acquiring person or an affiliate or
associate of an acquiring person, or an employee, director, representative,
nominee or designee of an acquiring person, or its affiliate or associate, but
who:
- was a member of our board of directors before any person becomes an
acquiring person, or
- became a member of our board of directors after any person becomes an
acquiring person if the member was nominated for election or elected to
our board of directors upon the recommendation or approval of a majority
of the continuing directors, is considered to be a continuing director of
Titan.
The term "acquiring person" does not include us, any of our subsidiaries,
any employee benefit plan of ours or of any of our subsidiaries or any entity
holding our common stock for or under an employee benefit plan of ours or any of
our subsidiaries. In addition, a person who would otherwise be an acquiring
person will not be considered an acquiring person if our board of directors
determines in good faith that such person inadvertently became the beneficial
owner of 15% or more of our common stock and such person divests itself, as
promptly as practicable, of beneficial ownership of a sufficient number of
shares of our common stock so that it would no longer otherwise qualify as an
acquiring person.
The rights agreement provides that, until the distribution date, or earlier
redemption or expiration of the rights, the rights will be transferred only with
our common stock. The rights will be evidenced, with respect to any common stock
certificate outstanding as of September 7, 1995, by that common stock
certificate with a summary of the rights attached to it. Until the distribution
date, or earlier redemption or expiration of the rights, new common stock
certificates issued after September 7, 1995 upon transfer or new issuances of
common stock will contain a notation incorporating the rights agreement by
reference. Until the distribution date, the surrender for transfer of any
certificates for common stock, even without a summary of the rights attached to
it, also will constitute the transfer of the rights associated with the common
stock represented by that certificate. As soon as practicable after the
distribution date, separate certificates evidencing the rights will be mailed to
holders of record of our common stock as of the close of business on the
distribution date, and the separate right certificates alone will evidence the
rights. Only our common stock issued before the distribution date will be issued
with rights.
The rights are not exercisable until the distribution date. The rights will
expire on August 17, 2005, unless the expiration date is extended or unless the
rights are earlier redeemed or exchanged by us, in each case as described below.
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The purchase price payable for the participating preferred shares, and the
number of participating preferred shares or other securities or property
issuable, upon exercise of the rights, as well as the number of rights
outstanding, are subject to adjustment from time to time to prevent dilution in
the following circumstances:
- in the event of a stock dividend on, or a subdivision, combination or
reclassification of the participating preferred shares,
- upon the grant to holders of the participating preferred shares of rights
or warrants to subscribe for or purchase participating preferred shares at
a price, or securities convertible into participating preferred shares
with a conversion price, less than the current market price of the
participating preferred shares, or
- upon the distribution to holders of the participating preferred shares of
evidences of indebtedness, securities or assets, excluding regular
periodic cash dividends at a rate not in excess of 125% of the last cash
dividend paid or, in the case that regular cash dividends have not been
paid, at a rate not in excess of 50% of the average net income per share
of the four quarters ended immediately before the payment of the dividend,
or dividends payable in participating preferred shares or of subscription
rights or warrants, other than those referred to above.
The number of outstanding rights and the number of one one-hundredths of a
participating preferred share issuable upon exercise of each right are also
subject to adjustment in the event of a dividend or other distribution on the
common stock payable in common stock or subdivisions, consolidations or
combinations of our common stock occurring, in any of those cases, before the
distribution date.
Participating preferred shares purchasable upon exercise of the rights will
not be redeemable. Each participating preferred share will be entitled to a
minimum preferential quarterly dividend payment of $1.00 per share, but will be
entitled to an aggregate dividend of 100 times the dividend declared per share
of our common stock. If there is a liquidation, the holders of the participating
preferred shares will be entitled to a minimum preferential liquidation payment
of $100 per share, but will be entitled to an aggregate payment of 100 times the
payment made per share of our common stock. Each participating preferred share
will have 100 votes, voting together with our common stock. If there is a
merger, consolidation or other transaction in which our common stock is
exchanged, each participating preferred share will be entitled to receive 100
times the amount received per share of our common stock. These rights are
protected by customary antidilution provisions.
Because of the nature of the dividend, liquidation and voting rights of the
participating preferred shares, the value of the one one-hundredth interest in a
participating preferred share purchasable upon exercise of each right should
approximate the value of one share of our common stock.
If any person or group becomes an acquiring person, except pursuant to
specified cash offers for all outstanding shares of our common stock approved by
our board of directors, or if we are the surviving corporation in a merger with
an acquiring person or any affiliate or associate of an acquiring person and our
common stock is not changed or exchanged, proper provision will be made so that
each holder of a right, other than rights beneficially owned by the acquiring
person, which will become null and void, will have the right to receive upon
exercise of the right at the then-current market price, instead of participating
preferred shares, that number of shares of our common stock having a market
value of two times the exercise price of the right. If we do not have sufficient
common stock issued but not outstanding, or authorized but unissued, to permit
the exercise in full of the rights, we will be required to take all action
necessary to authorize additional common stock for issuance upon exercise of the
rights. If, after a good-faith effort, we are unable to take all necessary
action, we will substitute, for each share of common stock that would otherwise
be issuable upon exercise of a right, a number of participating preferred
shares, or fractional participating preferred shares, with the same market value
as that share of common stock.
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If, after a person or group has become an acquiring person, we are acquired
in a merger or other business combination transaction or 50% or more of our
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a right, other than rights beneficially owned by the
acquiring person, which will become null and void, will have the right to
receive, upon the exercise of the right at its then-current exercise price and
instead of participating preferred shares, that number of shares of common stock
of the acquiring company, or its parent, which at the time of the transaction
will have a market value of two times the exercise price of the right.
The exercise price of a right at any date will be equal to the purchase
price at that date multiplied by the number of one one-hundredths of a
participating preferred share for which a right is exercisable at that date.
At any time after any person or group becomes an acquiring person and before
the acquisition by that person or group of 50% or more of our outstanding common
stock, our board of directors may exchange the rights, in whole or in part, for
a number of shares of our common stock, per right, having an aggregate value
equal to the excess of the value of the shares of our common stock issuable upon
exercise of a right after a person or group becomes an acquiring person over the
purchase price, subject to adjustment. Our board of directors will not exchange
the rights owned by the acquiring person or group, which will have become null
and void.
With specified exceptions, no adjustments in the purchase price for the
preferred shares will be required until cumulative adjustments require an
adjustment of at least 1% of that purchase price. No fractional participating
preferred shares will be issued, other than fractions which are integral
multiples of one one-hundredth of a participating preferred share, which may, at
our election, be evidenced by depositary receipts. Instead of issuing fractional
participating preferred shares, we will make an adjustment in cash based on the
market price of the participating preferred shares on the last trading day
before the date of exercise.
Upon approval by our board of directors, we may redeem the rights, in whole,
but not in part, at a price of $.01 per right at any time until ten days
following the public announcement that a person or group has become an acquiring
person. Our board of directors, with the concurrence of a majority of the
continuing directors, may extend the period during which the rights are
redeemable beyond the ten days following the public announcement that a person
or group has become an acquiring person.
Under circumstances described in the rights agreement, the decision to
redeem will require the concurrence of a majority of the continuing directors.
Immediately upon the determination of our board of directors to redeem the
rights, we will make an announcement of the redemption. Upon the redemption, the
right to exercise the rights will terminate and the only right of right holders
will be to receive the redemption price.
Until a right is exercised, the holder of the right, in the capacity of a
holder, will have no rights as a stockholder of ours, including, without
limitation, the right to vote or to receive dividends. Although the distribution
of the rights will not be taxable to stockholders or to us, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
rights become exercisable for our common stock or other consideration, or for
common stock of the acquiring company or its parent as set forth above.
Any of the provisions of the rights agreement may be amended or supplemented
by our board of directors before the distribution date. From and after the
distribution date, we and the rights agent may amend or supplement the rights
agreement from time to time without the approval of any holders of rights:
- to cure any ambiguity, to correct or supplement any defective or
inconsistent provisions,
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- to shorten or lengthen any time period under the rights agreement relating
to when the rights may be redeemed, so long as, under specified
circumstances, a majority of the continuing directors approve the
shortening or lengthening, or
- to make any other provisions with respect to the rights which we and the
rights agent may deem necessary or desirable.
Notwithstanding this right to amend or supplement, from and after the
distribution date, the rights agreement may not be amended in any manner which
would adversely affect the interest of the holders of rights.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
We are subject to section 203 of the Delaware General Corporation Law,
which, with specified exceptions, prohibits a Delaware corporation from engaging
in any "business combination" with any "interested stockholder" for a period of
three years following the time that the stockholder became an interested
stockholder unless:
- before that time, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
- upon completion of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned by persons who are
directors and also officers and by employee stock plans in which employee
participants do not have the right to determine confidentially whether
shares held subject to the plan will he tendered in a tender or exchange
offer; or
- at or after that time, the business combination is approved by the board
of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder.
Section 203 defines "business combination" to include the following:
- any merger or consolidation of the corporation with the interested
stockholder;
- any sale, transfer, pledge or other disposition of 10% or more of the
assets of the corporation involving the interested stockholder;
- subject to specified exceptions, any transaction that results in the
issuance or transfer by the corporation of any stock of the corporation to
the interested stockholder;
- any transaction involving the corporation that has the effect of
increasing the proportionate share of the stock of any class or series of
the corporation beneficially owned by the interested stockholder; or
- any receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or
through the corporation.
In general, section 203 defines an "interested stockholder" as any entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by that entity or person.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is American Stock
Transfer and Trust Company.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following, in the opinion of Cooley Godward LLP, counsel to Titan and
the trust, is a summary of the material United States federal income tax
consequences of the purchase, ownership, disposition, and conversion of HIGH
TIDES and our common stock. Unless otherwise stated, this summary deals only
with HIGH TIDES and Titan's common stock held as capital assets within the
meaning of Section 1221 of the Internal Revenue Code of 1986, as amended, by
United States persons which, as defined in the Internal Revenue Code, include
any beneficial owners, that are, for United States federal income tax purposes:
- citizens or residents of the United States;
- corporations or partnerships created or organized in or under the law of
the United States, any state thereof or the District of Columbia (other
than partnerships that are not treated as a United States person under any
applicable Treasury regulations);
- estates, the income of which is subject to United States federal income
taxation regardless of its source;
- trusts if (A) a court within the United States is able to exercise primary
supervision over the administration of the trust and (B) one or more
United States persons have the authority to control all substantial
decisions of the trust; or
- otherwise subject to United States federal income taxation on a net income
basis in respect of the HIGH TIDES or common stock.
This summary does not deal with special classes of holders such as:
- banks, thrifts and other financial institutions;
- real estate investment trusts and regulated investment companies;
- insurance companies;
- dealers in securities or currencies;
- tax-exempt investors;
- foreign investors;
- persons holding HIGH TIDES as part of a straddle or as part of a hedging
or conversion transaction or other integrated investment;
- persons that have a functional currency other than the U.S. dollar; or
- persons who are subject to the United States federal alternative minimum
tax.
Nor does this summary discuss the tax consequences to shareholders, partners
or beneficiaries of a holder of HIGH TIDES or Titan's common stock. Further,
this summary does not include any description of the tax laws of any state or
local government or of any foreign government that may be applicable to the HIGH
TIDES or Titan's common stock.
This summary is based on the Internal Revenue Code, the Treasury regulations
promulgated thereunder and administrative and judicial interpretations thereof,
all as of the date hereof, and all of which are subject to change, possibly on a
retroactive basis. The authorities on which this summary is based are subject to
various interpretations, and it is therefore possible that the federal income
tax treatment of the ownership and disposition of HIGH TIDES may differ from the
treatment described below. Neither the trust nor Titan has sought, nor will
either seek, a ruling from the Internal Revenue Service (the "IRS") on
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the U.S. federal tax consequences described in this summary, and it is possible
that the IRS could take a position contrary to the interpretations herein.
IN PART BECAUSE OF THE UNCERTAINTIES CONCERNING THE PROPER TAX TREATMENT OF
HIGH TIDES AS DISCUSSED BELOW, IT IS PARTICULARLY IMPORTANT THAT YOU CONSULT
WITH YOUR TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN INCOME,
AND OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP, DISPOSITION AND
CONVERSION OF THE HIGH TIDES AND THE OWNERSHIP AND DISPOSITION OF TITAN'S COMMON
STOCK.
CLASSIFICATION OF THE TRUST AS A GRANTOR TRUST
In connection with the initial offering of the HIGH TIDES, Cooley Godward
LLP rendered its opinion that, under current law, assuming full compliance with
the terms of the declaration of trust, the indenture and certain other
documents, and based on certain facts and assumptions contained in such opinion,
the trust will be classified for United States federal income tax purposes as a
grantor trust and not as a partnership, an association or a publicly traded
partnership taxable as a corporation. Accordingly, for United States federal
income tax purposes, each holder of HIGH TIDES generally will be considered the
owner of an undivided interest in the debentures issued by us to the trust, and
each holder will be required to include in its gross income all income or gain
with respect to its allocable share of those debentures, including original
issue discount (if any), whether or not cash is actually distributed to the
holder.
CLASSIFICATION OF THE DEBENTURES AS INDEBTEDNESS
Titan intends to take the position that the debentures will be classified
for United States federal income tax purposes as indebtedness of Titan. By
acceptance of the HIGH TIDES, each holder covenants to treat the debentures as
indebtedness and the HIGH TIDES as evidence of an indirect beneficial ownership
interest in the debentures. No assurance can be given, however, that the
classification of the debentures as indebtedness will not be challenged by the
IRS, or if challenged, that such a challenge will not be successful. The
remainder of this discussion assumes that the debentures will be classified as
indebtedness of Titan for United States federal income tax purposes.
TAX TREATMENT OF DEBENTURES AS RESET BONDS
Because no debt instrument closely comparable to the debentures has been the
subject of any Treasury regulation, revenue ruling or judicial decision, the
United States federal income tax treatment of debt obligations such as the
debentures is not certain. We intend to treat the debentures for United States
federal income tax purposes as "reset bonds" under Treasury regulations relating
to variable rate debt instruments. Assuming the debentures are reset bonds, they
will be treated, solely for purposes of the original issue discount rules of the
Internal Revenue Code, as maturing on the date immediately preceding the reset
date for the reset price and, if the remarketing agent remarkets the HIGH TIDES,
as being reissued on the reset date at the reset price.
There can be no assurance that the Internal Revenue Service will agree with,
or that a court would uphold, the treatment of the debentures as reset bonds. In
particular, the Internal Revenue Service could instead attempt to treat the
debentures as maturing at their stated maturity on February 15, 2030. If the
debentures were treated as maturing on such date, the debentures would be
treated as having contingent interest under the Treasury regulations governing
debt instruments that provide for contingent payments. In that event, we would
be required to construct a projected payment schedule for the debentures, based
on our current borrowing costs for comparable noncontingent debt instruments,
from which an estimated yield on the debentures would be calculated. A holder
would be required to include in income original issue discount in an amount
equal to the product of the "adjusted issue price" of the debentures at the
beginning of each interest accrual period and the estimated yield of the
debentures and to make certain adjustments to such income accruals for
differences between actual payments and projected payments. In general, the
"adjusted issue price" of a debenture would be equal to its "issue price" (the
first price at
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which a substantial amount of the HIGH TIDES are sold to the public, ignoring
sales to bond houses, brokers and similar persons acting as underwriters,
placement agents or wholesalers), increased by the original issue discount, if
any, previously accrued on the debenture, and reduced by any payments made on
the debenture. During the period prior to the reset date, the original issue
discount would accrue at a rate that is greater than the applicable rate, and
holders would have more taxable income than the cash payable on the HIGH TIDES.
In addition, under the Treasury regulations governing debt instruments that
provide for contingent payments, holders who sold or redeemed their HIGH TIDES
would recognize ordinary loss or reduced gain at that time to reflect any excess
of prior original issue discount accruals over actual interest payments
received. Holders who retain their HIGH TIDES following the reset date would
reduce their original issue discount accruals after that date to reflect any
such excess prior to the reset date. Furthermore, under the Treasury
regulations, any gain realized with respect to the HIGH TIDES would generally be
treated as ordinary income, any loss realized would generally be treated as
ordinary loss to the extent of the holder's prior ordinary income inclusions
with respect to the HIGH TIDES, and any additional loss would be capital loss.
The following discussion assumes the debentures are properly treated as
reset bonds rather than as contingent payment debt instruments.
INTEREST INCOME
Under the Treasury regulations, a "remote" contingency that stated interest
will not be timely paid will be ignored in determining whether a debt instrument
is issued with original issue discount. We believe that the likelihood of
interest payments being deferred is remote. Based on the foregoing, we believe
that the debentures will not be considered to be issued with original issue
discount at the time of their original issuance and, accordingly, a holder of
HIGH TIDES should include in gross income such holder's allocable share of
interest on the debentures in accordance with such holder's method of tax
accounting. If it is determined that the possible deferral of interest payments
should not be treated as a remote contingency, interest on the debentures would
not be treated as "qualified stated interest" and, thus, the debentures would be
treated as having been issued with original issue discount. In such case,
holders of HIGH TIDES would be required to include in income their allocable
share of the original issue discount accrued by the trust with respect to the
debentures on an economic accrual basis over the period of time the HIGH TIDES
(and the underlying allocable share of the debentures) are held, regardless of
their regular methods of accounting and regardless of whether interest has been
paid on the debentures or distributions are made on the HIGH TIDES. Actual
payments of interest on the debentures and corresponding distributions on the
HIGH TIDES would not result in additional income being recognized by the holders
of the HIGH TIDES. In such event, the interest income included by the holders of
the HIGH TIDES should not differ from the actual interest paid on the
debentures.
In addition, under the Treasury regulations, if at any time the payment of
interest on the debentures is deferred, the debentures would, solely for
purposes of determining the existence and amount of original issue discount with
respect to the debentures, at that time be treated as retired and reissued with
original issue discount, and all stated interest on the debentures would
thereafter be treated as original issue discount as long as the debentures
remained outstanding. In such event, holders of HIGH TIDES would be required to
include in income their allocable share of the original issue discount accrued
by the trust with respect to the debentures on an economic accrual basis over
the period of time that the HIGH TIDES (and the underlying allocable share of
the debentures) are held, regardless of their regular methods of tax accounting
and regardless of whether interest has been paid on the debentures or
distributions are made on the HIGH TIDES. Assuming that the debentures are
treated as reset bonds (as discussed above), the total original issue discount
that would accrue during the period up to the day before the reset date if we
were to exercise our option to defer payments of interest would be equal to the
excess of (1) the sum of (A) the reset price, plus (B) the total stated interest
payments called for under the debentures prior to the
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reset date after the date we exercise our option to defer interest payments on
the debentures, over (2) the adjusted issue price of the debentures as of the
date we exercised our option to defer payments of interest. Because the reset
price exceeds the principal amount of the debentures, during the period
following the date we exercise our option to defer interest payments on the
debentures through the reset date holders will accrue original issue discount at
a rate slightly in excess of the applicable initial rate.
The following discussion assumes that we will not defer payments of interest
on the debentures, and that the debentures will not be issued with original
issue discount.
Because the income underlying the HIGH TIDES will not be characterized as
dividends for United States federal income tax purposes, corporate holders of
the HIGH TIDES will not be entitled to a dividends received deduction for any
income recognized with respect to the HIGH TIDES.
RECEIPT OF DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Description of
HIGH TIDES--Tax Event or Investment Company Event Redemption or Distribution,"
debentures may be distributed to holders in exchange for the HIGH TIDES and in
liquidation of the trust. Under current law, such a distribution to holders, for
United States federal income tax purposes, would be treated as a nontaxable
event to each holder, and each holder would receive an aggregate tax basis in
the debentures equal to such holder's aggregate tax basis in its HIGH TIDES. A
holder's holding period in the debentures so received in liquidation of the
trust would include the period during which the HIGH TIDES were held by such
holder. If, however, the exchange is caused by a tax event which results in the
trust being treated as an association taxable as a corporation, the distribution
would likely constitute a taxable event to holders of the HIGH TIDES.
Under certain circumstances described herein (see "Description of HIGH
TIDES"), the debentures may be redeemed for cash and the proceeds of such
redemption distributed to holders in redemption of their HIGH TIDES. Under
current law, such a redemption would, for United States federal income tax
purposes, constitute a taxable disposition of the redeemed HIGH TIDES as to
holders, and a holder would recognize gain or loss as if it sold such redeemed
HIGH TIDES for cash. See "--Sale of HIGH TIDES."
SALE OF HIGH TIDES
A holder that sells its HIGH TIDES will recognize capital gain or loss equal
to the difference between the amount realized on the sale of the HIGH TIDES
(other than any amount attributable to accrued but unpaid interest) and the
holder's adjusted tax basis in such HIGH TIDES. Such capital gain or loss will
be long-term capital gain or loss if the HIGH TIDES have been held by the holder
for more than one year.
CONVERSION OF HIGH TIDES INTO COMMON STOCK
A holder of HIGH TIDES will not recognize income, gain or loss upon the
conversion, through the conversion agent, of debentures into common stock. The
holder will recognize gain upon the receipt of cash in lieu of a fractional
share of common stock equal to the amount of cash received less the holder's
adjusted tax basis in such fractional share. A holder's adjusted tax basis in
the common stock received upon conversion generally will be equal to the
holder's tax basis in the HIGH TIDES delivered to the conversion agent for
exchange less the tax basis allocated to any fractional share for which cash is
received, and a holder's holding period in the common stock received upon
conversion generally will include the period during which the HIGH TIDES were
held by such holder.
DIVIDENDS
The amount of any distribution we make in respect of our common stock will
be equal to the amount of cash and the fair market value, on the date of
distribution, of any property distributed. Generally,
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distributions will be treated as a dividend, subject to tax as ordinary income,
to the extent of our current or accumulated earnings and profits, as determined
for federal income tax purposes, then as a tax-free return of capital to the
extent of a holder's adjusted tax basis in the common stock and thereafter as
gain from the sale or exchange of such stock (as described below).
In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends received deduction if the holder owns less than 20% of the
voting power and value of our stock (other than any non-voting, non-convertible,
non-participating preferred stock). A corporate holder that owns 20% or more of
the voting power and value of our stock (other than any non-voting,
non-convertible, non-participating preferred stock) generally will qualify for
an 80% dividends received deduction. The dividends received deduction is subject
to certain holding period, taxable income and other limitations.
SALE OF COMMON STOCK
Upon the sale or disposition of common stock, a holder generally will
recognize capital gain or loss equal to the difference between the amount
realized upon the sale or disposition and such holder's adjusted tax basis in
the common stock. Such capital gain or loss will generally be long-term capital
gain or loss if such holder's holding period for the common stock exceeds one
year. A holder's basis and holding period in common stock received upon
conversion of HIGH TIDES are determined as discussed above under "--Conversion
of HIGH TIDES into Common Stock."
ADJUSTMENT OF CONVERSION PRICE
Treasury regulations promulgated under Section 305 of the Internal Revenue
Code would treat holders of HIGH TIDES as having received a constructive
distribution from us in the event the applicable conversion ratio of the
debentures were adjusted if:
- as a result of such adjustment, the proportionate interest (measured by
the amount of common stock into which the debentures are convertible) of
the holders of the HIGH TIDES in the assets or earnings and profits of
Titan were increased; and
- the adjustment was not made pursuant to a bona fide, reasonable
antidilution formula. An adjustment in the applicable conversion ratio
would not be considered made pursuant to such a formula if the adjustment
was made to compensate for certain taxable distributions with respect to
the common stock.
Thus, under certain circumstances, a reduction in the conversion price for
the holders may result in deemed dividend income to holders to the extent of the
current or accumulated earnings and profits of Titan. Holders of the HIGH TIDES
would be required to include their allocable share of such deemed dividend
income in gross income but will not receive any cash related thereto.
We will take the position that the adjustment to the initial conversion
ratio in connection with the remarketing will constitute an "isolated"
recapitalization for United States federal income tax purposes and, therefore,
not be deemed a constructive dividend under Section 305. However, the Internal
Revenue Service might contend that any increase in such initial conversion ratio
on the reset date is a constructive dividend to holders of the HIGH TIDES who
hold the HIGH TIDES immediately before the reset date and that any decrease in
such initial conversion ratio on the reset date (or elimination of the
conversion feature on the reset date) is a constructive dividend to all holders
of common stock at that time. In each case, the amount of the constructive
dividend would be the fair market value on the reset date of the number of
shares of common stock which, if actually distributed to holders of HIGH TIDES
(in the case of an increase in the initial conversion ratio) or to holders of
the common stock (in the case of a decrease in
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the initial conversion ratio or elimination of convertibility of HIGH TIDES),
would produce the same increase in the proportionate interests of such holders
in the assets or earnings and profits of Titan as that produced by the
adjustment. The aggregate deemed dividend is limited to the current or
accumulated earnings and profits of Titan. Holders of HIGH TIDES would be
required to include any such constructive dividend to them in gross income but
would not receive any cash related thereto.
INFORMATION REPORTING AND BACKUP WITHHOLDING TAX
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on HIGH TIDES, payments of dividends on
common stock, payments of the proceeds from the sale of HIGH TIDES and payments
of the proceeds from the sale of common stock. Such payments may be subject to
backup withholding at the rate of 31% unless the holder complies with certain
identification requirements or otherwise qualifies for an exemption from backup
withholding.
Any amounts withheld under the backup withholding rules from a payment to a
holder will be allowed as a credit against such holder's United States federal
income tax and may entitle the holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended
(ERISA) should consider the fiduciary standards of ERISA in the context of the
plan's particular circumstances before authorizing an investment in the HIGH
TIDES with assets of the plan. Accordingly, among other factors, the fiduciary
should consider whether the investment would satisfy the prudence and
diversification requirements of ERISA, whether the investment could result in a
delegation of fiduciary authority and whether the investment would be consistent
with the documents and instruments governing the plan.
Section 406 of ERISA and Section 4975 of the Code prohibit plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code, from engaging in certain transactions involving "plan assets" with persons
who are parties in interest under ERISA or disqualified persons under the Code
with respect to such plans. A violation of these prohibited transaction rules
may result in an excise tax or other liabilities under ERISA and/or
Section 4975 of the Code for such persons, unless exemptive relief is available
under an applicable statutory or administrative exemption. Employee benefit
plans that are governmental plans (as defined in Section 3(32) of ERISA),
certain church plans (as defined in Section 3(33) of ERISA) and foreign plans
(as described in Section 4(b)(4) of ERISA) are not subject to the requirements
of ERISA or Section 4975 of the Code; however, such plans may be subject to
federal, state or local laws or regulations which affect their ability to invest
in the HIGH TIDES. Any fiduciary of such a governmental, church or foreign plan
considering an investment in the HIGH TIDES should determine the need for, and,
if necessary, the availability of, any exemption relief under such laws or
regulations.
Under a regulation issued by the United States Department of Labor (the
DOL), the assets of the trust would be deemed to be plan assets of a plan for
purposes of ERISA and Section 4975 of the Code if plan assets of the plan were
used to acquire an equity interest in the trust and no exception were applicable
under the plan assets regulation. An equity interest is defined under the plan
assets regulation as any interest in an entity other than an instrument that is
treated as indebtedness under applicable local law and that has no substantial
equity features and specifically includes a beneficial interest in a trust.
Pursuant to an exception contained in the plan assets regulation, the assets
of the trust would not be deemed to be plan assets of investing plans if,
immediately after the most recent acquisition of any equity interest in the
trust, less than 25% of the value of each class of equity interests in the trust
were held by plans, other employee benefit plans not subject to ERISA or
Section 4975 of the Code (such as governmental, church and foreign plans), and
entities holding assets deemed to be plan assets of any plan.
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No assurance can be given that the value of the HIGH TIDES held by benefit plan
investors was less than 25% of the total value of such HIGH TIDES at the
completion of the initial offering or will be otherwise.
Certain transactions involving the trust could be deemed to constitute
direct or indirect prohibited transactions under ERISA and Section 4975 of the
Code with respect to a plan if the HIGH TIDES were acquired with plan assets of
such plan and assets of the trust were deemed to be plan assets of plans
investing in the trust. For example, if we are a party in interest with respect
to an investing plan (either directly or by reason of our ownership of our
subsidiaries) or become a party in interest by reason of the operation of the
trust, extensions of credit between the trust and us (as represented by the
debentures and the guarantee) would likely be prohibited by
Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below). Because the assets of the trust may be considered plan assets for
ERISA purposes as a result of a plan's acquisition and holding of HIGH TIDES, a
plan fiduciary should consider (a) whether powers which potentially may be
exercised by any person or entity with respect to the trust or its assets would
result in such person or entity being potentially deemed to be a fiduciary and,
therefore, a party in interest with respect to a plan acquiring or holding HIGH
TIDES and (b) if so, whether such acquisition and holding could result in a
delegation of fiduciary authority which is impermissible under the plan's
governing instruments or any investment management agreement with the plan. In
making such determination, a plan fiduciary should note that prior to a default,
the trustees will have only limited custodial and ministerial authority with
respect to the assets of the trust.
The DOL has issued five prohibited transaction class exemptions that may
provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the HIGH TIDES, assuming that assets
of the trust were deemed to be plan assets of plans investing in the trust (as
described above). Those class exemptions are PTCE 96-23 (for certain
transactions effected on behalf of a plan by an in-house asset manager), PTCE
95-60 (for certain transactions involving insurance company general accounts),
PTCE 91-38 (for certain transactions involving bank collective investment
funds), PTCE 90-1 (for certain transactions involving insurance company separate
pooled accounts) and PTCE 84-14 (for certain transactions effected on behalf of
a plan by an independent qualified professional asset manager).
Because the HIGH TIDES may be deemed to be equity interests in the trust for
purposes of applying ERISA and Section 4975 of Code, the HIGH TIDES may not be
purchased or held by any plan, any entity whose underlying assets include plan
assets by reason of any plan's investment in an entity (a plan asset entity) or
any person investing plan assets of any plan, unless the purchaser or holder is
eligible for the exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1
or 84-14. Any purchaser or holder of the HIGH TIDES or any interest therein will
be deemed to have represented by its purchase and holding that it either (a) is
not a plan or a plan asset entity and is not purchasing such securities on
behalf of or with plan assets of any plan or (b) is eligible for the exemptive
relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14. In addition, if
we were considered to be a fiduciary with respect to the trust as a result of
certain powers we hold (such as the powers to remove and replace the property
trustee and the administrative trustees), certain operations of the trust,
including the optional redemption or acceleration of the debentures, could be
considered to be prohibited transactions under Section 406(b) of ERISA and
Section 4975(c)(1)(E) of the Code. In order to avoid such prohibited
transactions the fiduciaries of any plan or plan asset entity which may purchase
or hold HIGH TIDES will be deemed as a result of such acquisition or holding to
have (a) directed the trust to invest in the debentures, (b) authorized and
directed any of the actions taken or which may be taken with respect to the
trust, the debentures and the HIGH TIDES by any of the trustees, the debenture
trustee, the guarantee trustee, or us as contemplated by the indenture, the
debentures or the guarantee and (c) appointed each of the trustees.
Based on the reasoning of the United States Supreme Court in JOHN HANCOCK
LIFE INS. CO. V. HARRIS TRUST AND SAV. BANK, 114 S. Ct. 517 (1993), an insurance
company's general account may be deemed to include assets of the plans investing
in the general account (e.g., through the purchase of an annuity contract), and
the insurance company might be treated as a party-in interest with respect to a
plan by virtue
72
<PAGE>
of such investment. Any purchaser of the HIGH TIDES that is an insurance company
using the assets of an insurance company general account should note that the
Small Business Job Protection Act of 1996 added new Section 401(c) of ERISA
relating to the status of the assets of insurance company general accounts under
ERISA and Section 4975 of the Code. Pursuant to Section 401(c), the DOL issued
final regulations effective January 5, 2000 (the "General Account Regulations")
with respect to insurance policies issued on or before December 31, 1998 that
are supported by an insurer's general account. As a result of these regulations,
assets of an insurance company general account will not be treated as "plan
assets" for purposes of the fiduciary responsibility provisions of ERISA and
Section 4975 of the Code to the extent such assets relate to contracts issued to
employee benefit plans on or before December 31, 1998 and the insurer satisfies
various conditions. Section 401(c) also provides that, except in the case of
avoidance of the General Account Regulations and actions brought by the
Secretary of Labor relating to certain breaches of fiduciary duties that also
constitute breaches of state or federal criminal law, until the date that is
18 months after the General Account Regulations become final, no liability under
the fiduciary responsibility and prohibited transaction provisions of ERISA and
Section 4975 of the Code may result on the basis of a claim that the assets of
the general account of an insurance company constitute the "plan assets" of any
such plan. The plan asset status of insurance company separate accounts is
unaffected by new Section 401(c) of ERISA, and separate account assets continue
to be treated as the plan assets of any such plan invested in a separate
account.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in nonexempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing the HIGH
TIDES on behalf of or with plan assets of any plan consult with their counsel
regarding the potential consequences if the assets of the trust were deemed to
be plan assets and the availability of exemptive relief under PTCE 96-23, 95-60,
91-38, 90-1 or 84-14.
REGISTRATION RIGHTS
In connection with the original offering of the HIGH TIDES, we and the trust
entered into a registration rights agreement with the initial purchasers of the
HIGH TIDES for the benefit of the holders of the HIGH TIDES wherein we and the
trust agreed, at our sole expense, to
- file, and use our best efforts to have declared effective, the shelf
registration statement of which this prospectus is a part covering resales
of the HIGH TIDES, the guarantee, the debentures and the related common
stock issuable upon conversion of the HIGH TIDES; and
- use our best efforts to keep effective the shelf registration statement
for two years or such other period as required under Rule 144(k) of the
Securities Act or any successor rule thereto or, if earlier, such time as
all of the applicable securities have been sold thereunder.
We will provide to each holder for whom the shelf registration statement was
filed copies of this prospectus, notify each such holder when the shelf
registration statement for the securities has become effective and take certain
other actions as are required to permit unrestricted resales of the securities.
A holder that sells securities pursuant to the shelf registration statement will
be required to be named as a selling holder in this prospectus or a prospectus
supplement and to deliver this prospectus or a prospectus supplement to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
holder (including certain indemnification rights and obligations).
Upon written notice to all the holders of the HIGH TIDES, we or the trust
will be permitted to suspend the use of this prospectus or any prospectus
supplement during prescribed periods of time if we or the trust possess material
non-public information. The periods during which we can suspend the use of this
prospectus or any prospectus supplement may not exceed 20 consecutive days or a
total of 60 days, whether or not consecutively, in any twelve month period and
neither we nor the trust are permitted to suspend the use of this prospectus or
any prospectus supplement within ten business days after our last suspension.
73
<PAGE>
Upon receipt of such notice, holders of the HIGH TIDES are required to cease
disposing of securities under the applicable prospectus or prospectus supplement
until the holders either receive copies of a new or additional prospectus
supplement or are advised in writing by us or the trust that offers and sales of
the securities and use of the applicable prospectus or prospectus supplement may
be resumed.
We and the trust may require each holder of the HIGH TIDES to furnish
information regarding the holder and the distribution of the securities as we or
the trust may reasonably require for inclusion in the shelf registration
statement.
A registration default will occur in the event that, after the shelf
registration statement is declared effective by the SEC, we or the trust fail to
keep the shelf registration statement continuously effective and usable (subject
to some exceptions) for the period required by the registration rights
agreement. If a registration default occurs, then additional interest, referred
to in this prospectus as special interest, will accrue on the debentures, and
corresponding special distributions will accrue on the HIGH TIDES and common
securities, in each case from and including the day following the registration
default to but excluding the day on which the registration default has been
cured or has been deemed to have been cured. Special interest and special
distributions will be paid in cash quarterly in arrears on each interest payment
date commencing with the first interest payment date following the applicable
registration default and will accrue at a rate so that the interest rate or
distribution rate, as the case may, will be increased 0.5% per annum of the
principal amount or liquidation amount, as applicable.
Following the cure of a registration default, special interest and special
distributions will cease to accrue with respect to the applicable registration
default.
Each security will contain a legend to the effect that the holder of the
security, by its acceptance of the security, will be deemed to have agreed to be
bound by the provisions of the registration rights agreement.
The registration rights agreement is governed by, and construed in
accordance with, the laws of the State of New York. This summary of the
registration rights agreement is not complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the
registration rights agreement, which is available for review as described in
"Where You Can Find More Information."
74
<PAGE>
SELLING HOLDERS
The HIGH TIDES were originally issued and sold to the initial purchasers,
Credit Suisse First Boston Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation. The initial purchasers simultaneously sold the HIGH
TIDES in transactions exempt from the registration requirements of the
Securities Act to persons reasonably believed by them to be qualified
institutional buyers as defined in Rule 144A under the Securities Act. The trust
used all of the proceeds of the issuance of the HIGH TIDES and of its concurrent
sale of common securities to us to purchase the debentures.
The selling holders may from time to time offer and sell pursuant to this
prospectus any or all of the HIGH TIDES, the debentures, the common stock
issuable upon conversion of the HIGH TIDES and the guarantee. The term "selling
holder" includes the holders listed below and the beneficial owners of the HIGH
TIDES and their transferees, pledgees, donees or other successors.
The following table sets forth information with respect to the selling
holders of the HIGH TIDES and the respective number of HIGH TIDES beneficially
owned by each selling holder that may be offered for such selling holder's
account pursuant to this prospectus. Such information has been obtained from the
selling holders.
<TABLE>
<CAPTION>
NUMBER OF
SELLING HOLDER HIGH TIDES
- -------------- ----------
<S> <C>
AAM/Zazove Institutional Income Fund, LP.................... 20,000
Aftra Health Fund........................................... 15,000
AIM America Growth Class.................................... 8,000
AIM Large Cap Opportunities Fund............................ 3,000
AIM Mid Cap Growth Fund..................................... 12,500
AIM Mid Cap Opportunities Fund.............................. 62,000
AIM Strategic Income Fund................................... 22,000
Allstate Insurance Company.................................. 30,000
Associated Electric & Gas Insurance Services Limited........ 8,000
Bank Austria Cayman Island, Ltd............................. 20,000
Bear Stearns & Co., Inc..................................... 10,000
BNY Hamilton Equity Income Fund............................. 1,600
Boilermaker--Blacksmith Pension Trust....................... 14,000
Brown & Williamson Tobacco Master Retirement Trust.......... 4,000
Burroughs Wellcome Fund..................................... 12,750
CALAMOS Convertible Fund--CALAMOS Investment Trust.......... 17,200
CALAMOS Convertible Portfolio--CALAMOS Advisors Trust....... 650
CALAMOS Global Growth and Income Fund--CALAMOS Investment
Trust..................................................... 1,150
CALAMOS Market Neutral Fund--CALAMOS Investment Trust....... 5,700
Canal Insurance Company..................................... 20,000
Champion International Corporation Master Retirement
Trust..................................................... 12,200
Chartwell Investment Partners............................... 600
Chrysler Corporation Employee #1 Pension Plan............... 144,500
Chrysler Corporation Master Retirement Trust................ 181,300
City of Albany Pension Plan................................. 1,200
City of Knoxville Pension System............................ 4,200
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SELLING HOLDER HIGH TIDES
- -------------- ----------
<S> <C>
Clinton Riverside Convertible Portfolio Limited............. 10,000
Consulting Group Capital Markets Funds...................... 3,000
Credit Suisse First Boston Corporation...................... 222,160
Delphi Foundation, Inc...................................... 600
Delta Air Lines Master Trust................................ 102,000
Deutsche Bank Securities Inc................................ 992,275
Franklin and Marshall College............................... 9,500
GE Pension Trust............................................ 70,000
General Motors Employees Global Group Pension Trust......... 113,250
General Motors Foundation, Inc.............................. 6,150
Golden Rule Financial Corporation........................... 20,000
GranGem 23 41 LLC........................................... 18,500
Greek Catholic Union II..................................... 175
Hamilton Family Trust....................................... 8,300
HT Insight Convertible Securities Fund...................... 14,000
JMG Triton Offshore Fund, Ltd............................... 67,500
John M. Olin Foundation..................................... 18,600
JP Morgan Securities Inc.................................... 20,000
Kettering Medical Center Funded Depreciation Account........ 900
Knoxville Utilities Board Retirement System................. 2,500
Lipper Convertibles, L.P.................................... 80,000
Lipper Offshore Convertibles, L.P........................... 20,000
Mainstay Convertible Fund................................... 67,000
Mainstay Strategic Value Fund............................... 4,000
Mainstay VP Convertible Portfolio........................... 30,000
Mary Ann Hamilton Trust for Self............................ 8,600
Michigan Municipal Employees Retirement System.............. 46,700
Morgan Stanley Dean Witter Convertible Securities Trust..... 50,000
Motion Picture Industry Health Plan--Active Member Fund..... 21,100
Motion Picture Industry Health Plan--Retiree Member Fund.... 10,600
Motors Insurance Corporation................................ 30,000
Museum of Fine Arts, Boston................................. 600
New Hampshire Retirement System............................. 3,300
OCM Convertible Trust....................................... 89,600
Parker-Hannifin Corporation................................. 1,300
Partner Reinsurance Company Ltd............................. 35,500
Penn Treaty Network America Insurance Company............... 12,200
Port Authority of Allegheny County Retirement and Disability
Allowance Plan for the Employees Represented by Local 85
of the Amalgamated Transit Union.......................... 15,000
ProMutual................................................... 2,000
Putnam Asset Allocation Funds--Balanced Portfolio........... 3,000
</TABLE>
76
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
SELLING HOLDER HIGH TIDES
- -------------- ----------
<S> <C>
Putnam Asset Allocation Funds--Conservative Portfolio....... 2,000
Putnam Balanced Retirement Fund............................. 1,100
Putnam Convertible Income--Growth Trust..................... 10,300
Putnam Convertible Opportunities and Income Trust........... 1,500
R.R. Donnelley & Sons....................................... 18,250
San Diego County Employees Retirement Association........... 20,000
SPT......................................................... 11,800
State Employees' Retirement Fund of the State of Delaware... 92,600
State of Connecticut Combined Investment Funds.............. 214,700
Susquehanna Capital Group................................... 54,800
Tennessee Consolidated Retirement System.................... 80,000
The Dow Chemical Company Employees' Retirement Plan......... 28,300
The Fondren Foundation...................................... 850
The Gabelli Global Convertible Securities Fund.............. 5,000
The Northwestern Mutual Life Insurance Company.............. 260,000
The TCW Group, Inc.......................................... 284,740
U.S. Olympic Foundation..................................... 11,800
Unifi, Inc. Profit Sharing Plan and Trust................... 1,400
United Food and Commercial Workers Local 1262 and Employers
Pension Fund.............................................. 6,800
University of Rochester..................................... 500
Value Line Convertible Fund, Inc............................ 20,000
Van Kampen Convertible Securities Fund...................... 118,100
Van Kampen Harbor Fund...................................... 21,900
Van Waters & Rogers, Inc. Retirement Plan (f.k.a. Univar
Corporation).............................................. 4,100
Vanguard Convertible Securities Fund, Inc................... 207,100
Washington University....................................... 22,300
White River Securities LLC.................................. 10,000
ZCM/HFR Index Management, L.L.C............................. 1,300
</TABLE>
None of the selling holders has, or within the past three years has had, any
position, office or other material relationship with Titan or the trust or any
of their predecessors or affiliates. Because the selling holders may, pursuant
to this prospectus, offer all or some portion of the HIGH TIDES, the debentures,
the common stock issuable upon conversion of the HIGH TIDES and the guarantee,
no estimate can be given as to the amount of those securities that will be held
by the selling holders upon termination of any such sales. In addition, the
selling holders identified above may have sold, transferred or otherwise
disposed of all or a portion of their HIGH TIDES since the date on which they
provided the information regarding their HIGH TIDES included herein in
transactions exempt from the registration requirements of the Securities Act.
77
<PAGE>
PLAN OF DISTRIBUTION
The HIGH TIDES, the debentures, the common stock issuable upon conversion of
the HIGH TIDES and the guarantee may be offered and sold from time to time to
purchasers directly by the selling holders. Alternatively, the selling holders
may from time to time offer those securities to or through underwriters,
broker-dealers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the selling holders or
the purchasers of the securities for whom they act as agents. The selling
holders and any underwriters, broker-dealers or agents that participate in the
distribution of the securities may be deemed to be "underwriters" within the
meaning of the Securities Act, and any profit on the sale of such securities and
any discounts, commissions, concessions or other compensation received by any
such underwriter, broker-dealer or agent may be deemed to be underwriting
discounts and commissions under the Securities Act.
The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The sale of the
securities may be effected in transactions, which may involve crosses or block
transactions:
- on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
- through the writing and exercise of options.
In connection with sales of the securities or otherwise, the selling holders may
enter into hedging transactions with broker-dealers, which may in turn engage in
short sales of the securities in the course of hedging the positions they
assume. The selling holders may also sell the securities short and deliver
securities to close out such short positions, or loan or pledge securities to
broker-dealers that in turn may sell such securities.
At the time a particular offering of the securities is made, a prospectus
supplement, if required in addition to this prospectus, will be distributed,
which will set forth the aggregate amount and type of securities being offered
and the terms of the offering, including the name or names of any underwriters,
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling holders and any discounts,
commissions or concessions allowed or reallowed to paid broker-dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the securities will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the securities may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
The selling holders will be subject to applicable provisions of the Exchange
Act and rules and regulations under the Exchange Act, which provisions may limit
the timing of purchases and sales of any of the securities by the selling
holders. This may affect the marketability of those securities.
Pursuant to the registration rights agreement, we shall bear all fees and
expenses incurred in connection with the registration of the securities, except
that selling holders will pay all broker's commissions and, in connection with
any underwritten offering, all expenses customarily borne by selling holders in
an underwritten offering, including underwriting discounts and commissions. The
selling holders will be indemnified by us and the trust, jointly and severally,
against certain civil liabilities, including certain liabilities under the
Securities Act or the Exchange Act or otherwise, or alternatively will be
entitled to contribution in connection with those liabilities.
78
<PAGE>
LEGAL MATTERS
Richards, Layton & Finger, P.A., special Delaware counsel to the trust and
Titan, will pass on certain matters of Delaware law relating to the validity of
the HIGH TIDES. Morgan, Lewis & Bockius, New York, New York, will pass upon the
validity of the debentures and the guarantee. Cooley Godward LLP, San Diego,
California, will pass upon the validity of the common stock issuable upon
conversion of the HIGH TIDES.
EXPERTS
The consolidated financial statements of The Titan Corporation as of
December 31, 1998 and 1999 and for each of the three years in the period ended
December 31, 1999, the consolidated financial statements of Advanced
Communication Systems, Inc. as of September 30, 1998 and 1999 and for each of
the three years in the period ended September 30, 1999, the financial statements
of Transnational Partners II, LLC as of December 31, 1997 and 1998 and for the
period from February 9, 1997 (commencement of operations) through December 31,
1997 and for the year ended December 31, 1998 and the financial statements of JB
Systems, Inc. (d.b.a. Mainsaver) as of December 31, 1997 and 1998 and for each
of the three years in the period ended December 31, 1998 and for the ten month
period ended October 31, 1999, incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
The financial statements of Assist Cornerstone Technologies, Inc. at
December 12, 1999, December 31, 1998 and December 31, 1997, and for the period
ended December 12, 1999 and the three years in the period ended December 31,
1998, incorporated by reference in this prospectus and registration statement
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their reports thereon and incorporated by reference herein, and are incorporated
by reference in reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
The consolidated financial statements of SFG Technologies, Inc. as of
December 21, 1999 and December 31, 1998 and for the period from January 1, 1999
to December 21, 1999, eight months ended December 31, 1998 and for the years
ended April 30, 1997 and 1998 have been incorporated by reference in this
prospectus and in the registration statement in reliance upon the report of KPMG
LLP, independent auditors, incorporated by reference herein and upon the
authority of said firm as experts in accounting and auditing.
79
<PAGE>
[LOGO]
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by Titan in
connection with resales of the securities being registered. All amounts are
estimates except the SEC registration statement filing fee. None of the costs
and expenses listed below will be paid by the selling security holders.
<TABLE>
<CAPTION>
AMOUNT TO
BE PAID
---------
<S> <C>
SEC Registration Statement Filing Fee....................... $ 66,000
Legal Fees and Expenses..................................... 50,000
Accounting fees and expenses................................ 37,500
Trustee's fees and expenses (including counsel fees)........ 10,000
Printing Fees............................................... 150,000
Transfer Agent Fees......................................... 5,000
Miscellaneous............................................... 10,000
--------
Total..................................................... $328,500
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Titan Corporation's Bylaws provide for indemnification (to the fullest
extent permitted by law) of directors, officers and other agents of The Titan
Corporation against expenses, judgments, fines and amounts paid in settlements
actually and reasonably incurred in connection with any proceeding arising by
reason of the fact that such person is, or was, an officer, director, or agent
of The Titan Corporation. The Titan Corporation also maintains directors and
officers liability insurance coverage and has entered into indemnification
agreements with its directors and officers.
Section 145 of the Delaware General Corporation Law ("DGCL") provides
generally that a corporation shall have the power, and in some cases is
required, to indemnify an agent, including an officer or director, 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 corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, against certain expenses, judgments, fines,
settlements, and other amounts under certain circumstances.
The Amended and Restated Declaration of Trust ("Declaration") provides that
(to the fullest extent permitted by law) The Titan Corporation shall indemnify
and hold harmless any trustee named therein, any affiliate of any trustee named
therein, any directors, officers or other agents of any trustee named therein,
or any employee or agent of Titan Capital Trust or its affiliates, from and
against any loss, damage, liability, tax, penalty, cost, expense, action, suit
or claim of any kind incurred by such person by reason of the creation,
operation, or termination of Titan Capital Trust or any act or omission
performed or omitted by such person in good faith on behalf of Titan Capital
Trust and in a manner such person reasonably believed to be within the scope of
authority conferred on such person by the Declaration. However, no person shall
be indemnified with respect to any loss, damage or claim incurred by reason of
gross negligence (or in the case of the property trustee, negligence) or willful
misconduct with respect to such acts or omissions. Further, expenses incurred by
such persons in defending any claim, demand, action, suit or proceeding shall be
advanced (to the fullest extent permitted by law) by The Titan Corporation upon
receipt by The Titan Corporation of an undertaking by such person to repay such
amount if it turns out that such persons are not entitled to indemnification.
These indemnification provisions may be sufficiently broad to permit
indemnification of The Titan Corporation's officers and directors for
liabilities (including reimbursement of expenses incurred) arising under the
Securities Act.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
*4.1 Certificate of Trust of Titan Capital Trust, a Delaware
statutory trust, filed January 19, 2000.
*4.2 Declaration of Trust of Titan Capital Trust, dated as of
January 19, 2000, among The Titan Corporation, as Depositor
and Debenture Issuer, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Property Trustee, and
the Administrative Trustees named therein.
*4.3 Indenture, dated as of February 9, 2000, between The Titan
Corporation and Wilmington Trust Company, as Trustee,
including form of 5 3/4% Convertible Senior Subordinated
Debenture due 2030.
*4.4 Remarketing Agreement, dated as of February 9, 2000, among
The Titan Corporation, Titan Capital Trust, Wilmington Trust
Company, as Tender Agent, and Credit Suisse First Boston
Corporation, as Remarketing Agent.
*4.5 Registration Rights Agreement, dated February 9, 2000, among
The Titan Corporation, Titan Capital Trust, Credit Suisse
First Boston Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation.
*4.6 Amended and Restated Declaration of Trust of Titan Capital
Trust, dated as of February 9, 2000, among The Titan
Corporation, as Depositor and Debenture Issuer, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Property Trustee, and the Administrative
Trustees named therein, including form of 5 3/4% Convertible
Preferred Security and form of Common Security.
*4.7 Preferred Securities Guarantee Agreement, dated as of
February 9, 2000, between The Titan Corporation and
Wilmington Trust Company, as Guarantee Trustee.
*5.1 Opinion of Cooley Godward LLP, as to the validity of the
Common Stock of The Titan Corporation issuable upon
conversion of the Convertible Preferred Securities being
registered hereby.
*5.2 Opinion of Morgan, Lewis & Bockius, as to the validity of
the Convertible Senior Subordinated Debentures and
Convertible Preferred Securities Guarantee of The Titan
Corporation being registered hereby.
*5.3 Opinion of Richards, Layton & Finger, P.A. as to the
validity of the Convertible Preferred Securities of Titan
Capital Trust being registered hereby.
*8.1 Opinion of Cooley Godward LLP as to certain tax matters.
*12.1 Statement Regarding Computation of Ratios.
*23.1 Consent of Arthur Andersen LLP, independent public
accountants.
*23.2 Consent of Arthur Andersen LLP, independent public
accountants.
*23.3 Consent of Arthur Andersen LLP, independent public
accountants.
*23.4 Consent of Arthur Andersen LLP, independent public
accountants.
*23.5 Consent of Ernst & Young LLP, Independent Auditors.
*23.6 Consent of KPMG LLP, independent chartered accountants.
*23.7 Consents of Cooley Godward LLP (included in Exhibits 5.1 and
8.1).
*23.8 Consent of Morgan, Lewis & Bockius (included in Exhibit
5.2).
*23.9 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.3).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------------- -----------
<C> <S>
*24.1 Power of Attorney of Officers and Directors of The Titan
Corporation (set forth on the signature pages hereto).
*25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Trustee under the Indenture filed as Exhibit 4.3 hereto.
*25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust filed as Exhibit 4.6 hereto.
*25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Guarantee Trustee under the Preferred Securities Guarantee
Agreement filed as Exhibit 4.7 hereto.
</TABLE>
- ------------------------
* Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
(1) (a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement (i) to include any
prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events arising after the effective date
of this registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in this registration statement, and (iii) to
include any material information with respect to the plan of distribution not
previously disclosed in this registration statement or any material change to
such information in this registration statement; PROVIDED, HOWEVER, that clauses
(i) and (ii) do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic reports filed
by the registrants pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this registration
statement;
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(2) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and therefore is
II-3
<PAGE>
unenforceable. In the event that a claim for indemnification against such
liabilities, other than the payment by the registrants of expenses incurred or
paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceeding, is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of a
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934, that is incorporated by reference in this
registration statement, shall be deemed to be a new registration statement,
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
To the extent either Registrant intends to rely on Section 305(b)(2) of the
Trust Indenture Act of 1939 (the "Trust Act") for determining the eligibility of
the Trustee under indentures for securities to be used, offered or sold on a
delayed basis by or on behalf of such registrants, each of the undersigned
Registrants hereby undertake to file an application for the purpose of
determining the eligibility of the trustee to act under subsection (a) of
Section 310 of such Trust Act in accordance with the rules and regulations
prescribed by the Securities and Exchange Commission under Section 305(b)(2) of
such Trust Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
named below certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Diego, State of California, on this 20th day
of April, 2000.
<TABLE>
<S> <C> <C>
THE TITAN CORPORATION
By: /s/ GENE W. RAY
-----------------------------------------
Gene W. Ray
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD
</TABLE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Eric M. DeMarco and Nicholas J. Costanza, Esq.
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place, and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments, exhibits thereto and other documents in connection
therewith) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated opposite the name.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on behalf
of The Titan Corporation and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ GENE W. RAY
-------------------------------------- President, Chief Executive Officer April 20, 2000
Gene W. Ray and Chairman of the Board
/s/ ERIC M. DEMARCO Executive Vice President and Chief
-------------------------------------- Financial Officer (Principal April 20, 2000
Eric M. DeMarco Financial Officer)
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DEANNA HOM PETERSEN
-------------------------------------- Vice President, Corporate Controller April 20, 2000
Deanna Hom Petersen (Principal Accounting Officer)
/s/ CHARLES R. ALLEN
-------------------------------------- Director April 20, 2000
Charles R. Allen
/s/ JOSEPH F. CALIGIURI
-------------------------------------- Director April 20, 2000
Joseph F. Caligiuri
/s/ DANIEL J. FINK
-------------------------------------- Director April 20, 2000
Daniel J. Fink
/s/ ROBERT M. HANISEE
-------------------------------------- Director April 20, 2000
Robert M. Hanisee
/s/ ROBERT E. LA BLANC
-------------------------------------- Director April 20, 2000
Robert E. La Blanc
/s/ THOMAS G. POWNALL
-------------------------------------- Director April 20, 2000
Thomas G. Pownall
/s/ JAMES ROTH
-------------------------------------- Director April 17, 2000
James Roth
/s/ GEORGE A. ROBINSON
-------------------------------------- Director April 14, 2000
George A. Robinson
</TABLE>
II-6
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the registrant
named below certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Diego, State of California, on this 20th day
of April, 2000.
<TABLE>
<S> <C> <C>
TITAN CAPITAL TRUST
By: /s/ DEANNA HOM PETERSEN
-----------------------------------------
Deanna Hom Petersen,
AS ADMINISTRATIVE TRUSTEE
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons on behalf
of Titan Capital Trust and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ DEANNA HOM PETERSEN
-------------------------------------- Administrative Trustee April 20, 2000
Deanna Hom Petersen
/s/ RAY GUILLAUME
-------------------------------------- Administrative Trustee April 20, 2000
Ray Guillaume
</TABLE>
II-7
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
*4.1 Certificate of Trust of Titan Capital Trust, a Delaware
statutory trust, filed January 19, 2000.
*4.2 Declaration of Trust of Titan Capital Trust, dated as of
January 19, 2000, among The Titan Corporation, as Depositor
and Debenture Issuer, Wilmington Trust Company, as Delaware
Trustee, Wilmington Trust Company, as Property Trustee, and
the Administrative Trustees named therein.
*4.3 Indenture, dated as of February 9, 2000, between The Titan
Corporation and Wilmington Trust Company, as Trustee,
including form of 5 3/4% Convertible Senior Subordinated
Debenture due 2030.
*4.4 Remarketing Agreement, dated as of February 9, 2000, among
The Titan Corporation, Titan Capital Trust, Wilmington Trust
Company, as Tender Agent, and Credit Suisse First Boston
Corporation, as Remarketing Agent.
*4.5 Registration Rights Agreement, dated February 9, 2000, among
The Titan Corporation, Titan Capital Trust, Credit Suisse
First Boston Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation.
*4.6 Amended and Restated Declaration of Trust of Titan Capital
Trust, dated as of February 9, 2000, among The Titan
Corporation, as Depositor and Debenture Issuer, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Property Trustee, and the Administrative
Trustees named therein, including form of 5 3/4% Convertible
Preferred Security and form of Common Security.
*4.7 Preferred Securities Guarantee Agreement, dated as of
February 9, 2000, between The Titan Corporation and
Wilmington Trust Company, as Guarantee Trustee.
*5.1 Opinion of Cooley Godward LLP, as to the validity of the
Common Stock of The Titan Corporation issuable upon
conversion of the Convertible Preferred Securities being
registered hereby.
*5.2 Opinion of Morgan, Lewis & Bockius, as to the validity of
the Convertible Senior Subordinated Debentures and
Convertible Preferred Securities Guarantee of The Titan
Corporation being registered hereby.
*5.3 Opinion of Richards, Layton & Finger, P.A. as to the
validity of the Convertible Preferred Securities of Titan
Capital Trust being registered hereby.
*8.1 Opinion of Cooley Godward LLP as to certain tax matters.
*12.1 Statement Regarding Computation of Ratios.
*23.1 Consent of Arthur Andersen LLP, independent public
accountants.
*23.2 Consent of Arthur Andersen LLP, independent public
accountants.
*23.3 Consent of Arthur Andersen LLP, independent public
accountants.
*23.4 Consent of Arthur Andersen LLP, independent public
accountants.
*23.5 Consent of Ernst & Young LLP, Independent Auditors.
*23.6 Consent of KPMG LLP, independent chartered accountants.
*23.7 Consents of Cooley Godward LLP (included in Exhibits 5.1
and 8.1).
*23.8 Consent of Morgan, Lewis & Bockius (included in
Exhibit 5.2).
*23.9 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.3).
*24.1 Power of Attorney of Officers and Directors of The Titan
Corporation (set forth on the signature pages hereto).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
*25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Trustee under the Indenture filed as Exhibit 4.3 hereto.
*25.2 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Property Trustee under the Amended and Restated Declaration
of Trust filed as Exhibit 4.6 hereto.
*25.3 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Guarantee Trustee under the Preferred Securities Guarantee
Agreement filed as Exhibit 4.7 hereto.
</TABLE>
- ------------------------
* Filed herewith.
<PAGE>
CERTIFICATE OF TRUST OF
TITAN CAPITAL TRUST
THIS Certificate of Trust of Titan Capital Trust (the "Trust") is being
duly executed and filed on behalf of the Trust by the undersigned, as trustees,
to form a business trust under the Delaware Business Trust Act (12 DEL. C.
Section 3801 ET SEQ.) (the "Act").
1. NAME. The name of the business trust formed hereby is Titan Capital
Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is WILMINGTON TRUST COMPANY, RODNEY SQUARE
NORTH, 1100 NORTH MARKET STREET, WILMINGTON, DELAWARE 19890-0001, ATTENTION:
CORPORATE TRUST ADMINISTRATION.
3. EFFECTIVE DATE. This Certificate of Trust will be effective upon
filing.
IN WITNESS WHEREOF, the undersigned have duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, as Delaware Trustee
By:
-----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Property Trustee
By:
-----------------------------------
Name:
Title:
----------------------------------
Deanna Hom Petersen, as Administrative Trustee
----------------------------------
Ray Guillaume, as Administrative Trustee
<PAGE>
DECLARATION OF TRUST
OF
TITAN CAPITAL TRUST
THIS DECLARATION OF TRUST is made as of January 19, 2000 (this
"Declaration of Trust"), by and among The Titan Corporation, a Delaware
corporation, as depositor (the "Depositor"), Wilmington Trust Company, a
Delaware banking corporation ("WTC"), as Delaware trustee (the "Delaware
Trustee"), WTC, as property trustee (the "Property Trustee") and Deanna Hom
Petersen and Ray Guillaume, each an individual, as administrative trustees (the
"Administrative Trustees;" and, together with the Delaware Trustee and the
Property Trustee, the "Trustees"). The Depositor and the Trustees hereby agree
as follows:
1. The trust created hereby shall be known as "Titan Capital Trust"
(the "Trust"), in which name the Trustees or the Depositor, to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trustees the sum of $10. The Trustees hereby acknowledge receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
in trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 DEL. C. Section 3801, ET SEQ. (the "Business Trust Act"),
and that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust with the Delaware Secretary of State in substantially the form attached
hereto as Exhibit A.
3. The Depositor and the Trustees will enter into an amended and
restated Declaration of Trust satisfactory to each such party and substantially
in the form to be included as an exhibit to the Offering Document referred to
below, or in such other form as the Trustees and the Depositor may approve, to
provide for the contemplated operation of the Trust created hereby and the
issuance of the trust preferred securities and common securities referred to
therein. Prior to the execution and delivery of such amended and restated
Declaration of Trust, the Trustees shall not have any duties or obligations
hereunder or with respect of the trust estate, except for the filing of the
Certificate of Trust with the Delaware Secretary of State. Notwithstanding the
foregoing, the Trustees may take all actions deemed proper as are necessary to
effect the transactions contemplated herein.
4. The Depositor, as the Depositor of the Trust, is hereby authorized,
in its discretion, (i) to prepare one or more offering memoranda or circular in
preliminary and final form relating to the offering and sale of Preferred
Securities of the Trust in a transaction exempt from the registration
requirements of the Securities Act of 1933, as amended (the "1933 Act"), and
such forms or filings as may be required by the 1933 Act, the Securities
Exchange Act of 1934, as amended, or the Trust Indenture Act of 1939, as
amended, in each case relating to the Preferred Securities of the Trust; (ii) to
file and execute on behalf of the Trust, such applications, reports, surety
bonds, irrevocable consents, appointments of attorney for service of process and
other papers and documents that shall be necessary or desirable to register or
establish the
<PAGE>
exemption from registration of the Preferred Securities of the Trust under the
securities or "Blue Sky" laws of such jurisdictions as the Depositor, on behalf
of the Trust, may deem necessary or desirable; (iii) to execute and file an
application, and all other applications, statements, certificates, agreements
and other instruments that shall be necessary or desirable, to the Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market;
(iv) to execute and deliver letters or documents to, or instruments for filing
with, a depository relating to the Preferred or Capital Securities of the Trust;
and (v) to execute, deliver and perform on behalf of the Trust one or more
purchase agreements, dealer manager agreements, escrow agreements, remarketing
agreements, registration rights agreements and other related agreements
providing for or relating to the sale of the Preferred Securities of the Trust.
In the event that any filing referred to in this Section 4 is required
by the rules and regulations of the Securities and Exchange Commission (the
"Commission"), PORTAL or state securities or "Blue Sky" laws to be executed on
behalf of the Trust by the Trustees, the Trustees, in their capacity as trustees
of the Trust, are hereby authorized to join in any such filing and to execute on
behalf of the Trust any and all of the foregoing, it being understood that the
Trustees, in their capacity as trustees of the Trust, shall not be required to
join in any such filing or execute on behalf of the Trust any such document
unless required by the rules and regulations of the Commission, PORTAL or state
securities or "Blue Sky" laws.
5. This Declaration of Trust may be executed in one or more
counterparts.
6. The number of Trustees of the Trust initially shall be four and
thereafter the number of trustees of the Trust shall be such number as shall be
fixed from time to time by a written instrument signed by the Depositor which
may increase or decrease the number of trustees of the Trust; provided, however,
that to the extent required by the Business Trust Act, one trustee of the Trust
shall either be 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. Subject to the foregoing, the Depositor is entitled to
appoint or remove without cause any trustee of the Trust at any time. The
Delaware Trustee may resign upon thirty days' prior notice to the Depositor.
7. This Declaration of Trust shall be governed by, and construed in
accordance with, the laws of the State of Delaware (with regard to conflict of
laws principles).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
THE TITAN CORPORATION, as Depositor
By:
Name:
Title:
WILMINGTON TRUST COMPANY, as Delaware Trustee
By:
Name:
Title:
WILMINGTON TRUST COMPANY, as Property Trustee
By:
Name:
Title:
---------------------------------
Deanna Hom Petersen, as Administrative Trustee
----------------------------------
Ray Guillaume, as Administrative Trustee
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF
TITAN CAPITAL TRUST
THIS Certificate of Trust of Titan Capital Trust (the "Trust") is being
duly executed and filed on behalf of the Trust by the undersigned, as trustees,
to form a business trust under the Delaware Business Trust Act (12 DEL. C.
Section 3801 ET SEQ.) (the "Act").
1. NAME. The name of the business trust formed hereby is Titan Capital
Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of
the Trust in the State of Delaware is WILMINGTON TRUST COMPANY, RODNEY SQUARE
NORTH, 1100 NORTH MARKET STREET, WILMINGTON, DELAWARE 19890-0001, ATTENTION:
CORPORATE TRUST ADMINISTRATION.
3. EFFECTIVE DATE. This Certificate of Trust will be effective upon
filing.
IN WITNESS WHEREOF, the undersigned have duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, as Delaware Trustee
By:
-----------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Property Trustee
By:
-----------------------------------
Name:
Title:
----------------------------------
Deanna Hom Petersen, as Administrative Trustee
----------------------------------
Ray Guillaume, as Administrative Trustee
<PAGE>
THE TITAN CORPORATION
TO
WILMINGTON TRUST COMPANY,
as Trustee
-----------------
Indenture
Dated as of February 9, 2000
-----------------
$206,185,600
(subject to increase to up to $257,732,000 in
the event and to the extent an over-allotment
option is exercised)
Convertible Senior Subordinated Debentures due 2030
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<S> <C>
SECTION 1.01 Definitions.............................................................................3
SECTION 1.02 Compliance Certificates and Opinions...................................................15
SECTION 1.03 Form of Documents Delivered to Trustee.................................................15
SECTION 1.04 Acts of Holders; Record Dates..........................................................16
SECTION 1.05 Notices, Etc., to Trustee and the Company..............................................18
SECTION 1.06 Notice to Holders; Waiver..............................................................18
SECTION 1.07 Conflict with Trust Indenture Act......................................................18
SECTION 1.08 Effect of Headings and Table of Contents...............................................19
SECTION 1.09 Successors and Assigns.................................................................19
SECTION 1.10 Separability Clause....................................................................19
SECTION 1.11 Benefits of Indenture..................................................................19
SECTION 1.12 Governing Law..........................................................................19
SECTION 1.13 Legal Holidays.........................................................................19
ARTICLE II
SECURITY FORMS
SECTION 2.01 Forms Generally........................................................................20
SECTION 2.02 Initial Issuance to Property Trustee...................................................20
SECTION 2.03 Additional Provisions Required in Global Security......................................21
SECTION 2.04 Issuance of Global Securities to Holders...............................................21
ARTICLE III
THE SECURITIES
SECTION 3.01 Title and Terms........................................................................22
SECTION 3.02 Denominations..........................................................................24
SECTION 3.03 Execution, Authentication, Delivery and Dating.........................................24
SECTION 3.04 Temporary Securities...................................................................25
SECTION 3.05 Global Securities......................................................................25
SECTION 3.06 Registration, Transfer and Exchange Generally; Certain
Transfers and Exchanges .....................................................26
SECTION 3.07 Mutilated, Destroyed, Lost and Stolen Securities.......................................29
2
<PAGE>
SECTION 3.08 Payment of Interest; Interest Rights Preserved.........................................30
SECTION 3.09 Persons Deemed Owners..................................................................32
SECTION 3.10 Cancellation...........................................................................32
SECTION 3.11 Right of Set Off.......................................................................32
SECTION 3.12 CUSIP Numbers..........................................................................33
SECTION 3.13 Extension of Interest Payment Period; Notice of Extension..............................33
SECTION 3.14 Paying Agent, Security Registrar and Conversion Agent..................................34
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.01 Satisfaction and Discharge of Indenture................................................34
SECTION 4.02 Application of Trust Money.............................................................36
ARTICLE V
REMEDIES
SECTION 5.01 Events of Default......................................................................36
SECTION 5.02 Acceleration of Maturity; Rescission and Annulment.....................................37
SECTION 5.03 Collection of Indebtedness and Suits for Enforcement
by Trustee...................................................................38
SECTION 5.04 Trustee May File Proofs of Claim.......................................................39
SECTION 5.05 Trustee May Enforce Claims Without Possession of Securities............................39
SECTION 5.06 Application of Money Collected.........................................................39
SECTION 5.07 Limitation on Suits....................................................................40
SECTION 5.08 Unconditional Right of Holders to Receive Principal
and Interest and Convert.....................................................40
SECTION 5.09 Restoration of Rights and Remedies.....................................................41
SECTION 5.10 Rights and Remedies Cumulative.........................................................41
SECTION 5.11 Delay or Omission Not Waiver...........................................................41
SECTION 5.12 Control by Holders.....................................................................41
SECTION 5.13 Waiver of Past Defaults................................................................42
SECTION 5.14 Undertaking for Costs..................................................................42
SECTION 5.15 Waiver of Stay or Extension Laws.......................................................42
SECTION 5.16 Enforcement by Holders of Preferred Securities.........................................43
ARTICLE VI
THE TRUSTEE
SECTION 6.01 Certain Duties and Responsibilities....................................................43
SECTION 6.02 Notice of Defaults.....................................................................44
ii
<PAGE>
SECTION 6.03 Certain Rights of Trustee..............................................................44
SECTION 6.04 Not Responsible for Recitals or Issuance of Securities.................................45
SECTION 6.05 May Hold Securities....................................................................45
SECTION 6.06 Money Held in Trust....................................................................46
SECTION 6.07 Compensation and Reimbursement.........................................................46
SECTION 6.08 Disqualification; Conflicting Interests................................................46
SECTION 6.09 Corporate Trustee Required; Eligibility................................................47
SECTION 6.10 Resignation and Removal; Appointment of Successor......................................47
SECTION 6.11 Acceptance of Appointment by Successor.................................................48
SECTION 6.12 Merger, Conversion, Consolidation or Succession to Business............................49
SECTION 6.13 Preferential Collection of Claims Against Company......................................49
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.01 Company to Furnish Trustee Names and Addresses of Holders..............................49
SECTION 7.02 Preservation of Information; Communications to Holders.................................50
SECTION 7.03 Reports by Trustee.....................................................................50
SECTION 7.04 Reports by Company.....................................................................50
SECTION 7.05 Tax Reporting..........................................................................51
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.01 Company May Consolidate, Etc., Only on Certain Terms...................................51
SECTION 8.02 Successor Substituted..................................................................52
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01 Supplemental Indentures Without Consent of Holders.....................................52
SECTION 9.02 Supplemental Indentures with Consent of Holders........................................53
SECTION 9.03 Execution of Supplemental Indentures...................................................54
SECTION 9.04 Effect of Supplemental Indentures......................................................54
SECTION 9.05 Conformity with Trust Indenture Act....................................................54
SECTION 9.06 Reference in Securities to Supplemental Indentures.....................................54
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
iii
<PAGE>
SECTION 10.01 Payment of Principal and Interest......................................................55
SECTION 10.02 Maintenance of Office or Agency........................................................55
SECTION 10.03 Money for Security Payments to Be Held in Trust........................................55
SECTION 10.04 Statement by Officers as to Default....................................................56
SECTION 10.05 Limitation on Dividends; Transactions with Affiliates;
Covenants as to the Trust....................................................56
SECTION 10.06 Payment of Expenses of the Trust.......................................................58
SECTION 10.07 Registration Rights....................................................................58
SECTION 10.08 [Reserved].............................................................................59
SECTION 10.09 Repurchase of Securities Upon the Failure to Consummate the Acquisition................59
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.01 Optional Redemption....................................................................59
SECTION 11.02 [Reserved].............................................................................60
SECTION 11.03 Tax Event Redemption...................................................................60
SECTION 11.04 [Reserved].............................................................................61
SECTION 11.05 Selection by Trustee of Securities to Be Redeemed......................................61
SECTION 11.06 Notice of Redemption...................................................................62
SECTION 11.07 Deposit of Redemption Price............................................................62
SECTION 11.08 Securities Payable on Redemption Date..................................................63
SECTION 11.09 Securities Redeemed in Part............................................................63
ARTICLE XII
SUBORDINATION OF SECURITIES
SECTION 12.01 Agreement to Subordinate...............................................................64
SECTION 12.02 Default on Secured Debt................................................................64
SECTION 12.03 Liquidation; Dissolution; Bankruptcy...................................................65
SECTION 12.04 Subrogation............................................................................66
SECTION 12.05 Trustee to Effectuate Subordination....................................................67
SECTION 12.06 Notice by the Company..................................................................67
SECTION 12.07 Rights of the Trustee; Holders of Secured Debt.........................................68
SECTION 12.08 Subordination May Not Be Impaired......................................................68
ARTICLE XIII
CONVERSION OF SECURITIES
SECTION 13.01 Conversion Rights......................................................................69
SECTION 13.02 Conversion Procedures..................................................................70
iv
<PAGE>
SECTION 13.03 Conversion Price Adjustments...........................................................72
SECTION 13.04 Reclassification, Consolidation, Merger or Sale of Assets..............................77
SECTION 13.05 Notice of Adjustments of Conversion Price..............................................78
SECTION 13.06 Prior Notice of Certain Events.........................................................78
SECTION 13.07 Adjustments in Case of Fundamental Changes.............................................79
SECTION 13.08 Dividend or Interest Reinvestment Plans................................................82
SECTION 13.09 Certain Additional Rights..............................................................83
SECTION 13.10 Restrictions on Common Stock Issuable Upon Conversion..................................83
SECTION 13.11 Trustee Not Responsible for Determining Conversion Price or Adjustments................83
</TABLE>
v
<PAGE>
INDENTURE, dated as of February 9, 2000, between The Titan Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company") having its principal office at 3033 Science Park
Road, San Diego, California 92121-1199, and Wilmington Trust Company, a Delaware
banking corporation, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, Titan Capital Trust, a Delaware business trust (the
"Trust"), governed by the Amended and Restated Declaration of Trust among the
Company, as sponsor, Wilmington Trust Company, as property trustee (the
"Property Trustee"), and Wilmington Trust Company, as Delaware trustee (the
"Delaware Trustee"), and Deanna Hom Petersen and Ray Guillaume, as trustees
(together with the Property Trustee and the Delaware Trustee, the "Issuer
Trustees"), and the holders from time to time of undivided beneficial interests
in the assets of the Trust, dated as of February 9, 2000 (the "Declaration"),
pursuant to the Purchase Agreement (the "Purchase Agreement"), dated February 3,
2000, among the Company, the Trust and the Initial Purchasers named therein,
will issue and sell up to 4,000,000 of its Remarketable Term Income Deferrable
Equity Securities (HIGH TIDES)K (or 5,000,000 to the extent the over-allotment
option is exercised in full) (the "Preferred Securities") with a liquidation
preference of $50 per Preferred Security, having an aggregate liquidation amount
with respect to the assets of the Trust of up to $200,000,000 (or up to
$250,000,000 to the extent the over-allotment option is exercised in full);
WHEREAS, the trustees of the Trust, on behalf of the Trust,
will execute and deliver to the Company, Common Securities evidencing an
ownership interest in the Trust, registered in the name of the Company, in an
aggregate amount equal to at least three percent of the capitalization of the
Trust, equivalent to up to 123,712 Common Securities (or up to 154,640 Common
Securities to the extent the over-allotment option is exercised in full), with a
liquidation preference of $50 per Common Security, having an aggregate
liquidation amount with respect to the assets of the Trust of up to $6,185,600
(or $7,732,000 to the extent the over-allotment option is exercised in full)
(the "Common Securities");
WHEREAS, the Trust will use the proceeds from the sale of the
Preferred Securities and the Common Securities to purchase Securities (as
defined below) from the Company in an aggregate principal amount of up to
$206,185,600 (or $257,732,000 to the extent the over-allotment option is
exercised in full);
WHEREAS, the Company is guaranteeing the payment of
distributions on the Preferred Securities, and payment of the Redemption Price
(as defined herein) and payments on liquidation with respect to the Preferred
Securities, to the extent provided in the Preferred Securities Guarantee
Agreement (the "Guarantee") between the Company and Wilmington Trust
<PAGE>
Company, as Guarantee Trustee, for the benefit of the Holders of the Preferred
Securities from time to time;
WHEREAS, the Company has duly authorized the creation of an
issue of its Convertible Senior Subordinated Debentures Due 2030 (the
"Securities"), of substantially the tenor and amount hereinafter set forth and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities, and
any Preferred Securities are outstanding, the Declaration provides that the
Holders of Preferred Securities may cause the Conversion Agent (as defined
herein) to (i) exchange such Preferred Securities for Securities held by the
Trust and (ii) immediately convert such Securities into Common Stock (as defined
herein);
WHEREAS, the Company, the Trust, the Remarketing Agent (as
defined herein) and Wilmington Trust Company, as Tender Agent have entered into
a Remarketing Agreement (as defined herein) dated as of the date hereof pursuant
to which such Remarketing Agent has agreed to use its best efforts to (i)
remarket all Preferred Securities tendered for remarketing (the "Remarketing")
as set forth in the Remarketing Agreement and (ii) establish, beginning on the
Reset Date (as defined herein), (a) the rate at which distributions will accrue
on the Preferred Securities, (b) the number of shares of Common Stock, if any,
into which each Preferred Security may be converted and (c) the price, manner
and time, if any, at which the Preferred Securities may be redeemed; and
WHEREAS, all things necessary to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as defined herein) thereof, it is mutually
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
1 ARTICLE
Definitions and Other
2 PROVISIONS OF GENERAL APPLICATION
<PAGE>
2.1 SECTION DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article 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
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACS" means Advanced Communication Systems, Inc., a Delaware
corporation.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Additional Amounts" has the meaning specified in Section 3.01(4).
"Additional Payments" means Compounded Interest and Additional
Amounts, if any.
"Adjusted Reference Market Price" has the meaning specified in Section
13.07(1)(A).
"Adjusted Relevant Price" has the meaning specified in Section
13.07(1)(A).
"Administrative Action" has the meaning specified in the definition of
"Tax Event" in this Section 1.01.
"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. For the purposes 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;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Security Registrar, co-registrar, Paying Agent,
Conversion Agent or any other agent appointed by the Company pursuant to Section
3.14.
<PAGE>
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Conversion Price" has the meaning specified in Section
13.01.
"Applicable Conversion Ratio" has the meaning specified in Section
13.01.
"Applicable Rate" means the rate at which the Securities accrue
interest and the corresponding Trust Securities accrue distributions. From the
date of original issuance of the Securities to (but excluding) the Reset Date
and in the absence of a Registration Default, the Applicable Rate shall be 5.75%
per annum (the "Initial Rate"). In the event of a Registration Default, the
Applicable Rate shall be increased in accordance with the provisions of Section
10.07 hereof. Beginning with and after the Reset Date, the Applicable Rate
shall be the Term Rate (as defined herein).
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or a day on which the
corporate trust office of the Property Trustee or the Trustee is closed for
business.
"Closing Price" has the meaning specified in Section 13.07(2).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this 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 Securities" has the meaning specified in the Second Recital to
this Indenture.
"Common Securities Guarantee" has the meaning specified in the Common
Securities Guarantee Agreement dated of even date herewith delivered by the
Company for the benefit of the holders of the Common Securities from time to
time.
<PAGE>
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. However, subject
to the provisions of Article XIII, shares issuable on conversion of Securities
shall include only shares of the class designated as the Common Stock, par value
$.01 per share, of the Company at the date of this 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, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Common Stock Fundamental Change" has the meaning specified in Section
13.07(2).
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its chairman of the board, its vice
chairman of the board, its president or a vice president, and by its treasurer,
an assistant treasurer, controller, its secretary or an assistant secretary, and
delivered to the Trustee.
"Company Transaction" has the meaning specified in Section 13.04.
"Compounded Interest" has the meaning specified in Section 3.13.
"Conversion Agent" means any Person appointed to act on behalf of the
Holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 13.02
hereof.
"Conversion Date" has the meaning specified in Section 13.02.
"Convertible Remarketing" means the remarketing of the Preferred
Securities in the Remarketing as securities which will be convertible into
Common Stock.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
and which at the date of this
<PAGE>
Indenture is Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of June 9, 1999, among the Company, as the borrower, the various
financial institutions from time to time that are parties thereto, as lenders,
The Bank of Nova Scotia, as lead manager and administrative agent, and Imperial
Bank as the document agent, any credit agreement evidencing the credit
facilities that are substantially described in the commitment letter dated
January 27, 2000, from Credit Suisse First Boston, New York branch, and First
Union National Bank to the Company, and any other secured debt facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, working capital loans or letters of credit, in each case, including any
related notes, guarantees, collateral documents, swap arrangements, instruments
and agreements entered into in connection therewith, and as such credit
agreements and related documents may be amended, restated, supplemented,
renewed, replaced, refinanced or otherwise modified from time to time whether or
not with the same agent, lender or group of lenders and whether with the same
borrowers or guarantors.
"Declaration" has the meaning specified in the First Recital to this
Indenture.
"Debt" means (i) the principal of and premium and interest, if any, on
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
"Defaulted Interest" has the meaning specified in Section 3.08.
"Deferral Notice" has the meaning specified in Section 3.13.
"Deferral Period" has the meaning specified in Section 3.13.
"Delaware Trustee" has the meaning given it in the First Recital to
this Indenture.
"Depositary" means the Depository Trust Company, or any successor
thereto.
"Direct Action" has the meaning specified in Section 5.16.
"Entitlement Date" has the meaning specified in Section 13.07(2).
<PAGE>
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"ex" date has the meaning specified in Section 13.03(7).
"Expiration Date" has the meaning specified in Section 1.04(4).
"Expiration Time" has the meaning specified in Section 13.03(6).
"Failed Final Remarketing" has the meaning specified in Section 2(d)
of the Remarketing Agreement.
"Fundamental Change" has the meaning specified in Section 13.07(2).
"Global Security" means a Security issued in the form prescribed in
Section 2.01, issued to the Depositary or its nominee, and registered in the
name of the Depositary or its nominee.
"Guarantee" has the meaning specified in the Fourth Recital to this
Indenture.
"Holder" means a Person in whose name a Security is registered in the
Security Register or a Person in whose name a Preferred Security is registered
in the List of Holders, as the case may be.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Conversion Price" has the meaning specified in Section 13.01.
"Initial Conversion Ratio" has the meaning specified in Section 13.01.
"Initial Rate" has the meaning specified in the definition of
"Applicable Rate" in this Section 1.01.
"Initial Redemption Price" has the meaning specified in Section 11.01.
<PAGE>
"Initial Purchasers," with respect to the Preferred Securities, means
Credit Suisse First Boston Corporation and Donaldson, Lufkin & Jenrette
Securities Corporation.
"Interest Payment Date" has the meaning specified in Section 3.01(2).
"Investment Company Event" has the meaning specified in the
Declaration.
"Issuer Trustees" has the meaning specified in the First Recital to
this Indenture.
"List of Holders" has the meaning specified in the Declaration.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"90 Day Period" has the meaning specified in Section 11.03.
"NNM" means the National Market System of the National Association of
Securities Dealers, Inc., or any successor national automated interdealer
quotation system.
"Non-Stock Fundamental Change" has the meaning specified in Section
13.07(2).
"No Recognition Opinion" means an opinion delivered to the Issuer
Trustees of a nationally recognized independent tax counsel (reasonably
acceptable to the Issuer Trustees) experienced in such matters, which opinion
may rely on published revenue rulings of the Internal Revenue Service, to the
effect that the Holders of the Preferred Securities will not recognize any
income, gain or loss for United States federal income tax purposes as a result
of the liquidation of the Trust and the distribution of the Securities to the
Holders of the Preferred Securities.
"Notice of Conversion" means the notice to be given by a Holder of
Preferred Securities to the Conversion Agent directing the Conversion Agent to
exchange such Preferred Securities for Securities and to convert such Securities
into Common Stock on behalf of such Holder.
"Obligations" means all obligations for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under, or with respect to, any Debt (including claims for rescission).
"Officers' Certificate" means a certificate signed by the chairman of
the board, the vice chairman of the board, the president or a vice president,
and by the treasurer, an assistant treasurer, the controller, the secretary or
an assistant secretary, of the Company, and delivered to the Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 10.04
shall be the principal executive, financial or accounting officer of the
Company.
<PAGE>
"OID" means original issue discount.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be reasonably acceptable to the Trustee.
"Optional Redemption" has the meaning specified in Section 11.01(1).
"Optional Redemption Date" means the date which is not less than 20,
nor more than 60, days following the date on which the Optional Redemption
Notice is sent, as specified in the Optional Redemption Notice (or if such date
is not a Business Day, the next succeeding Business Day).
"Optional Redemption Notice" has the meaning specified in Section
11.01(2).
"Optional Redemption Price" has the meaning specified in Section
11.01(1).
"Optional Redemption Ratio" has the meaning specified in Section
13.07(1)(A).
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, EXCEPT: (i) Securities theretofore canceled by the
Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose
payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; PROVIDED, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities that have been paid pursuant to Article XI,
converted into Common Stock pursuant to Section 13.01, or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Payment Resumption Date" has the meaning specified in Section
3.13(2).
"Person" or "person" means any individual, corporation, limited
liability company, company, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and,
<PAGE>
for the purposes of this definition, any Security authenticated and delivered
under Section 3.07 in exchange for or in lieu of a mutilated, destroyed, lost
or stolen Security shall be deemed to evidence the same debt as the mutilated,
destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in the First Recital
to this Indenture.
"Primary Treasury Dealer" has the meaning specified in the Remarketing
Agreement.
"Property Trustee" has the meaning specified in the First Recital to
this Indenture.
"Purchase Agreement" has the meaning specified in the Recitals to this
Indenture.
"Purchased Shares" has the meaning specified in Section 13.03(6).
"Purchaser Stock Price" has the meaning specified in Section 13.07(2).
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture, including without limitation, the Optional Redemption Date with
respect to an Optional Redemption.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture, including without limitation, the Optional Redemption Price with
respect to an Optional Redemption.
"Redemption Tax Opinion" means an opinion delivered to the Company of
a nationally recognized independent tax counsel (reasonably acceptable to the
Issuer Trustees) experienced in such matters that, as a result of a Tax Event,
there is more than an insubstantial risk that the Company would be precluded
from deducting the interest on the Securities for United States federal income
tax purposes, even after the Trust was liquidated and the Securities were
distributed to the Holders of the Preferred Securities.
"Reference Date" has the meaning specified in Section 13.03(4).
"Reference Market Price" has the meaning specified in Section
13.07(2).
"Reference Treasury Dealer" has the meaning specified in the
Remarketing Agreement.
"Reference Treasury Dealer Quotations" has the meaning specified in
the Remarketing Agreement.
"Registrable Securities" has the meaning specified in section 10.07.
<PAGE>
"Registration Default" has the meaning specified in Section 10.07.
"Registration Rights Agreement" has the meaning specified in Section
10.07.
"Regular Record Date" has the meaning specified in Section 3.01.
"Relevant Price" has the meaning specified in Section 13.07(2).
"Remarketing" has the meaning specified in the Seventh Recital to this
Indenture.
"Remarketing Agent" means an investment bank, broker, dealer, or other
organization which, in the judgment of the Company, is qualified to remarket the
Preferred Securities substantially in accordance with the terms of the
Remarketing Agreement. The initial Remarketing Agent shall be Credit Suisse
First Boston Corporation. The term "Remarketing Agent" shall also include any
successor Person appointed as such by the Company.
"Remarketing Agreement" means the Remarketing Agreement with the
Remarketing Agent dated the date hereof substantially in the form set forth in
Exhibit B to this Indenture and any substantially similar agreement entered into
by the Company with any successor Remarketing Agent.
"Remarketing Notice" shall have the meaning specified in the
Remarketing Agreement.
"Repurchased Securities" has the meaning specified in Section 10.09.
"Repurchased Securities Payment Date" has the meaning specified in
Section 10.09.
"Repurchased Securities Purchase Price" has the meaning specified in
Section 10.09.
"Reset Date" means any date that is (i) not later than February 15,
2005 (or, if such day is not a Business Day, the next succeeding Business Day),
and (ii) not earlier than 70 Business Days prior to February 15, 2005, as may be
determined by the Remarketing Agent, in its sole discretion.
"Responsible Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, any assistant vice
president, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of
<PAGE>
the Trustee customarily performing functions similar to those performed by any
of the above designated officers, and having direct responsibility for the
administration of this Indenture, and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Restricted Preferred Securities" means each Preferred Security
required to bear the restricted securities legend required by Section 9.02(j) of
the Declaration.
"Restricted Securities" means each Security required to bear a
Restricted Securities Legend pursuant to Section 2.02 hereof.
"Restricted Securities Legend" has the meaning specified in Section
2.02.
"Secured Debt" means Debt under the Credit Agreement and any Debt that
by its terms is secured by any lien, pledge, charge, encumbrance, mortgage, deed
of trust, hypothecation, assignment or security interest with respect to assets
having or intended to have an aggregate fair market value at the time of the
grant thereof (in the judgment of the board of directors, the chief financial
officer or other responsible agent or officer of the Company) not less than the
amount of such Debt.
"Securities" has the meaning specified in the Fifth Recital to this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.06(1).
"Significant Subsidiary" of any Person means a Subsidiary of such
Person meeting the requirements set forth in Rule 1-02(w) of Regulation S-X of
the Securities Act.
"Shelf Registration Statement" has the meaning specified in Section
10.07.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.08.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest or Additional Payments thereon,
means the date specified in such Security as the fixed date on which the
principal, together with any accrued and unpaid interest (and Additional
Payments, if any), of such Security or such installment of interest or
Additional Payments is due and payable.
<PAGE>
"Subsidiary" of any Person means (i) a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Tax Event" means the receipt by the Property Trustee of an opinion of
a nationally recognized independent tax counsel to the Company (reasonably
acceptable to the Issuer Trustees) experienced in such matters to the effect
that, as a result of (a) any amendment to or change (including any announced
prospective change (which shall not include a proposed change), provided that a
Tax Event shall not occur more than 90 days before the effective date of any
such 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 judicial decision or official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to or change in the administrative
position or interpretation of any Administrative Action or judicial decision
that differs from the theretofore generally accepted position, in each case, by
any legislative body, court, governmental agency or regulatory body,
irrespective of the manner in which such amendment or change is made known,
which amendment or change is effective or such Administrative Action or decision
is announced, in each case, on or after the date of the original issuance of the
Securities or the issue date of the Preferred Securities issued by the Trust,
there is more than an insubstantial risk that (x) if the Securities are held by
the Property Trustee, (i) the Trust is, or will be within 90 days of the date of
such opinion, subject to United States federal income tax with respect to
interest accrued or received on the Securities or subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges as
determined by such counsel, or (ii) any portion of interest payable by the
Company to the Trust (or OID accruing) on the Securities is not, or within 90
days of the date of such opinion will not be, deductible by the Company in whole
or in part for United States federal income tax purposes or (y) with respect to
Securities which are no longer held by the Property Trustee, any portion of
interest payable by the Company (or OID accruing) on the Securities is not, or
within 90 days of the date of such opinion will not be, deductible by the
Company in whole or in part for United States federal income tax purposes.
"Tender Agent" means the Property Trustee if any Preferred Securities
are outstanding and the Trustee if the Securities have been distributed to the
Holders of the Preferred Securities.
"Tender Notification Date" means a Business Day no earlier than 10
Business Days following the date of the Remarketing Notice, or such shorter
period as agreed to by the Remarketing Agent.
<PAGE>
"Term Call Protections" means the price, manner and time, if any, at
which the Securities may be redeemed at the option of the Company after the
Reset Date. The Term Call Protections, if any, will be established in
connection with the Remarketing.
"Term Provisions" shall have the meaning specified in the Remarketing
Agreement.
"Term Rate" means the rate established by the Remarketing Agent in
connection with the Remarketing at which interest shall accrue on the Securities
from and after the Reset Date.
"Term Redemption Price" has the meaning specified in Section 11.01(1).
"Trading Day" has the meaning specified in Section 13.07(2).
"Trust" has the meaning specified in the First Recital to this
Indenture.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this Indenture was executed; PROVIDED, HOWEVER,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities.
"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."
"Voting Stock" of any Person means capital stock of such Person which
ordinarily has voting power for the election of directors (or Persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
2.2 SECTION COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee such certificates
and opinions as may be required under the Trust Indenture Act or reasonably
requested by the Trustee in connection with such application or request. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given
<PAGE>
by counsel, and shall comply with the applicable requirements of the Trust
Indenture Act and any other applicable requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made or caused to be made such examination or investigation as is necessary
to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
2.3 SECTION FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
2.4 SECTION ACTS OF HOLDERS; RECORD DATES.
<PAGE>
(1) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or
instruments is or are delivered to the Trustee and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "ACT" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section.
(2) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of his authority. The fact and date
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee or the Company, as the case may be, deems sufficient.
(3) The Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action, or to vote on any action, authorized or permitted to be
given or taken by Holders. If not set by the Company prior to the first
solicitation of a Holder made by any Person in respect of any such action,
or, in the case of any such vote, prior to such vote, the record date for
any such action or vote shall be the 30th day (or, if later, the date of
the most recent list of Holders required to be provided pursuant to Section
7.01) prior to such first solicitation or vote, as the case may be. With
regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action.
(4) The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any notice of default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred
to in Section 5.12. If any record date is set pursuant to this paragraph,
the Holders of Outstanding Securities on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record
date; PROVIDED that no such action shall be
<PAGE>
effective hereunder unless taken on or prior to the date set by the
Trustee by which any such determination shall be made (the "Expiration
Date") by Holders of the requisite principal amount of Outstanding
Securities on such record date. Nothing in this paragraph shall be
construed to prevent the Trustee from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically
and with no action by any Person be canceled and of no effect), and
nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding
Securities as of the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Company in
writing and to each Holder of Securities in the manner set forth in
Section 1.06.
(5) The ownership of Securities shall be proved by the Security
Register.
(6) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of 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, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(7) Without limiting the foregoing, a Holder entitled hereunder to
give or take any such action with regard to any particular Security may do
so with regard to all or any part of the principal amount of such Security
or by one or more duly appointed agents each of which may do so pursuant to
such appointment with regard to all or any different part of such principal
amount.
2.5 SECTION NOTICES, ETC., TO TRUSTEE AND THE COMPANY. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this Indenture or at any other address previously
furnished in writing to the Trustee by the Company.
2.6 SECTION NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such
Holder's address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service or by
reason of any other cause, it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
2.7 SECTION CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with a provision of the Trust Indenture Act that
is required under such act to be a part of and govern this Indenture, the latter
provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
2.8 SECTION 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.
2.9 SECTION SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
2.10 SECTION SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities 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.
2.11 SECTION BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, the holders of Secured Debt, the Holders
of Preferred Securities (to the extent provided herein) and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
2.12 SECTION GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
<PAGE>
2.13 SECTION LEGAL HOLIDAYS. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security or the last date on
which a Holder has the right to convert his Securities shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest (and Additional Payments, if any) or principal
or conversion of the Securities need not be made on such date, but may be made
on the next succeeding Business Day (except that, if such Business Day is in the
next succeeding calendar year, such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, shall be the immediately preceding Business
Day) with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity or on such last day for conversion,
PROVIDED that no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may be.
3 ARTICLE
4 SECURITY FORMS
4.1 SECTION FORMS GENERALLY. The Securities and the Trustee's
certificates of authentication shall be substantially in the form of Exhibit A
which is hereby incorporated in and expressly made a part of this Indenture. The
Securities may have notations, legends or endorsements required by law, stock
exchange rule, agreements to which the Company is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Company). The Company shall furnish any such legend not set forth in
this Indenture and not contained in Exhibit A to the Trustee in writing. Each
Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The definitive Securities shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods or in
any other manner permitted by the rules of any securities exchange on which the
Securities may be listed, all as determined by the officers executing such
Securities, as evidenced by their execution of such Securities.
4.2 SECTION INITIAL ISSUANCE TO PROPERTY TRUSTEE. The Securities
initially issued to the Property Trustee of the Trust shall be in the form of
one or more individual certificates in definitive, fully registered form without
distribution coupons and shall bear the following legend (the "Restricted
Securities Legend") unless the Company determines otherwise in accordance with
applicable law:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933
(THE "SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE
UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
<PAGE>
EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A)
THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION HEREOF MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (i) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii) IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
4.3 SECTION ADDITIONAL PROVISIONS REQUIRED IN GLOBAL SECURITY. Any
Global Security issued hereunder shall, in addition to the provisions contained
in Section 2.02, bear a legend in substantially the following form:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A
TRANSFER OF THIS 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) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK) TO THE TITAN
CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
<PAGE>
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.,
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN."
4.4 SECTION ISSUANCE OF GLOBAL SECURITIES TO HOLDERS. The Securities
will be represented by one or more Global Securities registered in the name of
the Depositary or its nominee if, and only if, the Securities are distributed to
the holders of the Trust Securities. Until such time, the Securities shall be
registered in the name of and held by the Property Trustee. Securities
distributed to holders of book-entry Trust Securities shall be distributed in
the form of one or more Global Securities registered in the name of the
Depositary or its nominee, and deposited with the Security Registrar, as
custodian for such Depositary, or held by such Depositary for credit by the
Depositary to the respective accounts of the beneficial owners of the Securities
represented thereby (or such other accounts as they may direct). Securities
distributed to holders of Trust Securities other than book-entry Trust
Securities shall not be issued in the form of a Global Security or any other
form intended to facilitate book-entry trading in beneficial interests in such
Securities.
5 ARTICLE
6 THE SECURITIES
6.1 SECTION TITLE AND TERMS.
(1) The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is limited to the sum of
(i) $206,185,600 and (ii) such aggregate principal amount (which may not
exceed $51,546,400 aggregate principal amount) of Securities, if any, as
shall be purchased by the Trust pursuant to an over-allotment option in
accordance with the terms and provisions of the Purchase Agreement, except
for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
3.04, 3.05, 3.06, 3.07, 9.06, 11.09 or 13.01.
<PAGE>
(2) The Securities shall be known and designated as the "Convertible
Senior Subordinated Debentures Due 2030" of the Company. Their Stated
Maturity shall be February 15, 2030, and they shall bear interest at the
Applicable Rate, from February 9, 2000, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly
provided for, as the case may be, payable quarterly (subject to deferral as
set forth herein), in arrears, on February 15, May 15, August 15 and
November 15 (each an "Interest Payment Date") of each year, PLUS Additional
Payments, if any, commencing May 15, 2000 until the principal thereof is
paid or made available for payment, and they shall be paid, except as
provided herein, to the Person in whose name the Security is registered at
the close of business on the regular record date for such interest
installment, which shall be the close of business on the 1st day of each
February, May, August and November immediately preceding the applicable
Interest Payment Date (the "Regular Record Date"). If the Reset Date is
prior to the Regular Record Date for the immediately following Interest
Payment Date, then interest and Additional Amounts, if any, accrued from
and after the Reset Date to but excluding the immediately following
Interest Payment Date shall be paid on such Interest Payment Date to the
person in whose name each Security is registered on the relevant Regular
Record Date, subject to the right of the Company to initiate a Deferral
Period. If the Reset Date is on or after the Regular Record Date for the
immediately following Interest Payment Date, then (1) interest and
Additional Amounts, if any, accrued from and after the Regular Record Date
to but excluding the Reset Date shall be paid on the immediately following
Interest Payment Date to the person in whose name each Security is
registered on the relevant Regular Record Date and (2) interest and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Interest Payment Date shall be paid on
the second Interest Payment Date immediately following the Reset Date to
the person in whose name each Security is registered on the relevant
Regular Record Date for such second Interest Payment Date, subject in each
case to the right of the Company to initiate a Deferral Period. Interest
will compound quarterly and will accrue at the Applicable Rate on overdue
installments of interest (without regard to any applicable grace period) or
during an extension of an interest payment period as set forth in Section
3.13 hereof.
(3) The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided
in the following sentence, the amount of interest payable for any period
shorter than a full quarterly period for which interest is computed, will
be computed on the basis of the actual number of days elapsed in such a
30-day month. In the event that any date on which interest is payable on
the Securities is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date.
<PAGE>
(4) If at any time (including upon the occurrence of a Tax Event)
while the Property Trustee is the Holder of all the Securities, the Trust
or the Property Trustee is required to pay any taxes, duties, assessments
or governmental charges of whatever nature with regard to the Securities
(other than withholding taxes) imposed by the United States, or any other
taxing authority, then, in any case, the Company will pay as additional
amounts on the Securities held by the Property Trustee, such additional
amounts ("Additional Amounts") as shall be required so that the net amounts
received and retained by the Trust and the Property Trustee after paying
such taxes, duties, assessments or other governmental charges will be equal
to the amounts the Trust and the Property Trustee would have received had
no such taxes, duties, assessments or other governmental charges been
imposed.
(5) The principal of and interest (and Additional Payments, if any)
on the Securities shall be payable at the office or agency of the Company
in New York, New York maintained for such purpose and at any other office
or agency maintained by the Company for such purpose by check or wire
transfer in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
PROVIDED, HOWEVER, that at any time that the Property Trustee is not the
sole holder of the Securities, payment of interest may, at the option of
the Company, be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or by wire
transfer.
(6) The Securities shall be redeemable as provided in Article XI
hereof.
(7) The Securities shall be subordinated in right of payment only to
Secured Debt as provided in Article XII hereof.
(8) The Securities shall be convertible as provided in Article XIII
hereof.
6.2 SECTION DENOMINATIONS. The Securities shall be issuable only in
registered form without coupons and only in denominations of $50 and integral
multiples thereof.
6.3 SECTION EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its chairman of the
board, its vice chairman of the board, its president or one of its vice
presidents. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for
<PAGE>
authentication, together with a Company Order for the authentication and
delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Securities as in
this Indenture provided and not otherwise.
No Security 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 herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
6.4 SECTION TEMPORARY SECURITIES. Pending the preparation of definitive
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and make available for delivery, temporary Securities 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 and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 10.02, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
6.5 SECTION GLOBAL SECURITIES.
(1) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered,
in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (i) such Depositary advises the
Trustee in writing that such Depositary is no longer willing or able to
continue as a Depositary with respect to such Global Security, and no
successor depositary shall have been appointed, or if at any time the
Depositary ceases to be a "clearing agency" registered under the Exchange
Act, at a time when the Depositary is required to be so registered to act
as such depositary, (ii) the Company in its sole
<PAGE>
discretion determines that such Global Security shall be so exchangeable
or (iii) there shall have occurred and be continuing an Event of Default.
(3) If any Global Security is to be exchanged for other Securities or
canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Security Registrar for exchange or
cancellation as provided in this Article III. If any Global Security is to
be exchanged for other Securities or canceled in part, or if another
Security is to be exchanged in whole or in part for a beneficial interest
in any Global Security, then either (i) such Global Security shall be so
surrendered for exchange or cancellation as provided in this Article III or
(ii) the principal amount thereof shall be reduced or increased by an
amount equal to the portion thereof to be so exchanged or canceled, or
equal to the principal amount of such other Security to be so exchanged for
a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Security Registrar,
whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any
such surrender or adjustment of a Global Security by the Depositary,
accompanied by registration instructions, and, to the extent required by
Section 3.06, a Restricted Securities Certificate, the Trustee shall,
subject to Section 3.05(2) and as otherwise provided in this Article III,
authenticate and make available for delivery any Securities issuable in
exchange for such Global Security (or any portion thereof) in accordance
with the instructions of the Depositary. The Trustee shall not be liable
for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such instructions.
(4) The Depositary or its nominee, as registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Securities, and owners of beneficial interests
in a Global Security shall hold such interest pursuant to the rules and
procedures of the Depositary. Accordingly, any such owner's beneficial
interests in a Global Security shall be shown only on, and the transfer of
such interest shall be effected only through, records maintained by the
Depositary or its nominee or its Agent Members. Neither the Trustee nor
the Security Registrar shall have any liability in respect of any transfers
effected by the Depositary.
(5) The rights of the beneficial interests in a Global Security shall
be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary
and/or its Agent Members.
<PAGE>
6.6 SECTION REGISTRATION, TRANSFER AND EXCHANGE GENERALLY; CERTAIN
TRANSFERS AND EXCHANGES.
(1) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 10.02 being
herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the
Company shall provide for the registration of Securities and of transfers
of Securities. The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of Securities as herein
provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 10.02 for
such purpose, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees, one
or more new Securities of any authorized denominations and of a like
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be required by
this Indenture, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make
available for delivery, the Securities which the Holder making the exchange
is entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer
or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar
duly executed, by the Holder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 3.04, 3.05, 9.06,
11.09 or 13.01 not involving any transfer.
Neither the Company nor the Trustee shall be required (i) in the
case of a partial redemption of the Securities, to issue, register the
transfer of or exchange any
<PAGE>
Security during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.05 and ending at the close of
business on the day of such mailing or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.
(2) TRANSFER AND EXCHANGE PROCEDURES AND RESTRICTIONS. The
Securities may not be transferred except in compliance with the Restricted
Securities Legend unless otherwise determined by the Company in accordance
with applicable law. Upon any distribution of the Securities to the
holders of the Trust Securities in accordance with the Declaration, the
Company and the Trustee shall enter into a supplemental indenture pursuant
to Section 9.01(6) to provide for transfer procedures and restrictions with
respect to the Securities substantially similar to those contained in the
Declaration to the extent applicable in the circumstances existing at the
time of such distribution. Notwithstanding any other provision of the
Indenture, transfers and exchanges of Securities and beneficial interests
in a Global Security of the kinds specified in this Section 3.06(2) shall
be made only in accordance with this Section 3.06(2).
(A) NON-GLOBAL SECURITY TO GLOBAL SECURITY. If the Holder of a
Security (other than a Global Security) wishes at any time to transfer
all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in a Global
Security, such transfer may be effected only in accordance with the
provisions of this clause (2)(A) and subject to the rules and
procedures of the Depositary. Upon receipt by the Security Registrar
of (i) such Security as provided in Section 3.06(1) and instructions
satisfactory to the Security Registrar directing that a beneficial
interest in the Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a
specified Agent Member's account and (ii) a Securities Certificate
duly executed by such Holder or such Holder's attorney duly authorized
in writing, then the Security Registrar shall cancel such Security
(and issue a new Security in respect of the untransferred portion
thereof) as provided in Section 3.06(1) and increase the aggregate
principal amount of the Global Security by the specified principal
amount as provided in Section 3.05(3).
(B) NON-GLOBAL SECURITY TO NON-GLOBAL SECURITY. A Security that
is not a Global Security may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Security that is not
a Global Security as provided in Section 3.06(1); provided, that if
such Security to be transferred in whole or in part is a Restricted
Security, the Security Registrar shall have received the assignment
form attached to the Security duly executed by the transferor Holder
or such Holder's attorney duly authorized in writing.
(C) EXCHANGES BETWEEN GLOBAL SECURITY AND NON-GLOBAL SECURITY.
A beneficial interest in a Global Security may be exchanged for a
Security that is not a Global Security as provided in Section 3.05.
<PAGE>
(3) RESTRICTED SECURITIES LEGEND.
(A) Except as set forth below, all Securities shall bear the
Restricted Securities Legend set forth in Section 2.02.
(B) Subject to Section 3.06(2) and to the following clauses of
this Section 3.06(3), a Security (other than a Global Security) that
does not bear a Restricted Securities Legend may be issued in exchange
for or in lieu of a Restricted Security or any portion thereof that
bears such legend if, in the Company's judgment, placing such a legend
upon such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the written direction of the Company in the form of an Officers'
Certificate, shall countersign and deliver such a new Security.
(C) Notwithstanding the foregoing provisions of this Section
3.06(3), a successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such successor
Security is a "restricted security" within the meaning of Rule 144
under the Securities Act, in which case the Trustee, at the written
direction of the Company in the form of an Officers' Certificate,
shall countersign and deliver a new Security bearing a Restricted
Securities Legend in exchange for such successor Security.
(D) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 under the Securities Act after such
registration ceases to be effective: (i) in the case of any Restricted
Security that is a definitive Security, the Security Registrar shall
permit the Holder thereof to exchange such Restricted Security for a
definitive Security that does not bear the Restricted Securities
Legend and shall rescind any restriction on the transfer of such
Restricted Security; and (ii) in the case of any Restricted Security
that is represented by a Global Security, the Security Registrar shall
permit the Holder of such Global Security to exchange such Global
Security for another Global Security that does not bear the Restricted
Securities Legend.
(E) If Restricted Securities are being presented or surrendered
for transfer or exchange then there shall be (if so required by the
Trustee), (i) if such Restricted Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect; or (ii) if such Restricted Securities are being transferred, a
certification from the transferor as to the compliance with the
restrictions set forth in the Restricted Securities Legend.
<PAGE>
6.7 SECTION MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security is surrendered to the Trustee, the Company shall execute and
the Trustee shall authenticate and make available for delivery in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
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 has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
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.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
6.8 SECTION PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Subject to
Section 3.01(2), interest (and Additional Payments, if any) on any Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date.
Subject to Section 3.13, any interest on any Security which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
<PAGE>
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each 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 arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date (the "Special Record Date") for the payment
of such Defaulted Interest which shall be not more than 15 days and not
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less than
10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
so mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2).
(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 the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee; PROVIDED
that any such payment shall be made by check or wire transfer in coin or
currency of the United States of America which at the time of payment is a
legal tender for payment of public and private debt.
Subject to the foregoing provisions of this Section, 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 (including in each such case Additional Payments),
which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date (other
than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such
<PAGE>
Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (and Additional Payments, if
any) (whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, interest
whose Stated Maturity is after the date of conversion of such Security 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
(and Additional Payments, if any) on the Securities being converted, which shall
be deemed to be paid in full.
6.9 SECTION PERSONS DEEMED OWNERS. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.08) interest (and
Additional Payments, if any) on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor 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 Depositary shall have any rights under this
Indenture with respect to such Global Security, and such Depositary may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company or the
Trustee from giving effect to any written certification, proxy, or other
authorization furnished by a Depositary or impair, as between the Depositary and
such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as
Holder of any Security.
6.10 SECTION CANCELLATION. All Securities surrendered for payment,
redemption, registration of transfer or exchange or conversion shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for 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 promptly canceled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities canceled as provided in this Section, except as expressly permitted
by this Indenture. All canceled Securities held by the Trustee shall be
disposed of as directed by a Company Order; PROVIDED, HOWEVER, that the Trustee
shall not be required to destroy the certificates representing such canceled
Securities.
6.11 SECTION RIGHT OF SET OFF. Notwithstanding anything to the contrary
in this Indenture, the Company shall have the right to set off any payment it is
otherwise required to make hereunder to the extent the Company has theretofore
made, or is concurrently on the date of such payment making, a payment under the
Guarantee.
6.12 SECTION CUSIP NUMBERS. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
PROVIDED, that any such notice may state that no representation is made as to
the correctness of such numbers either as printed on the
<PAGE>
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Securities,
and any such redemption shall not be affected by any defect in or omission of
such numbers.
6.13 SECTION EXTENSION OF INTEREST PAYMENT PERIOD; NOTICE OF EXTENSION.
(1) So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this
Security, and from time to time to defer payments of interest for
successive periods not exceeding 20 consecutive quarters for each such
period (a "Deferral Period"); PROVIDED that no Deferral Period may extend
beyond (i) the Maturity (whether at February 15, 2030 or by declaration of
acceleration, call for redemption or otherwise) or (ii) in the case of a
Deferral Period that begins prior to the Reset Date, the Reset 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 3.13, will bear interest thereon at the Applicable
Rate compounded quarterly for each quarter of the Deferral Period
("Compounded Interest"). On the applicable Payment Resumption Date, the
Company shall pay all interest then accrued and unpaid on the Securities,
including any Compounded Interest that shall be payable to the Holders of
the Securities in whose names the Securities are registered in the Security
Register on the Regular Record Date fixed for such Payment Resumption Date.
A Deferral Period shall terminate upon the payment by the Company of all
interest then accrued and unpaid on the Securities (together with
Additional Payments), to the extent permitted by applicable law. Before
the termination of any Deferral Period, the Company may further extend such
period as provided in paragraph (2) of this Section 3.13, PROVIDED that
such period together with all such further extensions thereof shall not
exceed 20 consecutive quarters or extend beyond (i) the Maturity (whether
at February 15, 2030 or by declaration of acceleration, call for redemption
or otherwise) or (ii) in the case of a Deferral Period that begins prior to
the Reset Date, the Reset Date. Upon the termination of any Deferral
Period, and subject to the foregoing requirements, the Company may elect to
begin a new Deferral Period. No interest shall be due and payable during a
Deferral Period except on the Payment Resumption Date as determined
pursuant to paragraph (2) of this Section 3.13. There is no limitation on
the number of times that the Company may elect to begin a Deferral Period.
(2) The Company shall give the Holders of the Securities and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions
that would have been payable on the Trust Securities except for the
decision to begin or extend a Deferral Period. On or prior to the Regular
Record Date immediately preceding the Interest Payment Date on which the
Company elects to pay all interest then accrued and unpaid on the
Securities, including Compounded Interest (the "Payment Resumption Date"),
the Company shall give the Holders of the Securities and the Trustee
written notice that the Deferral Period will end on such Payment Resumption
Date. Notwithstanding the provision of such notice, the Company may elect
to further extend the Deferral Period, subject to the limitations set forth
in Section 3.13(1), by providing the Holders of the Securities and the
Trustee with a
<PAGE>
new Deferral Notice not less than three Business Days prior
to the Regular Record Date immediately preceding the previously scheduled
Payment Resumption Date. The Company may elect to pay all interest then
accrued and unpaid on the Securities, including Compounded Interest, on an
Interest Payment Date prior to its most recently established Payment
Resumption Date; PROVIDED that the Company gives the Holders of the
Securities and the Trustee a new Deferral Notice setting forth the revised
Payment Resumption Date at least three Business Days prior to the Regular
Record Date for such revised Payment Resumption Date.
(3) The quarter in which any Deferral Notice is given pursuant to
paragraph (2) hereof shall be counted as one of the 20 quarters permitted
in the maximum Deferral Period permitted under paragraph (1) hereof.
6.14 SECTION PAYING AGENT, SECURITY REGISTRAR AND CONVERSION AGENT.
The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security
Registrar, co-registrar or Conversion Agent without prior notice. The
Company may appoint one or more co-registrars, one or more additional Paying
Agents, one or more additional Conversion Agents, and one or more additional
agents in addition to the Security Registrar to accept Securities for
transfer or exchange, it being understood that the registration of all such
transfers and exchanges will only be effected in the Security Register. The
Company or any of its Affiliates may act in any such capacity.
7 ARTICLE
8 SATISFACTION AND DISCHARGE
8.1 SECTION SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect (except as to any surviving rights of
conversion, registration of transfer or exchange of Securities herein expressly
provided for), and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.06 and
(ii) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancellation; or
<PAGE>
(B) all such Securities 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) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest (and
Additional Payments, if any) to the date of such deposit (in the case
of Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; 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 and relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
8.2 SECTION APPLICATION OF TRUST MONEY. Subject to the provisions of
the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01 shall be held in trust and applied by it, in accordance
with the provisions of the Securities and this Indenture, to the payment, either
directly or through any Paying Agent (including the Company acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal and interest (and Additional Payments, if any) for whose payment
such money has been deposited with the Trustee. All moneys deposited with the
Trustee pursuant to Section 4.01 (and held by it or any Paying Agent) for the
payment of Securities subsequently converted shall be returned to the Company
upon Company Request.
<PAGE>
9 ARTICLE
10 REMEDIES
10.1 SECTION EVENTS OF DEFAULT. "Event of Default," wherever used
herein, means any one of the following events that has occurred and is
continuing (whatever the reason for such Event of Default and whether it shall
be occasioned by the provisions of Article XI or Article XII or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon any Security,
including any Additional Payments, when it becomes due and payable, and
continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of a Deferral Period); or
(2) default in the payment of the principal or premium, if any, of
any Security when due, whether at its Maturity, upon redemption, by
declaration of acceleration or otherwise; or
(3) default in the observation or performance in any material respect
of any covenant of the Company in this Indenture (other than a covenant
where a default in the performance of which or the breach of which is
specifically dealt with elsewhere in this Section), and continuance of such
default for a period of 60 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 aggregate outstanding principal
amount of the Securities a written notice specifying such default and
requiring it to be remedied; or
(4) failure by the Company to issue and deliver Common Stock upon an
election to convert the Securities into Common Stock; or
(5) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any of its Significant Subsidiaries
as bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any of its Significant Subsidiaries, as the case may be,
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Company
or any of its Significant Subsidiaries or of any substantial part of their
respective property or ordering the winding up or liquidation of their
respective affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
<PAGE>
(6) the institution by the Company or any of its Significant
Subsidiaries of proceedings to be adjudicated a bankrupt or insolvent, or
the consent by the Company or any such Significant Subsidiary to the
institution of bankruptcy or insolvency proceedings against the Company or
any such Significant Subsidiary, or the filing by the Company or any such
Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or the consent by the
Company or any such Significant Subsidiary to the filing of any such
petition or to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company or any
such Significant Subsidiary or of any substantial part of any their
respective property, or the making by any of them of an assignment for the
benefit of creditors, or the admission by any of them in writing of its
inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by the
Company or any of its Significant Subsidiaries in furtherance of any such
action; or
(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the distribution of
Securities to Holders of Preferred Securities and Common Securities in
liquidation or redemption of their interests in the Trust, (ii) the
redemption of all of the outstanding Preferred Securities and Common
Securities of the Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration.
10.2 SECTION ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); PROVIDED that, if upon an
Event of Default, the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities fail to declare the principal of all the
Securities to be immediately due and payable, the Holders of at least 25% in
aggregate liquidation amount of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee, and upon any
such declaration, such principal and all accrued interest (and Additional
Payments, if any) shall become immediately due and payable. The Holders of a
majority in aggregate principal amount of the Outstanding Securities may annul
such declaration and waive the default by written notice to the Company and the
Trustee if the Event of Default (other than the nonpayment of the principal of
these Securities which has become due solely by such acceleration) has been
cured or waived as provided in Section 5.13 and a sum sufficient to pay all
matured installments of interest (and Additional Payments, if any) and principal
of any Securities (and Additional Payments, if any) due otherwise than by
acceleration has been deposited with the Trustee. Should the Holders of the
Securities fail to annul such declaration and waive such default, the Holders of
a majority in aggregate liquidation amount of the outstanding Preferred
Securities shall have such right. Upon
<PAGE>
the effectiveness of any such declaration, such principal amount (or
specified amount) of and the accrued interest (including any Additional
Payments) on all the Securities shall then become immediately due and
payable; PROVIDED that the payment of principal and interest on, and all
other Obligations relating to, such Securities (including Additional
Payments) shall remain subordinated to the extent provided in Article XII.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
10.3 SECTION COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if
(1) default is made in the payment of any interest or any Additional
Payments on any Security when such interest or Additional Payments 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 any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest accrued in accordance with the
terms hereof (including any Additional Payments), at the rate borne by the
Securities, and, in addition thereto, all amounts owing to the Trustee under
Section 6.07.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
10.4 SECTION TRUSTEE MAY FILE PROOFS OF CLAIM. In case of any judicial
proceeding relative to the Company (or any other obligor upon the Securities),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee
shall be authorized to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it, and any predecessor Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization,
<PAGE>
arrangement, adjustment or composition affecting the Securities or the rights
of any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
10.5 SECTION TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of all the amounts owing to the Trustee and any predecessor
Trustee under Section 6.07, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
10.6 SECTION APPLICATION OF MONEY COLLECTED. Subject to Article XII, 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 interest (including any
Additional Payments), upon presentation of the Securities 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 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
and interest (including any Additional Payments), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
10.7 SECTION LIMITATION ON SUITS. Subject to Sections 5.08 and 5.16, no
Holder of any Security 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;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities 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;
<PAGE>
(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;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
10.8 SECTION UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL AND
INTEREST AND CONVERT. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and (subject to Section
3.08) interest (including any Additional Payments) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to convert such Security in accordance
with Article XIII and to institute suit for the enforcement of any such payment
and right to convert, and such rights shall not be impaired without the consent
of such Holder. If the Property Trustee is the sole Holder of the Securities,
any Holder of the Preferred Securities shall have the right to institute suit on
behalf of the Trust for the enforcement of any such payment and right to
convert.
10.9 SECTION RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Trustee and the Holders shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
10.10 SECTION RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.07, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
10.11 SECTION DELAY OR OMISSION NOT WAIVER. No delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to
<PAGE>
the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
10.12 SECTION CONTROL BY HOLDERS. The Holders of a majority in principal
amount of the Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee; PROVIDED,
that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
10.13 SECTION WAIVER OF PAST DEFAULTS. Subject to Section 9.02 hereof,
the Holders of not less than a majority in principal amount of the Outstanding
Securities, or failing such action by the majority in principal amount of the
Outstanding Securities, the majority in aggregate liquidation amount of the
Preferred Securities, may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any, or interest
(including any Additional Payments) on any Security (unless such default
has been cured and a sum sufficient to pay all matured installments of
interest (and Additional Payments, if any) and principal due otherwise than
by acceleration has been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Security affected;
PROVIDED, HOWEVER, that if the Securities are held by the Trust or the Property
Trustee, such waiver or modification of such waiver shall not be effective until
the Holders of a majority in aggregate liquidation amount of the outstanding
Preferred Securities shall have consented to such waiver or modification to such
waiver; PROVIDED FURTHER, that if the consent of the Holder of each Outstanding
Security is required, such waiver shall not be effective until each Holder of
the Trust Securities shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
10.14 SECTION UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; PROVIDED, that neither this
<PAGE>
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company or the Trustee or in any suit for the enforcement of the right to
receive the principal of and interest (and Additional Payments, if any) on any
Security or to convert any Security in accordance with Article XIII.
10.15 SECTION WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law 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.
10.16 SECTION ENFORCEMENT BY HOLDERS OF PREFERRED SECURITIES.
Notwithstanding anything to the contrary contained herein, but subject to
Article XII, if an Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest, Additional
Payments or principal on the Securities on the date such interest, Additional
Payments or principal is otherwise payable, the Company acknowledges that, in
such event, a Holder of Preferred Securities may institute a legal proceeding
directly for enforcement of payment to such Holder of the principal of, interest
or Additional Payments on the Securities having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the due date specified in the Securities. The
Company may not amend this Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of all the Holders of Preferred
Securities. Notwithstanding any payment made to such Holder of Preferred
Securities by the Company in connection with a Direct Action, the Company shall
remain obligated to pay the principal of and interest (and Additional Payments,
if any) on the Securities held by the Trust or the Property Trustee, and the
Company shall be subrogated to the rights of the Holders of such Preferred
Securities with respect to payments on the Preferred Securities to the extent of
any payments made by the Company to such Holders in any Direct Action. The
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the Holders of the Securities.
11 ARTICLE
12 THE TRUSTEE
12.1 SECTION CERTAIN DUTIES AND RESPONSIBILITIES.
(1) Except during the continuance of an Event of Default, the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee.
<PAGE>
(2) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
(3) At the written direction of the Remarketing Agent, the Trustee
shall (i) select the Primary Treasury Dealer to be a Reference Treasury
Dealer and (ii) determine the Reference Treasury Dealer Quotations, both in
accordance with the terms of the Remarketing Agreement. In addition, if
the Securities are no longer held by the Property Trustee, the Trustee
shall act as Tender Agent in accordance with the provisions of the
Remarketing Agreement.
(4) Notwithstanding the foregoing, (i) the duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act and (ii) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section.
12.2 SECTION NOTICE OF DEFAULTS. The Trustee shall give the Holders
notice of any default hereunder as and to the extent provided by the Trust
Indenture Act; PROVIDED, HOWEVER, that in the case of any default of the
character specified in Section 5.01(3), 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.
12.3 SECTION CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 6.01:
(1) the Trustee may conclusively 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, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(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
<PAGE>
action hereunder, the Trustee (unless other evidence 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 of its choice and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee 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, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such further inquiry or investigation, it
shall be entitled to reasonable examination of the books, records and
premises of the Company, personally or by agent or attorney at the sole
cost of the Company;
(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; and
(8) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith, without negligence or willful
misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
12.4 SECTION NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of the Securities or the proceeds thereof.
12.5 SECTION MAY HOLD SECURITIES. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may
<PAGE>
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, or such other agent.
12.6 SECTION MONEY HELD IN TRUST. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
12.7 SECTION COMPENSATION AND REIMBURSEMENT. The Company agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it 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, fees, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any loss, liability, claim, action, suit, cost or
expense incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The Trustee shall have a lien prior to the Securities as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 6.07, except with respect to funds held in
trust for the benefit of the Holders of any particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(5) or Section 5.01(6), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
12.8 SECTION DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has
or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.
<PAGE>
12.9 SECTION CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder which shall be a Person that is eligible pursuant
to the Trust Indenture Act to act as such and has a combined capital and surplus
of at least $50,000,000 and has its Corporate Trust Office in the United States.
If such Person publishes reports of condition at least annually, pursuant to law
or to the requirements of the federal and state authorities, then for the
purposes of this Section, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
12.10 SECTION 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 under Section 6.11.
(2) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(3) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal or resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(4) If at any time:
(A) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Security for at least six months; or
(B) the Trustee shall cease to be eligible under Section 6.09
and shall fail to resign after written request therefor by the Company
or by any such Holder; or
(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 may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf
<PAGE>
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
(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,
the Company, by a Board Resolution, shall promptly appoint a successor
Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of
a Security 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.
(6) The Company shall give written notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to
all Holders and the agent or representative for the holders of all Debt
under the Credit Agreement in the manner provided in Section 1.06. Each
notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office.
12.11 SECTION ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; PROVIDED, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
12.12 SECTION MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Trustee may be merged or converted or with which it
may be consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; PROVIDED such
<PAGE>
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. 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.
12.13 SECTION PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
13 ARTICLE
14 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
14.1 SECTION COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(1) semiannually, not later than March 15 and October 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days prior
to the delivery thereof; and
(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;
EXCLUDING from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
14.2 SECTION PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(1) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 7.01 and
the names and addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(2) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by
the Trust Indenture Act.
(3) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
<PAGE>
14.3 SECTION REPORTS BY TRUSTEE.
(1) Within 60 days after May 15 of each year, commencing May 15,
2000, the Trustee shall transmit by first-class mail to Holders such
reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act in the manner provided
pursuant thereto.
(2) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Securities are
listed on any stock exchange.
14.4 SECTION REPORTS BY COMPANY. The Company shall file with the Trustee
and the Commission, and transmit to Holders, such information, documents and
other reports, and such summaries thereof, as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such
Trust Indenture Act; PROVIDED, that any such information, documents or reports
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
14.5 SECTION TAX REPORTING. The Company shall provide to the Trustee on
a timely basis such information as the Trustee requires to enable the Trustee to
prepare and file any form required to be submitted by the Company with the
Internal Revenue Service and the Holders relating to original issue discount,
including, without limitation, Form 1099-OID or any successor form.
15 ARTICLE
16 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
16.1 SECTION COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person (other than a wholly owned Subsidiary of the Company), and no
Person shall consolidate with or merge with or into the Company or convey,
transfer or lease its properties and assets substantially as an entirety to the
Company, unless:
(1) in case the Company shall consolidate with or merge with or into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to
<PAGE>
any Person, the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance, transfer or
lease, such properties and assets substantially as an entirety shall be a
corporation, limited liability company, partnership or trust, shall be
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and interest (including any Additional
Payments) on all the Securities and the performance or observance of every
covenant of this Indenture on the part of the Company to be performed or
observed and shall have provided for conversion rights in accordance with
Article XIII;
(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;
(3) if at the time any Preferred Securities are outstanding, such
consolidation or merger or conveyance, transfer or lease of assets of the
Company is permitted under, and does not give rise to any breach or
violation of, the Declaration or the Guarantee; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture, comply
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
16.2 SECTION SUCCESSOR SUBSTITUTED. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of all or substantially all the properties and assets of the
Company on a consolidated basis in accordance with Section 8.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease to another
Person, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
17 ARTICLE
18 SUPPLEMENTAL INDENTURES
<PAGE>
18.1 SECTION SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders, the Company, when authorized by 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 satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of
this Indenture; PROVIDED, that such action pursuant to this clause (4)
shall not materially adversely affect the interests of the Holders of the
Securities or, so long as any of the Preferred Securities shall remain
outstanding, the Holders of the Preferred Securities; or
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(5) to make provision for transfer procedures, certification,
book-entry provisions, the form of restricted securities legends, if any,
to be placed on Securities, and all other matters required pursuant to
Section 3.06(2) or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to Holders of Preferred
Securities in the event of a distribution of Securities by the Trust if a
Tax Event or Investment Company Event occurs and is continuing.
<PAGE>
18.2 SECTION 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, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) extend the Stated Maturity of the principal of, or any
installment of interest (including any Additional Payments) on, any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or change the place of payment where,
or the coin or currency in which, any Security or interest or any
Additional Payments thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or adversely affect the right to convert any Security as provided in
Article XIII, or modify the provisions of this Indenture with respect to
the subordination of the Securities in a manner adverse to the Holders,
(2) change the Reset Date,
(3) reduce the percentage in principal amount of the Outstanding
Securities, 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
(4) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the Holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the Holders of the percentage of the aggregate stated
liquidation amount of such Preferred Securities then outstanding which is at
least equal to the percentage of aggregate stated principal amount of
Outstanding Securities as shall be required under this Indenture to effect any
such amendment, termination or waiver.
<PAGE>
It shall not be necessary for any Act of Holders 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.
18.3 SECTION EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
18.4 SECTION 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 Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby. No
such supplemental indenture shall directly or indirectly modify the provisions
of Article XII in any manner which might terminate or impair the rights of the
Secured Debt pursuant to such subordination provisions.
18.5 SECTION CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act.
18.6 SECTION REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities 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
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
19 ARTICLE
20 COVENANTS; REPRESENTATIONS AND WARRANTIES
20.1 SECTION PAYMENT OF PRINCIPAL AND INTEREST. The Company will duly
and punctually pay the principal of, interest and Additional Payments, if any,
on the Securities in accordance with the terms of the Securities and this
Indenture.
20.2 SECTION MAINTENANCE OF OFFICE OR AGENCY. (a) The Company will
maintain in New York, New York an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
transfer, exchange or conversion and where notices and demands to or upon the
Company in respect of the Securities and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be
<PAGE>
made or served at the Corporate Trust Office of the Trustee, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in the United States) where the Securities 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 New York, New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
Notwithstanding any other provision of this Indenture, payment with
respect to the Securities shall only take place in the Borough of Manhattan, The
City of New York, State of New York.
20.3 SECTION MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of, interest or Additional Payments, if any, on
any of the Securities, segregate and hold in trust for the benefit of the
Persons entitled thereto a sum sufficient to pay the principal, interest or
Additional Payments, if any, so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of, interest or Additional Payments, if
any, on any Securities, deposit with a Paying Agent a sum sufficient to pay the
principal, interest or Additional Payments, if any, so becoming due, such sum to
be held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may, at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
<PAGE>
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, interest or
Additional Payments, if any, on any Security and remaining unclaimed for two
years after such principal, interest or Additional Payments, if any, has 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 any
such Security 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.
20.4 SECTION STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the material terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
20.5 SECTION LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES;
COVENANTS AS TO THE TRUST.
(1) If at such time (x) there shall have occurred and is continuing
an Event of Default, (y) the Company shall be in default with respect to
its payment of any obligations under the Guarantee or (z) the Company shall
have given notice of its election to begin a Deferral Period as provided
herein and shall not have rescinded such notice, or such Deferral Period,
or any extension thereof, shall be continuing, the Company covenants that
the Company shall not (i) declare or pay any dividends or distributions on,
or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock (which includes common and preferred
stock) other than stock dividends or distributions which consist of stock
of the same class as that on which the dividend or distribution is being
paid, (ii) make any payment of principal, interest or premium, if any, on
or repay or repurchase or redeem any debt securities of the Company that
rank PARI PASSU with or junior in interest to the Securities or (iii) make
any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary of the Company if such guarantee
expressly ranks PARI PASSU with or junior in interest to the Securities (in
each case, other than (A) dividends or distributions in the Company's
capital stock, (B) any declaration of a dividend 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, (C) payments under the Guarantee or the
Common Securities Guarantee, (D) purchases or acquisitions of shares of
Common Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan, the exercise of any repurchase
rights under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking PARI PASSU with
or junior in interest to the Securities), (E) the purchase of fractional
shares resulting from a
<PAGE>
reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock or (F) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged).
(2) The Company also covenants and agrees (i) that it shall directly
or indirectly maintain 100% ownership of the Common Securities of the
Trust; PROVIDED, HOWEVER, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities
and (ii) that it shall use its reasonable efforts, consistent with the
terms and provisions of the Declaration, to cause the Trust (x) to not be
deemed an investment company, as defined under the Investment Company Act
of 1940, as amended from time to time, or any successor legislation,
required to be registered under such act, (y) to not be classified as an
association taxable as a corporation for United States federal income tax
purposes and (z) to otherwise continue to be classified as a grantor trust
for United States federal income tax purposes.
20.6 SECTION PAYMENT OF EXPENSES OF THE TRUST. In connection with the
offering, sale and issuance of the Securities to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company
shall:
(1) pay for all costs, fees and expenses relating to the offering,
sale and issuance of the Securities, including commissions to the Initial
Purchasers payable pursuant to the Purchase Agreement and compensation of
the Trustee under the Indenture in accordance with the provisions of
Section 6.07 of the Indenture;
(2) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs
and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions to the Initial
Purchasers in connection therewith), the fees and expenses of the Property
Trustee and the Delaware Trustee, the costs and expenses relating to the
operation of the Trust, including, without limitation, costs and expenses
of accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment, paying
agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the acquisition, financing, and disposition of
Trust assets); and
(3) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
20.7 SECTION REGISTRATION RIGHTS. The holders of the Preferred
Securities, the Securities, the Guarantee and the shares of Common Stock of the
Company issuable upon
<PAGE>
conversion of the Securities (collectively, the "Registrable Securities") are
entitled to the benefits of a Registration Rights Agreement, dated as of
February 9, 2000, among the Company, the Trust and the Initial Purchasers
(the "Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement the Company and the Trust have agreed for the benefit of the
holders of the Registrable Securities that (i) they will, at the Company's
sole expense, prior to April 24, 2000, file a shelf registration statement
(the "Shelf Registration Statement") with the Commission with respect to
resales of the Registrable Securities, (ii) they will use their best efforts
to cause such Shelf Registration Statement to be declared effective under the
Securities Act prior to July 8, 2000 and (iii) they will use their best
efforts to maintain such Shelf Registration Statement continuously effective
under the Securities Act (subject to certain exceptions under the
Registration Rights Agreement) until the second anniversary of the
effectiveness of the Shelf Registration Statement or such other period as
shall be required under Rule 144(k) thereunder or any successor rule or
regulation thereto or such earlier date as is provided in the Registration
Rights Agreement. If the Company fails to comply with either of clauses (ii)
or (iii) above, subject to certain exceptions provided in the Registration
Rights Agreement, (a "Registration Default") then, at such time, the
Applicable Rate will increase by 50 basis points (0.50%). Such increase will
remain in effect from and including the date on which any such Registration
Default shall occur to but excluding the date on which all Registration
Defaults have been cured, on which date the interest rate on the Securities
will decrease by 50 basis points (0.50%).
20.8 SECTION [Reserved]
20.9 SECTION REPURCHASE OF SECURITIES UPON THE FAILURE TO CONSUMMATE THE
ACQUISITION.
(1) In the event that the acquisition of Advanced Communication
Systems, Inc., a Delaware corporation ("ACS") pursuant to the Agreement and
Plan of Merger by and among the Company, ACS and A T Acquisition Corp., a
Delaware corporation, dated as of December 9, 1999, is not consummated by
March 31, 2000, the Company shall offer to purchase and, as set forth in
Article XV of the Declaration, the Trust shall accept such offer and agree
to sell the Securities (the "Repurchased Securities") held by it in an
amount equal to the total price to be paid by the Trust for the Trust
Securities tendered by the Holders thereof to the Trust pursuant to Article
XV of the Declaration, in an amount not to exceed 50% of the aggregate
liquidation amount of each of the Preferred Securities and the Common
Securities, at a purchase price (the "Repurchased Securities Purchase
Price") equal to 102.5% of the principal amount of the Securities to be
repurchased, plus accrued and unpaid interest thereon, if any, to the date
of the repurchase of the Securities (the "Repurchase Payment Date");
(2) On the Repurchase Payment Date, the Company shall pay to the
Trust by wire transfer the Repurchased Securities Purchase Price in
exchange for the Repurchased Securities and such Repurchased Securities
shall cease to be outstanding on that date.
21 ARTICLE
22 REDEMPTION OF SECURITIES
<PAGE>
22.1 SECTION OPTIONAL REDEMPTION.
(1) The Company shall have the right to redeem the Securities (an
"Optional Redemption") (i) in whole or in part, at any time or from time to
time, prior to the Reset Date but on or after February 20, 2003 until (but
excluding) the Tender Notification Date, at a Redemption Price (the
"Initial Redemption Price") equal to the prices per $50 principal amount of
Securities set forth in the following table, plus accrued and unpaid
interest, including Additional Payments, if any, to the Redemption Date, if
redeemed during the 12-month period up to but excluding February 20:
<TABLE>
<CAPTION>
Price Per $50
Principal
Year Amount
---- ------
<S> <C>
2004 $50.7188
2005 $50.0000
</TABLE>
(ii) after the Reset Date (except in the event of a Failed Final Remarketing),
in accordance with the Term Call Protections, if any, established in the
Remarketing; and (iii) in whole or in part, at any time on or after the third
anniversary of the Reset Date following a Failed Final Remarketing at a
redemption price equal to 100% of the then outstanding aggregate principal
amount of the Securities to be redeemed, plus accrued and unpaid interest
thereon (any Redemption Price so established in the Remarketing or as a result
of a Failed Final Remarketing, the "Term Redemption Price," and, together with
the Initial Redemption Price, an "Optional Redemption Price"); PROVIDED,
HOWEVER, that the Company shall not be permitted to redeem any Securities
pursuant to this Section 11.01(1) during any Deferral Period.
(2) If the Company desires to consummate an Optional Redemption, it
must cause to be sent, at its own expense, notice of such intent (an
"Optional Redemption Notice"), via first-class mail, postage prepaid, to
each Holder of Securities (and, if the Preferred Securities are still
outstanding, to each Holder of the corresponding Preferred Securities) to
be redeemed, at such Holder's address appearing in the Security Register
and the List of Holders, if applicable, which Optional Redemption Notice
shall comply with Section 11.06 hereof. Holders receiving an Optional
Redemption Notice have the right, upon notification of the Trustee and the
Conversion Agent prior to 5:00 p.m. New York City time on the Optional
Redemption Date, to convert their Securities called for redemption into
Company Common Stock at the Applicable Conversion Ratio prior to 5:00 p.m.
New York City time on the Optional Redemption Date in compliance with
Article XIII hereof.
(3) In the case of any Optional Redemption, the Company must notify
the Trustee and the Property Trustee in writing of the Optional Redemption
Date, the principal amount of Securities to be redeemed and provide a copy
of the Optional Redemption Notice at least 20 days prior to sending the
Optional Redemption Notice, or such shorter period as agreed to by the
Trustee and Property Trustee in writing.
<PAGE>
22.2 SECTION [Reserved]
22.3 SECTION TAX EVENT REDEMPTION.
(1) If a Tax Event has occurred and is continuing and:
(A) the Company has received a Redemption Tax Opinion; or
(B) the Issuer Trustees shall have been informed by nationally
recognized independent tax counsel (reasonably acceptable to the
Issuer Trustees) experienced in such matters that a No Recognition
Opinion cannot be delivered,
then the Company shall have the right upon not less than 30 days nor more than
60 days notice to the Holders of the Securities and within 90 days following the
occurrence and continuation of the applicable Tax Event (the "90 Day Period") to
redeem the Securities in whole, but not in part, for cash at $50 per $50
principal amount of the Securities plus accrued and unpaid interest, including
Additional Payments, if any, to the Redemption Date; PROVIDED, HOWEVER, that if,
at the time there is available to the Company or the Trust the opportunity to
eliminate, within the 90 Day Period, the applicable Tax Event by taking some
ministerial action, including, but not limited to, filing a form or making an
election, or pursuing some other similar reasonable measure which, in the sole
judgment of the Company, will have no adverse effect on the Company, the Trust
or the Holders of the Preferred Securities and will involve no material cost,
then the Company or the Trust shall pursue such ministerial action or other
measure in lieu of redemption; and PROVIDED FURTHER that the Company shall have
no right to redeem the Securities while the Trust is pursuing any ministerial
action or other similar measure pursuant to its obligations under the
Declaration.
(2) In the event that the Company redeems the Securities pursuant to
Section 11.03(1), Holders shall have the right upon notification of the
Trustee and the Conversion Agent, to convert their Securities or Preferred
Securities, if applicable, into Common Stock at the Applicable Conversion
Ratio prior to 5:00 p.m., New York City time, on the applicable Redemption
Date.
(3) If the Company opts not to redeem the Securities pursuant to
this Section 11.03, the Company shall be required to pay Additional Amounts
in respect of the Securities pursuant to Section 3.01 for so long as (i) a
Tax Event has occurred and is continuing and (ii) the Property Trustee is
the sole Holder of the Securities.
22.4 SECTION [Reserved]
22.5 SECTION SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. If less
than all the Securities are to be redeemed (unless such redemption affects only
a single Security), the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee pro rata, from
the Outstanding Securities not previously called for redemption. Such selection
method may provide for the selection for redemption of portions (equal to $50 or
any integral multiple thereof) of the principal amount of the Securities.
<PAGE>
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
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 amount of such Securities which has
been or is to be redeemed.
22.6 SECTION NOTICE OF REDEMPTION. Notice of redemption (other than
with respect to a redemption which is an Optional Redemption) shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed, at such Holder's address appearing in the Security Register.
All notices of redemption (including, without limitation, Optional
Redemption Notices) given pursuant to this Article XI shall identify the
Securities to be redeemed (including, if relevant, "CUSIP" numbers) and shall
state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(4) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(5) the date on which the right to convert the Securities to be
redeemed will terminate and the places where such Securities may be
surrendered for conversion.
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.
22.7 SECTION DEPOSIT OF REDEMPTION PRICE. Prior to 10:00 a.m. New
York City time on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying
<PAGE>
Agent (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 10.03) an amount of money sufficient to
pay the Redemption Price of, and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest (together with Additional Payments,
if any) on, all the Securities which are to be redeemed on that date.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held
in trust for the redemption of such Security shall (subject to any right of
the Holder of such Security or any Predecessor Security to receive interest
as provided in the last paragraph of Section 3.08) be paid to the Company
upon Company Request or, if then held by the Company, shall be discharged
from such trust.
22.8 SECTION 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) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest
(including Additional Payments, if any) to the Redemption Date; PROVIDED,
HOWEVER, that installments of interest whose Stated Maturity is on or prior
to the Redemption Date shall be payable to the Holders of such Securities, or
one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to the terms and the
provisions of Section 3.08.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
22.9 SECTION SECURITIES REDEEMED IN PART.
(1) In the event of any redemption in part, the Company shall not be
required to (i) issue, register the transfer of or exchange any Security
during a period beginning at the opening of business 15 days before the
date of mailing of a notice of redemption of Securities selected for
redemption and ending at the close of business on the day of such mailing
and (ii) register the transfer of or exchange any Securities so selected
for redemption, in whole or in part, except for the unredeemed portion of
any Securities being redeemed in part.
(2) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities
are listed other than the Private Offerings, Resale and Trading through
Automated Linkages Market, the Company shall not be permitted to effect
such partial redemption and may only redeem the Securities in whole.
(3) Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in
<PAGE>
writing), and the Company shall execute, and the Trustee shall
authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered. If a Global Security is surrendered, such
new Security will (subject to Section 3.06) also be a new Global Security.
23 ARTICLE
24 SUBORDINATION OF SECURITIES
24.1 SECTION AGREEMENT TO SUBORDINATE. The Company covenants and
agrees, and each Holder of Securities by such Holder's acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article XII; and each Holder of a Security, whether
upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions. The payment by the Company of the
principal of, premium, if any, interest (including Additional Payments, if
any) and other Obligations with respect to all Securities issued hereunder
shall, to the extent and in the manner hereinafter set forth, be subordinated
and junior in right of payment to the prior payment in full in cash of
principal of (and premium, if any), interest and all other Obligations with
respect only to all Secured Debt, whether outstanding at the date of this
Indenture or thereafter incurred; PROVIDED, HOWEVER, that no provision of
this Article XII shall prevent the occurrence of any default or Event of
Default hereunder.
24.2 SECTION DEFAULT ON SECURED DEBT. In the event and during the
continuation of any default by the Company in the payment of principal,
premium, if any, interest on or any other Obligation relating to, any Secured
Debt when the same becomes due and payable (a "payment default"), whether at
maturity or at a date fixed for prepayment or by declaration of acceleration
or otherwise, and such default continues beyond the period of grace, if any,
specified in the instrument evidencing such Secured Debt, then unless and
until such default shall have been cured or waived or shall have ceased to
exist or all Secured Debt and all Obligations relating thereto have been paid
in full in cash, no direct or indirect payment or distribution (in cash,
property, securities, by set-off or otherwise) shall be made or agreed to be
made with respect to the principal of (including redemption payments),
premium, if any, or interest on, or any other Obligation relating to, the
Securities or in respect of any redemption, repayment, retirement, purchase
or other acquisition of any of the Securities. In addition, no such payment
or distribution shall be made or agreed to be made if the maturity of any
Secured Debt has been accelerated because of a default.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 12.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to the holders of Secured
Debt, or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Secured Debt may have been
issued, as their respective interests may appear.
<PAGE>
24.3 SECTION LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any direct or
indirect payment by or on behalf of the Company or direct or indirect
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, by set-off or otherwise, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Company or
assignment for the benefit of creditors or marshaling of assets, whether
voluntary or involuntary, or in bankruptcy, insolvency, receivership or other
proceedings, all amounts (including principal, premium, if any, and interest)
due or to become due upon all Secured Debt shall first be paid in full in
cash, or such payment thereof provided for in money in accordance with its
terms, before any payment or distribution is made on account of the principal
(and premium, if any), interest or any other Obligation relating to the
Securities; and upon any such dissolution or winding up or liquidation or
reorganization, any direct or indirect payment by the Company, or direct or
indirect payment or distribution (in cash, property, securities, by set-off
or otherwise) to which the Holders of the Securities or the Trustee would be
entitled, except for the provisions of this Article XII, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Secured Debt (pro rata to such holders on the
basis of the respective amounts of Secured Debt held by such holders, as
calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Secured Debt may have been issued, as their respective
interests may appear, to the extent necessary to pay such Secured Debt in
full, in cash, after giving effect to any concurrent payment or distribution
to or for the holders of such Secured Debt, before any such payment or
distribution is made to the Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, by set-off or otherwise, prohibited by the
foregoing, shall be received by the Trustee or the Holders of the Securities
before all Secured Debt is paid in full in cash, or provision is made for
such payment in cash in accordance with its terms, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Secured Debt or their representative or
representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing such Secured Debt may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Secured Debt remaining unpaid to the extent
necessary to pay such Secured Debt in full in cash in accordance with its
terms, after giving effect to any concurrent payment or distribution to or
for the holders of such Secured Debt.
For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XII with respect
to the Securities only to the payment of all Secured Debt which may at the time
be outstanding; PROVIDED, that (i) such Secured Debt is assumed by the new
corporation, if any,
<PAGE>
resulting from any such reorganization or readjustment, and (ii) the rights
of the holders of such Secured Debt are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company with or into, another
Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of its properties and assets substantially as
an entirety to another Person upon the terms and conditions provided for in
Article VIII hereof shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of,
or payments to, the Trustee under or pursuant to Section 6.07 hereof.
24.4 SECTION SUBROGATION. Subject to the payment in full in cash of
all Secured Debt, the rights of the Holders of the Securities shall be
subrogated to the rights of the holders of such Secured Debt to receive
payments or distributions of cash, property or securities of the Company, as
the case may be, applicable to such Secured Debt until the principal of (and
premium, if any) and interest on the Securities shall be paid in full; and,
for the purposes of such subrogation, no payments or distributions to the
holders of such Secured Debt of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XII, and no payment over pursuant to the
provisions of this Article XII, to or for the benefit of the holders of such
Secured Debt by Holders of the Securities or the Trustee, shall, as between
the Company, its creditors other than holders of Secured Debt, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of such Secured Debt. It is understood that the provisions of this
Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one hand, and the
holders of such Secured Debt on the other hand.
Nothing contained in this Article XII 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 Secured Debt, and the
Holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of
(and premium, if any) and interest (including Additional Payments, if any) on
the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Secured Debt, nor shall anything
herein or therein 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 XII
of the holders of such Secured Debt in respect of cash, property or
securities of the Company, as the case may be, received upon the exercise of
any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XII, the Trustee, subject to the provisions of Section 6.03, and
the Holders of the Securities, shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the
<PAGE>
Securities, for the purposes of ascertaining the Persons entitled to
participate in such distribution, the holders of the Secured Debt and other
indebtedness of the Company, as the case may be, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article XII; PROVIDED that such
court, trustee, receiver, agent or other Person has been apprised of, or the
order, decree or certificate makes reference to, the provisions of this
Article.
24.5 SECTION TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of
Securities by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article XII and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
24.6 SECTION NOTICE BY THE COMPANY. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to
the Company which would prohibit the making of any payment of monies to or by
the Trustee in respect of the Securities pursuant to the provisions of this
Article XII. Notwithstanding the provisions of this Article XII or any other
provision of this Indenture, the Trustee shall not be charged with knowledge
of the existence of any facts which would prohibit the making of any payment
of monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XII, unless and until a Responsible Officer of the
Trustee shall have received written notice thereof at the Corporate Trust
Office of the Trustee from the Company or a holder or holders of Secured Debt
or from any trustee therefor; and before the receipt of any such written
notice, the Trustee, subject to the provisions of Section 6.03 hereof, shall
be entitled in all respects to assume that no such facts exist; PROVIDED,
HOWEVER, that if the Trustee shall not have received the notice provided for
in this Section 12.06 at least two Business Days prior to the date upon which
by the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (and premium, if any) or
interest on any Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive
such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary which may
be received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Section 6.03, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Secured Debt (or a trustee on behalf
of such holder) to establish that such notice has been given by a holder of
such Secured Debt or a trustee on behalf of any such holder or holders. In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Secured Debt
to participate in any payment or distribution pursuant to this Article XII,
the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Secured Debt held by such
Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the right of such
Person under this Article XII, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
<PAGE>
24.7 SECTION RIGHTS OF THE TRUSTEE; HOLDERS OF SECURED DEBT. The
Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XII in respect of any Secured Debt at any time held by
it, to the same extent as any other holder of Secured Debt, and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Secured Debt of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article XII, and no implied covenants or
obligations with respect to the holders of such Secured Debt shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to
owe any fiduciary duty to the holders of such Secured Debt and, subject to
the provisions of Section 6.03, the Trustee shall not be liable to any holder
of such Secured Debt if it shall pay over or deliver to Holders of
Securities, the Company or any other Person money or assets to which any
holder of such Secured Debt shall be entitled by virtue of this Article XII
or otherwise.
24.8 SECTION SUBORDINATION MAY NOT BE IMPAIRED.
(1) No right of any present or future holder of any Secured Debt to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.
(2) Without in any way limiting the generality of the foregoing
paragraph, the holders of Secured Debt may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the holders of the
Securities and without impairing or releasing the subordination provided in
this Article XII or the obligations hereunder of the Holders of the
Securities to the holders of Secured Debt, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, such Secured Debt, or otherwise
amend or supplement in any manner such Secured Debt or any instrument
evidencing the same or any agreement under which such Secured Debt is
outstanding; (ii) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Secured Debt; (iii)
release any Person liable in any manner for the collection of such Secured
Debt; and (iv) exercise or refrain from exercising any rights against the
Company and any other Person.
(3) The subordination provisions of this Article XII shall continue
to be effective or be reinstated, as the case may be, if at any time
payment and performance of the Secured Debt is, pursuant to applicable law,
avoided, recovered, or rescinded or must otherwise be restored or returned
by any holder of Secured Debt, whether as a "voidable preference,"
"fraudulent conveyance," "fraudulent transfer," or otherwise, all as though
such payment or performance had not been made.
<PAGE>
(4) If, upon any proceeding referred to in Section 12.03, the
Trustee does not file a claim in such proceeding prior to fifteen Business
Days before the expiration of the time to file such claim, any Holder of
the Securities, any Holder of Secured Debt or their respective agents may
file such claim on behalf of the Holders of the Securities.
(5) The subordination provisions contained herein are solely for the
benefit of the holders from time to time of Secured Debt and their
representatives, assignees and beneficiaries and may not be rescinded,
canceled, amended or modified in any way other than, as to any holder of
Secured Debt, pursuant to an amendment or modification that is permitted by
the documentation relating to the Secured Debt applicable to such holder.
25 ARTICLE
26 CONVERSION OF SECURITIES
26.1 SECTION CONVERSION RIGHTS. Subject to and upon compliance with
the provisions of this Article, the Securities are convertible, at the option
of the Holders, at any time prior to 5:00 p.m., New York City time, on or
prior to the Tender Notification Date and, in the event of either a
Convertible Remarketing which does not fail or a Failed Final Remarketing, on
and after the Reset Date through February 15, 2030 (except that Securities
called for redemption by the Company shall be convertible at any time prior
to 5:00 p.m., New York City time, on any Redemption Date), into fully paid
and nonassessable shares of Common Stock of the Company. On or prior to the
Tender Notification Date, each Security is initially convertible at the
option of the Holder into 1.0076 shares of Common Stock for each $50 in
aggregate principal amount of Securities (the "Initial Conversion Ratio")
(equal to an initial conversion price of $49.625 principal amount of
Securities per share of Common Stock (the "Initial Conversion Price")). On
and after the Reset Date, the Securities may, at the option of the Trust and
subject to the results of the Remarketing, become nonconvertible or
convertible into a different number of shares of Common Stock, as determined
by the Remarketing Agent in accordance with the terms of the Remarketing
Agreement. The conversion ratio and the equivalent conversion price in
effect at any given time are known as the "Applicable Conversion Ratio" and
the "Applicable Conversion Price," respectively, and are subject to
adjustment as described in this Article XIII. A Holder of Securities may
convert any portion of the principal amount of the Securities into that
number of fully paid and nonassessable shares of Common Stock (calculated as
to each conversion to the nearest 1/100th of a share) obtained by dividing
the principal amount of the Securities to be converted by the Applicable
Conversion Price. In case a Security or portion thereof is called for
redemption, such conversion right in respect of the Security or portion so
called shall expie at the close of business on the corresponding Redemption
Date, unless the Company defaults in making the payment due upon redemption.
<PAGE>
26.2 SECTION CONVERSION PROCEDURES.
(1) In order to convert all or a portion of the Securities, the
Holder thereof shall deliver to the Conversion Agent an irrevocable Notice
of Conversion setting forth the principal amount of Securities to be
converted, together with the name or names, if other than the Holder, in
which the shares of Common Stock should be issued upon conversion and, if
such Securities are definitive Securities, surrender to the Conversion
Agent the Securities to be converted, duly endorsed or assigned to the
Company or in blank. In addition, a Holder of Preferred Securities may
exercise its right under the Declaration to convert such Preferred
Securities into Common Stock by delivering to the Conversion Agent an
irrevocable Notice of Conversion setting forth the information called for
by the preceding sentence and directing the Conversion Agent (i) to
exchange such Preferred Security for a portion of the Securities held by
the Trust (at an exchange rate of $50 principal amount of Securities for
each Preferred Security) and (ii) to immediately convert such Securities,
on behalf of such Holder, into Common Stock of the Company pursuant to this
Article XIII and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the
Company or in blank. So long as any Preferred Securities are outstanding,
the Trust shall not convert any Securities except pursuant to a Notice of
Conversion duly executed and delivered to the Conversion Agent by a Holder
of Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder
will be entitled to receive the interest payable on the subsequent Interest
Payment Date on the portion of Securities to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any Security
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security 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 Securities 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 on
which the Notice of Conversion was received (the "Conversion Date") by the
Conversion Agent from the Holder or from a Holder of the Preferred Securities
effecting a conversion thereof pursuant to its conversion rights under the
Declaration, as the case may be. The Person or Persons entitled to receive
the Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such Common Stock as of the
Conversion Date. As promptly as practicable on or after the Conversion Date,
the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in
lieu of any fraction of any share to the Person or Persons entitled to
receive the same. The Conversion Agent shall deliver such certificate or
certificates to such Person or Persons.
(2) Subject to the right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph
of Section 3.08 and the
<PAGE>
second paragraph of clause (1) of Section 13.02, the Company's delivery
upon conversion of the whole number of shares of Common Stock into which
the Securities are convertible (together with the cash payment, if any,
in lieu of fractional shares) shall be deemed to satisfy the Company's
obligation to pay the principal amount at Maturity of the portion of
Securities so converted and any unpaid interest (including Additional
Payments) accrued on such Securities at the time of such conversion.
(3) No fractional shares of Common Stock will be issued as a result
of conversion, but in lieu thereof, the Company shall pay to the Conversion
Agent a cash adjustment in an amount equal to the same fraction of the
Closing Price of such fractional interest on the date on which the
Securities or Preferred Securities, as the case may be, were duly
surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn
will make such payment, if any, to the Holder of the Securities or the
Holder of the Preferred Securities so converted.
(4) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancellation thereof in
accordance with Section 3.06.
(5) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the Holders of
Preferred Securities (in the exchange of Preferred Securities for
Securities) and as agent of the Holders of Securities (in the conversion of
Securities into Common Stock), as the case may be, directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized
(x) if the Trust exists, (i) to exchange Securities held by or on behalf of
the Trust from time to time for Preferred Securities in connection with the
conversion of such Preferred Securities in accordance with this Article
XIII and (ii) to convert all or a portion of the Securities into Common
Stock and thereupon to deliver such shares of Common Stock in accordance
with the provisions of this Article XIII and to deliver to the Trust a new
Security or Securities for any resulting unconverted principal amount and
(y) if the Trust no longer exists (i) to exchange Securities held by the
Holders in connection with the conversion of such Securities in accordance
with this Article XIII and (ii) to convert all or a portion of the
Securities into Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this Article XIII and to deliver
to such Holders a new Security or Securities for any resulting unconverted
principal amount.
(6) All shares of Common Stock delivered upon any conversion of
Restricted Securities shall bear a restrictive legend substantially in the
form of the legend required to be set forth on such Securities and shall be
subject to the restrictions on transfer provided in such legend and in
Section 3.06(1) hereof. Neither the Trustee nor the Conversion Agent shall
have any responsibility for the inclusion or content of any such
restrictive legend on such Common Stock; provided, however, that the
Trustee or the Conversion Agent shall have provided to the Company or to
the Company's transfer agent for such Common Stock, prior to or
concurrently with a request to the Company to deliver to such
<PAGE>
Conversion Agent certificates for such Common Stock, written notice that
the Securities delivered for conversion are Restricted Securities.
26.3 SECTION CONVERSION PRICE ADJUSTMENTS. The Applicable Conversion
Price shall be subject to adjustment (without duplication) from time to time as
follows:
(1) In case the Company shall pay a dividend or make a distribution
on the Common Stock exclusively in Common Stock, the Applicable Conversion
Price in effect at the opening of business on the day following the date
fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination and the denominator 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 (1),
the number of shares of Common Stock at any time outstanding shall not
include shares held in the treasury of the Company. In the event that such
dividend or distribution is not so paid or made, the Applicable Conversion
Price shall again be adjusted to be the Applicable Conversion Price which
would then be in effect if such dividend or distribution had not occurred.
(2) In case the Company shall pay or make a dividend or other
distribution on its Common Stock consisting exclusively of, or shall
otherwise issue to all holders of its Common Stock, rights or warrants, in
each case entitling the holders thereof to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in subparagraph (7)) of the Common Stock on
the date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Applicable 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 Applicable Conversion
Price by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock which the
aggregate of the offering price of the total number of shares of 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
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of 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. To the extent that rights or warrants are not so issued or
shares of Common Stock are not so delivered after the expiration of such
rights or warrants, the Applicable Conversion Price shall be readjusted to
the Applicable Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights
or warrants that were not issued or expired without being exercised had not
been fixed. For
<PAGE>
the purposes of this subparagraph (2), the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of
the Company.
(3) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Applicable 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 outstanding shares of Common Stock shall
each be combined into a smaller number of shares of Common Stock, the
Applicable 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.
(4) Subject to the last sentence of this subparagraph (4), in case
the Company shall, by dividend or otherwise, distribute to all holders of
its Common Stock evidences of its indebtedness, shares of any class or
series of capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph (2) of this
Section 13.03, any dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in subparagraph (1) of this
Section 13.03), the Applicable Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph (4)
by a fraction of which the numerator shall be the current market price per
share (determined as provided in subparagraph (7) of this Section 13.03) of
the Common Stock on the date fixed for the determination of stockholders
entitled to receive such distribution (the "Reference Date") less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the
Board of Directors), on the Reference Date, of the portion of the evidences
of indebtedness, securities, shares of capital stock, cash and assets so
distributed applicable to one share of Common Stock and the denominator
shall be such current market price per share of the Common Stock, such
reduction to become effective immediately prior to the opening of business
on the day following the Reference Date. In the event that such dividend
or distribution is not so paid or made, the Applicable Conversion Price
shall again be adjusted to be the Applicable Conversion Price which would
then be in effect if such dividend or distribution had not occurred. For
purposes of this subparagraph (4), any dividend or distribution that
includes shares of Common Stock or rights or warrants to subscribe for or
purchase hares of Common Stock shall be deemed instead to be (A) a dividend
or distribution of the evidences of indebtedness, securities, shares of
capital stock, cash or assets other than such shares of Common Stock or
such rights or warrants (making any Applicable Conversion Price reduction
required by this subparagraph (4)) immediately followed by (B) a dividend
or distribution of such shares of Common Stock or such rights or warrants
(making any further Applicable Conversion Price reduction required by
subparagraph (1) or (2) of this Section 13.03),
<PAGE>
except any shares of 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 (1) of this
Section 13.03.
(5) In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding (x) cash
dividends that do not exceed the per share amount of the smallest of the
immediately four preceding quarterly cash dividends (as adjusted to
appropriately reflect any of the events referred to in subparagraphs (1),
(2), (3), (4), (5) and (6)), and (y) cash dividends, the per share amount
of which, together with the aggregate per share amount of any other cash
dividends paid within the 12 months preceding the date of payment of such
cash dividends, does not exceed 12.5% of the current market price per share
(determined as provided in subparagraph (7) of this Section 13.03) of the
Common Stock on the Trading Day next preceding the date of declaration of
such dividend), the Applicable Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by this subparagraph (5)
by a fraction of which the numerator shall be the current market price per
share (determined as provided in subparagraph (7) of this Section 13.03) of
the Common Stock on the date fixed for the payment of such distribution
less the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock, such reduction to
become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; PROVIDED,
HOWEVER, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the
current market price per share (as defined in subparagraph (7) of this
Section 13.03) of the Common Stock on the record date mentioned above, in
lieu of the foregoing adjustment, adequate provision shall be made so that
each Holder of Securities shall have the right to receive upon conversion
the amount of cash such Holder would have received had such Holder
converted each Security immediately prior to the record date for the
distribution of the cash. In the event that such dividend or distribution
is not so paid or made, the Applicable Conversion Price shall again be
adjusted to be the Applicable Conversion Price which would then be in
effect if such record date had not been fixed.
(6) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion
of the Company's Common Stock shall expire and such tender or exchange
offer shall involve the payment by the Company or such Subsidiary of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have
been amended) that exceeds 110% of the current market price per share
(determined as provided in subparagraph (7) of this
<PAGE>
Section 13.03) of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Applicable Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the
Applicable Conversion Price in effect immediately prior to the
effectiveness of the Applicable Conversion Price reduction contemplated
by this subparagraph (6) by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding (including any tendered
or exchanged shares) at the Expiration Time multiplied by the current
market price per share (determined as provided in subparagraph (7) of
this Section 13.03) of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of
(x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares)
at the Expiration Time and the current market price per share
(determined as provided i subparagraph (7) of this Section 13.03) of the
Common Stock on the Trading Day next succeeding the Expiration Time,
such reduction to become effective immediately prior to the opening of
business on the day following the Expiration Time.
(7) For the purpose of any computation under subparagraphs (2), (4),
(5) and (6) of this Section 13.03, the current market price per share of
Common Stock on any date in question shall be deemed to be the average of
the daily Closing Prices for the ten consecutive Trading Days prior to the
earlier of the day in question and, if applicable, the day before the "ex"
date (as hereinafter defined) with respect to the issuance or distribution
requiring such computation; PROVIDED, HOWEVER, that if the day in question
or the "ex" date for any event (other than the issuance or distribution
requiring such computation) that requires an adjustment to the Applicable
Conversion Price pursuant to Section 13.03 (2), (4), (5) or (6) occurs
during such 10 consecutive Trading Days, the Closing Price for each Trading
Day prior to such date for such other event shall be adjusted by
multiplying such Closing Price by the same fraction by which the Applicable
Conversion Price is so required to be adjusted as a result of such other
event. For purposes of this subparagraph (7), the term "ex" date (I) when
used with respect to any issuance or distribution, means the first date on
which the Common Stock trades regular way on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (II) when used with respect
to any subdivision or combination of shares of Common Stock, means the
first date on which the Common Stock trades regular way on such exchange or
in such market after the time at which such subdivision or combination
becomes effective and (III) when used with respect to any tender or
exchange offer means the first date on which the Common Stock trades
regular way on such exchange or in such market after the Expiration Time of
such offer. Notwithstanding the foregoing, whenever successive adjustments
to the Applicable Conversion Price are called for pursuant to this Section
13.03, such adjustments shall be made to the current market price as may be
necessary or
<PAGE>
appropriate to effectuate the intent of this Section 13.03 and to avoid
unjust or inequitable results, as determined in good faith by the Board of
Directors.
(8) The Company may make such reductions in the Applicable
Conversion Price, in addition to those required by subparagraphs (1), (2),
(3), (4), (5) and (6), as it considers to be advisable to avoid or diminish
any income tax to holders of Common Stock or rights to purchase Common
Stock resulting from any dividend or distribution of stock (or rights to
acquire stock) or from any event treated as such for income tax purposes.
(9) No adjustment of the Applicable Conversion Price shall be made
upon (a) the issuance of any shares of Common Stock pursuant to any present
or future plan providing for the reinvestment of dividends or interest
payable on securities of the Company and the investment of additional
optional amounts in shares of Common Stock under that plan, (b) the
issuance of any shares of Common Stock or options or rights to purchase
such shares pursuant to any present or future employee, director or
consultant benefit plan or program of the Company, (c) the issuance of any
shares of Common Stock pursuant to any option, warrant, right, or
exercisable, exchangeable or convertible security outstanding as of the
date the Securities were first issued or (d) the repurchase of the
Securities if the acquisition of ACS is not consummated by March 31, 2000,
pursuant to Section 10.09. There shall also be no adjustment of the
Applicable Conversion Price in case of the issuance of any Common Stock (or
securities convertible into or exchangeable for Common Stock), except as
specifically described above. Furthermore, no adjustment in the Applicable
Conversion Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Applicable Conversion Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this
subparagraph (9) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall
be required.
26.4 SECTION RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE OF ASSETS.
In the event that the Company shall be a party to any transaction (including
without limitation (a) any recapitalization or reclassification of the Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision or combination
of the Common Stock), (b) any consolidation of the Company with, or merger of
the Company into, any other Person, or any merger of another Person into the
Company (other than a consolidation or merger which does not result in a
reclassification, conversion, exchange or cancellation of outstanding shares of
Common Stock of the Company), (c) any sale or transfer of all or substantially
all of the assets of the Company or (d) any compulsory share exchange) (each of
the events in the preceding clauses (a) through (d) being referred to as a
"Company Transaction"), in each case, as a result of which shares of Common
Stock shall be converted into the right to receive other securities, cash or
other property, then lawful provision shall be made as part of the terms of such
Company Transaction whereby the Holder of each Security then outstanding shall
have the right thereafter to convert such Security only into (i) in the case of
any such transaction other than a Common Stock Fundamental Change, the kind and
amount of
<PAGE>
securities, cash and other property receivable upon consummation of such
Company Transaction by a holder of the number of shares of Common Stock of
the Company into which such Security could have been converted immediately
prior to such Company Transaction, after giving effect to any adjustment in
the Applicable Conversion Price required by the provision of Sections
13.07(1)(A), and (B) in the case of a Company Transaction involving a Common
Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an amount
determined pursuant to the provisions of Section 13.07(1)(B). Holders of the
Securities shall have no votingrights with respect to any Company Transaction
described in this Section 13.04.
The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate
or articles of incorporation or other constituent document to establish such
right. Such certificate or articles of incorporation or other constituent
document shall provide for adjustments which, for events subsequent to the
effective date of such certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article XIII. The above provisions
shall similarly apply to successive transactions of the foregoing type.
26.5 SECTION NOTICE OF ADJUSTMENTS OF CONVERSION PRICE. Whenever the
Applicable Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Applicable Conversion
Price and shall prepare a certificate signed by the Chief Financial Officer
or the Treasurer of the Company setting forth the adjusted Applicable
Conversion Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with the
Trustee, the Conversion Agent and the transfer agent for the Preferred
Securities and the Securities; and
(2) a notice stating the Applicable Conversion Price has been
adjusted and setting forth the adjusted Applicable Conversion Price shall
as soon as practicable be mailed by the Company to all record Holders of
Preferred Securities and the Securities at their last addresses as they
appear upon the stock transfer books of the Company and the books and
records of the Trust, respectively.
26.6 SECTION PRIOR NOTICE OF CERTAIN EVENTS. In case:
(1) the Company shall (A) declare any dividend (or any other
distribution) on its Common Stock, other than (i) a dividend payable in
shares of Common Stock or (ii) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.03(4) or (5) or (B) authorize
a tender or exchange offer that would require an adjustment pursuant to
Section 13.03(6);
(2) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or series or of any other rights or warrants;
<PAGE>
(3) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party
and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the Company or of any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or other property; or
(4) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause
to be filed with the transfer agent for the Preferred Securities, and shall
cause to be mailed to the Holders of record of the Preferred Securities, at
their last addresses as they shall appear upon the books and records of the
Trust or (b) if no Preferred Securities are outstanding, shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least fifteen days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which
a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined or (y) the
date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock
for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
26.7 SECTION ADJUSTMENTS IN CASE OF FUNDAMENTAL CHANGES.
(1) Notwithstanding any other provision in this Article XIII to the
contrary, in the case of any Company Transaction involving a Fundamental
Change, then the Applicable Conversion Price will be adjusted immediately
after such Fundamental Change as follows:
(A) in the case of a Non-Stock Fundamental Change, the
Applicable Conversion Price of the Securities shall thereupon become
the lower of (i) the Applicable Conversion Price immediately prior to
such Non-Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to this Article XIII, and
(ii) the result obtained by multiplying the greater of the Relevant
Price or the then applicable Reference Market Price by a fraction of
which the numerator shall be $50 and the denominator shall be the
then-current Optional Redemption Price or, on or prior to February 20,
2003 and at any time after the Reset Date at which the Securities are
not redeemable at the option of the Company, an amount per Security
determined by the Company in its sole
<PAGE>
discretion, after consultation with a nationally recognized investment
banking firm, to be the equivalent of the hypothetical Redemption
Price that would have been applicable if the Securities had been
redeemable during such period (such fraction shall hereinafter be
referred to as the "Optional Redemption Ratio") (such product shall
hereinafter be referred to as the "Adjusted Relevant Price" or the
"Adjusted Reference Market Price," as the case may be); and
(B) in the case of a Common Stock Fundamental Change, the
Applicable Conversion Price of the Securities in effect immediately
prior to such Common Stock Fundamental Change, but after giving effect
to any other prior adjustments effected pursuant to this Article XIII,
shall thereupon be adjusted by multiplying such Applicable Conversion
Price by a fraction of which the numerator shall be the Purchaser
Stock Price and the denominator shall be the Relevant Price; PROVIDED,
HOWEVER, that in the event of a Common Stock Fundamental Change in
which (i) 100% of the value of the consideration received by a holder
of Common Stock is common stock of the successor, acquiror or other
third party (and cash, if any, is paid only with respect to any
fractional interests in such common stock resulting from such Common
Stock Fundamental Change) and (ii) all of the Common Stock shall have
been exchanged for, converted into or acquired for common stock (and
cash with respect to fractional interests) of the successor, acquiror
or other third party, the Applicable Conversion Price of the
Securities in effect immediately prior to such Common Stock
Fundamental Change shall thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall
be one and the denominator shall be the number of shares of common
stock of the successor, acquiror, or other third party received by a
stockholder for one share of Common Stock as a result of such Common
Stock Fundamental Change.
(2) DEFINITIONS. The following definitions shall apply to terms
used in this Article XIII:
(A) "CLOSING PRICE" of any security on any day shall mean on
any day the last reported sale price of such security on such day, or
in case no sale takes place on such day, the average of the closing
bid and asked prices in each case on the principal national securities
exchange on which such securities are listed or admitted to trading
or, if not listed or admitted to trading on any national securities
exchange, on the NNM or, if such securities are not listed or admitted
to trading on any national securities exchange or quoted on the NNM,
the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange
member firm selected by the Company for such purpose.
(B) "COMMON STOCK FUNDAMENTAL CHANGE" shall mean 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 holders of Common Stock
<PAGE>
consists of common stock that for each of the ten consecutive Trading
Days immediately prior to and including the Entitlement Date has been
admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the NNM,
PROVIDED, HOWEVER, that a Fundamental Change shall not be a Common
Stock Fundamental Change unless either:
(i) the Company continues to exist after the occurrence of
the Fundamental Change and the outstanding Preferred Securities
continue to remain outstanding without having been converted into
another security; or
(ii) not later than the occurrence of the Fundamental
Change, the Outstanding Securities are converted into or
exchanged for debentures of a corporation succeeding to the
business of the Company, which debentures have terms
substantially similar to the Securities.
(C) "ENTITLEMENT DATE" shall mean the record date for
determination of the holders of Common Stock entitled to receive
securities, cash or other property in connection with a Non-Stock
Fundamental Change or a Common Stock Fundamental Change or, if there
is no such record date, the date upon which holders of Common Stock
shall have the right to receive such securities, cash or other
property.
(D) "FUNDAMENTAL CHANGE" shall mean the occurrence of any
transaction or event in connection with a Company Transaction pursuant
to which all or substantially all of the Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the
right to receive securities, cash or other property (whether by means
of an exchange offer, liquidation, tender offer, consolidation,
merger, combination, reclassification, recapitalization or otherwise);
PROVIDED, HOWEVER, in the case of a Company Transaction involving more
than one such transaction or event, for purposes of adjustment of the
Applicable Conversion Price, such Fundamental Change shall be deemed
to have occurred when substantially all of the Common Stock of the
Company shall be exchanged for, converted into, or acquired for or
constitute solely the right to receive securities, cash or other
property, but the adjustment shall be based upon the highest weighted
average of consideration per share that a holder of Common Stock could
have received in such transactions or events as a result of which more
than 50% of the Common Stock of the Company shall have been exchanged
for, converted into, or acquired for or constitute solely the right to
receive securities, cash or other property.
(E) "NON-STOCK FUNDAMENTAL CHANGE" shall mean any Fundamental
Change other than a Common Stock Fundamental Change.
<PAGE>
(F) "PURCHASER STOCK PRICE" shall mean, with respect to any
Common Stock Fundamental Change, the average of the daily Closing
Prices of the common stock received in such Common Stock Fundamental
Change for the ten (10) consecutive Trading Days prior to and
including the Entitlement Date, as adjusted in good faith by the Board
of Directors to appropriately reflect any of the events referred to in
subparagraphs (1), (2), (3), (4), (5) and (6) of Section 13.03.
(G) "REFERENCE MARKET PRICE" shall initially mean on the date
of original issuance of the Securities, $26.875 (which is an amount
equal to 66b% of the last reported sale price for the Common Stock on
the New York Stock Exchange Composite Tape on February 3, 2000) and,
in the event of any adjustment to the Applicable Conversion Price from
such date to (but excluding) the Reset Date, other than as a result of
a Non-Stock Fundamental Change, the Reference Market Price shall also
be adjusted so that the ratio of the Reference Market Price to the
Applicable Conversion Price after giving effect to any such adjustment
shall always be the same as the ratio of $26.875 to the Initial
Conversion Price. If the Securities are convertible into Common Stock
on and after the Reset Date, the Reference Market Price on such date
will be an amount equal to 66b% of the Closing Price of the Common
Stock on the Reset Date and, in the event of any adjustment to the
Applicable Conversion Price from the Reset Date and thereafter, other
than as a result of a Non-Stock Fundamental Change, the Reference
Market Price shall also be adjusted so that the ratio of the Reference
Market Price to the Applicable Conversion Price after giving effect to
any such adjustment shall always be the same as the ratio of the
Closing Price of the Common Stock on the Reset Date to the Term
Conversion Price.
(H) "RELEVANT PRICE" shall mean (i) in the event of a Non-Stock
Fundamental Change in which the holders of the Common Stock receive
only cash, the amount of cash received by a stockholder for one share
of Common Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Common Stock Fundamental Change, the average
of the daily Closing Prices of the Common Stock for the ten
consecutive Trading Days prior to and including the Entitlement Date,
in each case, as adjusted in good faith by the Company to
appropriately reflect any of the events referred to in subparagraphs
(1), (2), (3), (4), (5) and (6) of Section 13.03.
(I) "TRADING DAY" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to
determine the Closing Price.
26.8 SECTION DIVIDEND OR INTEREST REINVESTMENT PLANS.
(1) Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any present or future plan providing for
the reinvestment of dividends or interest payable on securities of the
Company and the investment of
<PAGE>
additional optional amounts in shares of Common Stock under any such plan,
and the issuance of any shares of Common Stock or options or rights to
purchase such shares pursuant to any present or future employee, director
or consultant benefit plan or program of the Company or pursuant to any
option, warrant, right or exercisable, exchangeable or convertible security
outstanding as of the date the Securities were first issued, shall not be
deemed to constitute an issuance of Common Stock or exercisable,
exchangeable or convertible securities by the Company to which any of the
adjustment provisions described above applies.
(2) There shall also be no adjustment of the Applicable Conversion
Price in case of the issuance of any stock (or securities convertible into
or exchangeable for stock) of the Company except as specifically described
in this Article XIII.
26.9 SECTION CERTAIN ADDITIONAL RIGHTS. Notwithstanding any other
provision in Section 13.03 to the contrary, rights, warrants, evidences of
indebtedness, other securities, cash or other assets (including, without
limitation, any rights distributed pursuant to any stockholder rights plan)
shall be deemed not to have been distributed for purposes of this Article XIII
if the Company makes proper provision so that each Holder who converts a
Security (or any portion thereof) after the date fixed for determination of
stockholders entitled to receive such distribution shall be entitled to receive
upon such conversion, in addition to the shares of Common Stock issuable upon
such conversion, the amount and kind of such distributions that such Holder
would have been entitled to receive if such Holder had, immediately prior to
such determination date, converted such Security into Common Stock.
26.10 SECTION RESTRICTIONS ON COMMON STOCK ISSUABLE UPON CONVERSION.
If shares of Common Stock to be issued upon conversion of a Security in respect
of Restricted Preferred Securities are to be registered in a name other than
that of the Holder of such Preferred Security, then the Person in whose name
such shares of Common Stock are to be registered must deliver to the Conversion
Agent a certificate satisfactory to the Company and signed by such Person, as to
compliance with the restrictions on transfer applicable to such Preferred
Security. Neither the Trustee nor any Conversion Agent or Registrar shall be
required to register in a name other than that of the Holder, shares of Common
Stock issued upon conversion of any such Security in respect of such Preferred
Securities not so accompanied by a properly completed certificate.
26.11 SECTION TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION
PRICE OR ADJUSTMENTS. Neither the Trustee nor any Conversion Agent shall at any
time be under any duty or responsibility to any Holder of any Security to
determine whether any facts exist which may require any adjustment of the
Applicable Conversion Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any Conversion Agent shall be accountable with respect to the
validity or value (or the kind or amount) of any shares of Common Stock or of
any securities or property, which may at any time be issued or delivered upon
the conversion of any Security; and neither the Trustee nor any Conversion Agent
makes any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment
<PAGE>
or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property upon the surrender of any
Security for the purpose of conversion, or, except as expressly herein
provided, to comply with any of the covenants of the Company contained in
Article X or this Article XIII.
[Signature page follows.]
<PAGE>
This Indenture 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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, as of the day and year first above written.
THE TITAN CORPORATION
By:
---------------------------------------
Name:
Title:
WILMINGTON TRUST COMPANY, as Trustee
By:
---------------------------------------
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include if a Global Security: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE
NAME OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS 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) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK) TO THE TITAN CORPORATION
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include Restricted Securities Legend if required under Section 2.02:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT
OF 1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER
OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON CONVERSION HEREOF
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
1
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TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]
THE TITAN CORPORATION
Convertible Senior Subordinated
Debenture Due 2030
No. $
[CUSIP No. ]
THE TITAN CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called "the Company," which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to , or
registered assigns, the principal sum [indicated on Schedule A hereof](1)
[of Dollars](2) ($ ) on February 15, 2030.
Interest Payment Dates: February 15, May 15, August 15 and November 15,
commencing May 15, 2000
Regular Record Dates: The close of business on the 1st day of each
February, May, August and November immediately
preceding the applicable Interest Payment Date
- ---------------
(1) Applicable to Global Securities only.
(2) Applicable to certificated Securities only.
2
<PAGE>
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
signed manually or by facsimile by its duly authorized officers.
Dated: ,
THE TITAN CORPORATION
By:
------------------------------------
Name:
Title:
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<PAGE>
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: , Wilmington Trust Company,
as Trustee
By:
-----------------------------------
Authorized Signatory
4
<PAGE>
[FORM OF REVERSE OF SECURITY]
THE TITAN CORPORATION
Convertible Senior Subordinated
Debenture Due 2030(3)
1. INTEREST. THE TITAN CORPORATION, a Delaware corporation (the
"Company"), is the issuer of this Convertible Senior Subordinated Debenture
Due 2030 (the "Security") limited in aggregate principal amount to
$206,185,600 (or up to $257,732,000 to the extent the over-allotment option
is exercised in full), issued under the Indenture hereinafter referred to.
The Company promises to pay interest on the Securities in cash from February
9, 2000 or from the most recent interest payment date to which interest has
been paid or duly provided for, quarterly (subject to deferral for up to 20
consecutive quarters as described in Section 3 hereof) in arrears on February
15, May 15, August 15 and November 15 of each year (each such date, an
"Interest Payment Date"), commencing May 15, 2000, at the Applicable Rate,
PLUS Additional Payments, if any, until the principal hereof shall have
become due and payable. If the Reset Date is prior to the Regular Record
Date for the immediately following Interest Payment Date, then interest and
Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Interest Payment Date shall be paid on
such Interest Payment Date to the person in whose name each Security is
registered on the relevant Regular Record Date, subject to the right of the
Company to initiate a Deferral Period. If the Reset Date is on or after the
Regular Record Date for the immediately following Interest Payment Date, then
(1) interest and Additional Amounts, if any, accrued from and after the
Regular Record Date to but excluding the Reset Date shall be paid on the
immediately following Interest Payment Date to the person in whose name each
Security is registered on the relevant Regular Record Date and (2) interest
and Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Interest Payment Date shall be paid on
the second Interest Payment Date immediately following the Reset Date to the
person in whose name each Security is registered on the relevant Regular
Record Date for such second Interest Payment Date, subject in each case to
the right of the Company to initiate a Deferral Period. Prior to the Reset
Date, the Applicable Rate shall be 5.75% per annum. On and after the Reset
Date, the Applicable Rate shall be the rate established by the Remarketing
Agent to be effective on the Reset Date.
The amount of interest payable for any period will be computed on
the basis of twelve 30-day months and a 360-day year. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed
on the basis of the actual number of days elapsed in such a 30-day
- ---------------
(3) All terms used in this Security which are defined in the Indenture
or in the Declaration referred to herein shall have the meanings assigned to
them in the Indenture or the Declaration, as the case may be.
5
<PAGE>
month. In the event that any date on which interest is payable on the
Securities is not a Business Day, then payment of interest payable on such
date will be made on the next succeeding day which is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. To the extent
lawful, the Company shall pay interest on overdue installments of interest
(without regard to any applicable grace period) at the rate borne by the
Securities, compounded quarterly. Any interest paid on this Security shall
be increased to the extent necessary to pay Additional Amounts as set forth
in this Security.
2. ADDITIONAL AMOUNTS. The Company shall pay to Titan Capital
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount
of dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with
the terms thereof shall not be reduced as a result of any additional taxes,
duties and other governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other taxing authority.
3. EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event of
Default has occurred and is continuing, the Company shall have the right, at
any time during the term of this Security, from time to time to defer
payments of interest by extending the interest payment period of such
Security for up to 20 consecutive quarters (a "Deferral Period"); PROVIDED
that no Deferral Period may extend beyond (i) the Maturity (whether at
February 15, 2030 or by declaration of acceleration, call for redemption or
otherwise) or (ii) in the case of a Deferral Period that begins prior to the
Reset Date, the Reset 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 Section 3.13 of the Indenture, will
bear interest thereon at the Applicable Rate compounded quarterly for each
quarter of the Deferral Period ("Compounded Interest"). On the applicable
Payment Resumption Date, the Company shall pay all interest then accrued and
unpaid on the Securities, including any Compounded Interest that shall be
payable to the Holders of the Securities in whose names the Securities are
registered in the Security Register on the record date fixed for such Payment
Resumption Date. Before the termination of any Deferral Period, the Company
may further extend such period, provided that such period together with all
such further extensions thereof shall not exceed 20 consecutive quarters or
extend beyond (i) the Maturity (whether at February 15, 2030 or by
declaration of acceleration, call for redemption or otherwise) or (ii) in the
case of a Deferral Period that begins prior to the Reset Date, the Reset
Date. Upon the termination of any Deferral Period and upon the payment of
all Compounded Interest and Additional Amounts (together, "Additional
Payments"), if any, then due, the Company may commence a new Deferral Period,
subject to the foregoing requirements. No interest shall be due and payable
during a Deferral Period except on the applicable Payment Resumption Date.
The Company shall give the Holder of the Security and the Trustee
written notice (a "Deferral Notice") of its selection of a Deferral Period at
least ten days prior to the record date
6
<PAGE>
for any distributions that would have been payable on the Trust Securities
except for the decision to begin or extend such Deferral Period. The Company
may elect to pay all interest then accrued and unpaid on the Securities,
including Compounded Interest, on an Interest Payment Date prior to its most
recently established Payment Resumption Date, PROVIDED that the Company gives
the Holder of the Security and the Trustee a new Deferral Notice setting
forth the revised Payment Resumption Date at least three Business Days prior
to the Regular Record Date for such revised Payment Resumption Date.
The quarter in which any Deferral Notice is given pursuant to the
second paragraph of this Section 3 shall be counted as one of the 20 quarters
permitted in the maximum Deferral Period permitted under the first paragraph
of this Section 3.
4. METHOD OF PAYMENT. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date, commencing on May
15, 2000, will, as provided in the Indenture, be paid to the Person in whose
name this Security (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 close of business on the 1st day of February,
May, August and November, as applicable, immediately preceding each Interest
Payment Date, or such other Person as described herein or therein. If the
Reset Date is prior to the Regular Record Date for the immediately following
Interest Payment Date, then interest and Additional Amounts, if any, accrued
from and after the Reset Date to but excluding the immediately following
Interest Payment Date shall be paid on such Interest Payment Date to the
person in whose name each Security is registered on the relevant Regular
Record Date, subject to the right of the Company to initiate a Deferral
Period. If the Reset Date is on or after the Regular Record Date for the
immediately following Interest Payment Date, then (1) interest and Additional
Amounts, if any, accrued from and after the Regular Record Date to but
excluding the Reset Date shall be paid on the immediately following Interest
Payment Date to the person in whose name each Security is registered on the
relevant Regular Record Date and (2) interest and Additional Amounts, if any,
accrued from and after the Reset Date to but excluding the immediately
following Interest Payment Date shall be paid on the second Interest Payment
Date immediately following the Reset Date to the person in whose name each
Security is registered on the relevant Regular Record Date for such second
Interest Payment Date, subject in each case to the right of the Company to
initiate a Deferral Period. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities not less than ten days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in said Indenture; PROVIDED that any such payment will be made
by wire transfer or check in such coin or currency of the United States of
America which at the time is a legal tender for payment of public and private
debts.
7
<PAGE>
Payment of the principal of and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in
New York, New York, by wire transfer or check in such coin or currency of the
United States of America which at the time of payment is legal tender for
payment of public and private debts; PROVIDED, HOWEVER, that at any time that
the Property Trustee is not the sole Holder of the Securities, payment of
interest may, at the option of the Company, be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by wire transfer.
5. PAYING AGENT AND SECURITY REGISTRAR. The Trustee will act as
Paying Agent, Security Registrar and Conversion Agent. The Company may
change any Paying Agent, Security Registrar, co-registrar or Conversion Agent
without prior notice. The Company or any of its Affiliates may act in any
such capacity.
6. INDENTURE. The Company issued the Securities under an
indenture, dated as of February 9, 2000 (the "Indenture"), between the
Company and Wilmington Trust Company, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (15 U.S. Code Sections 77aaa-77bbbb) (the "Trust
Indenture Act") as in effect on the date of the Indenture. The Securities
are subject to, and qualified by, all such terms, certain of which are
summarized hereon, and Holders are referred to the Indenture and the Trust
Indenture Act for a statement of such terms. The Securities are unsecured
general obligations of the Company limited to $206,185,600 in aggregate
principal amount (or up to $257,732,000 to the extent the over-allotment
option is exercised in full) and subordinated in right of payment only to all
existing and future Secured Debt of the Company. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Security at the times, place and
rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture.
7. OPTIONAL REDEMPTION. The Securities are redeemable at the
Company's option at any time and from time to time (an "Optional Redemption")
(i) in whole or in part, at any time or from time to time, prior to the Reset
Date but on or after February 20, 2003 until (but excluding) the Tender
Notification Date, at a Redemption Price (the "Initial Redemption Price")
equal to the prices per $50 principal amount of Securities set forth in the
table below, plus any accrued and unpaid interest, including Additional
Payments, if any, to the Redemption Date, if redeemed during the 12-month
period up to but excluding February 20:
8
<PAGE>
<TABLE>
<CAPTION>
Price Per $50
Principal
Year Amount
---- -------------
<S> <C>
2004 ................... $50.7188
2005 ................... $50.0000
</TABLE>
(ii) after the Reset Date (except in the event of a Failed Final
Remarketing), in accordance with the Term Call protections, if any,
established in connection with the Remarketing and (iii) in whole or in part,
at any time on or after the third anniversary of the Reset Date following a
Failed Final Remarketing at a redemption price equal to 100% of the then
outstanding aggregate principal amount of the Securities to be redeemed, plus
accrued and unpaid interest thereon; PROVIDED, HOWEVER, that the Company
shall not be permitted to redeem any Securities pursuant to this Section
during any Deferral Period.
If the Company desires to consummate an Optional Redemption, it
must cause to be sent, at its own expense, notice of such intent (an
"Optional Redemption Notice"), via first-class mail, postage prepaid, to each
Holder of Securities to be redeemed, at such Holder's address appearing in
the Security Register. Holders receiving an Optional Redemption Notice have
the right, upon notification of the Trustee and the Conversion Agent prior to
5:00 p.m. New York City time on the Optional Redemption Date, to convert
their Securities called for redemption into common stock of the Company, par
value $.01 per share ("Common Stock"), at the Applicable Conversion Ratio
prior to 5:00 p.m. New York City time on the Optional Redemption Date in
compliance with Article XIII of the Indenture. "Optional Redemption Date"
means the date which is not less than 20, nor more than 60, days following
the date on which the Optional Redemption Notice is sent, as specified in the
Optional Redemption Notice (or if such date is not a Business Day, the next
succeeding Business Day).
Securities in denominations larger than $50 may be redeemed in part
but only in integral multiples of $50. In the event of a redemption of less
than all of the Securities, the Securities will be chosen for redemption by
the Trustee pro rata in accordance with the Indenture. In the event of
redemption of this Security in part only, a new Security or Securities for
the unredeemed portion hereof will be issued in the name of the Holder hereof
upon the cancellation hereof. On and after the Redemption Date, interest
ceases to accrue on the Securities or portions of them called for redemption.
8. THE REMARKETING. At least 30 Business Days but not more than
90 Business Days prior to February 15, 2005, the Company will cause a notice
to be sent to all Holders of Securities stating whether it intends to
remarket the Securities as Securities which will be convertible into Common
Stock or which will be nonconvertible. All Securities will be deemed
tendered for remarketing unless the Holder thereof delivers irrevocable
notice to the contrary to the Tender Agent prior to 5:00 p.m., New York City
time on the Tender Notification Date (or, if such day is not a Business Day,
the next succeeding Business Day) (the "Tender Notification Date"). The
Remarketing Agent will establish, pursuant to the terms of the Remarketing
9
<PAGE>
Agreement, the Term Provisions, including the Term Rate at which interest
will accrue on the Securities, to be effective beginning on the Reset Date.
A Holder of Securities that has not duly given notice that it will retain its
Securities will cease to have any further rights with respect to such
Securities upon the successful remarketing thereof, except the right of such
Holder to receive an amount equal to (i) from the proceeds of the
Remarketing, 101% of the aggregate principal amount of the Securities, plus
(ii) from the Company, any accrued but unpaid interest (including Additional
Payments, if any) to (but excluding) the Reset Date. In the event of a
Failed Final Remarketing, the Remarketing Agent will set the Term Provisions
in accordance with the Remarketing Agreement.
9. OPTIONAL REDEMPTION UPON TAX EVENT. Subject to the conditions
set forth in the Indenture, the Securities are subject to redemption in
whole, but not in part, if a Tax Event shall occur and be continuing, at any
time within 90 days following the occurrence of such Tax Event, at a
Redemption Price equal to $50 per $50 principal amount thereof, plus accrued
but unpaid interest, including Additional Payments, if any, to the Redemption
Date.
In lieu of the foregoing, the Company shall also have the option of
causing the Securities to remain outstanding and pay Additional Amounts on
the Securities.
10. NOTICE OF REDEMPTION IN CONNECTION WITH A TAX EVENT. In case
of a redemption in connection with a Tax Event, notice of redemption will be
mailed by first-class mail, postage prepaid, at least 30 days but not more
than 60 days before the Redemption Date to each Holder of the Securities to
be redeemed at such Holder's address appearing in the Security Register.
11. MANDATORY REDEMPTION. The Securities will mature, and the
Company must redeem the securities in whole and not in part, on February 15,
2030 at a price equal to the aggregate principal amount thereof, plus accrued
and unpaid interest, including Additional Payments, if any, to the Redemption
Date. The failure of the Company to redeem all Outstanding Securities on
February 15, 2030 shall constitute an Event of Default.
12. NO SINKING FUND. There are no sinking fund payments with
respect to the Securities.
13. PAYMENT TO REGISTERED HOLDERS; CESSATION OF INTEREST ACCRUAL
UPON REDEMPTION.
If this Security is redeemed subsequent to a Regular Record Date
with respect to any Interest Payment Date specified above and on or prior to
such Interest Payment Date, then any accrued interest (and Additional
Payments, if any) will be paid to the person in whose name this Security is
registered at the close of business on such record date.
On or after the Redemption Date, interest will cease to accrue on
the Securities, or portion thereof, called for redemption.
10
<PAGE>
14. SUBORDINATION. The payment of the principal of, interest on
or any other amounts due on the Securities is subordinated in right of
payment only to all existing and future Secured Debt (as defined below) of
the Company, as described in the Indenture. Each Holder, by accepting a
Security, agrees to such subordination and authorizes and directs the Trustee
on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and appoints the Trustee as its
attorney-in-fact for such purpose.
"Secured Debt" means Debt under the Credit Agreement and any Debt
that by its terms is secured by any lien, pledge, charge, encumbrance,
mortgage, deed of trust, hypothecation, assignment or security interest with
respect to assets having or intended to have an aggregate fair market value
at the time of the grant thereof (in the judgment of the board of directors,
the chief financial officer or other responsible agent or officer of the
Company) not less than the amount of such Debt.
15. CONVERSION. The Holder of any Security has the right,
exercisable at any time prior to 5:00 p.m., New York City time, on or prior
to the Tender Notification Date or, in the event of a Convertible Remarketing
or a Failed Final Remarketing, from and after the Reset Date through February
15, 2030 (except that Securities called for redemption by the Company will be
convertible at any time prior to 5:00 p.m., New York City time, on any
Redemption Date) to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50) into shares of Common Stock. On
or prior to the Tender Notification Date, each Security is initially
convertible, at the option of the Holder into 1.0076 shares of Common Stock
for each $50 in aggregate principal amount of Securities (equivalent to an
initial conversion price of $49.625 per share of Common Stock). On and after
the Reset Date, the Securities may, at the option of the Company and subject
to the results of the Remarketing, become nonconvertible or convertible into
a different number of shares of Common Stock. The conversion ratio and
equivalent conversion price in effect at any time are known as the
"Applicable Conversion Price" and the "Applicable Conversion Ratio,"
respectively, and are subject to adjustment under certain circumstances. If
a Security is called for redemption, the conversion right will terminate at
5:00 p.m., New York City time on the corresponding Redemption Date, unless
the Company defaults in making the payment due upon redemption.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender
the Security (other than a Global Security) to a Conversion Agent, (3)
furnish appropriate endorsements or transfer documents if required by the
Security Registrar or Conversion Agent and (4) pay any transfer or similar
tax, if required. Upon conversion, no adjustment or payment will be made for
interest or dividends, but if any Holder surrenders a Security for conversion
after the close of business on the Regular Record Date for the payment of an
installment of interest and prior to the opening of business on the next
Interest Payment Date, then, notwithstanding such conversion, the interest
payable on such Interest Payment Date will be paid to the registered Holder
of such Security on such Regular Record Date. In such event, such Security,
when surrendered for conversion, need not be accompanied by payment of an
amount equal to the interest payable on such Interest Payment
11
<PAGE>
Date on the portion so converted. The number of shares issuable upon
conversion of a Security is determined by dividing the principal amount of
the Security converted by the Applicable Conversion Price in effect on the
Conversion Date. No fractional shares will be issued upon conversion but a
cash adjustment will be made for any fractional interest. The outstanding
principal amount of any Security shall be reduced by the portion of the
principal amount thereof converted into shares of Common Stock.
16. REGISTRATION RIGHTS. The holders of the Preferred Securities,
the Securities, the Guarantee Agreement and the shares of Common Stock of the
Company issuable upon conversion of the Securities (collectively, the
"Registrable Securities") are entitled to the benefits of a Registration
Rights Agreement, dated as of February 9, 2000 among the Company, the Trust
and the Initial Purchasers (the "Registration Rights Agreement"). Pursuant
to the Registration Rights Agreement the Company and the Trust have agreed
for the benefit of the holders of the Registrable Securities that (i) they
will, at the Company's sole expense, prior to April 24, 2000, file a shelf
registration statement (the "Shelf Registration Statement") with the
Commission with respect to resales of the Registrable Securities, (ii) they
will use their best efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act prior to July 8, 2000, and (iii)
they will use their best efforts to maintain such Shelf Registration
Statement continuously effective under the Securities Act (subject to certain
exceptions under the Registration Rights Agreement) until the second
anniversary of the effectiveness of the Shelf Registration Statement or such
other period as shall be required under Rule 144(k) thereunder or any
successor rule or regulation thereto or such earlier date as is provided in
the Registration Rights Agreement. If the Company fails to comply with either
of clauses (i), (ii) or (iii) above, subject to certain exceptions provided
in the Registration Rights Agreement, (a "Registration Default") then, at
such time, the Applicable Rate will increase by 50 basis points (0.50%). Such
increase will remain in effect from and including the date on which any such
Registration Default shall occur to but excluding the date on which all
Registration Defaults have been cured, on which date the interest rate on the
Securities will revert to the interest rate originally borne by the
Securities.
17. REGISTRATION, TRANSFER, EXCHANGE AND DENOMINATIONS. As
provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in New York, New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and
the Security Registrar duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Securities, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons
in denominations of $50 and integral multiples thereof. No service charge
shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Prior to due
presentment of this Security for registration of transfer, the Company, the
Trustee and any
12
<PAGE>
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not
this Security be overdue, and neither the Company, the Trustee nor any such
agent shall be affected by notice to the contrary. In the event of
redemption or conversion of this Security in part only, a new Security or
Securities for the unredeemed or unconverted portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.
18. PERSONS DEEMED OWNERS. Except as provided in Section 3
hereof, the registered Holder of a Security may be treated as its owner for
all purposes.
19. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent
shall pay the money back to the Company at its written request. After that,
Holders of Securities entitled to the money must look to the Company for
payment and all liability of the Trustee and such Paying Agent with respect
to such money shall cease.
20. EVENTS OF DEFAULT AND REMEDIES. The Securities shall have the
Events of Default as set forth in Section 5.01 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least
25% in aggregate principal amount of the Outstanding Securities by notice to
the Company and the Trustee may declare all amounts payable on the Securities
(including any Additional Payments) to be due and payable immediately;
PROVIDED that, if upon an Event of Default, the Trustee or the Holders of not
less than 25% in aggregate principal amount of the then Outstanding
Securities fail to declare the principal of all the Securities to be
immediately due and payable, the Holders of at least 25% in aggregate
liquidation amount of Preferred Securities then outstanding shall have such
right by a notice in writing to the Company and the Trustee, and upon any
such declaration such principal and all accrued interest (and Additional
Payments, if any) shall become immediately due and payable. The Holders of a
majority in aggregate principal amount of the Outstanding Securities may
annul such declaration and waive the default by written notice to the
Property Trustee, the Company and the Trustee if the default (other than the
nonpayment of the principal of these Securities which has become due solely
by such acceleration) has been cured and a sum sufficient to pay all matured
installments of interest (and Additional Payments, if any) and principal due
otherwise than by acceleration has been deposited with the Trustee. Should
the Holders of the Securities fail to annul such declaration and waive such
default, the Holders of a majority in aggregate liquidation amount of the
outstanding Preferred Securities shall have such right. Upon the
effectiveness of any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Payments) on
all the Securities shall then become immediately due and payable; and
PROVIDED FURTHER that the payment of principal and interest on such
Securities shall remain subordinated only to the extent provided in the
Indenture.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the Outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any
13
<PAGE>
trust or power. The Company must furnish annually compliance certificates to
the Trustee. The above description of Events of Default and remedies is
qualified by reference to, and subject in its entirety by, the more complete
description thereof contained in the Indenture.
21. AMENDMENTS, SUPPLEMENTS AND WAIVERS. The Indenture permits,
subject to the rights of the Holders of Preferred Securities set forth
therein and in the Declaration and with certain other exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company and the rights of the Holders of the Securities
under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of not less than a majority in aggregate principal
amount of the Securities at the time Outstanding, on behalf of the Holders of
all the Securities, subject to the rights of the Holders of the Preferred
Securities set forth therein and in the Declaration, to waive compliance by
the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange therefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon
this Security. Notwithstanding anything to the contrary in the Indenture or
the Declaration, if the Property Trustee is the sole holder of the
Securities, so long as any of the Preferred Securities remains outstanding,
no amendment shall be made that adversely affects the Holders of such
Preferred Securities, and no termination of the Indenture shall occur, and no
waiver of any Event of Default or compliance with any covenant under the
Indenture shall be effective, without the prior consent of the Holders of the
percentage of the aggregate stated liquidation amount of such Preferred
Securities then outstanding which is at least equal to the percentage of
aggregate stated principal amount of Outstanding Securities as shall be
required under the Indenture to effect any such amendment, termination or
waiver. The above description of amendments, supplements and waivers is
qualified by reference to, and subject in its entirety by the more complete
description thereof contained in the Indenture.
22. TRUSTEE DEALINGS WITH THE COMPANY. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the
same rights it would have, as if it were not a Trustee, subject to certain
limitations provided for in the Indenture and in the Trust Indenture Act.
Any Agent may do the same with like rights.
23. NO RECOURSE AGAINST OTHERS. A director, officer, employee or
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
14
<PAGE>
24. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
25. AUTHENTICATION. The Securities shall not be valid until
authenticated by the manual signature of an authorized officer of the Trustee
or an authenticating agent.
26. ABBREVIATIONS. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
The Company will furnish to any Holder of the Securities upon
written request and without charge a copy of the Indenture. Request may be
made to:
The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
- -------------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. number)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature:
-------------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
15
<PAGE>
Date:
---------------------
Signature Guarantee:(4)
----------------------------
- ---------------
(4) (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.)
16
<PAGE>
[Include the following if the Security bears a Restricted Securities Legend
In connection with any transfer of any of the Securities evidenced by
this certificate, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without
transfer; or
(2) / / transferred pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(3) / / transferred pursuant to and in compliance with Regulation S
under the Securities Act of 1933; or
(4) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(5) / / transferred pursuant to an effective registration statement
under the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any person
other than the registered Holder thereof; provided, however, that if box (3)
or (4) is checked, the Trustee may require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such
as the exemption provided by Rule 144 under such Act.
17
<PAGE>
Your Signature:
-------------------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Date:
---------------------
Signature Guarantee:(5)
----------------------------
- ---------------
(5) (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.)
18
<PAGE>
[TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.]
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
of 1933, and is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has
determined not to request such information and that it is aware that the
transferor is relying upon the undersigned's foregoing representations in
order to claim the exemption from registration provided by Rule 144A.
Dated:
--------------------------
------------------------------------
NOTICE: To be executed by an
executive officer
19
<PAGE>
(TO BE ATTACHED TO GLOBAL SECURITIES)
SCHEDULE A
The initial principal amount of this Global Security shall be $ .
The following increases or decreases in the principal amount of this Global
Security have been made:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Amount of increase in
Principal Amount of this
Global Security including Amount of decrease in Principal Amount of this Signature of authorized
upon exercise of over- Principal Amount of Global Security following officer of Trustee or
Date Made allotment option this Global Security such decrease or increase Securities Custodian
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
ELECTION TO CONVERT
To: The Titan Corporation
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion below designated, into
Common Stock of The Titan Corporation in accordance with the terms of the
Indenture referred to in this Security, 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.
Any Holder, upon the exercise of its conversion rights in
accordance with the terms of the Indenture and the Security, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
Common Stock issuable upon conversion of the Securities.
Date: ,
in whole __
Portions of Security to be converted
($50 or integral multiples thereof):
$_________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
Signature Guarantee:(6)
----------------------------
- ---------------
(6) (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.)
21
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
To: The Titan Corporation
The undersigned owner of this Security hereby elects to have all or
any part of this Security purchased by the Company in accordance with the
Indenture referred to in this Security. Pursuant to Section 10.09 of the
Indenture, the undersigned owner of this Security hereby states the amount
he or she elects to have purchased:
$
-----------------
Date:
----------------------
Signature:
-------------------------------------
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
Signature Guarantee:(7)
- ---------------
(7) (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.)
22
<PAGE>
EXHIBIT B
REMARKETING AGREEMENT
1
<PAGE>
REMARKETING AGREEMENT, February 9, 2000 (this "AGREEMENT"),
among (i) The Titan Corporation, a Delaware corporation (the
"COMPANY"), (ii) Titan Capital Trust, a Delaware business trust
(the "TRUST"), (iii) Wilmington Trust Company, as Tender Agent
and (iv) Credit Suisse First Boston Corporation, a
Massachusetts corporation (together with its successors and
assigns, the "REMARKETING AGENT").
RECITALS
WHEREAS the Trust is a statutory business trust that has been created
under Delaware law and exists pursuant to the Trust Agreement (as defined below)
and a certificate of trust filed with the Delaware Secretary of State; and
WHEREAS the Trust is issuing on today's date or has heretofore issued
$200,000,000 (or up to $250,000,000 to the extent the over-allotment option is
exercised in full) aggregate Liquidation Amount (as defined below) of
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)K, liquidation
amount $50 per security (the "HIGH TIDES") representing preferred undivided
beneficial interests in the assets of the Trust and has used the proceeds of the
HIGH TIDES, together with the proceeds of $6,185,600 (or up to $7,732,000 to the
extent the over-allotment option is exercised in full) aggregate Liquidation
Amount of its Common Securities (as defined in the Trust Agreement) of the
Trust, to purchase $206,185,600 (or up to $257,732,000 to the extent the
over-allotment option is exercised in full) aggregate principal amount of
Convertible Senior Subordinated Debentures Due 2030 (the "DEBENTURES") issued by
the Company pursuant to the Indenture (as defined below);
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. (a) The following terms shall have the
meanings indicated below:
"ADDITIONAL AMOUNTS" has the meaning specified in the Indenture.
"ADMINISTRATIVE TRUSTEES" has the meaning specified in the definition
of Trust Agreement in this Section 1.
"BROKER-DEALER" has the meaning assigned to such term in Section 5.
"BROKER-DEALER AGREEMENT" means an agreement between the Remarketing
Agent and a Broker-Dealer.
"BUSINESS DAY" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's or Debenture
<PAGE>
Trustee's Corporate Trust Office (as defined in the Trust Agreement with respect
to the Property Trustee and in the Indenture with respect to the Debenture
Trustee) is closed for business.
"CAUSE" means any one of the following events or circumstances shall
have occurred and be continuing: (i) the bankruptcy or insolvency of the
Remarketing Agent; or (ii) the Remarketing Agent shall cease to be registered as
a broker-dealer under the Exchange Act.
"CLOSING PRICE" means for any security on any day the last reported
sale price of the security on that day, or in case no sale takes place on that
day, the average of the closing bid and asked prices in each case on the
principal national securities exchange on which the securities are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc. or any successor national automated interdealer
quotation system (the "NMS") or, if the securities are not listed or admitted to
trading on any national securities exchange or quoted on the NMS, the average of
the closing bid and asked prices of the security in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected by the Company
for that purpose.
"COMMISSION" means the Securities and Exchange Commission or any
successor thereto.
"COMMON STOCK" has the meaning assigned to such term in the Indenture.
"COMPANY" has the meaning assigned to such term in the preamble to
this Agreement.
"COMPARABLE TREASURY ISSUE" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt securities
of comparable maturity to the Remaining Life. If no United States Treasury
security has a maturity which is within a period from three months before to
three months after the Reset Date, the two most closely corresponding United
States Treasury securities shall be used as the Comparable Treasury Issue, and
the rate being calculated shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month using such securities.
"COMPARABLE TREASURY PRICE" means (A) the arithmetic mean of five
Reference Treasury Dealer Quotations, after excluding the highest and lowest
such Reference Treasury
2
<PAGE>
Dealer Quotations, or (B) if the Quotation Agent obtains fewer than five such
Reference Treasury Dealer Quotations, the arithmetic mean of all such Reference
Treasury Dealer Quotations.
"CONVERTIBLE REMARKETING" has the meaning specified in Section 2(d).
"DEBENTURE TRUSTEE" means Wilmington Trust Company, as Trustee under
the Indenture (including its successors as Debenture Trustee thereunder).
"DEBENTURES" has the meaning assigned to such term in the recitals to
this Agreement.
"DECLARATION TRUSTEES" means collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"DISCLOSURE DOCUMENTS" means the Registration Statement, or if the
Registration Statement is not required to be filed with the Commission pursuant
to Section 2(b), the Nonregistered Offering Documents, including any preliminary
offering document or Preliminary Prospectus, as applicable, and as each may be
amended or supplemented.
"EFFECTIVE TIME" means the date and time as of which the Registration
Statement or its most recent post-effective amendment is declared effective by
the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"FAILED FINAL REMARKETING" has the meaning specified in Section 2(d).
"FINAL REMARKETING" has the meaning specified in Section 2(d).
"FINAL REMARKETING PERIOD" means the period beginning on the Business
Day immediately following the Initial Remarketing Termination Date and ending on
the day which is ten (10) Business Days (or such shorter period as shall be
agreed to by the Remarketing Agent) after the Initial Remarketing Termination
Date.
"FINAL RESET DATE" means February 15, 2005.
"GLOBAL SECURITY CERTIFICATE" has the meaning assigned to (i) the term
"Global Preferred Securities" in the Trust Agreement if the Subject Securities
are HIGH TIDES or (ii) the term "Global Security" in the Indenture if the
Subject Securities are Debentures.
"HIGH TIDES" has the meaning assigned to such term in the recitals to
this Agreement.
3
<PAGE>
"INDENTURE" means the Indenture, dated as of February 9, 2000, between
the Company and the Debenture Trustee, as such indenture may from time to time
be amended, modified or supplemented.
"INITIAL FAILED REMARKETING" has the meaning specified in Section
2(d).
"INITIAL REMARKETING" has the meaning specified in Section 2(d).
"INITIAL REMARKETING PERIOD" means the period beginning on the first
Business Day immediately following the Tender Notification Date and ending on
the day which is ten (10) Business Days (or such shorter period as shall be
agreed to by the Remarketing Agent) after the Tender Notification Date.
"INITIAL REMARKETING TERMINATION DATE" means the tenth (10) Business
Day following the Tender Notification Date (or such shorter period as shall be
agreed to by the Remarketing Agent).
"INTEREST" means all quarterly payments, interest (to the extent
permitted by applicable law) on quarterly payments not paid on the applicable
Interest Payment Date and Additional Amounts, as applicable.
"INTEREST PAYMENT DATE" has the meaning specified in the Indenture and
the Trust Agreement.
"LIQUIDATION AMOUNT" means, with respect to a HIGH TIDES or Common
Security, its stated liquidation amount of $50.
"MARKET EVENT" means the occurrence of (i) a change in U.S. or
international financial, political or economic conditions or currency exchange
rates or exchange controls as would, in the sole judgment of the Remarketing
Agent, be likely to prejudice materially the success of the Remarketing, issue,
sale or distribution of the Subject Securities, or (ii) (A) any change, or any
development or event involving a prospective change, in the condition (financial
or other), business, properties or results of operations of the Company or its
subsidiaries which, in the sole judgment of the Remarketing Agent, is material
and adverse and makes it impractical or inadvisable to proceed with completion
of the Remarketing or the sale of and payment for the Subject Securities; (B)
any downgrading in the rating of the Subject Securities or any other debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Securities Act),
or any public announcement that any such organization has under surveillance or
review its rating of the Subject Securities or any other debt securities of the
Company (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating); (C)
any suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Company on any exchange or
in the over-the-counter market; (D) any banking
4
<PAGE>
moratorium declared by U.S. Federal or New York authorities; or (E) any outbreak
or escalation of major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the sole judgment of the Remarketing
Agent, the effect of any such outbreak, escalation, declaration, calamity or
emergency makes it impractical or inadvisable to proceed with completion of the
Remarketing or the sale of and payment for the Subject Securities.
"MAXIMUM RATE" means a rate per annum equal to the Treasury Rate plus
10%.
"NO REGISTRATION OPINION" means an opinion of Securities Counsel that
the securities issuable in the Remarketing do not need to be registered under
the Securities Act and that no other filing of any kind is required to be made
with the Commission as a condition to the sale of such securities, which No
Registration Opinion shall be reasonably satisfactory to the Remarketing Agent
and its counsel.
"NONCONVERTIBLE REMARKETING" has the meaning specified in Section
2(d).
"NONREGISTERED OFFERING DOCUMENTS" has the meaning specified in
Section 6(a).
"NOTICE OF PURCHASERS" means a notice delivered by the Remarketing
Agent on the Reset Date to (i) the Tender Agent if the Subject Securities are
not evidenced by a Global Security Certificate on the Reset Date or (ii) The
Depository Trust Company if the Subject Securities are evidenced by a Global
Security Certificate on the Reset Date, in either case naming the parties who
will purchase the Subject Securities from the Remarketing Agent.
"OFFERING CIRCULAR" means the confidential offering circular, dated as
of February 3, 2000, relating to the issuance by the Trust of the HIGH TIDES.
"PAR AMOUNT" means $50 per Subject Security.
"PAYING AGENT" has the meaning specified in the Trust Agreement.
"PRELIMINARY PROSPECTUS" means each prospectus included in the
Registration Statement, or amendment thereof, before it becomes effective under
the Securities Act and any prospectus which may be filed by the Company with the
Commission pursuant to Rule 424(a) (or any successor applicable rule) of the
rules and regulations under the Securities Act (the "RULES AND REGULATIONS") in
connection with the Registration Statement.
"PRIMARY TREASURY DEALER" has the meaning specified in the definition
of Quotation Agent in this Section 1.
"PROPERTY TRUSTEE" has the meaning specified in the definition of
Trust Agreement in this Section 1.
5
<PAGE>
"PROSPECTUS" means the final prospectus which will be filed with the
Commission pursuant to Rule 424(b) (or any successor applicable rule) of the
Rules and Regulations and deemed to be a part of the Registration Statement at
the time of its effectiveness under the Securities Act pursuant to paragraph (b)
of Rule 430A (or any successor applicable rule) of the Rules and Regulations.
"QUOTATION AGENT" means Credit Suisse First Boston Corporation and its
successors; PROVIDED, HOWEVER, that if Credit Suisse First Boston Corporation or
its successors shall cease to be a primary United States Government securities
dealer in The City of New York (a "PRIMARY TREASURY DEALER"), the Company shall
substitute therefor another Primary Treasury Dealer.
"REFERENCE TREASURY DEALER" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Company.
"REFERENCE TREASURY DEALER QUOTATIONS" means, with respect to each
Reference Treasury Dealer, the arithmetic mean, as determined by the Debenture
Trustee of the bid and asked prices for the Comparable Treasury Issue (expressed
in each case as a percentage of its principal amount) quoted in writing to the
Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City
time, on the third Business Day preceding the Reset Date.
"REGISTRATION STATEMENT" means a registration statement covering the
securities to be issued in the Remarketing filed with the Commission pursuant to
the Securities Act, including any amendments thereto and any document or other
information incorporated by reference therein.
"REMAINING LIFE" means the period beginning on (and including) the
Reset Date and ending on February 15, 2030.
"REMARKETING" means the remarketing of all HIGH TIDES tendered as set
forth herein.
"REMARKETING AGENT" has the meaning assigned to such term in the
preamble to this Agreement (including any successor Remarketing Agent).
"REMARKETING CONDITIONS" means the following factors: (i) short-term
and long-term market rates and indices of such short-term and long-term rates,
(ii) market supply and demand for short-term and long-term securities, (iii)
yield curves for short-term and long-term securities comparable to the Subject
Securities, (iv) industry and financial conditions which may affect the Subject
Securities, (v) the number of Subject Securities to be remarketed, (vi) the
number of potential purchasers, (vii) the current ratings by nationally
recognized statistical rating organizations of long-term subordinated debt of
the Company and of other outstanding capital securities of the Company's trust
subsidiaries, (viii) the number of shares of Common Stock, if
6
<PAGE>
any, into which the Subject Securities will be convertible and (ix) the length
and type of call protections, if any.
"REMARKETING NOTICE" has the meaning specified in Section 2(d).
"RESET DATE" means any date (1) not later than February 15, 2005 (the
Final Reset Date) or, if such date is not a Business Day, the next succeeding
Business Day and (2) not earlier than 70 Business Days prior to February 15,
2005, as may be determined by the Remarketing Agent, in its sole discretion.
"RULES AND REGULATIONS" has the meaning specified in the definition of
Preliminary Prospectus in this Section 1.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
"SECURITIES COUNSEL" means counsel experienced in matters relating to
securities law.
"SUBJECT SECURITIES" means (i) the HIGH TIDES if, on the Reset Date,
the Debentures have not been distributed to holders of HIGH TIDES in connection
with a liquidation or dissolution of the Trust or (ii) otherwise, the
Debentures.
"TENDER AGENT" means (i) the Property Trustee if the Subject
Securities are HIGH TIDES or (ii) the Debenture Trustee if the Subject
Securities are Debentures.
"TENDER NOTIFICATION DATE" means a Business Day no earlier than ten
(10) Business Days following the date of the Remarketing Notice (or such shorter
period as shall be agreed to by the Remarketing Agent).
"TERM CALL PROTECTIONS" has the meaning assigned to such term in
Section 2(c).
"TERM CONVERSION PRICE" has the meaning assigned to such term in
Section 2(c).
"TERM CONVERSION RATIO" has the meaning assigned to such term in
Section 2(c).
"TERM PROVISIONS" has the meaning specified in Section 2(c).
"TERM RATE" has the meaning assigned to such term in Section 2(c).
"TREASURY RATE" means (i) the yield, under the heading which
represents the average for the week immediately prior to the date of
calculation, appearing in the most recently published statistical release
designated H.15(519) or any successor publication which is published weekly by
the Federal Reserve and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the Remaining
Life (if no maturity is within three
7
<PAGE>
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semiannual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
the Reset Date. The Treasury Rate shall be calculated by the Remarketing Agent
on the third Business Day preceding the Reset Date.
"TRUST" has the meaning assigned to such term in the preamble to this
Agreement.
"TRUST AGREEMENT" means the Amended and Restated Declaration of Trust,
dated as of February 15, 2000, among the Company, as Depositor, Wilmington Trust
Company, as Property Trustee (the "PROPERTY TRUSTEE"), Wilmington Trust Company,
as Delaware Trustee (the "DELAWARE TRUSTEE"), Deanna Hom Petersen and Ray
Guillaume (the "ADMINISTRATIVE TRUSTEES") and the holders from time to time of
undivided beneficial interests in the assets of the Trust, as such agreement may
from time to time be amended, modified or supplemented.
(b) Capitalized terms used herein and not otherwise defined but
defined in the Trust Agreement or Indenture shall have the meanings assigned to
such terms in the Trust Agreement or the Indenture, as applicable.
SECTION 2. ACCEPTANCE AND PERFORMANCE OF DUTIES. The Remarketing
Agent, the Company, the Trust and the Tender Agent agree as follows:
(a) The Remarketing Agent will perform the duties and obligations of
Remarketing Agent for the remarketed securities as specified in the Trust
Agreement (if the tendered securities are the HIGH TIDES), the Indenture (if the
tendered securities are the Debentures) and in this Agreement in good faith and
in compliance with the provisions of applicable laws.
(b) The Remarketing Agent will use its best efforts to remarket all
Subject Securities tendered or deemed tendered for sale; PROVIDED, HOWEVER, that
the Remarketing Agent will not be obligated to attempt to remarket such Subject
Securities, or to determine the Term Rate pursuant to Section 2(c) below, if (A)
in the Remarketing Agent's judgment any (i) Disclosure Document provided by the
Trust or the Company in connection with the Remarketing or (ii) document
publicly disclosed (including in a filing pursuant to the Exchange Act) by or on
behalf of the Trust or the Company, includes any untrue statement of a material
fact or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, unless the Remarketing Agent is satisfied in its sole discretion
that such statement or omission has been properly corrected, (B) unless the
Company provides a No Registration Opinion to the Remarketing Agent prior to the
Tender Notification Date, the Company and the Trust (if applicable) shall have
failed to have the
8
<PAGE>
Registration Statement declared effective by the Commission on or prior to the
Tender Notification Date and remain effective at least through and including the
Reset Date, PROVIDED that the Registration Statement may be declared effective
later than the Tender Notification Date if the Company provides an opinion of
Securities Counsel to the Remarketing Agent to the effect that such Registration
Statement need not become effective until the date the Initial Remarketing
Period is required to commence and the Remarketing Agent consents to such delay
or (C) the Company fails to comply with the requirements set forth in Section
6(c) of this Agreement. The Remarketing Agent may, but except as provided in
Section 11 shall not be obligated to, purchase tendered Subject Securities for
its own account.
(c) The Remarketing Agent has agreed to use its best efforts to
remarket all Subject Securities tendered as set forth herein for Remarketing on
the Tender Notification Date. The Remarketing Agent will establish, effective
beginning on the Reset Date, (i) the rate (the "TERM RATE") per annum at which
Interest will accrue on the Subject Securities, (ii) the term conversion ratio
and price, which determine the number of shares of Common Stock, if any, into
which each Subject Security may be converted (respectively, the "TERM CONVERSION
RATIO" and the "TERM CONVERSION PRICE") and (iii) the price, manner and time, if
any, at which the Subject Securities may be redeemed (the "TERM CALL
PROTECTIONS" and together with the Term Rate, Term Conversion Ratio and Term
Conversion Price, the "TERM PROVISIONS"). The Remarketing Agent will use its
best efforts to establish the Term Provisions most favorable to the Company
consistent with the successful remarketing of Subject Securities tendered as set
forth herein therefor at a price equal to 101% of the aggregate Par Amount
thereof; PROVIDED that each Subject Security will have the same Term Provisions;
PROVIDED that the Term Provisions may not permit the Company to redeem the
Subject Securities for a price less than the aggregate Par Amount thereof plus
any accrued and unpaid Interest thereon; and, PROVIDED FURTHER, that if no
Subject Security is tendered as set forth herein for remarketing on the Tender
Notification Date, the Remarketing will not take place (although the Remarketing
will not be deemed to have failed), and the Remarketing Agent will set the Term
Provisions in a manner consistent with the Remarketing Notice that it believes,
in its sole discretion, would result in a price per Subject Security equal to
101% of its Par Amount were the Remarketing actually to occur.
(d) The remarketing process will commence on the first Business Day
following the Tender Notification Date and will be conducted on the following
schedule and in the following manner:
At Least 30 Business Days, But
Not More Than 90 Business Days
Prior to the Final Reset Date:
The Trust shall cause a notice (the "REMARKETING NOTICE") to be sent to holders
of the Subject Securities stating whether it intends to remarket the Subject
Securities as securities which will be convertible into Common Stock of the
Company (a "CONVERTIBLE REMARKETING") or which will be nonconvertible (a
"NONCONVERTIBLE REMARKETING").
The date of the Remarketing Each outstanding Subject Security shall be
Notice through the Tender deemed to have been tendered for
Notification Date: remarketing unless the holder thereof has
9
<PAGE>
10
given irrevocable notice to the contrary
to the Tender Agent (which the Tender
Agent will promptly remit to the
Remarketing Agent). Such irrevocable
notice, which may be telephonic or
written, must be delivered prior to 5:00
p.m., New York City time, on the Tender
Notification Date. A holder's notice of an
election to retain Subject Securities must
state the number of Subject Securities to
be retained (which must be all of the
Subject Securities represented by the
applicable certificate, unless such
certificate is a Global Security
Certificate), the number of the
certificate representing the Subject
Securities not to be deemed to have been
so tendered (unless such certificate is a
Global Security Certificate) and the
number of Subject Securities represented
by such certificate (unless such
certificate is a Global Security
Certificate). Any transferee of a Subject
Security for which such notice has been
provided shall be bound thereby. The
failure by a holder of Subject Securities
to give timely notice of an election to
retain all (or, in the case of a Global
Security Certificate, any part) of such
holder's Subject Securities will
constitute the irrevocable tender for sale
in the Remarketing of all the Subject
Securities it holds. A holder of Subject
Securities which has not duly given notice
that it will not tender and retain its
Subject Securities will cease to have any
further rights with respect to such
Subject Securities upon the successful
remarketing thereof, except the right of
such holder to receive an amount equal to
(i) from the proceeds of the Remarketing,
101% of the aggregate Par Amount thereof,
plus (ii) from the Company, any accrued
and unpaid Interest thereon to (but
excluding) the Reset Date.
If any Subject Securities are
<PAGE>
11
tendered for remarketing, the
Remarketing Agent will commence a
Convertible Remarketing or a
Nonconvertible Remarketing, as the
case may be (in either case, an
"INITIAL REMARKETING"), in
accordance with the terms of this
Agreement and pursuant to the
instructions set forth in the
Remarketing Notice. The
Remarketing Agent will determine,
and upon request make available to
interested persons, nonbinding
indications of, the Term Provisions
based upon then-current Remarketing
Conditions. The Remarketing Agent
will solicit and receive orders
from prospective investors to
purchase tendered Subject
Securities. The Initial
Remarketing shall be deemed to have
failed (an "INITIAL FAILED
REMARKETING") if (i) despite using
its best efforts, the Remarketing
Agent is unable to establish, prior
to the Initial Remarketing
Termination Date, a Term Rate which
is less than or equal to the
Maximum Rate, (ii) the Remarketing
Agent is excused from Remarketing
the Subject Securities because of
(a) the failure by the Company or
the Trust to satisfy a condition in
this Agreement or (b) the
occurrence of a Market Event, (iii)
there is no Remarketing Agent on
the first day of the Initial
Remarketing Period or (iv) prior to
the Initial Remarketing Termination
Date, Term Provisions are
established by the Remarketing
Agent, but the Remarketing Agent,
despite
<PAGE>
12
using its best efforts, is unable to
consummate the sale of one or more
Subject Securities tendered for
remarketing because of the occurrence
of a Market Event.
Remainder of the Initial Remarketing The Remarketing Agent will continue,
Period: if necessary, using its best efforts
to remarket the Subject Securities
tendered for remarketing as described
above, adjusting the non-binding
indications of the Term Provisions
necessary to establish the Term
Provisions most favorable to the
Company consistent with remarketing
all Subject Securities tendered
therefor at 101% of the Par Amount,
until the Initial Remarketing is
completed or is deemed to have failed.
See the definition of an Initial
Failed Remarketing above. Promptly
upon determination of the Term
Provisions, the Remarketing Agent will
communicate such Term Provisions to
the Tender Agent, which will
communicate such Term Provisions to
the Declaration Trustees (if the Trust
has not dissolved), the Trust (if the
Trust has not dissolved), the
Debenture Trustee, the Paying Agent,
the Company and each holder (if any)
which timely elected not to tender all
of its Subject Securities for
remarketing, by delivery of a written
notice or by telephone promptly
confirmed by telecopy or writing.
Beginning the First Business Day If, prior to the Initial Remarketing
Following an Initial Failed Termination Date, the Initial
Remarketing (if applicable): Remarketing fails because the
Remarketing Agent was not able to
establish a Term Rate less than or
equal to the Maximum Rate or prior to
such Initial Termination Date, Term
Provisions are established by the
Remarketing Agent but the Remarketing
Agent, despite using its best efforts,
is unable to consummate the sale of one
or more Subject Securities tendered for
<PAGE>
13
remarketing because of the occurrence
of a Market Event, the Remarketing
Agent will commence a second
remarketing (the "FINAL REMARKETING"),
which will be a Convertible Remarketing
if the Initial Remarketing was a
Nonconvertible Remarketing and a
Nonconvertible Remarketing if the
Initial Remarketing was a Convertible
Remarketing. The Remarketing Agent
will determine, and upon request make
available to interested persons,
nonbinding indications of, the Term
Provisions based upon then-current
Remarketing Conditions. The
Remarketing Agent will solicit and
receive orders from prospective
investors to purchase tendered Subject
Securities. The Final Remarketing will
be deemed to have failed (a "FAILED
FINAL REMARKETING") if (i) despite
using its best efforts, the Remarketing
Agent is still not able to establish a
Term Rate less than or equal to the
Maximum Rate prior to the expiration of
the Final Remarketing Period, (ii) the
Remarketing Agent is excused from
Remarketing the Subject Securities
because of (a) the failure by the
Company or the Trust to satisfy a
condition in this Agreement or (b) the
occurrence of a Market Event, or (iii)
prior to the termination date for the
Final Remarketing Period, Term
Provisions are established by the
Remarketing Agent but the Remarketing
Agent, despite using its best efforts,
is unable to consummate the sale of one
or more Subject Securities tendered for
remarketing because of the occurrence
of a Market Event.
The Remarketing Agent will Reset Date:
continue, if necessary, to use its
best efforts to remarket the
Subject Securities, as described
above, adjusting the non-binding
indications of the Term
<PAGE>
14
Provisions as necessary to
establish the Term Provisions
most favorable to the Company
consistent with remarketing
all Subject Securities
tendered therefor at 101% of the
Par Amount until the Final
Remarketing is completed or is
deemed to have failed. See the
definition of a Failed Final
Remarketing above. If the
Remarketing Agent is able to
establish a Term Rate less than or
equal to the Maximum Rate during
the Final Remarketing Period, it
will promptly communicate such
Term Provisions to the Tender
Agent, which will communicate such
Term Provisions to the Declaration
Trustees (if the Trust has not
dissolved), the Trust (if the
Trust has not dissolved), the
Debenture Trustee, the Paying
Agent, the Company and each holder
(if any) which timely elected not
to tender all of its Subject
Securities for remarketing, by
delivery of a written notice or by
telephone promptly confirmed by
telecopy or writing.
New holders must deliver the
purchase price for the remarketed
securities in same-day funds to the
Remarketing Agent and the
Remarketing Agent will deliver such
purchase price to the Tender Agent
(in like funds). Settlement of
transactions in connection with the
remarketing will take place on the
Reset Date, or such date as the
Remarketing Agent may, in its
<PAGE>
15
sole discretion, determine, or, as
otherwise required by applicable
law. Payments to tendering holders
who hold Subject Securities in the
form of one or more Global Security
Certificates will be made in the
manner provided in the Offering
Circular under "Description of HIGH
TIDES-Depositary Procedures."
Tendering holders who hold Subject
Securities in certificated form
(other than in the form of Global
Security Certificates) must deliver
their certificates properly
endorsed for transfer to the Tender
Agent by 2:30 p.m., New York City
time on the Reset Date (or any
succeeding date) to receive payment
of the purchase price for their
Subject Securities. Subject to
compliance with the preceding two
sentences, the Tender Agent will
pay former holders the proceeds of
the Remarketing of their Subject
Securities by the Remarketing
Agent. In the event of a Failed
Final Remarketing, the Term Rate
shall be a rate equal to the
Treasury Rate plus 10% per annum.
The Term Conversion Price will be
equal to 105% of the average
Closing Price of the Company's
Common Stock for the five (5)
consecutive trading days after the
Final Remarketing Period. In the
event of a Failed Final
Remarketing, all outstanding
Subject Securities will be
redeemable by the Company, in whole
or in part, at any time on or after
the third anniversary of the Reset
Date at a
<PAGE>
16
redemption price equal to
100% of the aggregate Par Amount
thereof, plus accrued and unpaid
interest thereon. On and after the
Reset Date, the terms of all
Subject Securities, whether or not
tendered for remarketing, will be
modified by the Term Provisions, as
the same shall be established by
the Remarketing Agent. If the
Subject Securities are not held by
The Depository Trust Company or its
nominee in the form of one or more
Global Security Certificates,
certificates representing
remarketed Subject Securities will
be issued to the purchasers thereof,
irrespective of whether the
certificates formerly representing
such Subject Securities have been
delivered to the Tender Agent.
SECTION 3. REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF
THE COMPANY AND THE REMARKETING AGENT. (a) The Company represents, warrants,
covenants and agrees with the Remarketing Agent as follows:
(i) the Company has full power and authority to enter into
this Agreement and will have full power and authority to enter
into any agreements which it may enter into in connection with
the Remarketing; this Agreement and the transactions contemplated
hereby have been, and each other such agreement and the
transactions contemplated thereby will be, duly authorized,
executed and delivered by the Company; and this Agreement is, and
each such other agreement will be at the Reset Date, a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles and except to
the extent that the right to indemnity and contribution in the
Remarketing Agreement may be limited by state or federal
securities laws or the public policy underlying such laws;
(ii) the consummation of the transactions contemplated
herein do not now, and the consummation of the transactions
contemplated in any other agreement entered into by the Company
in connection with the Remarketing will not, at the Reset Date,
conflict with or constitute a breach of, or a default under, or
result in the creation or imposition of any lien, charge, other
encumbrance, or violation upon any property or
<PAGE>
17
assets of the Trust, the Company or any of the Company's subsidiaries
pursuant to any contract, indenture, declaration of trust, deed of trust,
mortgage, loan agreement, note, lease or other instrument or agreement to
which the Trust, the Company or any of its subsidiaries is or will be a
party or by which it or any of them may be bound, or to which any of the
property or assets of any of them is or will be subject, nor will such
actions result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries or any statute (including the
Securities Act, the Exchange Act and state securities laws) or any order,
rule or regulation of any court or governmental agency or body (including
the Commission) which has or will have jurisdiction over the Company or any
of its subsidiaries or any of their material property or assets except for
a conflict, breach, default, lien, charge, encumbrance or violation which
could not reasonably be expected to have a material adverse effect on the
consummation of the transactions contemplated herein or therein;
(iii) all required consents, rulings and approvals of
governmental authorities (other than "Blue Sky" authorities) required in
connection with the execution and delivery by the Company of this Agreement
and any agreement entered into by the Company in connection with the
transactions contemplated by any Disclosure Documents, and the performance
by the Company of its obligations hereunder and thereunder, have been
obtained and are in full force and effect and, at the Reset Date, will have
been obtained and be in full force and effect;
(iv) except as disclosed in the Disclosure Documents, neither the
Company nor any of its subsidiaries is or, at the Reset Date, will be (A)
in violation of its charters or by-laws, (B) in default in any respect, and
no event has occurred or will have occurred which, with notice or lapse of
time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any contract,
indenture, declaration of trust, deed of trust, mortgage, loan agreement,
note, lease or other instrument or agreement to which it is or will be
bound or to which any of its properties or assets is or will be subject or
(C) in violation of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject;
(v) the Disclosure Documents, including as provided in Section 3(x),
will not, at the Effective Time and thereafter through and including the
Reset Date, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED that no representation or
warranty is made as to information contained in or omitted from the
Disclosure Documents in reliance upon and in conformity with written
information furnished to the Company by the Remarketing Agent specifically
for inclusion therein;
(vi) the financial statements of the Company contained (or
incorporated by reference) in the Disclosure Documents will present fairly
the financial position of the entity set forth therein as of the dates
indicated, and the results of operations and
<PAGE>
18
changes in financial position of such entity for the periods covered, in
conformity with generally accepted accounting principles applied on a
consistent basis, except as otherwise set forth therein;
(vii) after the date of the most recent financial statements of the
Company contained (or incorporated by reference) in the Disclosure
Documents, there will not have been any material adverse change in the
condition (financial or other), stockholders' equity, results of operations
or business of the Company and its subsidiaries, except as disclosed in the
Disclosure Documents;
(viii) except as disclosed in the Disclosure Documents, there will be
no legal or governmental proceedings pending at the Reset Date to which the
Company or any of its subsidiaries is a party or of which any material
property or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a material adverse effect on the
condition (financial or other), stockholders' equity, results of operations
or business of the Company and its subsidiaries, taken as a whole;
(ix) any description of a contract, indenture, declaration of trust,
deed of trust, mortgage, loan agreement, note, lease or other instrument or
agreement contained in the Disclosure Documents will be, at the Effective
Time and thereafter through and including the Reset Date, true and complete
in all material respects; and
(x) If the Registration Statement is filed, the Registration
Statement at the Effective Time will conform to the requirements of the
Securities Act and the Rules and Regulations and will 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 not
misleading, and the Prospectus, as of the Effective Time and thereafter
through and including the Reset Date, will conform to the requirements of
the Securities Act and the Rules and Regulations and will not include any
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED that no
representation or warranty is made as to information contained in or
omitted from any Preliminary Prospectus, the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company by the Remarketing Agent specifically for
inclusion therein.
(b) The Remarketing Agent represents, warrants, covenants and agrees
with the Company that if it shall not have received a No Registration Opinion
and the Registration Statement shall not be effective on the Tender Notification
Date (or such later date as may be provided in Section 2(b)), the Remarketing
Agent will offer and sell the Subject Securities only in compliance with the
federal and state securities laws applicable to unregistered sales of securities
in effect at the time of the Remarketing.
<PAGE>
19
SECTION 4. FEES AND EXPENSES. (a) The Company agrees to pay to the
Remarketing Agent upon settlement of the transactions contemplated by the
Remarketing (i) as compensation for its services hereunder, a fee equal to 1% of
the aggregate Par Amount of outstanding Subject Securities on the Reset Date,
plus (ii) all out-of-pocket expenses reasonably incurred by the Remarketing
Agent in connection with the performance of its duties; PROVIDED that if both
the Initial Remarketing and the Final Remarketing fail, the Company shall not be
required to pay any fees to, or reimburse any out-of-pocket expenses of, the
Remarketing Agent.
(b) The Remarketing Agent acknowledges and agrees that the
performance of its duties hereunder will be without charge to holders or
purchasers of the Subject Securities other than the Company.
SECTION 5. BROKER-DEALER PARTICIPATION. The Remarketing Agent shall
enter into Broker-Dealer Agreements with all broker-dealers ("BROKER-DEALERS"),
if any, which it selects to have participate in the remarketing process;
PROVIDED that (i) such Broker-Dealers agree to comply with the terms of this
Agreement, including the terms of Section 3(b) of this Agreement, (ii) any fees
or commissions paid to the Broker-Dealers shall be paid by the Remarketing Agent
out of the fees it is paid pursuant to Section 4(a), and (iii) the Remarketing
Agent agrees to provide to the Company an executed copy of each Broker-Dealer
Agreement. None of the Remarketing Agent, the Trust and the Company shall be
responsible for the out-of-pocket expenses of such Broker-Dealers or for
ensuring compliance by such Broker-Dealers with the terms of this Agreement
(except, with respect to the Remarketing Agent, as specifically set forth in the
Broker-Dealer Agreement).
SECTION 6. DISCLOSURE DOCUMENTS AND OTHER INFORMATION. (a) If (i)
the Registration Statement is not required to be filed with the Commission
pursuant to the provisions of Section 2(b) of this Agreement and (ii) the
Remarketing Agent determines that it is necessary or desirable to use a
disclosure document in connection with the performance of its obligation to
remarket the Subject Securities, the Remarketing Agent will notify the Company
and the Company will provide to the Remarketing Agent prior to the Tender
Notification Date at the Company's expense a disclosure document or documents
reasonably satisfactory to the Remarketing Agent and its counsel in respect of
the Subject Securities (collectively, and including any documents or other
information incorporated by reference therein, the "NONREGISTERED OFFERING
DOCUMENTS"). The Company will supply the Remarketing Agent at the Company's
expense with such number of copies of the Disclosure Documents as the
Remarketing Agent reasonably requests from time to time. The Company will
supplement and amend the Disclosure Documents so that at all times they will not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements in the Disclosure Documents, in light of the
circumstances under which they were made, not misleading.
(b) The Company and the Trust each agrees to furnish to the
Remarketing Agent (i) as promptly as practicable after they are available, all
regular and periodic reports, if
<PAGE>
20
any, which the Company or the Trust files with the Commission under the Exchange
Act and all reports which the Company or the Trust provides generally to holders
of its publicly held securities and (ii) from time to time, such other
information concerning the Company and the Trust as the Remarketing Agent may
reasonably request.
(c) The Company will provide the Remarketing Agent with such
certificates, opinions of counsel, accountants' letters and other support for
the information contained in any Disclosure Documents as the Remarketing Agent
and its counsel may reasonably request.
(d) If the Registration Statement is filed with the Commission, the
Company agrees that it will:
(i) prepare the Registration Statement in conformity with the
requirements of the Securities Act and the Rules and Regulations;
(ii) cause the Registration Statement to become effective prior to
the Tender Notification Date (or such later date as may be permitted in
accordance with the provisions of Section 2(b));
(iii) prepare the Prospectus in a form approved by the Remarketing
Agent and file the Prospectus in accordance with Rule 424(b) (or any
successor applicable rule) under the Securities Act and Rule 430A(a)(3) (or
any successor applicable rule) under the Securities Act; make no further
amendment or any supplement to the Registration Statement or to the
Prospectus except as permitted herein or required hereby; advise the
Remarketing Agent, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has
been filed and furnish the Remarketing Agent with copies thereof; advise
the Remarketing Agent, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the securities covered by such
Registration Statement for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information; and
in the event of the issuance of any stop order or of any order preventing
or suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, promptly use its best efforts to obtain
its withdrawal;
(iv) furnish promptly to the Remarketing Agent and to counsel for the
Remarketing Agent a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith;
<PAGE>
21
(v) deliver promptly to the Remarketing Agent such number of the
following documents as the Remarketing Agent shall reasonably request: (1)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and
(2) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus; and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the securities covered by the Registration Statement and if at such
time any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary to amend or supplement the Prospectus in
order to comply with the Securities Act, notify the Remarketing Agent and,
upon its request, prepare and furnish without charge to the Remarketing
Agent as many copies as the Remarketing Agent may from time to time
reasonably request of an amended or supplemented Prospectus which will
correct such statement or omission or effect such compliance;
(vi) file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Remarketing
Agent, be required by the Securities Act or requested by the Commission;
(vii) prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 (or any applicable successor rule) of the Rules and
Regulations, furnish a copy thereof to the Remarketing Agent and counsel
for the Remarketing Agent;
(viii) as soon as practicable after the Effective Time, make
generally available to the Company's security holders and deliver to the
Remarketing Agent an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) (or any applicable
successor section) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158 (or any applicable
successor rule));
(ix) promptly from time to time take such action as the Remarketing
Agent may request to qualify the securities covered by the Registration
Statement for offering and sale under the securities laws of such
jurisdictions as the Remarketing Agent may request and to take all steps
necessary to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary
to complete the distribution of the Subject Securities; PROVIDED, HOWEVER,
that in connection therewith the Company will not be required to qualify as
a foreign corporation or to file a general consent to service of process in
any jurisdiction where it is not so qualified; and
<PAGE>
22
(x) use its best effort to have the Subject Securities listed on any
securities exchange or quoted in any automated inter-dealer quotation
system reasonably requested by the Remarketing Agent.
SECTION 7. INDEMNIFICATION. (a) The Company and the Trust will
indemnify and hold harmless the Remarketing Agent against any losses, claims,
damages or liabilities, joint or several, to which the Remarketing Agent may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any Disclosure Document, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse the Remarketing Agent for any legal or
other expenses reasonably incurred by the Remarketing Agent in connection with
investigating or defending any such loss, claim, damage liability or action as
such expenses are incurred; PROVIDED, HOWEVER, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement in or omission or alleged omission from any Disclosure Document in
reliance upon and in conformity with written information furnished to the
Company by the Remarketing Agent specifically for use therein.
(b) The Remarketing Agent will indemnify and hold harmless the
Company and the Trust against any losses, claims, damages or liabilities to
which the Company or the Trust may become subject, under the Securities Act or
the Exchange Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Disclosure Documents, or any amendment or supplement thereto, or arise out
of or are based upon the omission or the alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company or the Trust by the
Remarketing Agent specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company or the Trust in connection
with investigating or defending any such loss, claim, damage, liability or
action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
the indemnifying party from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above. In case any such action
is brought against any indemnified party and it notifies the indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein and, to the
<PAGE>
23
extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action 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 any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Remarketing Agent on the other from the
Remarketing of the Subject Securities in accordance with this Agreement 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
Company on the one hand and the Remarketing Agent on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Remarketing
Agent on the other shall be deemed to be in the same proportion as the aggregate
outstanding Liquidation Amount (if the Subject Securities are HIGH TIDES) or
principal amount (if the Subject Securities are Debentures) bear to the fees
received by the Remarketing Agent from the Company under this Agreement. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Remarketing Agent and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to inclde any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), the Remarketing Agent
shall not be required to contribute any amount in excess of the amount by which
the aggregate outstanding Liquidation Amount (if the Subject Securities are HIGH
TIDES) or principal amount (if the Subject Securities are Debentures) of the
Subject Securities remarketed exceeds the amount of any damages which the
Remarketing Agent has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
<PAGE>
24
(e) The obligations of the Company and the Trust under this Section
shall be in addition to any liability which the Company and the Trust may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls the Remarketing Agent within the meaning of the
Securities Act or the Exchange Act; and the obligations of the Remarketing Agent
under this Section shall be in addition to any liability which the Remarketing
Agent may otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls the Company and the Trust within the
meaning of the Securities Act or the Exchange Act.
SECTION 8. REMARKETING AGENT'S LIABILITIES. The Remarketing Agent
shall incur no liability to the Company, the Debenture Trustee, the Property
Trustee, the Administrative Trustees, the Delaware Trustee, the Tender Agent or
any holder of Subject Securities for its actions as Remarketing Agent pursuant
to the terms hereof and of the Trust Agreement or Indenture without gross
negligence or in the absence of wilful misconduct. The undertaking of the
Remarketing Agent to remarket any Subject Securities shall be on a "best
efforts" basis.
SECTION 9. TERMINATION. This Agreement will terminate upon the
earliest to occur of the following: (i) the written agreement of all parties
hereto; (ii) the date that no Debenture is outstanding; and (iii) the day
immediately following the Reset Date. The provisions of Sections 7, 8, 11 and 12
hereof will continue in effect as to actions prior to the date of termination,
and each party will pay to the others any amounts owing at the time of
termination.
SECTION 10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a)
The Remarketing Agent may resign at any time hereunder by giving at least 30
days' written notice thereof to the Company and the Tender Agent. No successor
need have accepted its appointment for such resignation to be effective.
(b) The Remarketing Agent may be removed at any time for Cause by the
holders of a majority in aggregate Par Amount of the Subject Securities
outstanding, by written notice to the Remarketing Agent, the Tender Agent and
the Company. No successor need have accepted its appointment for such removal
to be effective.
(c) If the Remarketing Agent resigns or is removed in accordance with
Section 10(b), the Company will use its best efforts to appoint as the successor
Remarketing Agent hereunder an investment bank, broker, dealer or other
organization which, in the judgment of the Company, is qualified to remarket the
Subject Securities and to establish the Term Provisions. If the Company fails
to so appoint a successor Remarketing Agent reasonably promptly, in light of the
proximity of the Tender Notification Date, or if such successor fails to accept
such appointment, the holders of not less than 25% in aggregate Par Amount of
the Subject Securities outstanding, by written notice to the Tender Agent and
the Company, may appoint a successor Remarketing Agent which is an investment
bank, broker, dealer or other organization qualified to remarket the Subject
Securities and to establish the Term Provisions; PROVIDED that for purposes of
determining the holders of not less than 25% in aggregate Par Amount of the
Subject
<PAGE>
25
Securities outstanding, Subject Securities owned by the Company, the Trust or
any trustee or administrator of the Trust or any affiliate of any of the
foregoing shall be disregarded and deemed not to be outstanding.
(d) A successor Remarketing Agent shall accept its appointment by
executing and delivering a written instrument of acceptance to the Tender Agent
and the Company.
(e) The provisions of Sections 7, 8, 11 and 12 hereof will continue
in effect as to actions of the Remarketing Agent prior to the date of
resignation or removal, and the Remarketing Agent will pay to and have the right
to receive from the other parties hereto any amounts owing at the time of such
event.
(f) The Tender Agent shall provide written notice of each resignation
and each removal of the Remarketing Agent and each appointment of a successor
Remarketing Agent and such successor's acceptance thereof by first-class mail,
postage prepaid, to the holders of the Subject Securities as their names and
addresses appear in the applicable register.
(g) Any corporation or other entity into which the Remarketing 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 the
Remarketing Agent may be a party, or any corporation succeeding to all or
substantially all of the business of the Remarketing Agent, shall be the
successor of the Remarketing Agent hereunder, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
SECTION 11. DEALING IN SUBJECT SECURITIES BY REMARKETING AGENT. The
Remarketing Agent, either as principal or agent, may buy, sell, own, hold and
deal in Subject Securities, and may join in any action which any owner of the
Subject Securities may be entitled to take with like effect as if it did not act
in any capacity hereunder. Except as provided in the next succeeding sentence,
the Remarketing Agent is under no obligation at any time to purchase Subject
Securities. If the Term Provisions are established by the Remarketing Agent but
on the Reset Date the Remarketing Agent is unable to consummate the sale of one
or more Subject Securities tendered for remarketing, the Remarketing Agent shall
purchase such Subject Securities on the Reset Date for 101% of their aggregate
Par Amount; PROVIDED, HOWEVER, that if, prior to the Initial Remarketing
Termination Date or prior to the expiration of the Final Remarketing Period,
Term Provisions are established by the Remarketing Agent but the Remarketing
Agent is unable to consummate the sale of one or more Subject Securities
tendered for remarketing due to the occurrence of a Market Event, then the
Initial Remarketing or Final Remarketing, as the case may be, shall be deemed to
have failed, and the provisions of this Agreement relating to an Initial Failed
Remarketing or a Failed Final Remarketing, as applicable, shall apply. The
Remarketing Agent agrees that the purchase of Subject Securities for its own
account or the account of its affiliates will be upon terms no more favorable to
it than those pertaining to the purchase of Subject Securities in the market
(which shall be determined by the Remarketing Agent in its sole discretion) in
general at the time of such purchase and that neither it nor its affiliates will
elect to retain Subject Securities on the Reset Date if the Subject
<PAGE>
26
Securities could be remarketed pursuant to this Agreement on terms more
favorable to the Trust or the Company than the terms upon which the Remarketing
Agent or such affiliates would continue to hold it. The Remarketing Agent,
either as principal or agent, may also engage in or be interested in any
financial or other transaction with the Trust or the Company and may act as
depository, trustee or agent for any committee or body of owners of Subject
Securities or other obligations of the Trust or the Company as freely as if it
had no obligations hereunder or under the Trust Agreement or Indenture.
SECTION 12. RECORDS. The Remarketing Agent agrees to keep books and
records relating to its activities as Remarketing Agent in accordance with
standard industry practice.
SECTION 13. PURCHASE AND SALES BY COMPANY. While the Company and its
affiliates may from time to time purchase, hold and sell Subject Securities, the
Company and the Remarketing Agent acknowledge that neither the Company nor any
affiliate of the Company may acquire or bid to acquire Subject Securities on the
Reset Date or submit orders in the Remarketing. The Remarketing Agent agrees
that it will not knowingly remarket any Subject Securities to the Company or any
of its affiliates.
SECTION 14. COMMUNICATION OF REMARKETING CONDITIONS. The Remarketing
Agent agrees, upon request from time to time by any holder of Subject Securities
and to the extent the Remarketing Agent deems advisable, to advise such holder
of current Remarketing Conditions.
SECTION 15. NOTICES. Unless otherwise provided herein, all notices,
requests, demands and formal actions hereunder shall be in writing and mailed or
sent by facsimile transmission or delivered, as follows:
If to the Company:
The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
Attention: General Counsel
Telephone: (858) 552-9500
Telecopy: (858) 552-9759
If to the Tender Agent:
Wilmington Trust Company, as Tender Agent
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Telephone: (302) 651-1000
Telecopy: (302) 651-8882
<PAGE>
27
If to the Trust:
c/o The Titan Corporation
Attention: General Counsel
3033 Science Park Road
San Diego, California 92121-1199
Telephone: (858) 552-9500
Telecopy: (858) 552-9759
If to the Remarketing Agent:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Attention: Transactions Advisory Group - Joseph D. Fashano
Telephone: (212) 325-2107
Telecopy: (212) 325-4296
Each of the above parties may, by written notice given hereunder to
the others, designate any further or different addresses or telecopier numbers
to which subsequent notices, certificates, requests or other communications
shall be sent. In addition, the parties hereto may agree to any other means by
which subsequent notices, certificates, requests or other communications may be
sent.
SECTION 16. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon, inure to the benefit of and be enforceable by, the respective successors
and assigns of the Company, the Trust, the Tender Agent, the Remarketing Agent
and the holders of the Subject Securities.
SECTION 17. THE TENDER AGENT. In serving as the Tender Agent
hereunder, the Debenture Trustee shall be entitled to the protections and
benefits of Sections 6.01(d), 6.03, 6.06 and 12.07 of the Indenture and the
Property Trustee shall be entitled to the protections and benefits of Sections
3.09, 3.10 and 10.04 of the Trust Agreement.
SECTION 18. ENTIRE AGREEMENT. Except as otherwise provided herein,
this Agreement contains the entire agreement between the parties relating to the
subject matter hereof, and there are no other representations, endorsements,
promises, agreements or understandings, oral, written or inferred, among the
parties.
SECTION 19. DESCRIPTIVE HEADINGS. The descriptive headings of the
several sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
<PAGE>
28
SECTION 20. AMENDMENT; WAIVER. (a) This Agreement shall not be
deemed or construed to be modified, amended, rescinded, canceled or waived, in
whole or in part, except by a written instrument signed by a duly authorized
representative of each of the Company, the Tender Agent, the Administrative
Trustees on behalf of the Trust and the Remarketing Agent.
(b) Failure of any party to exercise any right or remedy under this
Agreement in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
SECTION 21. SEVERABILITY. If any clause, provision or section of
this Agreement shall be ruled invalid or unenforceable by any court of competent
jurisdiction, the invalidity or unenforceability of such clause, provision or
section shall not affect any of the remaining clauses, provisions or sections
hereof.
SECTION 22. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in several counterparts, each of which shall be deemed an original and
all of which shall constitute but one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more than
one such counterpart signed by the party against which enforcement of this
Agreement is sought.
SECTION 23. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING,
WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
<PAGE>
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
THE TITAN CORPORATION
By:
Name:
Title:
TITAN CAPITAL TRUST
By:
Name: Deanna Hom Petersen
Title: Administrative Trustee
By:
Name: Ray Guillaume
Title: Administrative Trustee
WILMINGTON TRUST COMPANY, as Tender Agent
By:
Name:
Title:
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
Name:
Title:
<PAGE>
4,000,000 HIGH TIDES-SM-
TITAN CAPITAL TRUST
5 3/4% CONVERTIBLE PREFERRED SECURITIES
REMARKETABLE TERM INCOME DEFERRABLE EQUITY SECURITIES (HIGH TIDES-SM-)
(LIQUIDATION AMOUNT $50 PER
EACH OF THE HIGH TIDES)
GUARANTEED TO THE EXTENT SET FORTH
IN THE GUARANTEE AGREEMENT BY, AND
CONVERTIBLE INTO COMMON STOCK OF,
THE TITAN CORPORATION
REGISTRATION RIGHTS AGREEMENT
February 9, 2000
Credit Suisse First Boston Corporation
Donaldson, Lufkin & Jenrette
Securities Corporation
c/o Credit Suisse First Boston Corporation
As Representative of Donaldson, Lufkin & Jenrette
Securities Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Dear Sirs:
Titan Capital Trust, a statutory business trust formed under the laws of
the State of Delaware (the "Trust") by The Titan Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell to Credit Suisse First
Boston Corporation and the other initial purchasers (collectively, the
"Purchasers") named in Schedule A to the Purchase Agreement dated February 3,
2000 (the "Purchase Agreement"), among the Purchasers, the Company and the
Trust, upon the terms set forth in the Purchase Agreement, up to 4,000,000 (or
up to 5,000,000 to the extent the over-allotment option is exercised in full) of
its Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)K,
liquidation amount $50 per security (the "Preferred Securities") (the "Initial
Placement"). The proceeds of the sale by the
<PAGE>
Trust of the Preferred Securities and the Common Securities of the Trust,
liquidation amount $50 per Common Security (the "Common Securities"), are to be
invested in the Convertible Senior Subordinated Debentures due 2030 of the
Company issued pursuant to the Indenture dated February 9, 2000 between the
Company and Wilmington Trust Company, as Trustee (the "Debentures") having an
aggregate principal amount equal to the aggregate liquidation amount of the
Preferred Securities and the Common Securities. As an inducement to you to enter
into the Purchase Agreement and in satisfaction of a condition to your
obligations thereunder, the Trust and the Company agree with you, (i) for the
benefit of the Purchasers and (ii) for the benefit of the registered holders
from time to time of the Preferred Securities, the Debentures and the Common
Stock of The Titan Corporation, par value $.01 per share (such Common Stock and
any other shares issuable in place of or in addition to such shares pursuant to
the antidilution provisions of the Debentures, being referred to as the "Common
Stock"), of the Company issuable upon conversion of the Preferred Securities or
the Debentures (collectively, together with the Guarantee by the Company of the
Preferred Securities, the "Securities"), including the Purchasers (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or, if not defined therein, in the Offering Circular dated February 3,
2000, in respect of the Preferred Securities or, if not defined therein, in the
Amended and Restated Declaration of Trust dated as of February 9, 2000 (the
"Declaration") relating to the Trust. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"ACT" or "SECURITIES ACT" means the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"AFFILIATE" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by contract or
otherwise; the terms "controlling" and "controlled" have meanings correlative to
the foregoing.
"APPLICABLE RATE" means the rate at which the Preferred Securities
accrue distributions and the Debentures accrue interest. The Applicable Rate
shall be 5 3/4% per annum from the date of original issuance of the Preferred
Securities to (but excluding) the Reset Date. From the Reset Date, the
Applicable Rate will be the Term Rate established by the Remarketing Agent to be
effective on the Reset Date. The Applicable Rate will be increased upon the
occurrence of a Registration Default, as set forth in Section 7(a) hereof.
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in The City of New York are authorized or
<PAGE>
required by law or executive order to remain closed or (iii) a day on which the
corporate trust office of the Debenture Trustee or the Property Trustee is
closed for business.
"CLOSING DATE" has the meaning given such term in the Purchase
Agreement.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" has the meaning set forth in the first paragraph to
this Agreement.
"COMPANY" has the meaning set forth in the first paragraph to this
Agreement.
"DEBENTURES" has the meaning set forth in the first paragraph to this
Agreement.
"DEBENTURE TRUSTEE," "GUARANTEE TRUSTEE" and "PROPERTY TRUSTEE" each
means Wilmington Trust Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"GUARANTEE" means the guarantee by the Company of the Preferred
Securities pursuant to a Guarantee Agreement dated as of February 9, 2000
between the Company and the Guarantee Trustee.
"HOLDER" and "HOLDERS" each has the meaning set forth in the first
paragraph to this Agreement.
"INDEMNIFIED PARTIES" has the meaning set forth in Section 5(a)
hereof.
"INITIAL PLACEMENT" has the meaning set forth in the first paragraph
to this Agreement.
"MANAGING UNDERWRITERS" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"PARTICIPATING BROKER-DEALER" means any broker-dealer that is the
beneficial owner (as defined in Rule13d-3 under the Exchange Act) of Securities
received by such broker-dealer.
"PREFERRED SECURITIES" has the meaning set forth in the first
paragraph to this Agreement.
"PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information
<PAGE>
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Act), with respect to the terms
of the offering of any portion of the Securities covered by such Shelf
Registration Statement, as amended or supplemented by all amendments (including
post-effective amendments) and supplements to the Prospectus.
"PURCHASE AGREEMENT" has the meaning set forth in the first paragraph
to this Agreement.
"PURCHASERS" has the meaning set forth in the first paragraph to this
Agreement.
"REGISTRABLE SECURITIES" has the meaning specified in the Indenture.
"REGISTRATION DEFAULT" has the meaning given to such term in Section
7(a) hereof.
"REMARKETING AGENT" has the meaning specified in the Indenture.
"RESET DATE" means any date that is (i) not later than February 15,
2005 (or, if such day is not a Business Day, the next succeeding Business Day),
and (ii) not earlier than 70 Business Days prior to February 15, 2005, as may be
determined by the Remarketing Agent, in its sole discretion.
"SECURITIES" means the Preferred Securities, the Debentures, the
Common Stock and the Guarantee, individually and collectively.
"SHELF REGISTRATION" means a registration effected pursuant to Section
2 hereof.
"SHELF REGISTRATION PERIOD" has the meaning set forth in Section 2(b)
hereof.
"SHELF REGISTRATION STATEMENT" means a "shelf" registration statement
of the Trust and the Company pursuant to the provisions of Section 2 hereof
filed with the Commission which covers some or all of the Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"SUSPENSION PERIOD" has the meaning set forth in Section 7(b) hereof.
"TERM RATE" means the rate established by the Remarketing Agent (as
defined in the Indenture) in connection with the Remarketing (as defined in the
<PAGE>
Indenture) at which interest will accrue on the Debentures and distributions
will accrue on the Preferred Securities on and after the Reset Date.
"TRUST" has the meaning set forth in the first paragraph to this
Agreement.
"TRUSTEE" means the Guarantee Trustee, the Debenture Trustee or the
Property Trustee, as applicable.
"UNDERWRITER" means any underwriter of Securities in connection with
an offering thereof under a Shelf Registration Statement.
(a) SHELF REGISTRATION. The Trust and the Company shall as promptly as
practicable prepare and, not later than the 75th day following the Closing Date,
shall file with the Commission and thereafter shall each use their best efforts
to cause to be declared effective under the Act as soon as practicable, but in
no event later than the 150th day following the Closing Date, a Shelf
Registration Statement relating to the offer and sale of the Securities by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement.
(b) The Trust and the Company shall each use its best efforts
(i) to keep the Shelf Registration Statement continuously
effective in order to permit the Prospectus forming part thereof to be
usable by Holders until resale of the Securities is permitted pursuant
to Rule 144(k) under the Securities Act or any successor rule or
regulation thereto after the date the Shelf Registration Statement is
declared effective or such shorter period that will terminate upon the
earlier of the following:
(1) when all the Preferred Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement;
(2) when all Debentures issued to Holders in respect of
Preferred Securities that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the Shelf
Registration Statement; or
(3) when all shares of Common Stock issued upon conversion
of any such Preferred Securities or any such Debentures that had
not been sold pursuant to the Shelf Registration Statement have
been sold pursuant to the Shelf Registration Statement (in any
such case, such period being called the "Shelf Registration
Period"); and
<PAGE>
(ii) after the effectiveness of the Shelf Registration Statement,
promptly upon the request of any Holder to take any action reasonably
necessary to register the sale of any Securities of such Holder and to
identify such Holder as a selling securityholder.
2. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to the Purchasers and any
other Holders who so request, and their respective counsel and accountants,
prior to the filing thereof with the Commission, a copy of any Shelf
Registration Statement, and each amendment thereof and each amendment or
supplement, if any, to the Prospectus included therein and shall each use
its best efforts to reflect in each such document, when so filed with the
Commission, such comments as the Purchasers and such other Holders
reasonably may propose.
(b) The Trust and the Company shall take such action as may be
necessary so that (i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any amendment or
supplement thereto (and each report or other document incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and
regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading and (iii) any Prospectus forming part of any Shelf Registration
Statement, and any amendment or supplement to such Prospectus, does not,
during the Shelf Registration Period, include an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements, in the light of the circumstances under which they were
made, not misleading.
(i) The Company shall advise the Purchasers and the Holders and, if
requested by the Purchasers or any such Holder, confirm such advice in
writing:
(1) when a Shelf Registration Statement and any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective; and
(2) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
<PAGE>
(ii) The Trust and the Company shall advise the Purchasers and
the Holders and, if requested by the Purchasers or any such Holder,
confirm such advice in writing:
(1) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(2) of the receipt by the Trust or the Company of any
notification with respect to the suspension of the qualification
of the Securities included therein for sale in any state or the
initiation or threatening of any proceeding for such purpose; and
(3) of the happening, during the Shelf Registration Period,
of any event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such
date, the Registration Statement and the Prospectus do not
contain an untrue statement of a material fact and do not omit to
state a material fact required to be stated therein or necessary
to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes
have been made).
(c) Each of the Trust and the Company shall use its best efforts to
prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(d) The Trust and the Company shall furnish to each Holder of
Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto (including any reports
or other documents incorporated therein by reference), including financial
statements and schedules, and, if the Holder so requests in writing, all
exhibits (including those incorporated by reference).
(e) The Trust and the Company shall, during the Shelf Registration
Period, deliver to each Holder of Securities included within the coverage
of any Shelf Registration Statement, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in such Shelf
Registration Statement and any amendment or supplement thereto as such
Holder may reasonably request; and each of the Trust and the Company
consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders of Securities in connection
<PAGE>
with the offering and sale of the Securities covered by the Prospectus or
any amendment or supplement thereto during the Shelf Registration Period.
(f) Prior to any offering of Securities pursuant to any Shelf
Registration Statement, the Trust and the Company shall register or qualify
or cooperate with the Holders of Securities included therein and their
respective counsel in connection with the registration or qualification of
such Securities for offer and sale under the securities or blue sky laws of
such states as any such Holders reasonably request in writing and do any
and all other acts or things necessary or advisable to enable the offer and
sale in such states of the Securities covered by such Shelf Registration
Statement; provided, however, that neither the Trust nor the Company will
be required to qualify generally to do business in any jurisdiction where
it is not then so qualified or to take any action which would subject it to
general service of process or to taxation in any such jurisdiction where it
is not then so subject.
(g) Unless the applicable Securities shall be in book-entry only
form, the Trust and the Company shall cooperate with the Holders of
Securities to facilitate the timely preparation and delivery of
certificates representing Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
permitted denominations and registered in such names as Holders may request
in connection with the sale of Securities pursuant to such Shelf
Registration Statement.
(h) Upon the occurrence of any event contemplated by Section
3(c)(i)(2) or 3(c)(ii)(3) above, the Trust and the Company shall promptly
prepare a post-effective amendment to any Shelf Registration Statement or
an amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Securities included therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If the Trust or the Company notifies
the Holders of the occurrence of any event contemplated by Section
3(c)(ii)(3) above, the Holders shall suspend the use of the Prospectus
until the requisite changes to the Prospectus have been made.
(i) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Company shall provide a CUSIP number
for the Preferred Securities and, in the event of and at the time of any
distribution thereof to Holders, the Debentures, registered under such
Shelf Registration Statement, and provide the applicable Trustee with
certificates for such Securities, in a form eligible for deposit with The
Depository Trust Company.
(j) The Trust and the Company shall use their best efforts to comply
with all applicable rules and regulations of the Commission and shall
<PAGE>
make generally available to their securityholders or otherwise in
accordance with Section 11(a) of the Securities Act as soon as practicable
after the effective date of the applicable Shelf Registration Statement an
earning statement satisfying the provisions of Section 11(a) of the
Securities Act.
(k) The Trust and the Company shall cause the Indenture, the
Declaration and the Guarantee to be qualified under the Trust Indenture Act
in a timely manner.
(l) The Trust and the Company may require each Holder of Securities
to be sold pursuant to any Shelf Registration Statement to furnish to the
Trust and the Company such information regarding the Holder and the
distribution of such Securities as the Trust and the Company may from time
to time reasonably require for inclusion in such Shelf Registration
Statement.
(m) The Trust and the Company shall, if requested, promptly
incorporate in a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing Underwriters
reasonably agree should be included therein and to which the Trust and the
Company do not reasonably object and shall make all required filings of
such Prospectus supplement or post-effective amendment as soon as
practicable after they are notified of the matters to be incorporated in
such Prospectus supplement or post-effective amendment.
(n) The Trust and the Company shall enter into such customary
agreements (including underwriting agreements in customary form) to take
all other appropriate actions in order to expedite or facilitate the
registration or the disposition of the Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification provisions and procedures substantially identical
to those set forth in Section 5 hereof (or such other customary provisions
and procedures acceptable to the Managing Underwriters, if any) with
respect to all parties to be indemnified pursuant to Section 5 hereof.
(o) The Trust and the Company shall (i) make reasonably available for
inspection by the Holders of Securities to be registered thereunder, any
underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent
retained by such Holders or any such underwriter, all relevant financial
and other records, pertinent corporate documents and properties of the
Trust and the Company and its subsidiaries as shall be requested in
connection with the discharge of their due diligence obligations; (ii)
cause the Company's officers, directors, employees and independent public
accountants and any relevant Trustees to supply at the Company's expense
all relevant information reasonably requested by such Holders or any such
underwriter, attorney, accountant or agent in connection with any such
Shelf Registration Statement as is customary for similar due diligence
examinations; provided, however,
<PAGE>
that any information that is designated in writing by the Trust and the
Company in good faith as confidential at the time of delivery of such
information shall be kept confidential by such Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made
in connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a third
party without an accompanying obligation of confidentiality; and provided
further that the foregoing inspection and information gathering shall, to
the greatest extent possible, be coordinated on behalf of the Holders and
the other parties entitled thereto by one counsel designated by and on
behalf of such Holders and other parties; (iii) to the extent requested,
make such representations and warranties to the Holders of Securities
registered thereunder and the underwriters, if any, in form, substance and
scope as are customarily made by the issuers to underwriters in primary
underwritten offerings and covering matters as are customarily covered in
representation and warranties requested in primary underwritten offerings
including, but not limited to, those set forth in the Purchase Agreement;
(iv) to the extent requested, obtain opinions of counsel to the Trust and
the Company and updates thereof (which counsel and opinions (in form, scope
and substance) shall be reasonably satisfactory to the Managing
Underwriters, if any) addressed to each selling Holder and the
underwriters, if any, covering such matters and with such exceptions as are
customarily covered or taken in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such
Holders and underwriters (it being agreed that the matters to be covered by
such opinion shall include, without limitation, as of the date of the
opinion and as of the effective date of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, a
statement by such counsel regarding the absence from such Shelf
Registration Statement and the prospectus included therein, as then amended
or supplemented, including the documents incorporated by reference therein,
of an untrue statement of a material fact or the omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading); (v) to the extent requested, obtain
"cold comfort" letters and updates thereof from the independent certified
public accountants of the Company (and, if necessary, any other independent
certified public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each such Holder of Securities
registered thereunder and the underwriters, if any, in customary form and
covering matters of the type customarily covered in "cold comfort" letters
in connection with primary underwritten offerings; and (vi) deliver such
documents and certificates as may be reasonably requested by any such
Holders and the Managing Underwriters, if any, including those to evidence
compliance with Section 3(i) and with any customary conditions contained in
the underwriting agreement or other agreement entered into by the Trust and
the Company. The foregoing actions set forth in clauses (iii), (iv), (v)
and (vi) of this Section 3(p), to the extent
<PAGE>
requested, shall be performed at (A) the effectiveness of such Shelf
Registration Statement and each post-effective amendment thereto and (B)
each closing under any underwritten offering to the extent required under
any related underwriting or similar agreement.
(p) Each of the Trust and the Company will use its best efforts to
cause the Common Stock relating to such Shelf Registration Statement to be
listed on each securities exchange, over-the-counter market, or respective
counterpart if any, on which any shares of Common Stock are then listed.
(q) The Trust and the Company shall, in the event that any broker-
dealer registered under the Exchange Act shall underwrite any Securities or
participate as a member of an underwriting syndicate or selling group or
"assist in the distribution" (within the meaning of the Rules of Fair
Practice and the By-Laws of the National Association of Securities Dealers,
Inc. ("NASD")) thereof, whether as a Holder of such Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker-dealer in complying with the
requirements of such Rules and By-Laws, including, without limitation, by
(A) if such Rules or By-Laws, including Schedule E thereto, shall so
require, engaging a "qualified independent underwriter" (as defined in such
Schedule) to participate in the preparation of the Shelf Registration
Statement relating to such Securities, to exercise usual standards of due
diligence in respect thereto, (B) indemnifying any such qualified
independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof and (C) providing such
information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the Rules of Fair Practice
of the NASD.
(r) The Trust and the Company shall use their best efforts to take
all other steps necessary to effect the registration, offering and sale of
the Securities covered by the Shelf Registration Statement contemplated
hereby.
3. REGISTRATION EXPENSES. Except as otherwise provided in Section 6, the
Company shall bear all fees and expenses incurred in connection with the
performance of the obligations of the Company and the Trust under Sections 2 and
3 hereof and shall bear, or reimburse the Purchasers or the Holders for, the
reasonable fees and disbursements of one counsel designated in connection with
the filing of the Shelf Registration Statement. Notwithstanding anything to the
contrary herein contained, each Holder of Securities shall pay all registration
expenses to the extent required by applicable law.
4. INDEMNIFICATION. (a) The Trust and the Company, jointly and severally
agree, to indemnify and hold harmless each Holder of the Securities, any
Participating Broker-Dealer and each person, if any, who controls such Holder or
such Participating Broker-Dealer within the meaning of the Securities Act or the
Exchange Act (each Holder, any Participating Broker-Dealer and such controlling
<PAGE>
persons are referred to collectively as the "INDEMNIFIED PARTIES") from and
against any losses, claims, damages or liabilities, joint or several, or any
actions in respect thereof (including, but not limited to, any losses, claims,
damages, liabilities or actions relating to purchases and sales of the
Securities) to which each Indemnified Party may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in an amendment thereof, or in any
preliminary prospectus relating to a Shelf Registration, or arise out of, or are
based upon, the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse, as incurred, the Indemnified Parties for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action in
respect thereof; PROVIDED, HOWEVER, that (i) the Trust and the Company shall not
be liable in any such case to the extent that such loss, claim, damage or
liability arises out of or is based upon any untrue statement or alleged untrue
statement or omission or alleged omission made in the Shelf Registration
Statement as originally filed or in an amendment thereof, or in any preliminary
prospectus relating to a Shelf Registration Statement in reliance upon and in
conformity with written information pertaining to any Holder and furnished to
the Trust or the Company by or on behalf of any Holder specifically for
inclusion therein and (ii) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus relating
to a Shelf Registration Statement, the indemnity agreement contained in this
paragraph (a) shall not inure to the benefit of any Holder or Participating
Broker-Dealer from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities concerned, to the extent that a prospectus
relating to such Securities was required to be delivered by such Holder or
Participating Broker-Dealer under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder or
Participating Broker-Dealer results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the final prospectus if the Trust or
the Company had previously furnished copies thereof to such Holder or
Participating Broker-Dealer; PROVIDED FURTHER, HOWEVER, that this indemnity
agreement will be in addition to any liability which the Trust or the Company
may otherwise have to such Indemnified Party. The Trust and the Company shall
also indemnify underwriters, their officers and directors and each person who
controls such underwriters within the meaning of the Securities Act or the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Securities if requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Trust, the Trustee, the Company, each of the
directors of the Company, each of the officers of the Company who signs such
Shelf Registration Statement and each person, if any, who controls the Trust or
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the
<PAGE>
Company, the Trust, the Trustee, each of the directors of the Company, each of
the officers of the Company who signs such Shelf Registration Statement or any
person who controls the Trust or the Company may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in an amendment thereof, or in any
preliminary prospectus relating to a Shelf Registration Statement, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with
written information pertaining to such Holder and furnished to the Trust or the
Company by or on behalf of such Holder specifically for inclusion therein; and,
subject to the limitation set forth immediately preceding this clause, shall
reimburse, as incurred, the Trust, the Trustee, the Company, each of the
directors of the Company, each of the officers of the Company who signs such
Shelf Registration Statement or any person who controls the Trust or the Company
for any legal or other expenses reasonably incurred by the Trust, the Trustees,
the Company, each of the directors of the Company, each of the officers of the
Compay who signs such Shelf Registration Statement or any such controlling
person in connection with investigating or defending any loss, claim, damage,
liability or action in respect thereof. This indemnity agreement will be in
addition to any liability which such Holder may otherwise have to the Company,
the Trust, the Trustees, each of the directors of the Company, each of the
officers of the Company who signs such Shelf Registration Statement or any
person who controls the Trust or the Company.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 5, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder
<PAGE>
by such indemnified party unless such settlement includes an unconditional
release of such indemnified party from all liability on any claims that are the
subject matter of such action, and does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnifid party.
(d) If the indemnification provided for in this Section 5 is unavailable
or insufficient to hold harmless an indemnified party under paragraphs (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in paragraph (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the Initial Placement and the Shelf
Registration Statement, or (ii) if the allocation provided by the foregoing
clause (i) 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 indemnifying party or parties on the
one hand and the indemnified party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Trust, on
the one hand, or such Holder or such other indemnified party, as the case may
be, on the other, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this paragraph (d)
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim which is the subject of this paragraph (d). Notwitstanding any other
provision of this Section 5(d), the Holders of the Securities shall not be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holders from the sale of the Securities pursuant to
the Shelf Registration Statement exceeds the amount of damages which such
Holders have 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. For purposes of this paragraph
(d), each person, if any, who controls such indemnified party within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as such indemnified party and each of the directors of the Company,
each of the officers of the Company who signs such Shelf Registration Statement,
and each person, if any, who controls the Company within the meaning of the
Securities Act or the Exchange Act shall have the same rights to contribution as
the Company and each person, if any, who controls the Trust within the meaning
of the Securities Act or the Exchange Act shall have the same rights to
contribution as the Trust.
<PAGE>
(e) The agreements contained in this Section 5 shall survive the sale of
the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.
5. UNDERWRITTEN OFFERING. If, pursuant to written notice delivered to
the Company by the Holders of a majority in aggregate liquidation amount of the
Preferred Securities, a majority in aggregate principal amount of the Debentures
or a majority of Holders of the Common Stock, as the case may be, registered
pursuant to a Shelf Registration, such Holders so elect, the offer and sale of
any such Preferred Securities, Debentures and/or Common Stock may be effected in
the form of an underwritten offering. In any such underwritten offering, the
investment banker or bankers and manager or managers that will administer the
offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Company; provided, however, that such
investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Holders of a majority of the Securities to be included in
such offering. The Company shall not, in any event, be obligated to arrange for
more than one underwritten offering during the Shelf Registration Period. No
Holder may participate in any underwritten offering contemplated hereby unless
(i) such Holder (a) agrees to sell such Holder's Securities in accordance with
any approved underwriting arrangements, (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
approved underwriting arrangements and (ii) at least 20% of the outstanding
Securities are included in such underwritten offering. The Holders
participating in any underwritten offering shall be responsible for any expenses
customarily borne by selling securityholders, including underwriting discounts
and commissions and fees and expenses of counsel to the selling securityholders
and shall reimburse the Trust and the Company for the fees and disbursements of
their counsel, their independent public accountants and any printing expenses
incurred in connection with such underwritten offering. Notwithstanding the
foregoing or the provisions of Section 3(n) hereof, upon receipt of a request
from the Managing Underwriter or a representative of Holders of a majority of
the Securities outstanding to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
(a) CHANGES TO THE APPLICABLE RATE UNDER CERTAIN CIRCUMSTANCES. The
Applicable Rate at which interest is paid on the Debentures (including in
respect of amounts accruing during any Deferral Period), and distributions are
paid on the Preferred Securities shall be adjusted as follows, if any of the
following events occur (each such event in clauses (i) through (iii) below, a
"Registration Default"):
(i) if a Shelf Registration Statement is not filed with the
Commission on or prior to the 75th day following the Closing Date;
<PAGE>
(ii) if the Shelf Registration Statement is not declared
effective on or prior to the 150th day following the Closing Date;
(iii) if (1) after the Shelf Registration Statement is declared
effective, such Shelf Registration Statement ceases to be effective
prior to the end of the Shelf Registration Period (except as permitted
in paragraph (b) of this Section 7) or (2) such Shelf Registration
Statement or the related Prospectus ceases to be usable in connection
with resales of Securities covered by such Shelf Registration
Statement prior to the end of the Shelf Registration Period (except as
permitted in paragraph (b) of this Section 7) because either (A) any
event occurs as a result of which the related Prospectus forming part
of such Shelf Registration Statement would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein in light of the circumstances
in which they were made not misleading or (B) it shall be necessary to
amend such Shelf Registration Statement, or supplement the related
Prospectus, to comply with the Securities Act or the Exchange Act or
the respective rules thereunder.
The Applicable Rate will increase following the occurrence of each
Registration Default set forth in clauses (i), (ii) and (iii) above from and
including the next day following each such Registration Default, in each case by
.50% per annum of the principal amount or liquidation amount, as applicable, of
the Securities without prejudice to any other claim that any Holder may have for
any failure by the Company to obtain or maintain continuous effectiveness of a
Shelf Registration Statement in accordance with the terms of this Registration
Agreement. The increase in the Applicable Rate attributable to each
Registration Default shall cease to be effective from the date such Registration
Default is cured, and the Applicable Rate shall be reduced at such time to the
Applicable Rate in effect immediately prior to such Registration Default;
provided, however, in the event a Registration Default occurs prior to the Reset
Date and is cured on or after the Reset Date, the Applicable Rate shall be the
Term Rate from the date such Registration Default is cured.
(b) Notwithstanding anything in Section 7(a) to the contrary, the
Company may prohibit offers and sales of Registrable Securities at any time
if
(i) (1) it is in possession of material non-public information,
(2)(A) the Board of Directors of the Company or (B) the Chief
Financial Officer and the General Counsel of the Company, determine in
good faith that disclosure of such material non-public information at
such time would not be in the best interests of the Company, and
(3)(A) the Chief Executive Officer of the Company or (B) the Chief
Financial Officer and the General Counsel of the Company, determine
that such prohibition is necessary in order to
<PAGE>
avoid a requirement to disclose such material non-public information;
or
(ii) the Company has made a public announcement relating to an
acquisition or business combination transaction including the Company
and/or one or more of its subsidiaries (1) that is material to the
Company and its subsidiaries taken as a whole (and for such purpose no
transaction shall be deemed material unless, on a pro forma basis and
after giving effect thereto, consolidated assets or consolidated
revenues of the Company and its subsidiaries as of the end of or for
the most recently completed fiscal year would be increased by at least
20%) and (2) the Board of Directors of the Company or the Chief
Executive Officer or the Chief Financial Officer of the Company
determines in good faith that offers and sales of Registrable
Securities prior to the consummation of such transaction (or such
earlier date as the Board of Directors or the Chief Executive Officer
or the Chief Financial Officer of the Company shall determine) is not
in the best interests of the Company;
provided that during any period of prohibition neither the Company nor any other
Person to whom the Company shall have given registration rights with respect to
shares of Common Stock shall be entitled to make offers and sales of Common
Stock pursuant to a registration statement filed under the Securities Act, other
than pursuant to an employee stock purchase plan, stock option or other employee
benefit plan or a dividend re-investment plan of the Company (each period during
which any prohibition of offers and sales of Registrable Securities is in effect
pursuant to clause (i) or (ii) of this Section 7(b) is referred to herein as a
"Suspension Period").
A Suspension Period shall commence on and include the date on which
the Company provides written notice to Holders of Registrable Securities that
offers and sales of Registrable Securities cannot be made in accordance with
this Section 7(b) and shall end on the date on which each such Holder of
Registrable Securities either receives copies of a prospectus supplement, or is
advised in writing by the Company that offers and sales of Registrable
Securities and use of the Prospectus may be resumed; provided, however, that all
Suspension Periods pursuant to clause (i) of this Section 7(b) in the aggregate
shall not exceed 60 days during any period of twelve consecutive calendar months
(nor more than 20 consecutive days for any one Suspension Period) and each
Suspension Period shall be followed by at least ten Business Days during which
no Suspension Period is in effect.
(c) A Registration Default referred to in Section 7(a)(iii) shall be
deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related Prospectus if (i) such Registration
Default has occurred solely as a result of (1) the filing of a
post-effective amendment to such Shelf Registration Statement to
incorporate annual audited financial information with respect to the
Company where such post-effective amendment is not yet effective and needs
to be declared effective to
<PAGE>
permit Holders to use the related Prospectus or (2) the occurrence of other
material events or developments with respect to the Trust or the Company
that would need to be described in such Registration Statement or the
related Prospectus and (ii) in the case of clause (2), the Trust and the
Company are proceeding promptly and in good faith to amend or supplement
such Registration Statement and related Prospectus to describe such events;
provided, however, that in any case, if such Registration Default occurs
for a continuous period in excess of 45 days, the Applicable Rate shall
increase by .50% per annum of the principal amount or the liquidation
amount, as applicable, in accordance with paragraph (a) above from the
first day of such 45-day period until the date on which such Registration
Default is cured.
6. MISCELLANEOUS.
(a) No Inconsistent Agreements. The Trust and the Company have not,
as of the date hereof, entered into, nor shall they on or after the date
hereof, enter into, any agreement with respect to their securities or
otherwise that is inconsistent with the rights granted to the Holders
herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Purchasers.
(c) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(i) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this
Section 8(c), which address initially is, with respect to each Holder,
the address of such Holder maintained by the Registrar under the
Indenture, with respect to the Debentures, or the Declaration, with
respect to the Preferred Securities, with a copy in a like manner to
Credit Suisse First Boston Corporation;
(ii) if to the Purchasers, initially at the address set forth in
the Purchase Agreement; and
(iii) if to the Trust or the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
<PAGE>
The Purchaser or the Trust and the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties and the Holders, including, without the need for an express
assignment or any consent by the Trust or the Company thereto, subsequent
Holders of Securities. The Trust and the Company hereby agree to extend
the benefits of this Agreement to any Holder of Securities and any such
Holder may specifically enforce the provisions of this Agreement as if an
original party hereto.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without
regard to principles of conflicts of laws.
(h) Severability. In the event that any one of more of the
provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for
any reason, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions hereof shall not be
in any way impaired or affected thereby, it being intended that all of the
rights and privileges of the parties shall be enforceable to the fullest
extent permitted by law.
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Trust and you.
Very truly yours,
TITAN CAPITAL TRUST
By: _______________________________
Name:
Title: Administrative Trustee, solely in a
capacity as trustee and not in an
individual capacity
THE TITAN CORPORATION
By: _______________________________
Name:
Title:
The foregoing Registration Rights Agreement
is hereby confirmed and accepted as of
the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: CREDIT SUISSE FIRST BOSTON CORPORATION
Acting on behalf of itself and as the
representative of Donaldson, Lufkin & Jenrette
Securities Corporation
By: _________________________
Name:
Title:
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TITAN CAPITAL TRUST
FEBRUARY 9, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration"),
dated and effective as of February 9, 2000, by the undersigned trustees
(together with all other Persons from time to time duly appointed and serving as
trustees in accordance with the provisions of this Declaration, the "Trustees"),
The Titan Corporation, a Delaware corporation, as trust Depositor (the
"Depositor"), and by the holders, from time to time, of undivided beneficial
interests in the assets of the Trust (as defined below) issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Depositor established Titan
Capital Trust (the "Trust") under the Business Trust Act (as hereinafter
defined) pursuant to a Declaration of Trust dated as of January 19, 2000 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on January 19, 2000, 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 of the Debenture Issuer (as hereinafter defined);
WHEREAS, as of the date hereof, no interests of the
Trust have been issued;
WHEREAS, all of the Trustees and the Depositor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
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Section 1.01 DEFINITIONS. Unless the context otherwise
requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(b) a term defined anywhere in this Declaration or the
Indenture has the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(f) 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
(g) a reference to the singular includes the plural and vice
versa.
"ACS" means Advanced Communication Systems, Inc., a
Delaware corporation.
"ADDITIONAL AMOUNTS" has the meaning specified in the
Indenture.
"ADMINISTRATIVE ACTION" has the meaning set forth in the
definition of "Tax Event" in this Section 1.01.
"ADMINISTRATIVE TRUSTEE" means any Trustee other than the
Property Trustee and the Delaware Trustee.
"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. For the purposes 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;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent, Conversion
Agent or co-registrar.
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"APPOINTMENT EVENT" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person.
"BENEFICIARIES" has the meaning set forth in Section
4.03(a).
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Preferred Securities Certificate, ownership and transfers of which shall be
maintained and made through book entries by a Depositary as described in Section
9.02.
"BUSINESS DAY" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed, or a day on
which the Corporate Trust Office of the Property Trustee or the Debenture
Trustee is closed for business.
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 eT Seq., as it may be amended from
time to time, or any successor legislation.
"CERTIFICATE" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"CHANGE IN 1940 ACT LAW" has the meaning specified in
paragraph 4(d) of Annex I.
"CLOSING DATE" means February 9, 2000.
"CODE" means the Internal Revenue Code of 1986, as amended, or
any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES" has the meaning specified in Section
7.01(a).
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to
be dated as of February 9, 2000 of the Depositor in respect of the Common
Securities.
"COMMON STOCK" has the meaning specified in the Indenture.
"COMPOUNDED INTEREST" has the meaning specified in the
Indenture.
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<PAGE>
"CONVERSION AGENT" has the meaning set forth in Section 7.04.
"CONVERSION DATE" has the meaning specified in paragraph 5(b)
of Annex I.
"CONVERSION REQUEST" has the meaning specified in paragraph
5(b) of Annex I.
"COVERED PERSON" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"DEBENTURE EVENT OF DEFAULT" in respect of the Securities
means an Event of Default (as defined in the Indenture) has occurred and is
continuing in respect of the Debentures.
"DEBENTURE ISSUER" means the Depositor in its capacity as
issuer of the Debentures.
"DEBENTURES" means the Convertible Senior Subordinated
Debentures Due 2030 of the Debenture Issuer.
"DEBENTURE TRUSTEE" means Wilmington Trust Company, a Delaware
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"DECLARATION" means this Amended and Restated Declaration of
Trust as originally executed or as it may from time to time be supplemented or
amended.
"DECLARATION TRUSTEES" means collectively, the Administrative
Trustees, the Property Trustee and the Delaware Trustee.
"DEFERRAL PERIOD" has the meaning specified in paragraph 2(b)
of Annex I.
"DEFINITIVE PREFERRED SECURITIES" means any Preferred
Securities in definitive form issued by the Trust.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.02.
"DEPOSITARY" means The Depository Trust Company, the initial
clearing agency, until a successor shall be appointed pursuant to Section 9.05,
and thereafter means such successor Depositary.
"DEPOSITOR" means The Titan Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as Depositor of the Trust.
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<PAGE>
"DIRECT ACTION" has the meaning specified in Section 3.08(e).
"DISCLOSURE DOCUMENTS" has the meaning specified in the
Remarketing Agreement.
"DISSOLUTION TAX OPINION" has the meaning specified in the
definition of Tax Event in this Section 1.01.
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.01.
"DISTRIBUTION DATE" has the meaning specified in paragraph
2(b) of Annex I.
"EVENT OF DEFAULT" means:
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any
Distribution when it becomes due and payable, and continuation of such
default for a period of 30 days (subject to the deferral of any due
date in the case of a Deferral Period); or
(iii) default by the Trust in the payment of any
Redemption Price of any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any
material respect, of any covenant or warranty of the Trustees in the
Declaration (other than a covenant or warranty, a default in the
performance of which or the breach of which is addressed in clause (ii)
or (iii) above), and continuation of such default or breach for a
period of 60 days after there has been given, by registered or
certified mail, to the Declaration Trustee or Declaration Trustees by
the holders of at least 25% in aggregate liquidation amount of the
outstanding Preferred Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" under the Declaration; or
(v) the occurrence of a bankruptcy or insolvency with
respect to the Property Trustee and the failure of the Depositor to
appoint a successor Property Trustee in the manner required by Section
5.06(c).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
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<PAGE>
"FAILED FINAL REMARKETING" has the meaning specified in the
Remarketing Agreement.
"FISCAL YEAR" shall have the meaning specified in Section
11.01.
"GLOBAL PREFERRED SECURITY" shall have the meaning specified
in Section 7.03(a).
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means (a) any Trustee; (b) any Affiliate
of any Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"INDENTURE" means the Indenture, dated as of February 9, 2000,
between the Debenture Issuer and the Debenture Trustee, as it may be amended
from time to time.
"INITIAL CONVERSION PRICE" has the meaning specified in
paragraph 5(a) of Annex I.
"INITIAL RATE" has the meaning specified in paragraph 2(a) of
Annex I.
"INITIAL REDEMPTION PRICE" has the meaning specified in the
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 specified in
paragraph 4(d) of Annex I.
"LEGAL ACTION" has the meaning set forth in Section 3.06(g).
"LIKE AMOUNT" means (i) with respect to a redemption of
Securities, Securities having an aggregate liquidation amount equal to that
portion of the principal amount of Debentures to be contemporaneously redeemed
in accordance with the Indenture, allocated to such Securities based upon the
relative liquidation amounts of such Securities and the proceeds of which will
be used to pay the applicable Redemption Price of such Securities and (ii) with
respect to a distribution of Debentures to Holders of the Securities in
connection with a dissolution and liquidation of the Trust, Debentures having a
principal amount equal to the aggregate liquidation amount of the Securities of
the Holder to whom such Debentures are distributed.
6
<PAGE>
"LIQUIDATION DISTRIBUTION" has the meaning specified in
paragraph 3 of Annex I.
"LIST OF HOLDERS" has the meaning set forth in Section
2.02(a).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means,
except as provided in the terms of the Securities and 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 Preferred Securities
or Holders of outstanding Common Securities voting separately as a class,
representing more than 50% of the aggregate liquidation amount (i.e., 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.
"MINISTERIAL ACTION" has the meaning set forth in paragraph
4(d) in Annex I.
"NO RECOGNITION OPINION" has the meaning specified in
paragraph 4(d) of Annex I.
"NOTICE" has the meaning set forth in Section 15.01(c).
"OBLIGATIONS" means any costs, expenses or liabilities of the
Trust, other than obligations of the Trust to pay to Holders of any Securities
or other similar interests in the Trust the amounts due such Holders pursuant to
the terms of the Securities or such other similar interests, as the case may be.
"OFFER TO REPURCHASE" has the meaning set forth in Section
15.01(a).
"OFFERING CIRCULAR" means the confidential offering circular,
dated as of February 3, 2000, relating to the issuance by the Trust of Preferred
Securities.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(i) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the
definitions relating thereto;
(ii) brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
(iii) a statement that each such officer has made
such examination or investigation as, in such officer's opinion, is
necessary to enable such
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<PAGE>
officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(a) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"OID" means original issue discount.
"OPTIONAL CLOSING DATE" has the meaning assigned to such term
in the Purchase Agreement.
"OPTIONAL REDEMPTION" has the meaning specified in the
Indenture.
"PARTICIPANTS" has the meaning set forth in Section 7.03(b).
"PAYING AGENT" has the meaning specified in Section 7.04.
"PAYMENT AMOUNT" has the meaning specified in Section 6.01.
"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.
"PREFERRED SECURITIES" has the meaning specified in Section
7.01(a).
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement
to be dated as of February 9, 2000, between the Depositor and Wilmington Trust
Company, as Guarantee Trustee, in respect of the Preferred Securities.
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant
or as an indirect participant, in each case in accordance with the rules of such
Depositary).
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in
Section 3.08(c).
"PRO RATA" has the meaning specified in paragraph 9 of Annex
I.
"QIBS" has the meaning set forth in Section 3.06(b)(i).
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<PAGE>
"PURCHASE AGREEMENT" has the meaning set forth in Section
7.03.
"QUORUM" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"REDEMPTION PRICE" has the meaning specified in the Indenture.
"REDEMPTION TAX OPINION" has the meaning specified in
paragraph 4 (d) of Annex I.
"REGISTRAR" has the meaning set forth in Section 7.04.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated February 9, 2000, among the Depositor, the Trust, and the
Purchasers named in the Purchase Agreement.
"REGULAR RECORD DATE" has the meaning specified in the
Indenture.
"RELATED PARTY" means, with respect to the Depositor, any
direct or indirect wholly owned subsidiary of the Depositor or any other Person
that owns, directly or indirectly, 100% of the outstanding voting securities of
the Depositor.
"REMARKETING" has the meaning specified in the Remarketing
Agreement.
"REMARKETING AGENT" has the meaning specified in the
Indenture.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated
February 9, 2000 among the Depositor, the Trust, the Tender Agent and the
Remarketing Agent.
"REPURCHASE PAYMENT" has the meaning set forth in Section
15.01(a).
"REPURCHASE PAYMENT DATE" has the meaning set forth in Section
15.01(c)(ii).
"RESET DATE" means any date that is (i) not later than
February 15, 2005 (or, if such day is not a Business Day, the next succeeding
Business Day), and (ii) not earlier than 70 Business Days prior to February 15,
2005, as may be determined by the Remarketing Agent, in its sole discretion.
"RESPONSIBLE OFFICER" means, with respect to the Property
Trustee, any vice-president, any assistant vice-president, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer in the corporate trust department of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
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officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"RESTRICTED PREFERRED SECURITIES" has the meaning specified in
Section 9.01(j).
"RESTRICTED SECURITIES LEGEND" shall mean the legend specified
in Section 9.02(j)(i).
"SECURITIES" means the Common Securities and the Preferred
Securities.
"SECURITIES ACT" means the Securities Act of 1933 or any
successor legislation.
"SECURITIES CUSTODIAN" means the custodian with respect to any
Preferred Security in global form.
"SECURITIES GUARANTEE" means the Common Securities Guarantee
and the Preferred Securities Guarantee.
"SPECIAL TRUSTEE" means a trustee appointed by the Holders of
a Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B).
"SUCCESSOR DELAWARE TRUSTEE" has the meaning set forth in
Section 5.06(d).
"SUCCESSOR ENTITY" has the meaning specified in Section
3.15(b).
"SUCCESSOR PROPERTY TRUSTEE" has the meaning set forth in
Section 5.06(b).
"SUCCESSOR SECURITIES" has the meaning specified in Section
3.15(b).
"SUPER MAJORITY" has the meaning set forth in Section
2.06(a)(ii).
"TAX EVENT" means the receipt by the Property Trustee of an
opinion of a nationally recognized independent tax counsel to the Depositor
(reasonably acceptable to the Trustees) experienced in such matters (a
"DISSOLUTION TAX OPINION") to the effect that, as a result of (i) any amendment
to or change (including any announced prospective change (which shall not
include a proposed change), PROVIDED that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "ADMINISTRATIVE ACTION") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that
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differs from the theretofore generally accepted position, in each case, by any
legislative body, court, governmental agency or regulatory body, irrespective of
the manner in which such amendment or change is made known, which amendment or
change is effective or such Administrative Action or decision is announced, in
each case, on or after the date of the original issuance of the Debentures or
the issue date of the Preferred Securities issued by the Trust, there is more
than an insubstantial risk that (a) if the Debentures are held by the Property
Trustee, (x) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to interest
accrued or received on the Debentures or subject to more than a DE MINIMIS
amount of other taxes, duties or other governmental charges as determined by
such counsel, or (y) any portion of interest payable by the Depositor to the
Trust (or OID accruing) on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Depositor in whole or in part for
United States federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Depositor (or OID accruing) on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes.
"TENDER AGENT" means the Property Trustee if any Preferred
Securities are outstanding and the Debenture Trustee if the Debentures have been
distributed to the Holders of the Preferred Securities.
"TENDER NOTIFICATION DATE" has the meaning specified in the
Indenture.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Securities or by the Trust Indenture Act, Holders
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, representing 10%
or more of the aggregate liquidation amount (i.e., 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.
"TERM PROVISIONS" has the meaning specified in the Remarketing
Agreement.
"TERM CALL PROTECTIONS" has the meaning specified in the
Remarketing Agreement.
"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 succeed ing regulations).
"TRUST" has the meaning specified in the first recital of this
Agreement.
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"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"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.
"UNRESTRICTED GLOBAL PREFERRED SECURITY" has the meaning set
forth in Section 9.02(b).
ARTICLE II
TRUST INDENTURE ACT
Section 2.01 TRUST INDENTURE ACT; APPLICATION. (a) This
Declaration is subject to the provisions of the Trust Indenture Act that are
required to be part of this Declaration, which are incorporated by reference in
and made part of this Declaration and shall, to the extent applicable, be
governed by such provisions.
(b) The Property Trustee shall be the only Trustee 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 2.02 LISTS OF HOLDERS OF SECURITIES. (a) Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide the Property Trustee (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property 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 Depositor nor the Adminis trative 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 Property
Trustee by the Depositor and the Administrative 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 Property Trustee. The Property
Trustee shall preserve, in as current a form as is reasonably practicable,
all
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information contained in Lists of Holders given to it or which it receives in
its capacity as Paying Agent (if acting in such capacity), PROVIDED that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
Section 2.03 REPORTS BY THE PROPERTY TRUSTEE. Within 60
days after May 15 of each year, commencing May 15, 2000, the Property Trustee
shall provide to the Holders of the 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
Property Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
Section 2.04 PERIODIC REPORTS TO PROPERTY TRUSTEE. Each of
the Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of thE Trust Indenture Act (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act, such compliance certificate to be delivered annually on or
before 120 days after the end of each fiscal year of the Depositor.
Section 2.05 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT. Each of the Depositor and the Administrative Trustees on behalf of
the Trust shall provide to the Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
Section 2.06 EVENTS OF DEFAULT; WAIVER. (a) The Holders of
a Majority in liquidation amount of Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past
Event of Default in respect of the Preferred Securities and its consequences,
PROVIDED that, if the Event of Default:
(i) is caused by a Debenture Event of Default that is
not waivable under the Indenture, the Event of Default under the
Declaration shall also not be waivable;
(ii) is caused by a Debenture Event of Default that
requires the consent or vote of greater than a majority in principal
amount of the holders of the Debentures (a "SUPER MAJORITY") to be
waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the
proportion in liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
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(iii) is the result of a default by the Trust in the
payment of any Distribution when it becomes due and payable, which
default has continued for 30 days (subject to the deferral of any due
date in the case of a Deferral Period), the Event of Default shall not
be waivable; or
(iv) is the result of a default by the Trust in the
payment of any Redemption Price of any Preferred Security when it
becomes due and payable, the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Preferred Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(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 Event of Default is
caused by a Debenture Event of Default that:
(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 2.06(b), the Event of Default under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the Common Securities are
deemed to have waived such Event of Default under the Declaration as
provided below in this Section 2.06(b), the Event of Default under the
Declaration may only be waived by the vote of the Holders of at least
the proportion in liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate principal amount of
the Debentures outstanding;
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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 the effects of all Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Preferred Securities and only
the Holders of the Preferred Securities will have the right to direct the
Property Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.06(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.06(b),
upon such waiver, any such default shall cease to exist and any Event of
Default with respect to the 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 Event of Default under the Indenture by
the Property Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.06(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 2.07 EVENT OF DEFAULT; NOTICE. (a) The Property
Trustee shall, within ten Business Days after the occurrence of an Event of
Default actually known to the Property Trustee, (i) transmit by mail,
first-class postage prepaid, to the Holders of the Securities, and (ii) transmit
by any means provided for in this Declaration to the Administrative Trustees and
the Depositor, notices of all defaults actually known to the Property Trustee,
unless such defaults have been cured or waived before the giving of such notice
(the term "defaults" for the purposes of this Section 2.07(a) being hereby
defined to be an Event of Default, not including any periods of grace and
irrespective of the giving of any notice); PROVIDED that, except for a default
in the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Property Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(1) and 5.01(2) of
the Indenture; or
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(ii) any default as to which the Property Trustee
shall have received written notice.
ARTICLE III
ORGANIZATION
Section 3.01 NAME. The Trust is named "Titan Capital Trust,"
as such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
Section 3.02 OFFICE. The address of the principal office of
the Trust is c/o The Titan Corporation, 3033 Science Park Road, San Diego,
California 92121-1199, Attention: General Counsel. On ten Business Days' written
notice to the Holders of Securities, the Administrative Trustees may designate
another principal office.
Section 3.03 PURPOSE. The exclusive purposes and functions of
the Trust are (a) to issue and sell the 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 or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States Federal income tax purposes as a grantor trust.
Section 3.04 AUTHORITY. (a) Subject to the limitations
provided in this Declaration and to the specific duties of the Property
Trustee, the Administrative Trustees shall have exclusive and complete authority
to carry out the purposes of the Trust. An action taken by the Administrative
Trustees in accordance with their powers shall constitute the act of and serve
to bind the Trust and an action taken by the Property Trustee 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.
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Administrative Trustees is called with respect to any
matter over which the Administrative Trustees have power to act, any power of
the Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the
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purposes of signing any documents which the Administrative Trustees have power
and authority to cause the Trust to execute pursuant to Section 3.06.
Section 3.05 TITLE TO PROPERTY OF THE TRUST. Except as
provided in Section 3.08 with respect to the Debentures and the Property Trustee
Account or as otherwise provided in this Declaration, legal title to all assets
of the Trust shall be vested in the Trust. The Holders shall not have legal
title to any part of the assets of the Trust, but shall have an undivided
beneficial interest in the assets of the Trust.
Section 3.06 POWERS AND DUTIES OF THE ADMINISTRATIVE TRUSTEES.
The Administrative Trustees shall have, together (except in the case of
paragraphs (a), (b) and (c) of this Section 3.06) with any Special Trustee
holding office pursuant to Section 5.06, if any, the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the Common
Securities in accordance with this Declaration; PROVIDED, HOWEVER, that the
Trust may issue no more than one series of Preferred Securities and no more than
one series of Common Securities, and, PROVIDED FURTHER, that there shall be no
interests in the Trust other than the Securities, and the issuance of Securities
shall be limited to simultaneous issuances of both Preferred Securities and
Common Securities on the Closing Date and any Optional Closing Date;
(b) in connection with the issue and sale of the Preferred
Securities, at the direction of the Depositor, to:
(i) assist in the preparation of the Offering
Circular and preliminary offering circular, in each case prepared by
the Depositor, in relation to the offering and sale of the Preferred
Securities to qualified institutional buyers ("QIBs") in reliance on
Rule 144A under the Securities Act and to execute and file with the
Commission, at such time as determined by the Depositor, a
registration statement filed on Form S-3 prepared by the Depositor,
including any amendments thereto, in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by the
Depositor, or take any acts as determined by the Depositor to be
necessary in order to qualify or register all or part of the Preferred
Securities in any state or foreign jurisdiction in which the Depositor
has determined to qualify or register such Preferred Securities for
sale;
(iii) execute and file an application, prepared by
the Depositor, to the Private Offerings, Resale and Trading through
Automated Linkages ("PORTAL") Market and, at such time, if any, as
determined by the Depositor to the New York Stock Exchange, Inc. or any
other national stock exchange or the NASDAQ National Market for listing
or quotation upon notice of issuance of any
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Preferred Securities (including at the time of the Remarketing), but if
and only if the Depositor has so instructed the Administrative Trustees
to make such filing;
(iv) execute and deliver letters, documents, or
instruments with The Depository Trust Company relating the Preferred
Securities;
(v) execute and file with the Commission a
registration statement on Form 8-A, including any amendments thereto,
prepared by the Depositor relating to the registration of the Preferred
Securities under Section 12 of the Exchange Act, but if and only if the
Depositor has so instructed the Administrative Trustees to make such
filing; and
(vi) execute and enter into the Remarketing
Agreement, the Purchase Agreement, the Registration Rights Agreement,
and other related agreements providing for the sale of the Preferred
Securities; and
(vii) and to execute and file any agreement,
certificate or other document which such Administrative Trustee deems
necessary or appropriate in connection with the issuance and sale of
the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; PROVIDED, HOWEVER, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of Common Securities;
(d) to give the Depositor and the Property Trustee prompt
written notice of the occurrence of a Tax Event or an Investment Company Event;
PROVIDED that the Administrative Trustees (and Special Trustee, if any) shall
consult with the Depositor and the Property Trustee before taking or refraining
from taking any Ministerial Action in relation to a Tax Event or Investment
Company Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of 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 Administrative 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
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pursuant to Section 3.08(e), the Property 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 Property Trustee, which certificate may be
executed by any Administrative 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,
Conversion Agent, Paying Agent, Tender Agent and transfer agent for the
Securities;
(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to cause the Trust to comply with the Trust's obligations
under Article XV of the Declaration in the event that the acquisition of ACS is
not consummated by March 31, 2000;
(o) as set forth in the Remarketing Agreement, to assist in
the preparation of any Disclosure Documents in relation to the offering and sale
of the securities to be issued in the Remarketing;
(p) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(q) 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 Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
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(r) to take any action, not inconsistent with this Declaration
or with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or desirable in carrying out the activities of the
Trust as set out in this Section 3.06, 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 not as an
association taxable as a corporation or partnership; and
(iii) cooperating with the Debenture Issuer to ensure
that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
PROVIDED that such action does not adversely affect the interests of Holders;
and
(s) 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 Administrative Trustees, on
behalf of the Trust.
The Administrative Trustees must exercise the powers set forth
in this Section 3.06 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.03, and the Administrative Trustees
shall not take any action that is inconsistent with the purposes and functions
of the Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees
shall have none of the powers or the authority of the Property Trustee set forth
in Section 3.08.
Any expenses incurred by the Administrative Trustee (or the
Special Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by
the Debenture Issuer.
The Administrative Trustees shall take all action on behalf of
the Trust that are not specifically required by this Declaration to be taken by
any other Trustee.
Section 3.07 PROHIBITION OF ACTIONS BY THE TRUST AND THE
TRUSTEES. The Trust shall not, and the Trustees (including the Property Trustee)
on behalf of the Trust shall not, engage in any activity other than as required
or authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property 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;
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(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the Securities in any way
whatsoever, except as provided in the Remarketing Agreement;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the Trust other
than the Securities; or
(vii) other than as provided in the Declaration or
Annex I hereto, (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 Section
5.13 of 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, in the case of each action described in clause (A), (B), (C) or
(D), the Trust shall have received an opinion of a nationally
recognized independent counsel experienced in such matters 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 3.08 POWERS AND DUTIES OF THE PROPERTY TRUSTEE. (a)
The legal title to the Debentures shall be owned by and held of record in the
name of the Property Trustee in trust for the benefit of the Holders of the
Securities. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.06. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
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(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "PROPERTY TRUSTEE ACCOUNT") in the name of
and under the exclusive control of the Property Trustee on behalf of
the Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and make payments
to the Holders of the Preferred Securities and Holders of the Common
Securities from the Property Trustee Account in accordance with Section
6.01. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration.
(ii) engage in such ministerial activities as so
directed and as shall be necessary or appropriate to effect the
redemption of the Preferred Securities and the Common Securities to
the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by
the Administrative Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as so directed as
shall be necessary or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the occurrence of certain
special events (as may be defined in the terms of the Securities)
arising from a change in law or a change in legal interpretation or
other specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with an Event of Default or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; PROVIDED, HOWEVER, that if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the Redemption
Date), then a Holder of Preferred Securities may institute a legal proceeding
directly, subject to the terms of the Indenture (including the subordination
provisions set forth in Article XII thereof), for enforcement of payment to
such Holder of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such Holder (a "DIRECT ACTION") on or after the respective due date specified in
the Securities. In connection with such Direct Action, the Holders of the Common
Securities will be subrogated to the rights of such Holder of Preferred
Securities to the extent of any payment made by the Depositor to such Holder of
Preferred Securities in such Direct Action. In addition, if the Property Trustee
fails to enforce its rights under the Debentures (other than rights arising from
an Event of Default
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described in the immediately preceding sentence) after any Holder of Preferred
Securities shall have made a written request to the Property Trustee to enforce
such rights, such Holder of Preferred Securities may, to the fullest extent
permitted by law, institute a Direct Action to enforce the rights of the
Property Trustee or any other Person. Except as provided in this paragraph, the
Holders of Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed
and has accepted that appointment in accordance with Section 5.06.
(g) The Property 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 occurs and is continuing, the
Property 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 Property Trustee shall act as the initial Paying Agent
and Registrar to pay Distributions, redemption payments or liquidation payments
on behalf of the Trust with respect to the Preferred Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. The
Property Trustee shall also act as the initial Conversion Agent. Any Paying
Agent or Conversion Agent may be removed by the Administrative Trustees at any
time and a successor Paying Agent or Conversion Agent or additional Paying
Agents or Conversion Agents may be appointed at any time by the Administrative
Trustees. The Administrative Trustees may also appoint one or more agents in
addition to the Registrar to accept Preferred Securities for transfer or
exchange, it being understood that the registration of all such transfers and
exchanges will be effected in the register maintained for such purpose by the
Registrar. The Paying Agent, the Conversion Agent and any additional agents
appointed by the Administrative Trustees pursuant to the immediately preceding
sentence may resign upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Depositor.
(i) Subject to this Section 3.08, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.06.
The Property Trustee must exercise the powers set forth in
this Section 3.08 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.03, and the Property Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.03.
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Section 3.09 CERTAIN DUTIES AND RESPONSIBILITIES OF THE
PROPERTY TRUSTEE. (a) The Property Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.06), the Property 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 its 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 Property 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
Property Trustee shall be determined solely by the express
provisions of this Declaration and in the Securities and the
Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Declaration and in the Securities, and no
implied covenants or obligations shall be read into this
Declaration or the Securities against the Property Trustee;
and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Declaration (but need not
confirm or investigate the accuracy of mathematical
calculations or other facts stated therein);
(ii) the Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
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(iii) the Property Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of 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 Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require
the Property 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;
(v) the Property Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the Debentures
and the Property Trustee Account shall be to deal with such property in
a similar manner as the Property Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration and
the Trust Indenture Act;
(vi) the Property 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 Property Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree with the Depositor. Money held by the Property Trustee need not
be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant
to Section 3.08(c)(i) and except to the extent otherwise required by
law; and
(viii) the Property Trustee shall not be responsible
for monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Declaration, nor
shall the Property Trustee be liable for the default or misconduct of
the Administrative Trustees or the Depositor.
Section 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE. (a) Subject
to the provisions of Section 3.09:
(i) the Property Trustee may rely conclusively 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
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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 Depositor or the
Administrative Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Depositor or the
Administrative Trustees;
(iv) the Property Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of
its choice or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Depositor or any
of its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee security
satisfactory to the Property Trustee, against the costs, expenses
(including its attorneys' fees and expenses) and liabilities that might
be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested in writing by
the Property Trustee, PROVIDED, that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Property Trustee, upon the
occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement,
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instrument, opinion, report, notice, request, direction, consent,
order, security, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action and
no third party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder the Property Trustee (i) may request
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 Property
Trustee under the terms of the Securities in respect of such remedy,
right or action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are received, and
(iii) shall be protected in acting in accordance with such
instructions, subject to the express terms of this Declaration;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in good faith
and reasonably believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
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perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 DELAWARE TRUSTEE. Notwithstanding any other
provision of this Declaration other than Section 5.02, the Delaware Trustee
shall not be entitled to exercise any powers, nor shall the Delaware Trustee
have any of the duties and responsibilities of the Administrative Trustees or
the Property Trustee described in this Declaration. Except as set forth in
Section 5.02, the Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of ss. 3807 of the Business Trust Act.
Section 3.12 EXECUTION OF DOCUMENTS. Except as otherwise
required by applicable law, any Administrative Trustee is authorized to execute
on behalf of the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.06; PROVIDED that, the
registration statement referred to in Section 3.06(b)(i), including any
amendments thereto, shall be signed by a majority of the Administrative Trustees
(or, if there are only two Administrative Trustees, by both Administrative
Trustees).
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Depositor, 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, the Debentures or the Securities.
Section 3.14 DURATION OF TRUST. The Trust, unless dissolved
pursuant to the provisions of Article VIII hereof, shall exist until February 9,
2035.
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) of this Declaration or paragraph 3 of Annex
I.
(b) The Trust may, with the consent of a majority of the
Administrative Trustees (or, if there are only two Administrative Trustees, both
Administrative Trustees) and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state or the District of Columbia; PROVIDED that:
(i) if the Trust is not the surviving entity, the
successor entity (the "SUCCESSOR ENTITY") either:
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
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(B) substitutes for the Preferred Securities
other securities having substantially the same terms as the
Preferred Securities (the "SUCCESSOR SECURITIES") as long as
the Successor Securities rank, with respect to participation
in the profits and distributions and in the assets of the
Successor Entity, at least as high as the Preferred Securities
rank with respect to participation in the profits and
distributions or in the assets of the Trust;
(ii) the Debenture Issuer expressly appoints a
trustee of the Successor Entity that possesses the same powers and
duties as the Property Trustee as the Holder of the Debentures;
(iii) to the extent the Preferred Securities are
listed on any national securities exchange or with another organization
for listing or quotation, the Preferred Securities or any Successor
Securities shall be so listed, or any Successor Securities will be
listed upon notification of issuance, on any national securities
exchange or with any other organization on which the Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the powers, preferences and other
special rights of the Holders of the Preferred Securities (including
any Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose
substantially identical and limited to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation or replacement, the Depositor has received an opinion of a
nationally recognized independent counsel (reasonably acceptable to the
Property Trustee) to the Trust experienced in such matters to the
effect that:
(A) following such merger, consolidation,
amalgamation or replacement, the Trust or the Successor
Entity will continue to be treated as a grantor trust for
United States federal income tax purposes;
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(B) following such merger, consolidation,
amalgamation or replacement, none of the Depositor, the Trust
or the Successor Entity will be required to register as an
Investment
Company;
(C) such merger, consolidation, amalgamation
or replacement will not adversely affect the limited liability
of the Holders of the Securities (including any Successor
Securities);
(viii) the Depositor or any permitted successor or
assignee directly or indirectly owns all the Common Securities and
provides a guarantee to the Holders of the Successor Securities with
respect to the Successor Entity having substantially the same terms as
the Preferred Securities Guarantee; and
(ix) such merger, consolidation, amalgamation,
replacement or lease is not a taxable event for the Holders of the
Preferred Securities.
(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 or
convey, transfer or lease its properties and assets substantially as an entirety
to any other entity or permit any other entity to consolidate, amalgamate,
merge with or into, or replace it if such consolidation, amalgamation, merger 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
DEPOSITOR
Section 4.01 DEPOSITOR'S PURCHASE OF COMMON SECURITIES. On the
Closing Date and any Optional Closing Date the Depositor will purchase an amount
of Common Securities issued by the Trust such that the aggregate liquidation
amount of such Common Securities purchased by the Depositor shall at such date
equal at least 3% of the total capital of the Trust.
Section 4.02 RESPONSIBILITIES OF THE DEPOSITOR. In connection
with the issue and sale of the Preferred Securities, the Depositor shall have
the exclusive right and responsibility to engage in the following activities:
(a) to prepare the Offering Circular and to prepare for filing
by the Trust with the Commission the Shelf Registration Statement, including any
amendments thereto;
(b) to determine the states and foreign jurisdictions in which
to take appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts (including at the time of
the Remarketing), other than actions which must be taken by
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the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust, as the
Depositor deems necessary or advisable in order to comply with the applicable
laws of any such states and foreign jurisdictions;
(c) if so determined by the Depositor, to prepare for filing
by the Trust an application to PORTAL, to the New York Stock Exchange or any
other national stock exchange or the NASDAQ National Market for listing or
quotation upon notice of issuance of any Preferred Securities (including at the
time of the Remarketing);
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities (both at the time of their original issuance and at the time of the
Remarketing, if required) under Section 12 of the Exchange Act, including any
amendments thereto, if the Depositor in its sole discretion determines such a
filing is necessary or appropriate;
(e) to negotiate the terms of the Purchase Agreement, the
Registration Rights Agreement, the Remarketing Agreement and other related
agreements providing for the sale of the Preferred Securities (both at the time
of their original issuance and at the time of the Remarketing);
(f) to cause the Trust to comply with the Trust's obligations
under Article XV of the Declaration and Section 10.09 of the Indenture in the
event that the acquisition of ACS is not consummated by March 31, 2000;
(g) as set forth in the Remarketing Agreement, to prepare
Disclosure Documents in relation to the offering and sale of the securities to
be issued in the Remarketing.
Section 4.03 GUARANTEE OF PAYMENT OF TRUST OBLIGATIONS. (a)
Subject to the terms and conditions of this Section 4.03, the Depositor hereby
irrevocably and unconditionally guarantees, to the extent set forth in the
Securities Guarantees and subject to the terms of the Indenture (including the
subordination provisions set forth in Article XII thereof), to each Person to
whom the Trust is now or hereafter becomes indebted or liable (the
"BENEFICIARIES") the full payment, when and as due, of any and all Obligations
to such Beneficiaries.
(b) The agreement of the Depositor in Section 4.03(a) is
intended to be for the benefit of, and to be enforceable by, all such
Beneficiaries, whether or not such Beneficiaries have received notice hereof.
(c) The agreement of the Depositor set forth in Section
4.03(a) shall terminate and be of no further force and effect upon the later of
(a) the date on which full payment has been made of all amounts payable to all
Holders of all the Preferred Securities (whether upon redemption, liquidation,
exchange or otherwise) and (b) the date on which there are no Beneficiaries
remaining; PROVIDED, HOWEVER, that such agreement shall continue to be effective
or shall be
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reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
TRUSTEES
Section 5.01 NUMBER OF TRUSTEES. The number of Trustees shall
initially be four (4), consisting of two (2) Administrative Trustees, the
Delaware Trustee and the Property Trustee, and:
(a) at any time before the issuance of any Securities, the
Depositor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Securities:
(i) the number of Trustees may be increased or
decreased, except as provided in Sections 5.01(b)(ii) and
5.06(a)(ii)(B) with respect to the Special Trustee and except as
provided in Section 5.06(a)(ii)(A) with respect to the removal of the
Property Trustee and the Delaware Trustee upon a Debenture Event of
Default, 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 (2); PROVIDED, FURTHER, that (1) one
Trustee, in the case of a natural person, shall be a person who is a
resident of the State of Delaware or that, if not a natural person, is
an entity which has its principal place of business in the State of
Delaware; (2) there shall be at least one Trustee who is an employee or
officer of, or is affiliated with the Depositor (an "Administrative
Trustee"); and (3) one Trustee shall be the Property Trustee for so
long as this Declaration is required to qualify as an indenture under
the Trust Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements.
(ii) the number of Trustees shall be increased
automatically by one (1) if an Appointment Event has occurred and is
continuing and the Holders of a Majority in liquidation amount of the
Preferred Securities appoint a Special Trustee in accordance with
Section 5.06(a)(ii).
Section 5.02 DELAWARE TRUSTEE. If required by the Business
Trust Act, one Trustee (the "DELAWARE TRUSTEE") shall be (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
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State of Delaware, and otherwise meets the requirements of applicable law,
PROVIDED that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application. The initial Delaware Trustee shall be Wilmington
Trust Company.
Section 5.03 PROPERTY TRUSTEE; ELIGIBILITY. (a) There shall at
all times be one Trustee which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Depositor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least fifty million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.03(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.03(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.06(e).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the 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 Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be Wilmington Trust
Company.
Section 5.04 QUALIFICATIONS OF ADMINISTRATIVE TRUSTEES AND
DELAWARE TRUSTEE GENERALLY. Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall be either a
natural person who is at least 21 years of age or a legal entity that shall act
through one or more Authorized Officers.
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Section 5.05 INITIAL TRUSTEES. The initial Administrative
Trustees shall be:
Deanna Hom Petersen
c/o The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
Ray Guillaume
c/o The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
The initial Delaware Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
ATTENTION: Corporate Trust Administration
The initial Property Trustee shall be:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
ATTENTION: Corporate Trust Administration
Section 5.06 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Except as provided otherwise in this Section 5.06, Trustees may be appointed
or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Depositor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special
Trustee, 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, unless a Debenture
Event of Default shall have occurred and be continuing, in
which event the Property Trustee and the Delaware Trustee may
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only be removed by the Holders of a Majority in liquidation
amount of the Preferred Securities, voting as a class at a
meeting of the Holders of the Preferred Securities; and
(B) if an Appointment Event has occurred and
is continuing, one (1) additional trustee (the "SPECIAL
TRUSTEE"), who shall have the same rights, powers and
privileges as an Administrative Trustee except as provided in
Section 3.06, may be appointed by vote of the Holders of a
Majority in liquidation amount of the Preferred Securities,
voting as a class at a meeting of the Holders of the Preferred
Securities, and such Special Trustee may only be removed
(otherwise than by the operation of Section 5.06(e)), by vote
of the Holders of a Majority in liquidation amount of the
Preferred Securities voting as a class at a meeting of the
Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.06 until a successor Property Trustee
meeting the requirements of Section 5.03 (a "SUCCESSOR PROPERTY TRUSTEE") has
been appointed and has accepted such appointment by written instrument executed
by such Successor Property Trustee and delivered to the Administrative Trustees
and the Depositor.
(c) The Depositor shall remove the Property Trustee by written
instrument upon:
(i) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Property Trustee as bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Property Trustee under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of the Property Trustee 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 unstayed and
in effect for a period of 60 consecutive days; or
(ii) the institution by the Property Trustee of
proceedings to be adjudicated a bankrupt or insolvent, or the consent
by it to the institution of bankruptcy or insolvency proceedings
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Property Trustee 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
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pay its debts generally as they become due and its willingness to be
adjudicated a bankrupt, or the taking of corporate action by the
Property Trustee in furtherance of any such action.
The Depositor shall appoint a Successor Property Trustee within 60 days of such
an event.
(d) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.06(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"SUCCESSOR DELAWARE TRUSTEE") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Trustees and the Depositor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
PROVIDED that a Special Trustee shall only hold office while an Appointment
Event is continuing and shall cease to hold office immediately after the
Appointment Event pursuant to which the Special Trustee was appointed and all
other Appointment Events cease to be continuing. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the Depositor and the Trust,
which resignation shall take effect upon such delivery or upon such later date
as is specified therein; PROVIDED, HOWEVER, that:
(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee and
delivered to the Trust, the Depositor and the resigning
Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the Holders of the Securities;
(ii) no such resignation of the Trustee that acts as
the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by
instrument executed by such Successor Delaware Trustee and delivered to
the Trust, the Depositor and the resigning Delaware Trustee; and
(iii) no such resignation of a Special Trustee shall
be effective until the 60th day following delivery of the instrument of
resignation of the Special Trustee to the Depositor and the Trust or
such later date specified in such
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instrument during which period the Holders of the Preferred Securities
shall have the right to appoint a successor Special Trustee as provided
in this Section 5.06.
(f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.06 within 60 days after delivery to the Depositor and the Trust of an
instrument of resignation or removal, the resigning Property Trustee or Delaware
Trustee, resigning or being removed as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(h) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
Section 5.07 VACANCIES AMONG TRUSTEES. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees (or, if there are only two
Administrative Trustees, by both Administrative Trustees) shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.06.
Section 5.08 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 dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 5.06, the Administrative
Trustees in office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Declaration.
Section 5.09 MEETINGS. Meetings of the Administrative Trustees
shall be held from time to time upon the call of any Administrative Trustee.
Regular meetings of the Administrative Trustees may be held at a time and place
fixed by resolution of the Administrative Trustees. Notice of any meetings of
the Administrative Trustees shall be hand delivered or otherwise delivered in
writing (including by facsimile or overnight courier) not less than 24 hours
before such meeting. Notices shall contain a brief statement of the time, place
and anticipated
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purposes of the meeting. The presence (whether in person or by telephone) of an
Administrative Trustee at a meeting shall constitute a waiver of notice of such
meeting except where an Administrative 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 Administrative Trustees may be taken at a
meeting by a vote of a majority of the Administrative Trustees (or if there are
only two Administrative Trustees, by a vote by both of them) 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 and without prior notice
by the unanimous written consent of the Administrative Trustees.
In the event there is only one Administrative Trustee, any and
all action of such Administrative Trustee shall be evidenced by a written
consent of such Administrative Trustee. In the event a Special Trustee is
holding office pursuant to Section 5.06, such Special Trustee shall have the
same rights as an Administrative Trustee with respect to notice and
participation in a meeting of the Administrative Trustees.
Section 5.10 DELEGATION OF POWER. (a) Any Administrative
Trustee may, by power of attorney consistent with applicable law, delegate to
any other natural person over the age of 21 his or her power for the purpose of
executing any documents contemplated in Section 3.06, including any registration
statement or amendment thereto filed with the Commission, or making any other
governmental filing; and
(b) the Administrative 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 Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
Section 5.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS. Any Person into which the Property Trustee or the Delaware Trustee,
as the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property 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 other than
as required by applicable law.
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ARTICLE VI
DISTRIBUTIONS
Section 6.01 DISTRIBUTIONS. Holders shall receive
Distributions in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in the terms
attached as Annex I hereto. If and to the extent that the Debenture Issuer makes
a payment of interest (including Compounded Interest (as defined in the
Indenture) and Additional Amounts (as defined in the Indenture)), premium and/or
principal on the Debentures held by the Property Trustee (the amount of any such
payment being a "PAYMENT AMOUNT"), the Property Trustee shall and is directed,
to the extent funds are available for that purpose, to make a distribution (a
"DISTRIBUTION") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.01 GENERAL PROVISIONS REGARDING SECURITIES. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, designated as Remarketable Term Income
Deferrable Equity Securities (HIGH TIDES)-SM-, representing undivided
beneficial interests in the assets of the Trust (the "PREFERRED SECURITIES"),
having such terms as are set forth in Annex I (including as such terms may be
modified in accordance with the provisions of the Remarketing Agreement) and one
class of convertible common securities, liquidation amount $50, representing
undivided beneficial interests in the assets of the Trust (the "COMMON
SECURITIES"), having such terms as are set forth in Annex I. On the Reset Date
and as contemplated by the Remarketing Agreement, the Trust may also issue
securities having Term Provisions to be set by the Remarketing Agent in
accordance with the terms of the Remarketing Agreement. The Trust shall have no
securities or other interests in the assets of the Trust other than the
Preferred Securities and the Common Securities. The Trust shall issue no
Securities in bearer form.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable, subject to Section 10.01 with respect to the
Common Securities, and shall not be subject to preemptive or other similar
rights.
(d) Every Person, by virtue of having become a Holder or a
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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(e) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have covenanted to treat the Debentures as
indebtedness and the Securities as evidence of an indirect beneficial ownership
interest in the Debentures.
Section 7.02 EXECUTION AND AUTHENTICATION. (a) The Securities
shall be signed on behalf of the Trust by one Administrative Trustee. In case
any Administrative Trustee who shall have signed any of the Securities shall
cease to be such Administrative Trustee before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be delivered as though
the person who signed such Securities had not ceased to be such Administrative
Trustee; and any Securities may be signed on behalf of the Trust by such persons
who, at the actual date of execution of such Security, shall be the
Administrative Trustees, although at the date of the execution and delivery of
the Declaration any such person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Preferred Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Sections 7.06 and 7.07.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Depositor or an Affiliate.
Section 7.03 FORM AND DATING. The Preferred Securities and the
Property 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, typewritten, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Administrative Trustees, as evidenced by their execution thereof. The
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Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (PROVIDED that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Depositor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Depositor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
The Preferred Securities are being offered and sold by the
Trust pursuant to a Purchase Agreement relating to the Preferred Securities,
dated February 9, 2000, among the Trust, the Depositor and the Purchasers named
therein (the "PURCHASE AGREEMENT").
(a) GLOBAL SECURITIES. Preferred Securities offered and sold
as provided in the Purchase Agreement, shall be initially issued in the form of
one or more permanent global Securities in definitive, fully registered form
without distribution coupons with the appropriate global legends and Restricted
Securities Legend set forth in Exhibit A-1 hereto (each a "Global Preferred
Security"), which shall be deposited on behalf of the purchasers of the
Preferred Securities represented thereby with the Property Trustee, at its
Corporate Trust Office, as custodian for the Depositary, and registered in the
name of the Depositary or a nominee of the Depositary, duly executed by the
Trust and authenticated by the Property Trustee as provided herein. The number
of Preferred Securities represented by the Global Preferred Security may from
time to time be increased or decreased by adjustments made on the records of the
Property Trustee and the Depositary or its nominee as hereinafter provided.
(b) BOOK-ENTRY PROVISIONS. The Preferred Securities, on
original issuance, will be issued in the form of one or more, fully registered
Global Preferred Securities, to be delivered to the Depositary, or the
Securities Custodian by, or on behalf of, the Trust.
An Administrative Trustee on behalf of the Trust shall execute
and the Property Trustee shall, in accordance with this Section 7.03,
authenticate and deliver initially one or more Global Preferred Securities that
(i) shall be registered in the name of Cede & Co. or other nominee of such
Depositary and (ii) shall be delivered by the Property Trustee to such
Depositary or pursuant to such Depositary's written instructions or held by the
Property Trustee as custodian for the Depositary.
Unless and until definitive, fully registered certificated
Preferred Securities have been issued to the Preferred Security Beneficial
Owners pursuant to Section 7.03:
(i) the provisions of this Section 7.03 shall be in
full force and effect;
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(ii) the Trust, the Trustees, the Registrar and the
Paying Agent shall be entitled to deal with the Depositary for all
purposes of this Declaration (including the payment of Distributions on
the Global Preferred Security and receiving approvals, votes or
consents hereunder) as the Holder of the Preferred Securities and the
sole holder of the Global Preferred Security and shall have no
obligation to the Preferred Security Beneficial Owners;
(iii) to the extent that the provisions of this
Section 7.03 conflict with any other provisions of this Declaration,
the provisions of this Section 7.03 shall control; and
(iv) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Depositary and/or the
Participants and the Depositary shall receive and transmit payments of
Distributions on the Global Preferred Securities to such Participants.
The Depositary will make book-entry transfers among the Participants
and receive and transmit payments of Distributions on the Global
Preferred Securities to such Participants; PROVIDED, that solely for
the purposes of determining whether the Holders of the requisite
amount of Preferred Securities have voted on any matter provided for in
this Declaration, so long as Definitive 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 Depositary setting forth the Preferred
Security Beneficial Owners' votes or assigning the right to vote on any
matter to any other Persons either in whole or in part.
Members of, or participants in, the Depositary
("PARTICIPANTS") shall have no rights under this Declaration with respect to any
Global Preferred Security held on their behalf by the Depositary or by the
Property Trustee as the custodian of the Depositary or under such Global
Preferred Security, and the Depositary may be treated by the Trust, the Property
Trustee and any agent of the Trust or the Property Trustee as the absolute owner
of such Global Preferred Security for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Trust, the Property Trustee or
any agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Participants, the operation of
customary practices of such Depositary governing the exercise of the rights of a
holder of a beneficial interest in any Global Preferred Security.
(c) CERTIFICATED SECURITIES. Except as provided in Section
7.03(d), owners of beneficial interests in the Global Preferred Security will
not be entitled to receive physical delivery of certificated Preferred
Securities.
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(d) Subject to Section 9.05, a Global Preferred Security
deposited with the Depositary or with the Property Trustee as custodian for the
Depositary pursuant to this Section 7.03 shall be transferred to the beneficial
owners thereof in the form of certificated Preferred Securities only if such
transfer complies with Section 9.02 and (i) the Depositary notifies the
Depositor or the Trust that it is unwilling or unable to continue as Depositary
for such Global Preferred Security or if at any time such Depositary ceases to
be a "clearing agency" registered under the Exchange Act, at a time when the
Depositary is required to be so registered to act as such depositary, (ii) the
Depositor or Administrative Trustees in its or their sole discretion determines
that such Global Preferred Security shall be so exchangeable, or (iii) an Event
of Default has occurred and is continuing.
(e) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of certificated Preferred Securities
pursuant to this Section 7.03 shall be surrendered by the Depositary to the
Property Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Property Trustee shall authenticate and deliver, upon
such transfer of each portion of such Global Preferred Security, an equal
aggregate liquidation amount of Preferred Securities of authorized denominations
in the form of certificated Preferred Securities. Any portion of a Global
Preferred Security transferred pursuant to this Section shall be registered in
such names and such amounts as the Depositary shall direct. Any Preferred
Security in the form of certificated Preferred Securities delivered in exchange
for an interest in the Global Preferred Security shall, except as otherwise
provided by Section 9.02, bear the Restricted Securities Legend.
(f) Subject to the provisions of Section 7.03(e), the
registered holder of a Global Preferred Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Declaration or the Securities.
(g) In the event of the occurrence of any of the events
specified in Section 7.03(d), the Trust will promptly make available to the
Property Trustee a reasonable supply of certificated Securities in definitive,
fully registered form without distribution coupons.
Section 7.04 REGISTRAR, PAYING AGENT, CONVERSION AGENT AND
TENDER AGENT. (a) The Administrative Trustees shall maintain (i) an office or
agency where Preferred Securities may be presented for registration of transfer
or for exchange ("REGISTRAR"), (ii) an office or agency where Preferred
Securities may be presented for payment ("PAYING AGENT") and (iii) an office or
agency where Preferred Securities may be presented for conversion ("CONVERSION
AGENT"). The Registrar shall keep a register of the Preferred Securities and of
their transfer and exchange.
The Administrative Trustees may appoint the Registrar, the
Paying Agent and the Conversion Agent and may appoint one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent and the term "Conversion Agent"
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includes any additional conversion agent. The Administrative Trustees may change
any Paying Agent, Registrar, co-registrar or Conversion Agent without prior
notice to any Holder; PROVIDED that the Administrative Trustees shall provide
notice of such change to all Holders promptly thereafter. The Administrative
Trustees shall notify the Property Trustee of the name and address of any Agent
not a party to this Declaration. If the Administrative Trustees fail to appoint
or maintain another entity as Registrar or Conversion Agent, the Property
Trustee shall act as such; PROVIDED, HOWEVER, that the Trust shall always
maintain an office or agency in the Borough of Manhattan, The City of New York,
State of New York, where Preferred Securities may be presented for payment. The
Trust or any of its Affiliates may act as Paying Agent, Registrar, or Conversion
Agent.
The Trust shall act as Paying Agent, Registrar, co-registrar,
and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, Conversion Agent for the Preferred Securities. The
Property Trustee shall also serve as Tender Agent and shall have the
responsibilities of such described in the Remarketing Agreement for so long as
the Debentures are held by the Property Trustee.
(b) Notwithstanding any other provision of this Declaration,
payment with respect to the Preferred Securities shall only take place at the
office or agency maintained by the Trust for such purpose in the Borough of
Manhattan, The City of New York, State of New York.
Section 7.05 PAYING AGENT TO HOLD MONEY IN TRUST. The Trust
shall require each Paying Agent other than the Property Trustee to agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Property Trustee all money held by the Paying Agent for the payment of
principal or distributions on the Securities, and will notify the Property
Trustee if there are insufficient funds. While any such insufficiency continues,
the Property Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Administrative Trustees at any time may require a
Paying Agent to pay all money held by it to the Property Trustee and to account
for any money disbursed by it. Upon payment over to the Property Trustee, the
Paying Agent (if other than the Trust or the Depositor or an Affiliate of the
Trust or Depositor) shall have no further liability for the money. If the Trust
or the Depositor or an Affiliate of the Trust or the Depositor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
Section 7.06 REPLACEMENT SECURITIES. If the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken
or if such Security is mutilated and is surrendered to the Trust or in the case
of the Preferred Securities to the Property Trustee, an Administrative Trustee
on behalf of the Trust shall issue and the Property Trustee shall authenticate
a replacement Security if the Property Trustee's and such Administrative
Trustee's requirements, as the case may be, are met. If required by the
Property Trustee or such Administrative Trustee, an indemnity bond must be
sufficient in the judgment of both to protect the Trustees, the
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Depositor or any authenticating agent from any loss which any of them may suffer
if a Security is replaced. The Depositor may charge for its expenses in
replacing a Security.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, or is about to be purchased by
the Depositor pursuant to Article III hereof, the Depositor in its discretion
may, instead of the Trust's issuing a new Security, pay or purchase such
Security, as the case may be.
Every replacement Security is an additional obligation of the
Trust.
Section 7.07 OUTSTANDING PREFERRED SECURITIES. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancellation, and those described in this Section as not
outstanding.
If a Preferred Security is replaced, paid or purchased
pursuant to Section 7.06 hereof, it ceases to be outstanding unless the Property
Trustee receives proof satisfactory to it that the replaced, paid or purchased
Preferred Security is held by a protected purchaser (as such term is used in
Section 8-405 of the Delaware Uniform Commercial Code).
If Preferred Securities are considered paid in full in
accordance with the terms of this Declaration, they cease to be outstanding and
Distributions on them cease to accumulate.
A Preferred Security does not cease to be outstanding because
one of the Trust, the Depositor or an Affiliate of the Depositor holds the
Security.
Section 7.08 PREFERRED SECURITIES IN TREASURY. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Depositor or an Affiliate of the Depositor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the purposes of
determining whether the Property Trustee shall be fully protected in relying on
any such direction, waiver or consent, only Securities which the Property
Trustee knows are so owned shall be so disregarded.
Section 7.09 TEMPORARY SECURITIES. Until definitive Securities
are ready for delivery, the Trust may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and deliver to
the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation
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amount of definitive Preferred Securities in certificated form in exchange for
temporary Preferred Securities (other than any such Preferred Securities in
global form).
Section 7.10 CANCELLATION. Any Administrative Trustee on
behalf of the Trust at any time may deliver Preferred Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Conversion Agent shall
forward to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, conversion, exchange or payment. The
Property Trustee shall promptly cancel all Preferred Securities, surrendered for
registration of transfer, redemption, conversion, exchange, payment, replacement
or cancellation and shall return such canceled Preferred Securities to the
Administrative Trustees. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has converted.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.01 DISSOLUTION OF TRUST. (a) The Trust shall
dissolve upon the earliest to occur of the following:
(i) the bankruptcy, dissolution or liquidation of the
Holder of the Common Securities or the Depositor;
(ii) the filing of a certificate of dissolution or
its equivalent with respect to the Holder of the Common Securities or
the Depositor, or the revocation of the charter of the Holder of the
Common Securities or the Depositor and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) a written direction of the Depositor to
dissolve the Trust and distribute a Like Amount of Debentures to
Holders of the Securities in accordance with the terms of the
Securities;
(iv) 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) the expiration of the term of the Trust as set
forth in Section 3.14 hereof;
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(vi) the entry of a decree of judicial dissolution of
the Holder of the Common Securities, the Depositor or the Trust by a
court of competent jurisdiction;
(vii) upon distribution of the Common Stock of the
Depositor to Holders of all outstanding Securities upon conversion of
all such Securities; or
(viii) before the issuance of any Securities, with
the consent of all the Administrative Trustees and the Depositor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a), and after the completion of the winding up of
the affairs of the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.09 and Article X shall survive
the termination of the Trust.
ARTICLE IX
TRANSFER AND EXCHANGE
Section 9.01 GENERAL.
(a) When Preferred Securities are presented to the Registrar
or a co-registrar with a request to register a transfer or to exchange them for
an equal number of Preferred Securities represented by different certificates,
the Registrar shall register the transfer or make the exchange if its
requirements for such transactions are met. To permit registrations of transfers
and exchanges, the Administrative Trustees shall prepare and one Administrative
Trustee shall execute and the Property Trustee shall authenticate Preferred
Securities at the Registrar's request.
(b) 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. To the fullest extent permitted by law, any
transfer or purported transfer of any Security not made in accordance with this
Declaration shall be null and void.
Subject to this Article IX, the Depositor and any Related
Party may only transfer Common Securities (i) in accordance with Article VIII of
the Indenture, or (ii) to the Depositor or a Related Party of the Depositor;
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:
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(i) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(c) The Administrative Trustees shall provide for the
registration of Securities and of transfers of Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Administrative Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Securities, the Administrative Trustees shall cause one or
more new Securities to be issued and authenticated by the Property Trustee in
the name of the designated transferee or transferees. Every Security surrendered
for registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Administrative Trustees duly executed by
the Holder or such Holder's attorney duly authorized in writing. Each Security
surrendered for registration of transfer shall be cancelled in accordance with
Section 7.10. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
(d) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
(e) All Preferred Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Preferred Securities surrendered upon such transfer or exchange.
Section 9.02 TRANSFER PROCEDURES AND RESTRICTIONS. (a)
GENERAL. Subject to Sections 9.02(b) and 9.02(j)(ii), if Preferred Securities
are issued upon the transfer, exchange or replacement of Preferred Securities
bearing the Restricted Securities Legend, or if a request is made to remove such
Restricted Securities Legend on Preferred Securities, the Preferred Securities
so issued shall bear the Restricted Securities Legend, or the Restricted
Securities Legend shall not be removed, as the case may be, unless there is
delivered to the Trust and the Property Trustee such satisfactory evidence,
which may include an opinion of counsel, as may be reasonably required by the
Depositor, that (i) neither the legend nor the restrictions on transfer set
forth therein are required to ensure that transfers thereof comply with the
provisions of Rule
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144A or Rule 144 under the Securities Act or (ii) that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Property Trustee, at the written
direction of an Administrative Trustee on behalf of the Trust, shall
authenticate and deliver Preferred Securities that do not bear the Restricted
Securities Legend.
(b) TRANSFERS AFTER EFFECTIVENESS OF SHELF REGISTRATION
STATEMENT. After a transfer of Preferred Securities pursuant to an effective
Shelf Registration Statement, all requirements pertaining to Restricted
Securities Legends on any Preferred Security included within such Shelf
Registration Statement will cease to apply, and beneficial interests in a
Preferred Security in global form without Restricted Securities Legends will be
available to transferees of such Preferred Securities, upon directions to
transfer such Holder's beneficial interest in the Global Preferred Security.
After the effectiveness of the Shelf Registration Statement, the Administrative
Trustees shall execute and deliver and the Property Trustee shall authenticate a
Preferred Security in global form without the Restricted Securities Legend (the
"Unrestricted Global Preferred Security") to deposit with the Depositary to
evidence transfers of beneficial interests from the Global Preferred Security.
(c) [Reserved]
(d) TRANSFER AND EXCHANGE OF DEFINITIVE PREFERRED SECURITIES.
When Definitive Preferred Securities are presented to the Registrar or
co-Registrar
(x) to register the transfer of such Definitive
Preferred Securities; or
(y) to exchange such Definitive Preferred Securities
for an equal number of Definitive Preferred Securities of
another denomination;
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
PROVIDED, HOWEVER, that the Definitive Preferred Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly
executed by the Holder thereof or his attorney duly authorized in
writing; and
(ii) in the case of Definitive Preferred Securities
that are Restricted Preferred Securities, and are being transferred or
exchanged, such transfer or exchange shall be (x) pursuant to an
effective registration statement
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under the Securities Act or (y) pursuant to, and in compliance with,
clause (A) or (B) below:
(A) if such Restricted Preferred Securities
are being delivered to the Registrar by a Holder for
registration in the name of such Holder, without transfer,
such Holder shall deliver a certification to that effect (in
the form set forth on the reverse of the Preferred Security);
or
(B) if such Restricted Preferred Securities
are being transferred pursuant to an exemption from
registration in accordance with Rule 144A or Rule 144 under
the Securities Act such Holder shall deliver: (i) a
certification to that effect (in the form set forth on the
reverse of the Preferred Security) and (ii) if the Trust or
Registrar so requests, evidence reasonably satisfactory to
them as to the compliance with the restrictions set forth in
the Restricted Securities Legend.
For definitive Preferred Securities that are transferred to QIBs in
accordance with Rule 144A under the Securities Act, QIBs must take delivery of
their interests in the Preferred Securities in the form of a beneficial interest
in the Global Preferred Security in accordance with Section 9.02(e).
(e) RESTRICTIONS ON TRANSFER OF A DEFINITIVE PREFERRED
SECURITY FOR A BENEFICIAL INTEREST IN A GLOBAL PREFERRED SECURITY. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth
below. Upon receipt by the Property Trustee of a Definitive Preferred Security,
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee, together with written instructions
directing the Property Trustee to make, or to direct the Depositary to make, an
adjustment on its books and records with respect to such Global Preferred
Security to reflect an increase in the number of the Preferred Securities
represented by the Global Preferred Security, then the Property Trustee shall
cancel such Definitive Preferred Security and cause, or direct the Depositary to
cause, the aggregate number of Preferred Securities represented by the Global
Preferred Security to be increased accordingly. If no Global Preferred
Securities are then outstanding, the Administrative Trustee shall execute and
deliver and the Property Trustee shall authenticate, upon written order of any
Administrative Trustee, an appropriate number of Preferred Securities in global
form.
(f) TRANSFER AND EXCHANGE OF GLOBAL PREFERRED SECURITIES. The
transfer and exchange of Global Preferred Securities or beneficial interests
therein shall be effected through the Depositary, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depositary therefor.
(g) TRANSFER OF A BENEFICIAL INTEREST IN A GLOBAL PREFERRED
SECURITY FOR A DEFINITIVE PREFERRED SECURITY.
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(i) The transfer of a beneficial interest in a Global
Preferred Security in exchange for a Definitive Preferred Security will
require the delivery by the transferee of a transfer certificate in the
form set forth in Exhibit A-1.
(ii) Definitive Preferred Securities issued in
exchange for a beneficial interest in a Global Preferred Security
pursuant to this Section 9.02(g) shall be registered in such names and
in such authorized denominations as the Depositary, pursuant to
instructions from its Participants or indirect participants or
otherwise, shall instruct the Property Trustee. The Property Trustee
shall deliver such Preferred Securities to the Persons in whose names
such Preferred Securities are so registered in accordance with the
instructions of the Depositary.
(h) RESTRICTIONS ON TRANSFER AND EXCHANGE OF GLOBAL PREFERRED
SECURITIES. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.03), a Global Preferred Security may not
be transferred as a whole except by the Depositary to a nominee of the
Depositary or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor Depositary.
(i) [Reserved]
(j) LEGEND.
(i) Except as permitted by the following paragraph
(ii), each Preferred Security certificate evidencing the Global
Preferred Securities and the Definitive Preferred Securities (and all
Preferred Securities issued in exchange therefor or substitution
thereof) shall bear a legend in substantially the following form (the
"Restricted Preferred Security"):
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS
SECURITY AND ANY CONVERTIBLE SENIOR SUBORDINATED
DEBENTURES ISSUED UPON EXCHANGE FOR THIS SECURITY AND ANY
COMMON STOCK ISSUABLE UPON CONVERSION THEREOF MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION
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FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT (A) THIS SECURITY AND ANY
CONVERTIBLE SENIOR SUBORDINATED DEBENTURES ISSUABLE UPON
EXCHANGE THEREFOR AND COMMON STOCK ISSUABLE UPON CONVERSION
THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iii) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL,
AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Restricted
Preferred Security (including any Restricted Preferred Security
represented by a Global Preferred Security) pursuant to Rule 144 under
the Securities Act or an effective registration statement under the
Securities Act the Registrar shall permit the Holder thereof to
exchange such Restricted Preferred Security for an interest in the
Unrestricted Global Preferred Security.
(k) CANCELLATION OR ADJUSTMENT OF GLOBAL PREFERRED SECURITY.
At such time as all beneficial interests in a Global Preferred Security have
either been exchanged for Definitive Preferred Securities to the extent
permitted by the Declaration or redeemed, repurchased or cancelled in accordance
with the terms of this Declaration, such Global Preferred Security shall be
returned to the Depositary for cancellation or retained and cancelled by the
Property Trustee. At any time prior to such cancellation, if any beneficial
interest in a Global Preferred Security is exchanged for Definitive Preferred
Securities, Preferred Securities represented by such Global Preferred Security
shall be reduced and an adjustment shall be made on the books and records of the
Property Trustee (if it is then the Securities Custodian for such Global
Preferred Security)
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with respect to such Global Preferred Security, or by the Securities Custodian,
to reflect such reduction.
(l) NO OBLIGATION OF THE PROPERTY TRUSTEE.
(i) The Property Trustee shall have no responsibility
or obligation to any Preferred Security Beneficial Owner, a Participant
in the Depositary or other Person with respect to the accuracy of the
records of the Depositary or its nominee or of any Participant thereof,
with respect to any ownership interest in the Preferred Securities or
with respect to the delivery to any Participant, Preferred Security
Beneficial Owner or other Person (other than the Depositary) of any
notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Preferred Securities. All notices
and communications to be given to the Holders and all payments to be
made to Holders under the Preferred Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Preferred Security).
The rights of Preferred Security Beneficial Owners in any Global
Preferred Security shall be exercised only through the Depositary
subject to the applicable rules and procedures of the Depositary. The
Property Trustee may conclusively rely and shall be fully protected in
relying upon information furnished by the Depositary or agent thereof
with respect to its Participants and any Preferred Security Beneficial
Owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or inquire as to compliance
with any restrictions on transfer imposed under this Declaration or
under applicable law with respect to any transfer of any interest in
any Preferred Security (including any transfers between or among
Depositary Participants or Preferred Security Beneficial Owners in any
Global Preferred Security) other than to require delivery of such
certificates and other documentation or evidence as are expressly
required by, and to do so if and when expressly required by, the terms
of this Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
Section 9.03 DEEMED SECURITY HOLDERS. The Trustees may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Property Trustee, the Registrar or a
co-registrar shall have actual or other notice thereof.
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Section 9.04 NOTICES TO DEPOSITARY. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary and shall have no
notice obligations to the Preferred Security Beneficial Owners.
Section 9.05 APPOINTMENT OF SUCCESSOR DEPOSITARY. If the
Depositary elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Depositary with respect to such Preferred
Securities.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.01 LIABILITY. (a) Except as expressly set forth in
this Declaration, the Securities Guarantee and the terms of the Securities, the
Depositor shall not be:
(i) personally liable for the return of any portion
of the capital contributions (or any return thereon) of the Holders of
the Securities which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act,
the Holders of the 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 10.02 EXCULPATION. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the
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case of the Property Trustee, 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 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 10.03 FIDUCIARY DUTY. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person 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
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(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
Section 10.04 INDEMNIFICATION. (a) To the fullest extent
permitted by applicable law, the Debenture Issuer shall indemnify and hold
harmless each Indemnified Person from and against any loss, damage, liability,
tax, penalty, cost, expense, action, suit or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of
authority conferred on such Indemnified Person by this Declaration, except that
no Indemnified Person shall be entitled to be indemnified in respect of any
loss, damage or claim incurred by such Indemnified Person by reason of gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification shall survive
the termination of this Declaration.
Section 10.05 OUTSIDE BUSINESSES. Any Covered Person, the
Depositor, the Delaware Trustee and the Property Trustee (subject to Section
5.03(c)) may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. None of the Depositor, any Covered Person, the Delaware Trustee,
the Administrative Trustees or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Depositor, the Delaware Trustee and the
Property Trustee shall have the
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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 Property Trustee may engage or be
interested in any financial or other transaction with the Depositor or any
Affiliate of the Depositor, 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 Depositor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.01 FISCAL YEAR. The fiscal year ("FISCAL YEAR") of
the Trust shall be the calendar year, or such other year as is required by the
Code.
Section 11.02 CERTAIN ACCOUNTING MATTERS. (a) At all times
during the existence of the Trust, the Administrative Trustees shall keep, or
cause to be kept, full books of account, records and supporting documents, which
shall reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year by a firm of independent
certified public accountants selected by the Administrative Trustees.
(b) The Depositor shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Depositor, annual financial statements of the Depositor, including a
balance sheet of the Depositor as of the end of such Fiscal Year, and the
related statements of income or loss;
(c) The Administrative 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 Administrative
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Administrative 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 Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
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Section 11.03 BANKING. The Administrative Trustees on behalf
of 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 Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; PROVIDED, HOWEVER, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
Section 11.04 WITHHOLDING. The Trust and the Administrative
Trustees on behalf of the Trust shall comply with all withholding requirements
under United States federal, state and local law. The Administrative Trustees on
behalf of the Trust shall request, and the Holders shall provide to the
Administrative Trustees, 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 Administrative
Trustees on behalf of the Trust to assist it in determining the extent of, and
in fulfilling the Trust's withholding obligations. The Administrative 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 overwithholding, Holders shall be limited to
an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Administrative
Trustees on behalf of the Trust may reduce subsequent Distributions by the
amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.01 AMENDMENTS. (a) Except as otherwise provided in
this Declaration or by any applicable terms of the Securities, this Declaration
may be amended from time to time by the Depositor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders of the Securities,
(i) to cure any ambiguity, correct or supplement any provision in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to ministerial matters or questions arising under
the Declaration, which shall not be inconsistent with the other provisions of
the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
not be taxable as a corporation or will be classified for United States federal
income tax purposes as a grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act; PROVIDED, HOWEVER, that
in the case of clause (i), such action shall not adversely affect in any
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material respect the interests of any Holder of Securities, and any such
amendments of the Declaration shall become effective when notice thereof is
given to the Holders of the Securities.
(b) Except as provided in (c) below, and the terms of the
Securities, this Declaration may be amended by the Trustees and the Depositor
with (i) the consent of Holders representing not less than a Majority in
liquidation amount of the outstanding Preferred Securities, and (ii) receipt by
the Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status as an "investment
company" under the Investment Company Act.
(c) Without the consent of each Holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or (ii) restrict the right of a Holder of Securities to institute suit for
the enforcement of any such payment on or after such date.
Section 12.02 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. Except as otherwise set
forth in the terms of the Securities, the Administrative Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 25% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Administrative Trustees one or more requests
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities represented by the Certificates so
specified shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange on which the Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the
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Holders of Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting and without prior
notice if a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the minimum
aggregate liquidation amount of Securities 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 Administrative Trustees may specify that any written
ballot submitted to the Holders for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Administrative Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of Securities executing it. Except as otherwise
provided herein, all matters relating to the giving, voting or
validity of proxies shall be governed by the General Corporation Law of
the State of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities
shall be conducted by the Administrative Trustees or by such other
Person that the Administrative 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 on which the Preferred Securities are then
listed or trading, provide otherwise, the Administrative 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 PROPERTY TRUSTEE AND DELAWARE TRUSTEE
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Section 13.01 REPRESENTATIONS AND WARRANTIES OF PROPERTY
TRUSTEE. The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Depositor at the date of this Declaration, at
the Closing Date and at each Optional Closing Date, if any, and each Successor
Property Trustee represents and warrants to the Trust and the Depositor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate 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 Property
Trustee of the Declaration have been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Property Trustee do not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) 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 Property Trustee, of the Declaration.
(e) The Property Trustee satisfies the qualifications set
forth in Section 5.03 and shall not create, incur or assume or suffer to exist
any mortgage, pledge, hypothecation, encumbrance, lien or other change or
security interest upon the Debentures.
Section 13.02 REPRESENTATIONS AND WARRANTIES OF DELAWARE
TRUSTEE. The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Depositor at the date of this Declaration, at
the Closing Date and at each Optional Closing Date, if any, and each Successor
Delaware Trustee represents and warrants to the Trust and the Depositor at the
time of the Successor Property Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust
powers, duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
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(b) The execution, delivery and performance by the Delaware
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. The Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Delaware Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Delaware Trustee.
(d) 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.
(e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.01 REGISTRATION RIGHTS. The Holders of the
Preferred Securities, the Debentures, the Preferred Securities Guarantee and the
shares of Common Stock of the Depositor issuable upon conversion of the
Securities are entitled to the benefits of a Registration Rights Agreement as
set forth in the Purchase Agreement and the Indenture.
ARTICLE XV
REPURCHASE OF SECURITIES UPON THE FAILURE TO CONSUMMATE THE ACQUISITION
Section 15.01 REPURCHASE OF SECURITIES. (a) In the event that
the acquisition of ACS pursuant to the Agreement and Plan of Merger by and among
Depositor, ACS and A T Acquisition Corp., a Delaware corporation, dated as of
December 9, 1999, is not consummated by March 31, 2000, the Property Trustee on
behalf of the Trust shall offer to purchase
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up to 50% of the aggregate liquidation amount of each of the issued and
outstanding Securities (the "OFFER TO REPURCHASE") at a purchase price equal to
102.5% of the liquidation amount of each class of the Securities, plus accrued
and unpaid Distributions thereon, if any, to the date of repurchase (the
"REPURCHASE PAYMENT").
(b) The Offer to Repurchase shall be made in compliance with
all applicable laws, including, without limitation, Regulation 14E under the
Exchange Act and the rules thereunder and all other applicable Federal and state
securities laws. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Article XV, the Trust shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Article XV by virtue thereof.
(c) Within 30 days following March 31, 2000, the Property
Trustee on behalf of the Trust shall commence the Offer to Repurchase by mailing
to each Holder of Securities a notice (the "Notice"), which shall govern the
terms of the Offer to Repurchase,
and shall state:
(i) that the Offer to Repurchase is being made
pursuant to this Article XV and that up to 50% of the aggregate
liquidation amount of each of the Securities will be accepted for
payment, each at a purchase price equal to 102.5% of the liquidation
amount of the Securities;
(ii) the purchase date, which shall be a Business Day
no earlier than 30 days nor later than 45 days from the date the Notice
is mailed (the "REPURCHASE PAYMENT DATE");
(iii) that any Preferred Security or Common
Securities not tendered for payment pursuant to the Offer to Repurchase
shall continue to be outstanding and accrue distributions in accordance
with the terms thereof;
(iv) that, unless the Trust defaults in the payment
of the Repurchase Payment, all Securities tendered and accepted for
payment pursuant to the Offer to Repurchase shall cease to be
outstanding on the Repurchase Payment Date;
(v) that any Holder electing to have Securities
purchased pursuant to an Offer to Repurchase shall be required to
surrender such Preferred Securities and Common Securities, as the case
may be, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Preferred Securities and Common Securities
completed, to the Paying Agent at the address specified in the Notice;
(vi) that a Holder whose Preferred Securities or
Common Securities are being purchased only in part shall be issued new
Preferred Securities or Common Securities equal in liquidation amount
to the unpurchased portion of the Preferred
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Securities or Common Securities surrendered, which unpurchased portion
must be equal to $50 in liquidation amount or an integral multiple
thereof;
(vii) that if more than 50% of the aggregate
liquidation amount of either the Preferred Securities or Common
Securities are tendered, the Property Trustee shall repurchase the
Preferred Securities or Common Securities, as the case may be, from
each tendering Holder on a proportionate basis according to the number
of Preferred Securities or Common Securities tendered by each Holder;
(viii) the instructions that Holders must follow in
order to tender their Preferred Securities and Common Securities; and
(ix) the circumstances and relevant facts regarding
the failure to consummate the acquisition of ACS.
(d) On the Repurchase Payment Date, the Trust shall, to the
extent lawful, (i) accept for payment the Securities or portions thereof
tendered pursuant to the Offer to Repurchase and not withdrawn, (ii) deposit
with the Paying Agent an amount equal to the aggregate Repurchase Payment in
respect of all Securities or portions thereof so tendered and not withdrawn,
which amount shall have been delivered to the Trust by the Depositor pursuant to
Section 10.09 of the Indenture and (iii) deliver or cause to be delivered to the
Property Trustee the Securities so accepted, together with a certificate stating
that the Securities or the portions thereof tendered to the Trust and not
withdrawn are accepted for payment. The Paying Agent shall promptly mail to each
Holder of Preferred Securities and Common Securities so accepted payment in an
amount equal to the purchase price for such Preferred Securities and Common
Securities, and the Property Trustee on behalf of the Trust shall authenticate
and mail (or cause to be transferred by book entry) to each Holder a new
Preferred Security or Common Security, as the case may be, equal in liquidation
amount to any unpurchased portion of the Preferred Securities or Common
Securities surrendered, if any, PROVIDED, that each such new Preferred Security
or Common Security will be in the liquidation amount of $50 or an integral
multiple thereof.
(e) The Property Trustee on behalf of the Trust shall make a
public announcement of the results of the Offer to Repurchase on or as soon as
practicable after the Repurchase Payment Date. For the purposes of this Article
XV, the Property Trustee shall act as the Paying Agent.
Section 15.02 AGREEMENT TO SELL DEBENTURES.
The Trust shall accept the Depositor's offer, as described in
Section 10.09 of the Indenture, to purchase the Debentures held by the Trust in
an amount equal to the total price to be paid by the Trust for the Securities
tendered by the Holders of the Securities to the Trust pursuant to Article XV of
this Declaration. Said amount shall not exceed 50% of the
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aggregate liquidation amount of the Securities and the purchase price for the
Debentures will equal 102.5% of the principal amount of the Debentures, plus
accrued and unpaid interest thereon, if any, to the date of the repurchase of
the Debentures.
ARTICLE XVI
MISCELLANEOUS
Section 16.01 NOTICES. All notices provided for in this
Declaration shall be in writing, duly signed by the party giving such notice,
and shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) if given to the Trust, in care of the Administrative
Trustees at the Trust's mailing address set forth below (or such other address
as the Administrative Trustees may give notice of to the Holders of the
Securities):
Titan Capital Trust
c/o The Titan Corporation
3033 Science Road
San Diego, California 92121-1199
Attention: General Counsel
Telecopy: (858) 552-9759
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
Telecopy: (302) 651-8882
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Attention: Corporate Trust Administration
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Telecopy: (302) 651-8882
(d) if given to the Holder of the Common Securities, at the
mailing address of the Depositor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
The Titan Corporation
3033 Science Road
San Diego, California 92121-1199
Attention: General Counsel
Telecopy: (858) 552-9759
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid 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 16.02 GOVERNING LAW. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. Sections 3540 and
3561 of Title 12 of the Delaware Code shall not apply to the Trust. To the
fullest extent permitted by law, there shall not be applicable to the parties
hereunder or this Declaration any provision of the laws (statutory or common) of
the State of Delaware pertaining to trusts that relate to or regulate, in a
manner inconsistent with the terms hereof (A) the filing with any court or
governmental body or agency of trustee accounts or schedules of trustee fees and
charges, (B) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (C) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (D) fees or other sums payable to trustees, officers,
agents, or employees of a trust, (E) the allocation of receipts and expenditures
to income or principal, (F) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets or (G)
the establishment of fiduciary or other standards of responsibility or
limitations on the acts or powers of trustees that are inconsistent with the
limitations or liabilities or authorities and powers of the trustees hereunder
as set forth or referenced in this Declaration.
Section 16.03 INTENTION OF THE PARTIES. It is the intention of
the parties hereto that the Trust be classified for United States federal income
tax purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
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Section 16.04 HEADINGS. Headings contained in this Declaration
are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
Section 16.05 SUCCESSORS AND ASSIGNS. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Depositor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
Section 16.06 PARTIAL ENFORCEABILITY. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to Persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 16.07 COUNTERPARTS. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
Deanna Hom Petersen,
as Administrative Trustee
------------------------------------------
Ray Guillaume,
as Administrative Trustee
------------------------------------------
The Titan Corporation,
as Depositor and Debenture Issuer
By:
--------------------------------------
Name:
Title:
Wilmington Trust Company,
as Delaware Trustee
By:
--------------------------------------
Name:
Title:
Wilmington Trust Company,
as Property Trustee
By:
--------------------------------------
Name:
Title:
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ANNEX I
TERMS OF
Remarketable Term Income Deferrable
Equity Securities (HIGH TIDES-SM-) and
HIGH TIDES Common Securities
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust, dated as of February 9, 2000 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the 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, the Indenture or
Remarketing Agreement (as defined in the Declaration) or, if not defined in the
Declaration, Indenture or Remarketing Agreement, as defined in the Offering
Circular (as defined in the Declaration):
1. DESIGNATION AND NUMBER.
(a) "Preferred Securities." 5,000,000 (including 1,000,000 relating to
the exercise of the full amount of the over-allotment option) Preferred
Securities of the Trust with an aggregate liquidation preference with respect to
the assets of the Trust of TWO HUNDRED FIFTY MILLION Dollars ($250,000,000)
(including FIFTY MILLION Dollars ($50,000,000) relating to the exercise of the
full amount of the over-allotment option), and a liquidation amount with respect
to the assets of the Trust of $50 per Preferred Security, are hereby designated
for the purposes of identification only as "Remarketable Term Income Deferrable
Equity Securities (HIGH TIDES-SM-)" (the "Preferred Securities"). The Preferred
Security Certificates evidencing the Preferred Securities shall be substantially
in the form attached hereto as Exhibit A-1, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange or other organization
on which the Preferred Securities are listed, if any.
(b) "Common Securities." 154,640 (including 30,928 relating to the
exercise of the full amount of the over-allotment option) Common Securities of
the Trust with an aggregate liquidation amount with respect to the assets of the
Trust of SEVEN MILLION SEVEN HUNDRED THIRTY TWO THOUSAND Dollars ($7,732,000)
(including ONE MILLION FIVE HUNDRED FORTY FIX THOUSAND FOUR HUNDRED Dollars
($1,546,400) relating to the exercise of the full amount of the over-allotment
option) 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 "HIGH TIDES Common Securities" (the "Common Securities"). The Common
Security Certificates evidencing the Common Securities shall be substantially in
the form attached hereto as Exhibit A-2, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice.
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2. DISTRIBUTIONS.
(a) Distributions payable on each Security will accrue at the
Applicable Rate (as defined in the Indenture) applied to the stated liquidation
amount of $50 per Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. The Applicable Rate will be 5.75%
per annum (the "Initial Rate") from the date of original issuance of the
Securities to but excluding the Reset Date. From the Reset Date, the Applicable
Rate will be the Term Rate established by the Remarketing Agent to be effective
on the Reset Date. Distributions in arrears for more than one quarter will bear
interest thereon compounded quarterly at the Applicable Rate (to the extent
permitted by applicable law). The Applicable Rate shall be subject to adjustment
in the event of a Registration Default, as described in the Indenture. The term
"Distributions" as used herein includes such quarterly distributions, additional
distributions on quarterly distributions not paid on the applicable Distribution
Date and Additional Amounts, as applicable. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months. Except as provided in the following sentence, the amount
of Distributions payable for any period shorter than a full quarterly
Distribution period will be computed on the basis of the actual number of days
elapsed per 30-day month. In the event that any date on which Distributions are
payable on the Securities is not a Business Day, then payment of Distributions
payable on such date will be made on the next succeeding day which is a Business
Day (and without any additional Distributions or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
(b) Distributions on the Securities will be cumulative, will accrue
from the date of their original issuance and will be payable quarterly in
arrears, on the following dates (each a "Distribution Date"), which dates
correspond to the interest payment dates on the Debentures: February 15, May 15,
August 15 and November 15 of each year, commencing on May 15, 2000, except as
otherwise described below. The 1st day of the month immediately preceding each
Distribution Date is the record date for determining which holders of Securities
shall be paid the Distributions and Additional Amounts, if any, payable on such
Distribution Date. If the Reset Date is prior to the record date for the
immediately following Distribution Date, then Distributions and Additional
Amounts, if any, accrued from and after the Reset Date to but excluding the
immediately following Distribution Date shall be paid on such Distribution Date
to the person in whose name each Security is registered on the relevant record
date, subject to the Depositor's right to initiate a Deferral Period. If the
Reset Date is on or after the record date for the immediately following
Distribution Date, then (1) Distributions and Additional Amounts, if any,
accrued from and after the record date to but excluding the Reset Date shall be
paid on the immediately following Distribution Date to the person in whose name
each Security is registered on the relevant record date and (2) Distributions
and Additional
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Amounts, if any, accrued from and after the Reset Date to but excluding the
immediately following Distribution Date shall be paid on the second Distribution
Date immediately following the Reset Date to the person in whose name each
Security is registered on the relevant record date for such second Distribution
Date, subject in each case to the Depositor's right to initiate a Deferral
Period. So long as no Debenture Event of Default has occurred and is continuing,
the Depositor has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for a
period not exceeding 20 consecutive quarters (each a "Deferral Period") and, as
a consequence of such deferral, Distributions will also be deferred. Despite
such deferral, quarterly Distributions will continue to accrue with interest
thereon (to the extent permitted by applicable law) at the Applicable Rate
compounded quarterly during any such Deferral Period. Prior to three Business
Days before a Regular Record Date fixed for a Payment Resumption Date (as
defined in the Indenture), the Depositor may further extend such Deferral
Period; PROVIDED that such Deferral Period together with all such previous and
further deferrals thereof may not exceed 20 consecutive quarters or extend
beyond (i) the maturity (whether at the stated maturity or by declaration of
acceleration, call for redemption or otherwise) of the Debentures under the
Indenture and (ii) in the case of a Deferral Period which begins prior to the
Reset Date, the Reset Date. Payments of accrued Distributions will be payable to
Holders by the Depositor as they appear on the books and records of the Trust on
the Regular Record Date for the relevant Payment Resumption Date. Upon the
termination of any Deferral Period and the payment of all amounts then due, the
Depositor may commence a new Deferral 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. The relevant record dates shall be on the
1st day of the month immediately preceding each relevant payment date, except as
otherwise described in this Annex I to the Declaration. Subject to any
applicable laws and regulations and the provisions of the Declaration, each such
payment in respect of Preferred Securities being held in book-entry form through
The Depository Trust Company (the "Depositary"), or any successor Depositary
appointed pursuant to the Declaration, will be made as described under the
heading "Description of HIGH TIDES-Depositary Procedures" in the Offering
Circular. The relevant record dates for the Common Securities shall be the same
record dates as for the Preferred Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Depositor 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 Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payment in respect of any such delay) except
that if such Business Day
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is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
(d) In the event of an election by the Holder to convert its Securities
through the Conversion Agent into Common Stock pursuant to the terms of the
Securities as 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, or be required to be made; PROVIDED that Holders of Securities
at the close of business on any record date who convert their Securities after
such record date and on or prior to the corresponding payment date will be
entitled to receive the Distributions payable on such Securities on the
corresponding payment date notwithstanding the conversion of such Securities
into Common Stock following such record 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 dissolution of the Trust,
the Trust shall be liquidated by the Trustees as expeditiously as the Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders of the
Securities a Like Amount of Debentures, unless such Distribution would not be
practical, in which event such Holders will be entitled to receive out of the
assets of the Trust available for Distribution to Holders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the aggregate liquidation amount thereof plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis in accordance with paragraph 9. The
Holder of the Common Securities will be entitled to receive Distributions upon
any such liquidation Pro Rata with the Holders of the Preferred Securities,
except as provided in paragraph 10.
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment or payment of the Debentures in whole or in
part, whether at maturity or upon redemption or otherwise (other than following
any distribution of the Debentures to the Holders), the proceeds from such
repayment or redemption shall be simultaneously applied to redeem, on a Pro Rata
basis, a Like Amount of Securities, on the Redemption Date, in an amount per
Security equal to the applicable Redemption Price, payable in cash, which
Redemption Price will be equal to (i) the liquidation amount of each of the
Securities plus any accrued and unpaid Distributions thereon (A) in the case of
the
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repayment of the Debentures at stated maturity, or (B) in the case of a
redemption of the Debentures in certain limited circumstances set forth in the
Indenture upon the occurrence of a Tax Event, or (ii) (A) in the case of an
Optional Redemption after February 20, 2003 until but excluding the Tender
Notification Date, the Initial Redemption Price; (B) in the case of an Optional
Redemption on or after the Reset Date (except in the event of a Failed Final
Remarketing), in accordance with the Term Call Protections or (C) in the case of
an Optional Redemption after a Failed Final Remarketing, 100% of the then
outstanding aggregate principal amount of the Securities being redeemed, plus
accrued and unpaid interest thereon.
(b) If fewer than all the outstanding Securities are to be so redeemed,
the Common Securities and the Preferred Securities will be redeemed Pro Rata and
the Preferred Securities to be redeemed will be as described in Paragraph
4(f)(ii) below.
(c) The Depositor, as the Holder of the outstanding Common Securities,
shall have the right at any time (including, without limitation, upon the
occurrence of a Tax Event or Investment Company Act Event) to dissolve the Trust
and, after satisfaction of the creditors of the Trust, cause a Like Amount of
the Debentures to be distributed to the Holders of the Securities in liquidation
of the Trust, PROVIDED that neither the Depositor nor the Administrative
Trustees may cause the dissolution of the Trust during the period beginning on
the Business Day following the Tender Notification Date and ending on the Reset
Date (other than upon the occurrence of a Tax Event or an Investment Company
Event), and provided further that the Administrative Trustees shall have
received a No Recognition Opinion (as defined below) prior to the dissolution of
the Trust.
(d) If, at any time, a Tax Event shall occur and be continuing the
Depositor shall cause the Trustees to dissolve the Trust and, after satisfaction
of the creditors of the Trust, cause a Like Amount of Debentures to be
distributed to the Holders of the Securities in liquidation of the Trust within
90 days following the occurrence of such Tax Event; PROVIDED, HOWEVER, that such
dissolution, liquidation and distribution shall be conditioned on (i) the
Trustees' receipt of an opinion of a nationally recognized independent tax
counsel (reasonably acceptable to the Trustees) experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the Holders of the Preferred
Securities will not recognize any income, gain or loss for United States federal
income tax purposes as a result of such dissolution and distribution of
Debentures, and (ii) the Depositor being unable to avoid such Tax Event within
such 90-day period by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Depositor, will have no
adverse effect on the Trust, the Depositor or the Holders of the Preferred
Securities and will involve no material cost ("Ministerial Action").
If (i) the Depositor has received an opinion (a "Redemption Tax
Opinion") of a nationally recognized independent tax counsel (reasonably
acceptable to the Trustees) experienced in such matters that, as a result of a
Tax Event, there is more than an insubstantial
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risk that the Depositor would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes, even after the
Debentures were distributed to the Holders of Securities upon liquidation of the
Trust as described in this paragraph 4(d), or (ii) the Trustees shall have been
informed by such tax counsel that it cannot deliver a No Recognition Opinion,
the Depositor shall have the right, upon not less than 30 nor more than 60 days'
notice, and within 90 days following the occurrence and continuation of such Tax
Event, to redeem the Debentures in whole, but not in part, for cash, for the
principal amount plus accrued and unpaid interest thereon and, following such
redemption, all the Securities will be redeemed by the Trust at the liquidation
amount of $50 per Security plus accrued and unpaid Distributions thereon;
PROVIDED, HOWEVER, that, if at the time there is available to the Depositor or
the Trust the opportunity to eliminate, within such 90-day period, the Tax Event
by taking some Ministerial Action, the Trust or the Depositor will pursue such
Ministerial Action in lieu of redemption.
In lieu of the foregoing options, the Depositor shall also have the
option of causing the Securities to remain outstanding and pay Additional
Amounts on the Debentures.
"Tax Event" means that the Property Trustee shall have received an
opinion of a nationally recognized independent tax counsel to the Depositor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to, or change (including any announced prospective change (which shall not
include a proposed change), PROVIDED that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority therefor or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (x) the Trust is, or will be within
90 days of the date of such opinion, subject to United States federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a DE MINIMIS amount of other taxes, duties or other governmental
charges as determined by such counsel, or (y) any portion of interest payable by
the Depositor to the Trust (or OID accruing) on the Debentures is not, or within
90 days of the date of such opinion will not be, deductible by the Depositor in
whole or in part for United States federal income tax purposes or (b) with
respect to Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Depositor (or OID accruing) on
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the Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Depositor in whole or in part for United States federal
income tax purposes.
If an Investment Company Event (as hereinafter defined) shall occur and
be continuing, the Depositor shall cause the Trustees to dissolve the Trust
and, after satisfaction to creditors of the Trust, cause a Like Amount of the
Debentures to be distributed to the Holders of the Securities in liquidation of
the Trust within 90 days following the occurrence of such Investment Company
Event.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), to the effect that the Trust is or will
be considered an Investment Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes effective on or
after the date of the Offering Circular.
After the date fixed for any distribution of Debentures: (i) the
Securities will no longer be deemed to be outstanding, (ii) the Depositary or
its nominee (or any successor Depositary or its nominee), as record Holder of
Preferred Securities represented by 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, except for certificates representing Preferred Securities held by
the Depositary or its nominee (or any successor Depositary or its nominee), will
be deemed to represent Debentures having an aggregate principal amount equal to
the aggregate stated liquidation amount of such Securities, with accrued and
unpaid interest equal to accrued and unpaid Distributions on such Securities
until such certificates are presented to the Depositor or its agent for
cancellation, whereupon the Depositor or its agent will issue to the Holder of
such Securities, and the Debenture Trustee will authenticate, a certificate
representing such Debentures.
(e) The Securities will not be redeemed unless all accrued and unpaid
Distributions have been paid on all Securities for all quarterly Distribution
periods terminating on or before the date of redemption.
(f) Redemption, Distribution and Remarketing Procedures.
(i) Holders will be given not less than 20 nor more
than 60 days notice of an Optional Redemption. Holders will be given at
least 30 days but not more than 60 days notice of a redemption pursuant
to paragraph 4(d). Notice of distribution of Debentures in exchange for
the Securities will be given by the Administrative Trustees on behalf
of the Trust by mail to each Holder of Securities to be exchanged not
fewer than 30 nor more than 60 days before the date fixed for exchange
thereof. For purposes of the calculation of the date of redemption or
exchange and the dates on which notices are given
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<PAGE>
pursuant to this paragraph 4(f)(i) (other than notices in connection
with a Remarketing, the terms of which shall be governed by the
Remarketing Agreement), a redemption or distribution notice shall be
deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of Securities. Each
redemption or distribution notice shall be addressed to the Holders of
Securities at the address of each such Holder appearing in the books
and records of the Trust. No defect in the redemption or distribution
notice or in the mailing of either thereof with respect to any Holder
shall affect the validity of the redemption or exchange proceedings
with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Securities, it being understood
that, in respect of Preferred Securities registered in the name of and
held of record by the Depositary (or any successor Depositary) or any
nominee, the distribution of the proceeds of such redemption will be
made to each Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the
Administrative Trustees on behalf of the Trust gives a redemption or
distribution notice, which notice may only be issued if the Debentures
are redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then (A) with respect to Preferred Securities held in
book-entry form, by 10:00 a.m., New York City time, on the Redemption
Date, to the extent funds are available, with respect to Preferred
Securities held in global form, the Property Trustee will deposit
irrevocably with the Depositary (or successor Depositary) funds
sufficient to pay the amount payable on redemption with respect to such
Preferred Securities and will give the Depositary irrevocable
instructions and authority to pay the amount payable on redemption to
the Holders of such Preferred Securities, and (B) with respect to
Preferred Securities issued in certificated form and Common Securities,
to the extent funds are available, the Property Trustee will
irrevocably deposit with the Paying Agent funds sufficient to pay the
amount payable on redemption to the Holders of such Securities and will
give the Paying Agent irrevocable instructions and authority to pay the
amount payable on redemption to the Holders thereof upon surrender of
their certificates. If a redemption or distribution notice shall have
been given and funds deposited as required, then on the date of such
deposit, all rights of Holders of such Securities so called for
redemption will cease, except the right of the Holders of such
Securities to receive the Redemption Price, but without interest on
such Redemption Price, and such Securities will cease to be
outstanding. Neither the Administrative Trustees nor the Trust shall be
required to register or cause
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to be registered the transfer of any Securities that have been so
called for redemption. If any date fixed for redemption of Securities
is not a Business Day, then payment of the amount payable on such date
will be made on the next succeeding day that is a Business Day (without
any interest or other payment in respect of any such delay) except
that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed
for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the
Trust or by the Depositor as guarantor pursuant to the relevant
Securities Guarantee, Distributions on such Securities will continue to
accrue at the then Applicable Rate, from the original Redemption Date
to the date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating
the amount payable upon redemption (other than for purposes of
calculating any premium).
(iv) Redemption and/or distribution notices, as
applicable, shall be sent by the Administrative Trustees on behalf of
the Trust to (A) in the case of Preferred Securities held in book-entry
form, the Depositary and, in the case of Preferred Securities held in
certificated form, the Holders of such certificates and (B) in respect
of the Common Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities laws),
the Depositor or any of its subsidiaries may at any time and from time
to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement; PROVIDED that neither the
Depositor nor any of its Affiliates may purchase Preferred Securities
on the Reset Date or submit orders in the Remarketing.
5. CONVERSION RIGHTS.
The Holders of Securities shall have the right at any time prior to
5:00 p.m., New York City time, on the Tender Notification Date and, in the event
of a Convertible Remarketing or a Failed Final Remarketing, from and after the
Reset Date to and including February 15, 2030 (except that Securities called for
redemption by the Depositor will be convertible at any time prior to 5:00 p.m.,
New York City time on any Redemption Date), at their option, to cause the
Conversion Agent to convert Securities, on behalf of the converting Holders,
into shares of Common Stock (as defined in the Indenture) 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 Common Stock pursuant to the
Holder's direction to the Conversion Agent to exchange such Securities for a
portion of the Debentures theretofore held
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<PAGE>
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 Common Stock on or prior to the Tender Notification
Date, into 1.0076 shares of Common Stock per $50 principal amount of Debentures
(which is equivalent to a conversion price of $49.625 per share of Common Stock,
subject to certain adjustments set forth in the Indenture (as so adjusted,
"Initial Conversion Price")). On and after the Reset Date, the Securities may,
at the option of the Trust and subject to the results of the Remarketing, become
nonconvertible or convertible into a different number of shares of Common Stock.
(b) In order to convert Securities into 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 Holder must furnish appropriate endorsements or transfer
documents, if required by the Conversion Agent, and pay any transfer or similar
tax, if required. The Trust shall not cause the conversion of any Debentures
except pursuant to such a Conversion Request. The Conversion Request shall (i)
set forth the number of Securities to be converted and the name or names, if
other than the Holder, in which the shares of Common Stock 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 Common Stock (at the conversion rate specified in the
preceding paragraph). The Conversion Agent shall notify the Property Trustee of
the Holder's election to exchange Securities for a portion of the Debentures
held by the Trust and the Property Trustee shall, upon receipt of such notice,
deliver to the Conversion Agent the appropriate principal amount of Debentures
for exchange in accordance with this Section 5. The Conversion Agent shall
thereupon notify the Depositor of the Holder's election to convert such
Debentures into shares of Common Stock. Holders of Securities at the close of
business on a Distribution record date will be entitled to receive the
Distribution payable on such Securities on the corresponding Distribution
payment date notwithstanding the conversion of such Securities following such
record date but prior to such distribution payment date. Except as provided
above, neither the Trust nor the Depositor will make, or be required to make,
any payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities, whether or not
in arrears, (including any Additional Amounts accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid dividends on the shares
of Common Stock issued upon such conversion, except to the extent that such
shares are held of record on the record date for any such distributions.
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 is received by the Trust in accordance with the foregoing provision
(the "Conversion Date"). The Person or Persons entitled to receive the Common
Stock issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the Conversion Date, the Depositor shall
issue and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full
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shares of Common Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the Person or Persons
entitled to receive the same, unless otherwise directed by the Holder in the
Conversion Request and the Conversion Agent shall distribute such certificate or
certificates to such Person or Persons.
(c) In effecting the conversion and transactions described in this
Section 5, the Conversion Agent shall be acting as agent of the Holders of
Securities directing it to effect such conversion transactions. The Conversion
Agent is hereby authorized (i) to exchange Securities from time to time for
Debentures held by the Trust in connection with the conversion of such
Securities in accordance with this Section 5 and (ii) to convert all or a
portion of the Debentures into Common Stock and thereupon to deliver such shares
of Common Stock in accordance with the provisions of this Section and to deliver
to the Trust a new Debenture or Debentures for any resulting unconverted
principal amount.
(d) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, such fractional interest will be paid in cash
by the Depositor to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.
(e) The Depositor shall at all times reserve and keep available out of
its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, the Depositor shall be entitled to deliver upon conversion of
Debentures, shares of Common Stock reacquired and held in the treasury of the
Depositor (in lieu of the issuance of authorized and unissued shares of Common
Stock), so long as any such treasury shares are free and clear of all liens,
charges, security interests or encumbrances. Any shares of Common Stock issued
upon conversion of the Debentures shall be duly authorized, validly issued and
fully paid and nonassessable. The Property Trustee shall deliver the shares of
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 Depositor and the
Administrative Trustees on behalf of the Trust shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory permits
or other authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of the Common Stock
(and all requirements to list the Common Stock issuable upon conversion of
Debentures that are at the time applicable), in order to enable the Depositor to
lawfully issue Common Stock to the Trust upon conversion of the Debentures and
the Trust to lawfully deliver the Common Stock to each Holder upon conversion of
the Securities.
(f) The Depositor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
Debentures and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. The Depositor shall not, however, be required to
pay any tax which may be payable in respect of any transfer
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involved in the issue and delivery of shares of 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 set forth
in this Annex I to the Declaration or in the Declaration itself or otherwise
require the Property Trustee or the Trust to pay any amounts on account of such
withholdings.
6. VOTING RIGHTS - PREFERRED SECURITIES.
(a) Except as provided under paragraphs 6(b) and 8, as otherwise
required by law, the Declaration and the Indenture, the Holders of the Preferred
Securities will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred
Securities with respect to the enforcement of payment of principal and interest
on the Debentures set forth herein, in the Declaration or in the Indenture, if
(i) a Debenture Event of Default occurs and is continuing or (ii) the Depositor
defaults under the Preferred Securities Guarantee (each of (i) and (ii) being an
"Appointment Event"), then the Holders of the Preferred Securities, acting as a
single class, will be entitled by the vote of a Majority in liquidation amount
of the Preferred Securities to appoint a Special Trustee in accordance with
Section 5.06(a)(ii)(B) of the Declaration. Any Holder of Preferred Securities
(other than the Depositor or any of its Affiliates) will be entitled to nominate
any Person to be appointed as Special Trustee. Not later than 30 days after such
right to appoint a Special Trustee arises, the Trustees will convene a meeting
for the purpose of appointing a Special Trustee. If the Trustees fail to convene
such meeting within such 30-day period, the Holders of not less than 10% in
aggregate liquidation amount of the Preferred Securities will be entitled to
convene such meeting in accordance with Section 12.02 of the Declaration. The
record date for such meeting will be the close of business on the Business Day
that is one Business Day before the day on which notice of the meeting is sent
to the Holders. The provisions of the Declaration relating to the convening and
conduct of the meetings of the Holders will apply with respect to any such
meeting.
Any Special Trustee so appointed shall cease to be a Special Trustee if
the Appointment Event pursuant to which the Special Trustee was appointed and
all other Appointment Events cease to be continuing. A Special Trustee may be
removed without cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting of the Holders of
the Preferred Securities in accordance with Section 5.06(ii)(B) of the
Declaration. The Holders of 10% in liquidation amount of the Preferred
Securities will be entitled to convene such a meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting will be the close of
business on the Business Day which is one
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Business Day before the day on which the notice of meeting is sent to Holders.
Notwithstanding the appointment of a Special Trustee, the Depositor shall
retain all rights under the Indenture, including the right to defer payments of
interest by extending the interest payment period on the Debentures.
Subject to the requirements set forth in this paragraph and as long as
the Debentures are held by the Trust, the Holders of a majority in liquidation
amount of the outstanding Preferred Securities, voting separately as a class
may, and the Trustees shall not, without obtaining the prior approval of the
Holders of a Majority in aggregate liquidation amount of all Preferred
Securities (i) direct the time, method, and place of conducting any proceeding
for any remedy available to the Property Trustee under the Indenture, or
executing any trust or power conferred upon the Property Trustee with respect to
the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture or otherwise, (iii) exercise any
right to rescind or annul a declaration that the principal of all the Debentures
shall be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, PROVIDED, HOWEVER, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the direction
of the Holders of at least the proportion in liquidation preference of the
Preferred Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding. The Property Trustee
shall not, and none of the other Trustees shall in any event, revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities, except by a subsequent vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee as set forth above, the
Property Trustee shall not take any action in accordance with the directions of
the Holders of the Preferred Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel experienced in such matters to
the effect that, as a result of such action, the Trust will not fail to be
classified as a grantor trust for United States federal income tax purposes.
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption on the Redemption Date), then a Holder of
Preferred Securities may directly institute a proceeding, subject to the terms
of the Indenture (including the subordination provisions set forth in Article
XII thereof), for enforcement of payment to such Holder (a "Direct Action") of
the principal of or interest on the Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred Securities of such Holder
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the Holders of the Common Securities will be subrogated
to the rights of such Holder of Preferred Securities to the extent of any
payment made by the Depositor to such Holder of Preferred Securities in such
Direct Action. In addition, if the Property Trustee fails to enforce its rights
under the
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Debentures (other than rights arising from an Event of Default described in the
immediately preceding sentence) after any Holder of Preferred Securities shall
have made a written request to the Property Trustee to enforce such rights, such
Holder of Preferred Securities may, to the fullest extent permitted by law,
institute a Direct Action to enforce the rights of the Property Trustee or any
other Person. Except as provided in this paragraph, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Preferred Securities may be
given at a separate meeting of Holders of Preferred Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent without prior notice. The Administrative Trustees
will cause a notice of any meeting at which Holders of 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 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 Preferred Securities will be
required for the Trust to redeem and cancel or remarket the Preferred Securities
or to distribute the Debentures in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Depositor, the Trustees or any
Affiliate of the Depositor or the Trustees 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, except that for the purposes of determining whether the
Property Trustee shall be fully protected in relying on any such direction,
waiver or consent, only Securities which the Property Trustee knows are so owned
shall be so disregarded.
7. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the
Business Trust Act and as otherwise required by law and the Declaration, the
Holders of the Common Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in accordance
with Article V of the Declaration, to vote to appoint, remove or replace any
Trustee, subject to the exclusive right of the Holders of the Preferred
Securities to appoint, remove or replace a Special Trustee and unless a
Debenture Event of Default shall have occurred and be continuing, in which
event the Property Trustee and the Delaware Trustee may only be removed by
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the Holders of a Majority in liquidation amount of the Preferred Securities,
voting as a class at a meeting of the Holders of the Preferred Securities; and
(c) Subject to Section 2.06 of the Declaration and only after the Event
of Default with respect to the 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 Common Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred upon the Property
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee
or exercising any trust or power conferred on the Debenture Trustee with respect
to the Debentures, (ii) waive any past default and its consequences that is
waivable under Section 5.13 of the Indenture, or (iii) exercise any right to
rescind or annul a declaration that the principal of all the Debentures shall be
due and payable, PROVIDED that, where a consent or action under the Indenture
would require the consent or act of the Holders of greater than a majority in
principal amount of Debentures affected thereby (a "Super Majority"), the
Property Trustee may only give such consent or take such action at the direction
of the Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this paragraph 7(c),
the Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall not take any action in accordance with the directions
of the Holders of the Common Securities under this paragraph unless the Property
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action the Trust will not fail to be classified as a grantor trust for
United States federal income tax purposes. If the Property Trustee fails to
enforce its rights, as holder of the Debentures, under the Indenture, any Holder
of Common Securities may, after a period of 30 days has elapsed from such
Holder's written request to the Property Trustee to enforce such rights and to
the fullest extent permitted by law, institute a legal proceeding directly
against the Depositor, to enforce the Property Trustee's rights, as holder of
the Debentures, under the Indenture, without first instituting any legal
proceeding against the Property 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 in the Trust or pursuant to
written consent without prior notice. The Administrative Trustees will cause a
notice of any meeting at which Holders of Common Securities are entitled to vote
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.
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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 and the terms of the
Securities.
8. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Administrative Trustees other wise propose to effect, (i) any action that would
adversely affect the powers, preferences or 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 8.01
of the Declaration, then the Holders of outstanding Securities will be entitled
to vote on such amendment or proposal (but not on any other amendment or
proposal) and such amendment or proposal shall not be effective except with the
approval of the Holders of at least a Majority in liquidation amount of the
Securities, voting together as a single class, PROVIDED, HOWEVER, that, the
rights of Holders of Preferred Securities under Article V of the Declaration to
appoint, remove or replace a Special Trustee shall not be amended without the
consent of each Holder of Preferred Securities; and PROVIDED FURTHER that if any
amendment or proposal referred to in clause (i) above would adversely affect
only the 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 at
least a Majority in liquidation amount of such class of Securities.
(b) In the event the consent of the Property 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 Property
Trustee shall request the 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 at least
the same proportion in aggregate stated liquidation preference of the
Securities; PROVIDED, HOWEVER, that the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Securities under
this paragraph 8(b) unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income tax
the Trust will not be classified as other than a grantor trust on account of
such action.
9. PRO RATA.
A reference in these terms of the Securities to any payment,
Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, on any Distribution Date or Redemption Date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any Distribution on, or amount payable upon redemption
of, any Common Security, and no other payment on account of the redemption,
liquidation or other
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acquisition of Common Securities, shall be made unless payment in full in cash
of all accumulated and unpaid Distributions on all outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the amount payable upon redemption of the Preferred
Securities, the full amount of such amount in respect of all outstanding
Preferred Securities then called for redemption shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or the amount payable upon
redemption of Preferred Securities then due and payable.
10. RANKING.
The Preferred Securities rank PARI PASSU and payment thereon shall be
made Pro Rata with the Common Securities except that, where a Debenture Event of
Default occurs and is continuing in respect of the Debentures held by the
Property Trustee, 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 Preferred
Securities.
11. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE.
Each Holder of Preferred Securities and Common Securities, by the
acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein, and to the provisions of the Indenture
including the subordination provisions therein, which are each incorporated by
reference herein and which include, among other things, provisions relating to
certain rights of the Holders of the Preferred Securities all as set forth
therein.
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.
The Depositor will provide a copy of the Declaration, the 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 Depositor
at its principal place of business.
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EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include the following Restricted Securities Legend on all
Restricted Preferred Securities, including Global Preferred Securities, unless
otherwise determined by the Depositor in accordance with applicable law -- THIS
SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES
ACT"), AND THIS SECURITY AND ANY CONVERTIBLE SENIOR SUBORDINATED DEBENTURES
ISSUED UPON EXCHANGE FOR THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON
CONVERSION THEREOF MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT (A) THIS SECURITY AND ANY CONVERTIBLE SENIOR
SUBORDINATED DEBENTURES ISSUABLE UPON EXCHANGE THEREFOR AND COMMON STOCK
ISSUABLE UPON CONVERSION THEREOF MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (i) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (ii) PURSUANT TO
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (iii) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH (iii) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER APPLICABLE JURISDICTION, AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.]
A-1-1
<PAGE>
[Include if Preferred Security is in global form and The
Depository Trust Company is the Depositary -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
A-1-2
<PAGE>
Certificate Number
Number of Preferred Securities
Aggregate Liquidation Value $
CUSIP NO.
----------
Preferred Securities
of
Titan Capital Trust
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)-SM-*
(liquidation amount $50 per HIGH TIDE)
Titan Capital Trust, 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 Remarketable Term Income Deferrable Equity
Securities (HIGH TIDES)-SM-*(liquidation amount $50 per HIGH TIDE) (the
"Preferred Securities"). Subject to the restrictions set forth in the
Declaration (as defined below), the Preferred Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the 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 February 9, 2000, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the 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 Preferred Securities Guarantee to the extent provided therein. The Depositor
will provide a copy of the Declaration, the Preferred Securities Guarantee and
the Indenture to a Holder without charge upon written request to the Trust at
its principal place of business.
Reference is hereby made to select provisions of the 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.
- ---------------------
* The terms Remarketable Term Income Deferrable Equity Securities
(HIGH TIDES)-SM- and HIGH TIDES-SM- are registered servicemarks
of Credit Suisse First Boston Corporation.
A-1-3
<PAGE>
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 Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
A-1-4
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of February, 2000.
Titan Capital Trust
By:
------------------------
Name:
Title: Administrative Trustee
[CONTINUED ON NEXT PAGE]
A-1-5
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: February 9, 2000
Wilmington Trust Company,
as Property Trustee
By:
-----------------------
Authorized Signatory
A-1-6
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will accrue
at the Applicable Rate applied to the stated liquidation amount of $50 per
Preferred Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. The Applicable Rate will be 5.75%
per annum (the "Initial Rate") from the date of original issuance of the
Securities to but excluding the Reset Date, and the Term Rate from the Reset
Date and thereafter. The Term Rate will be the rate established by the
Remarketing Agent to be effective on the Reset Date. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at the
Applicable Rate (to the extent permitted by applicable law). The Applicable Rate
shall be subject to adjustment in the event of a Registration Default, as
described in the Indenture. The term "Distributions" as used herein includes
quarterly distributions, additional distributions on quarterly distributions not
paid on the applicable Distribution Date and Additional Amounts, as applicable.
A Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the
Preferred Securities will be cumulative, will accrue from the date of their
original issuance and will be payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year (except as provided below),
commencing on May 15, 2000, to Holders of record at the close of business on the
1st day of the month immediately preceding the applicable payment date, which
payment dates shall correspond to the interest payment dates on the Debentures.
The Reset Date is any date (1) not later than February 15, 2005 (or, if such day
is not a Business Day, the next succeeding Business Day), and (2) not earlier
than 70 Business Days prior to February 15, 2005, as may be determined by the
Remarketing Agent, in its sole discretion. The 1st day of the month immediately
preceding each Distribution Date is the record date for determining which
holders of Preferred Securities shall be paid the Distributions and Additional
Amounts, if any, payable on such Distribution Date. If the Reset Date is prior
to the record date for the immediately following Distribution Date, then
Distributions and Additional Amounts, if any, accrued from and after the Reset
Date to but excluding the immediately following Distribution Date shall be paid
on such Distribution Date to the person in whose name each Preferred Security is
registered on the relevant record date, subject to the Depositor's right to
initiate a Deferral Period (as defined below). If the Reset Date is on or after
the record date for the immediately following Distribution Date, then (1)
Distributions and Additional Amounts, if any, accrued from and after the record
date to but excluding the Reset Date shall be paid on the immediately following
Distribution Date to the person in whose name each Preferred Security is
registered on the relevant record date and (2) Distributions
A-1-7
<PAGE>
and Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on the
second Distribution Date immediately following the Reset Date to the person in
whose name each Preferred Security is registered on the relevant record date for
such second Distribution Date, subject in each case to the Depositor's right to
initiate a Deferral Period. So long as no Debenture Event of Default has
occurred and is continuing, the Depositor has the right under the Indenture to
defer payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
a "Deferral Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Applicable Rate compounded quarterly during any such Deferral Period. Prior
to three Business Days before a Regular Record Date fixed for a Payment
Resumption Date, the Depositor may further extend such Deferral Period; PROVIDED
that such Deferral Period together with all such previous and further deferrals
thereof may not exceed 20 consecutive quarters or extend beyond (i) the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture and (ii) in the
case of a Deferral Period which begins prior to the Reset Date, the Reset Date.
Payments of accrued Distributions will be payable to Holders by the Depositor as
they appear on the books and records of the Trust on the Regular Record Date for
the relevant Payment Resumption Date. Upon the termination of any Deferral
Period and the payment of all amounts then due, the Depositor may commence a new
Deferral Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in
the Declaration.
The Preferred Securities shall be convertible into shares of
Common Stock, through (i) the exchange of Preferred Securities for a portion of
the Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
A-1-8
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
Titan Capital Trust
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Common Stock (as such term is defined in the
Indenture, dated February 9, 2000, between The Titan Corporation and Wilmington
Trust Company, as Debenture Trustee) of The Titan Corporation in accordance with
the terms of the Amended and Restated Declaration of Trust (as amended from time
to time, the "Declaration"), dated as of February 9, 2000, by Deanna Hom
Petersen and Ray Guillaume, as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee, The
Titan Corporation, as Depositor, and by the Holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Preferred Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Preferred Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the 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 other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Preferred Securities,
agrees to be bound by the terms of the Registration Rights Agreement relating to
the Common Stock issuable upon conversion of the Preferred Securities and agrees
to appoint the Conversion Agent for the purpose of effecting the conversion of
the Preferred Securities into shares of Common Stock.
A-1-9
<PAGE>
Date: ,
------------ ----
in whole in part
--- --
Number of Preferred Securities to be
converted:
------------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature Guarantee:**
----------------------
- ------------------------
** (Signature must be guaranteed by an "eligible guarantor
institution" that is, a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or participation
in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as
amended.)
A-1-10
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this 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 Preferred Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
-----------------------
Signature:
------------------
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:***
- --------------------------
*** (Signature must be guaranteed by an "eligible guarantor
institution" that is, a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or participation
in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as
amended.)
A-1-11
<PAGE>
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF RESTRICTED
PREFERRED SECURITIES
This certificate relates to _____________ Preferred Securities held in (check
applicable space) ____ book-entry or ____ definitive form by the undersigned.
(A) The undersigned (check one box below):
(1) / / has requested the Property Trustee
by written order to deliver in
exchange for its beneficial interest
in the Global Preferred
Security held by the Depositary a
Preferred Security or Preferred
Securities in definitive,
registered form in such number
equal to its beneficial interest in
such Global Preferred Security
(or the number thereof indicated
above); or
(2) / / has requested the Property Trustee
by written order to exchange
its Preferred Security in definitive
registered form for an interest
in the Global Preferred Security
held by the Depositary in such
number equal to number of Preferred
Securities in definitive
registered form so held; or
(3) / / has requested the Property Trustee
by written order to exchange
or register the transfer of a
Preferred Security or Preferred Securities.
(B) The undersigned confirms that such Securities are being (check one box
below):
(1) / / acquired for the undersigned's own
account, without transfer
(in satisfaction of Section
9.02(d)(ii)(A) of the Declaration); or
(2) / / transferred pursuant to and in compliance
with Rule 144A under the Securities Act of
1933; or
(3) / / transferred pursuant to and in
compliance with Regulation S
under the Securities Act of 1933; or
(4) / / transferred pursuant to another
available exemption from the
registration requirements of the
Securities Act of 1933; or
(5) / / transferred pursuant to an effective
registration statement under
the Securities Act.
Unless one of the boxes in (B) above is checked, the Property Trustee will
refuse to register any of the Preferred Securities evidenced by this certificate
in the name of any person other
A-1-12
<PAGE>
than the registered Holder thereof; provided, however, that if box (3) or (4) is
checked, the Property Trustee may require, prior to registering any such
transfer of the Preferred Securities such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act.
-----------------------------------------
Signature
Signature Guarantee:****
-----------------------------------------
Signature must be guaranteed Signature
-----------------------------------------
Signature
- -----------------------
**** (Signature must be guaranteed by an "eligible guarantor
institution" that is, a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or participation
in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as
amended.)
A-1-13
<PAGE>
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing these Preferred
Securities for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Trust as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
-------------------
NOTICE: To be executed by an executive officer
A-1-14
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
To: Wilmington Trust Company,
as Property Trustee of
Titan Capital Trust
The undersigned owner of these Securities hereby elects to
have all or any part of these Securities purchased by the Trust pursuant to
Article XV of the Amended and Restated Declaration of Trust (as amended from
time to time, the "Declaration"), dated as of February 9, 2000, by Deanna Hom
Petersen and Ray Guillaume, as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee, The
Titan Corporation, as Depositor, and by the Holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to the Declaration. Pursuant to Article XV of the Declaration, the undersigned
owner of these Securities hereby states the amount he or she elects to have
purchased:
$
-------------------
Date:
--------------
Signature:
------------------
(Sign exactly as your name appears on the other side of this 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.)
A-1-15
<PAGE>
EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE
REGISTRATION STATEMENT.]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF THE TITAN CORPORATION]
Certificate Number Number of Common Securities
Common Securities
of
Titan Capital Trust
HIGH TIDES Common Securities
(liquidation amount $50 per HIGH TIDES Common Security)
Titan Capital Trust, 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 HIGH TIDES Common Securities
(liquidation amount $50 per Remarketable Common Security) (the "Common
Securities"). Subject to the restrictions set forth in the Declaration (as
defined below), 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 February 9, 2000, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Common Securities Guarantee to the
extent provided therein. The Depositor will provide a copy of the Declaration,
the
A-2-1
<PAGE>
Common Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Reference is hereby made to select provisions of the 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.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ____ day of February, 2000.
Titan Capital Trust
By:
----------------------------
Name:
Title: Administrative Trustee
A-2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will accrue
at the Applicable Rate applied to 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 Property Trustee. The Applicable Rate will be
5.75% per annum (the "Initial Rate") from the date of original issuance of
the Securities to but excluding the Reset Date, and the Term Rate from the
Reset Date and thereafter. The Term Rate will be the rate established by the
Remarketing Agent to be effective on the Reset Date. Distributions in arrears
for more than one quarter will bear interest thereon compounded quarterly at
the Applicable Rate (to the extent permitted by applicable law). The
Applicable Rate shall be subject to adjustment in the event of a Registration
Default, as described in the Indenture. The term "Distributions" as used
herein includes quarterly distributions, additional distributions on
quarterly distributions not paid on the applicable Distribution Date and
Additional Amounts, as applicable. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will
be computed on the basis of the actual number of days elapsed per 30-day
month.
Except as otherwise described below, Distributions on the
Common Securities will be cumulative, will accrue from the date of their
original issuance and will be payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year (except as provided below),
commencing on May 15, 2000, to Holders of record at the close of business on the
1st day of the month immediately preceding the applicable payment date, which
payment dates shall correspond to the interest payment dates on the Debentures.
The Reset Date is any date (1) not later than February 15, 2005 (or, if such day
is not a Business Day, the next succeeding Business Day), and (2) not earlier
than 70 Business Days prior to February 15, 2005, as may be determined by the
Remarketing Agent, in its sole discretion. The 1st day of the month immediately
preceding each Distribution Date is the record date for determining which
holders of Common Securities shall be paid the Distributions and Additional
Amounts, if any, payable on such Distribution Date. If the Reset Date is prior
to the record date for the immediately following Distribution Date, then
Distributions and Additional Amounts, if any, accrued from and after the Reset
Date to but excluding the immediately following Distribution Date shall be paid
on such Distribution Date to the person in whose name each Common Security is
registered on the relevant record date, subject to the Depositor's right to
initiate a Deferral Period (as defined below). If the Reset Date is on or after
the record date for the immediately following Distribution Date, then (1)
Distributions and Additional Amounts, if any, accrued from and after the record
date to but excluding the Reset Date shall be paid on the immediately following
Distribution Date to the person in whose name each Common Security is registered
on the relevant record date and (2) Distributions
A-2-4
<PAGE>
and Additional Amounts, if any, accrued from and after the Reset Date to but
excluding the immediately following Distribution Date shall be paid on the
second Distribution Date immediately following the Reset Date to the person in
whose name each Common Security is registered on the relevant record date for
such second Distribution Date, subject in each case to the Depositor's right to
initiate a Deferral Period. So long as no Debenture Event of Default has
occurred and is continuing, the Depositor has the right under the Indenture to
defer payments of interest by extending the interest payment period from time to
time on the Debentures for a period not exceeding 20 consecutive quarters (each
a "Deferral Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accrue with interest thereon (to the extent permitted by applicable law) at
the Applicable Rate compounded quarterly during any such Deferral Period. Prior
to three Business Days before a Regular Record Date fixed for a Payment
Resumption Date, the Depositor may further extend such Deferral Period; PROVIDED
that such Deferral Period together with all such previous and further deferrals
thereof may not exceed 20 consecutive quarters or extend beyond (i) the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture and (ii) in the
case of a Deferral Period which begins prior to the Reset Date, the Reset Date.
Payments of accrued Distributions will be payable to Holders by the Depositor as
they appear on the books and records of the Trust on the Regular Record Date for
the relevant Payment Resumption Date. Upon the termination of any Deferral
Period and the payment of all amounts then due, the Depositor may commence a new
Deferral 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
Common Stock, through (i) the exchange of Common Securities for a portion of the
Debentures and (ii) the immediate conversion of such Debentures into Common
Stock, in the manner and according to the terms set forth in the Declaration.
A-2-5
<PAGE>
CONVERSION REQUEST
To: Wilmington Trust Company,
as Property Trustee of
Titan Capital Trust
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities,
or the portion below designated, into Common Stock (as such term is defined in
the Indenture, dated February 9, 2000, between The Titan Corporation and
Wilmington Trust Company, as Debenture Trustee) of The Titan Corporation in
accordance with the terms of the Amended and Restated Declaration of Trust (as
amended from time to time, the "Declaration"), dated as of February 9, 2000, by
Deanna Hom Petersen and Ray Guillaume, as Administrative Trustees, Wilmington
Trust Company, as Delaware Trustee, Wilmington Trust Company, as Property
Trustee, The Titan Corporation, as Depositor, and by the Holders, from time to
time, of undivided beneficial interests in the assets of the Trust to be issued
pursuant to 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 the
terms of the Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debentures on behalf of the undersigned, into Common
Stock (at the conversion rate specified in the terms of the 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 other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Any holder, upon the exercise of its conversion rights in
accordance with the terms of the Declaration and the Common Securities, agrees
to be bound by the terms of the Registration Rights Agreement relating to the
Common Stock issuable upon conversion of the Common Securities and agrees to
appoint the Conversion Agent for the purpose of effecting the conversion of the
Common Securities into shares of Common Stock.
A-2-6
<PAGE>
Date: ,
------------ ----
in whole in part
---- --
Number of Common Securities to be converted:
----------------------
If a name or names other than the
undersigned, please indicate in the spaces
below the name or names in which the shares
of Common Stock are to be issued, along with
the address or addresses of such person or
persons
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number
--------------------------------------------
--------------------------------------------
--------------------------------------------
Signature Guarantee:******
-----------------
- ----------------------------
****** (Signature must be guaranteed by an "eligible guarantor
institution" that is, a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
A-2-7
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -----------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- -----------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints_______________________________________________________
_______________________________________________________________________________
____________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date:
-----------------------
Signature:
------------------
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee*******:
-----------------------------------------------------
- ---------------------------
******* (Signature must be guaranteed by an "eligible guarantor
institution" that is, a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.)
A-2-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
To: Wilmington Trust Company,
as Property Trustee of
Titan Capital Trust
The undersigned owner of these Securities hereby elects to
have all or any part of these Securities purchased by the Trust pursuant to
Article XV of the Amended and Restated Declaration of Trust (as amended from
time to time, the "Declaration"), dated as of February 9, 2000, by Deanna Hom
Petersen and Ray Guillaume, as Administrative Trustees, Wilmington Trust
Company, as Delaware Trustee, Wilmington Trust Company, as Property Trustee, The
Titan Corporation, as Depositor, and by the Holders, from time to time, of
undivided beneficial interests in the assets of the Trust to be issued pursuant
to the Declaration. Pursuant to Article XV of the Declaration, the undersigned
owner of these Securities hereby states the amount he or she elects to have
purchased:
$
-------------------
Date:
--------------
Signature:
------------------
(Sign exactly as your name appears on the other side of this 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.)
A-2-9
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I INTERPRETATION AND DEFINITIONS
Section 1.01 Definitions..........................................................2
ARTICLE II
TRUST INDENTURE ACT
Section 2.01 Trust Indenture Act; Application....................................12
Section 2.02 Lists of Holders of Securities......................................12
Section 2.03 Reports by the Property Trustee.....................................13
Section 2.04 Periodic Reports to Property Trustee................................13
Section 2.05 Evidence of Compliance with Conditions Precedent....................13
Section 2.06 Events of Default; Waiver...........................................13
Section 2.07 Event of Default; Notice............................................15
ARTICLE III ORGANIZATION
Section 3.01 Name................................................................16
Section 3.02 Office..............................................................16
Section 3.03 Purpose.............................................................16
Section 3.04 Authority...........................................................16
Section 3.05 Title to Property of the Trust......................................17
Section 3.06 Powers and Duties of the Administrative Trustees....................17
Section 3.07 Prohibition of Actions by the Trust and the Trustees................21
Section 3.08 Powers and Duties of the Property Trustee...........................21
Section 3.09 Certain Duties and Responsibilities of the Property Trustee.........24
Section 3.10 Certain Rights of Property Trustee..................................25
Section 3.11 Delaware Trustee....................................................28
Section 3.12 Execution of Documents..............................................28
Section 3.13 Not Responsible for Recitals or Issuance of Securities..............28
Section 3.14 Duration of Trust...................................................28
Section 3.15 Mergers.............................................................28
ARTICLE IV DEPOSITOR
Section 4.01 Depositor's Purchase of Common Securities...........................30
Section 4.02 Responsibilities of the Depositor...................................30
Section 4.03 Guarantee of Payment of Trust Obligations...........................31
<PAGE>
ARTICLE V TRUSTEES
Section 5.01 Number of Trustees..................................................32
Section 5.02 Delaware Trustee....................................................33
Section 5.03 Property Trustee; Eligibility.......................................33
Section 5.04 Qualifications of Administrative Trustees and Delaware Trustee
Generally...........................................................34
Section 5.05 Initial Trustees....................................................34
Section 5.06 Appointment, Removal and Resignation of Trustees....................34
Section 5.07 Vacancies among Trustees............................................37
Section 5.08 Effect of Vacancies.................................................37
Section 5.09 Meetings............................................................38
Section 5.10 Delegation of Power.................................................38
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.........38
ARTICLE VI DISTRIBUTIONS
Section 6.01 Distributions.......................................................39
ARTICLE VII ISSUANCE OF SECURITIES
Section 7.01 General Provisions Regarding Securities.............................39
Section 7.02 Execution and Authentication........................................40
Section 7.03 Form and Dating.....................................................41
Section 7.04 Registrar, Paying Agent, Conversion Agent and Tender Agent..........43
Section 7.05 Paying Agent to Hold Money in Trust.................................44
Section 7.06 Replacement Securities..............................................45
Section 7.07 Outstanding Preferred Securities....................................45
Section 7.08 Preferred Securities in Treasury....................................45
Section 7.09 Temporary Securities................................................46
Section 7.10 Cancellation........................................................46
ARTICLE VIII TERMINATION OF TRUST
Section 8.01 Dissolution of Trust................................................46
ARTICLE IX TRANSFER AND EXCHANGE
Section 9.01 General.............................................................47
Section 9.02 Transfer Procedures and Restrictions................................48
Section 9.03 Deemed Security Holders.............................................54
i
<PAGE>
Section 9.04 Notices to Depositary...............................................54
Section 9.05 Appointment of Successor Depositary.................................54
ARTICLE X LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS
Section 10.01 Liability...........................................................54
Section 10.02 Exculpation.........................................................55
Section 10.03 Fiduciary Duty......................................................55
Section 10.04 Indemnification.....................................................56
Section 10.05 Outside Businesses..................................................56
ARTICLE XI ACCOUNTING
Section 11.01 Fiscal Year.........................................................57
Section 11.02 Certain Accounting Matters..........................................57
Section 11.03 Banking.............................................................58
Section 11.04 Withholding.........................................................58
ARTICLE XII AMENDMENTS AND MEETINGS
Section 12.01 Amendments..........................................................58
Section 12.02 Meetings of the Holders of Securities; Action by Written Consent....59
ARTICLE XIII REPRESENTATIONS OF PROPERTY
TRUSTEE AND DELAWARE TRUSTEE
Section 13.01 Representations and Warranties of Property Trustee..................61
Section 13.02 Representations and Warranties of Delaware Trustee..................61
ARTICLE XIV REGISTRATION RIGHTS
Section 14.01 Registration Rights.................................................62
ARTICLE XV REPURCHASE OF SECURITIES UPON
THE FAILURE TO CONSUMMATE THE ACQUISITION
Section 15.01 Repurchase of Securities............................................63
Section 15.02 Agreement to Sell Debentures........................................65
ARTICLE XVI MISCELLANEOUS
ii
<PAGE>
Section 16.01 Notices.............................................................65
Section 16.02 Governing Law.......................................................66
Section 16.03 Intention of the Parties............................................67
Section 16.04 Headings............................................................67
Section 16.05 Successors and Assigns..............................................67
Section 16.06 Partial Enforceability..............................................67
Section 16.07 Counterparts........................................................67
</TABLE>
ANNEX I
EXHIBIT A-1
EXHIBIT A-2
iii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
BETWEEN
THE TITAN CORPORATION
AND
WILMINGTON TRUST COMPANY
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT, dated as of February 9,
2000, executed and delivered by The Titan Corporation, a Delaware corporation
(the "Guarantor"), and Wilmington Trust Company, a Delaware banking corporation,
as trustee (the "Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the HIGH TIDES (as defined herein) of Titan Capital
Trust, a Delaware statutory business trust (the "Trust").
WHEREAS pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of February 9, 2000, executed by the Guarantor, as
Depositor, Wilmington Trust Company, as Delaware Trustee, Wilmington Trust
Company, as Property Trustee, and the Administrative Trustees named therein, the
Trust is issuing $200 million ($250 million including the over-allotment option)
aggregate liquidation amount of its 5 3/4% Convertible Preferred Securities,
Remarketable Term Income Deferred Equity Securities (HIGH TIDES)K, liquidation
amount $50 per security (the "HIGH TIDES") and $6,185,600 ($7,732,000 including
the over-allotment option) aggregate liquidation amount of its Common
Securities, liquidation amount $50 per security (the "Common Securities" and
collectively with the HIGH TIDES, the "Trust Securities") representing undivided
beneficial interests in the assets of the Trust and having the terms set forth
in the Declaration;
WHEREAS the Trust Securities will be issued by the Trust and the
proceeds thereof will be used to purchase the Convertible Senior Subordinated
Debentures Due 2030 (the "Debentures") of the Guarantor which will be deposited
with Wilmington Trust Company as Property Trustee under the Declaration, as
trust assets; and
WHEREAS as incentive for the Holders to purchase HIGH TIDES, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, to pay to the Holders of the HIGH TIDES the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
HIGH TIDES, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the HIGH TIDES.
ARTICLE I
<PAGE>
DEFINITIONS
SECTION 1.01. DEFINITIONS. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Declaration as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; PROVIDED, HOWEVER, that the Trust shall be
deemed not to be an Affiliate of the Guarantor. For the purposes 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; the terms "controlling" and "controlled" have meanings correlative to
the foregoing.
"Common Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of June 9, 1999, among the Guarantor, as the borrower, the various
financial institutions from time to time that are parties thereto, as lenders,
The Bank of Nova Scotia, as lead manager and administrative agent, and Imperial
Bank as the document agent, any credit agreement evidencing the credit
facilities that are substantially described in the commitment letter dated
January 27, 2000, from Credit Suisse First Boston, New York branch, and First
Union National Bank to the Guarantor, and any other secured debt facilities with
banks or other institutional lenders providing for revolving credit loans, term
loans, working capital loans or letters of credit, in each case, including any
related notes, guarantees, collateral documents, swap arrangements, instruments
and agreements entered into in connection therewith, and as such credit
agreements and related documents may be amended, restated, supplemented,
renewed, replaced, refinanced or otherwise modified from time to time whether or
not with the same agent, lender or group of lenders and whether with the same
borrowers or guarantors.
"Debentures" shall have the meaning specified in the second recital of
this Guarantee Agreement.
"Debt" means (i) the principal of and premium, if any, and unpaid
interest on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Guarantor is responsible for the payment of such
indebtedness of others, (v) renewals, extensions and refunding of any such
indebtedness, (vi) interest or obligations in respect of any such indebtedness
accruing after the commencement of any insolvency or bankruptcy proceedings and
(vii)
<PAGE>
obligations associated with derivative products such as interest rate and
currency exchange contracts, foreign exchange contracts, commodity contracts and
similar arrangements.
"Declaration" shall have the meaning specified in the first recital to
this Guarantee Agreement.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; PROVIDED, HOWEVER,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the HIGH TIDES, to the extent not paid or
made by or on behalf of the Trust: (i) any accrued and unpaid Distributions
required to be paid on the HIGH TIDES, to the extent the Trust shall have funds
on hand available therefor at such time, (ii) the applicable Redemption Price,
with respect to the HIGH TIDES called for redemption by the Trust to the extent
the Trust shall have funds on hand available therefor at such time, and (iii)
upon a voluntary or involuntary dissolution, winding-up or liquidation of the
Trust, unless Debentures are distributed to the Holders of the HIGH TIDES or all
the HIGH TIDES are redeemed, the lesser of (a) the aggregate of the liquidation
amount of $50 per HIGH TIDES plus accrued and unpaid Distributions on the HIGH
TIDES to the date of payment (the "Liquidation Distribution") to the extent the
Trust shall have funds on hand available to make such payment at such time and
(b) the amount of assets of the Trust remaining available for distribution to
Holders of the HIGH TIDES upon liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as required by applicable law.
"Guarantee Trustee" means Wilmington Trust Company, a Delaware banking
corporation, until a Successor Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Guarantee Agreement and
thereafter means each such Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first paragraph of
this Guarantee Agreement.
"HIGH TIDES" shall have the meaning specified in the first recital of
this Guarantee Agreement.
"Holder" means any holder, as registered on the books and records of
the Trust, of any HIGH TIDES; PROVIDED, HOWEVER, that in determining whether the
holders of the requisite percentage of HIGH TIDES have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantor or
any Affiliate of the Guarantor.
<PAGE>
"Indenture" means the Indenture dated as of February 9, 2000, as
amended or supplemented, between the Guarantor and Wilmington Trust Company, as
trustee, relating to the issuance of Debentures.
"Trust" shall have the meaning specified in the first paragraph of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in liquidation amount of the HIGH TIDES" means, except as
provided in the terms of the HIGH TIDES or by the Trust Indenture Act, a vote by
the Holder(s), voting separately as a class, of more than 50% of the aggregate
liquidation amount (i.e., 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 then outstanding HIGH TIDES.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the chief executive officer, president or a vice
president, and by the treasurer, an associate treasurer, an assistant treasurer,
the secretary or an assistant secretary of such Person, and delivered to the
Guarantee Trustee. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this Guarantee Agreement
shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Responsible Officer" when used with respect to the Guarantee Trustee
means any officer assigned to the Corporate Trust Office, including any vice
president,
<PAGE>
assistant vice president, assistant treasurer, the controller, assistant
secretary or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers,
and having direct responsibility for the administration of this Guarantee
Agreement, and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.
"Secured Debt" means Debt under the Credit Agreement and any Debt that
by its terms is secured by any lien, pledge, charge, encumbrance, mortgage, deed
of trust, hypothecation, assignment or security interest with respect to assets
having or intended to have an aggregate fair market value at the time of the
grant thereof (in the judgment of the board of directors, the chief financial
officer or other responsible agent or officer of the Guarantor) not less than
the amount of such Debt.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb), as amended.
"Trust Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.01. TRUST INDENTURE ACT; APPLICATION. This Guarantee
Agreement is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee Agreement and shall, to the extent
applicable, be governed by such provisions. If and to the extent that any
provision of this Guarantee Agreement limits, qualifies or conflicts with the
duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act,
such imposed duties shall control.
SECTION 2.02. LISTS OF HOLDERS OF SECURITIES. (a) The Guarantor
shall provide the Guarantee Trustee (i) within 14 days after each record date
for payment of Distributions, a list, in such form as the Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the HIGH TIDES
("LIST OF HOLDERS") as of such record date, 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 Guarantee
Trustee by the Guarantor 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 Guarantee Trustee.
<PAGE>
(b) The Guarantee Trustee shall comply with its obligations under
Section 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. REPORTS BY THE GUARANTEE TRUSTEE. Within 60 days after
May 15 of each year, commencing May 15, 2000, the Guarantee Trustee shall
provide to the Holders of the HIGH TIDES such reports as are required by Section
313 of the Trust Indenture Act, if any, in the form and in the manner provided
by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. PERIODIC REPORTS TO THE GUARANTEE TRUSTEE. The
Guarantor shall provide to the Guarantee Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.05. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by any officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. EVENTS OF DEFAULT; WAIVER. The Holders of a Majority
in liquidation amount of the HIGH TIDES may, by vote, on behalf of all the
Holders, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.07. EVENT OF DEFAULT; NOTICE. (a) The Guarantee Trustee
shall, within 10 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notices of all Events of
Default known to the Guarantee Trustee, unless such Events of Default have been
cured before the giving of such notice; PROVIDED, that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
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 Guarantee Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of
any Event of Default unless the Guarantee Trustee shall have received written
notice thereof,
<PAGE>
or a Responsible Officer of the Guarantee Trustee charged with the
administration of this Guarantee Agreement shall have obtained actual knowledge
thereof.
SECTION 2.08. CONFLICTING INTERESTS. The Declaration shall be deemed
to be specifically described in this Guarantee Agreement for the purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE
GUARANTEE TRUSTEE
SECTION 3.01. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.06), the
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Guarantee Agreement, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own wilful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
<PAGE>
(A) the duties and obligations of the Guarantee Trustee shall be
determined solely by the express provisions of this Guarantee
Agreement, and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set
forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the Guarantee
Trustee, the Guarantee Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Guarantee
Trustee and conforming to the requirements of this Guarantee
Agreement; but in the case of any such certificates or opinions that
by any provision hereof or of the Trust Indenture Act are specifically
required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Guarantee
Trustee, unless it shall be proved that the Guarantee Trustee was negligent
in ascertaining the pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the HIGH TIDES relating to the time, method and place of
conducting any proceeding for any remedy available to the Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee Agreement; and
(iv) no provision of this Guarantee Agreement shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers.
SECTION 3.02. CERTAIN RIGHTS OF GUARANTEE TRUSTEE. (a) Subject to
the provisions of Section 3.01:
(i) The Guarantee Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document reasonably believed by it to be
genuine and to have been signed, sent or presented by the proper party or
parties.
<PAGE>
(ii) Any direction or act of the Guarantor contemplated by this
Guarantee Agreement shall be sufficiently evidenced by an Officers'
Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement, the
Guarantee Trustee shall deem it desirable that a matter relating to
compliance by the Guarantor with any of its obligations contained in this
Guarantee Agreement be proved or established before taking, suffering or
omitting to take any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an Officers'
Certificate (with respect to the Guarantor) which, upon receipt of such
request from the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel of its
selection, and the advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor, the Trust or any
of its Affiliates and may be one of its employees. The Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Guarantee Agreement at the
request or direction of any Holder, unless such Holder shall have provided
to the Guarantee Trustee such security and indemnity reasonably
satisfactory to it, against the costs, expenses (including attorneys' fees
and expenses) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as may
be requested by the Guarantee Trustee; PROVIDED, that nothing contained in
this Section 3.02(a)(v) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, and the Guarantee Trustee shall not be responsible
for any
<PAGE>
misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (A) may request instructions from the
Holders, (B) may refrain from enforcing such remedy or right or taking such
other action until such instructions are received and (C) shall be fully
protected in acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement shall be deemed to
impose any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or imposed on it
in any jurisdiction in which it shall be illegal, or in which the Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. INDEMNITY. The Guarantor agrees to indemnify the
Guarantee Trustee and its directors, officers, agents and employees for, and to
hold them harmless against, any and all loss, liability, claim, action, suit,
cost or expense incurred without negligence or bad faith on the part of the
Guarantee Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The Guarantee Trustee
will not claim or exact any lien or charge on any Guarantee Payments as a result
of any amount due to it under this Guarantee Agreement. This indemnity shall
survive the termination of this Guarantee Agreement or the resignation or
removal of the Guarantee Trustee.
SECTION 3.04. EXPENSES. The Guarantor shall from time to time
reimburse the Guarantee Trustee for its expenses and costs incurred in
connection with the performance of its duties hereunder. This reimbursement
obligation shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
<PAGE>
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.01. GUARANTEE TRUSTEE; ELIGIBILITY. (a) There shall at
all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust Indenture Act
to act as such and has a combined capital and surplus of at least
$50,000,000, and shall be a corporation meeting the requirements of Section
310(c) of the Trust Indenture Act. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Guarantee Trustee shall cease to be eligible
to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign
in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantor shall in all respects comply with the provisions
of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. APPOINTMENT, REMOVAL AND RESIGNATION OF THE GUARANTEE
TRUSTEE. (a) Subject to Section 4.02(b), in the absence of the existence of an
Event of Default, the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold office until
a Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office by an instrument in
writing executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
<PAGE>
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.02 within 30 days after
delivery to the Guarantor of an instrument of resignation or notice of removal
by the Guarantor, the retiring Guarantee Trustee may petition, at the expense of
the Guarantor, any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.01. GUARANTEE. The Guarantor irrevocably and
unconditionally agrees to pay in full to the Holders the Guarantee Payments
(without duplication of amounts theretofore paid by or on behalf of the Trust),
as and when due, regardless of any defense, right of set-off or counterclaim
which the Trust may have or assert, other than the defense of payment. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Trust to pay such amounts to the Holders. The Guarantor shall give written
notice to the Guarantee Trustee as promptly as practicable in the event it makes
any direct payment hereunder.
SECTION 5.02. WAIVER OF NOTICE AND DEMAND. The Guarantor hereby
waives notice of acceptance of the Guarantee Agreement and, with respect to its
obligations under Section 5.01, hereby waives presentment, demand for payment,
any right to require a proceeding first against the Guarantee Trustee, Trust or
any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.03. OBLIGATIONS NOT AFFECTED. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the HIGH TIDES to be performed or
observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions (other than any deferral of time for payment
of Distributions that results from the deferral of any interest payment
period on the Debentures as so provided in the Indenture), Redemption
Price, Liquidation Distribution or any other sums payable under the terms
of the HIGH TIDES or the extension of time
<PAGE>
for the performance of any other obligation under, arising out of, or in
connection with, the HIGH TIDES;
(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 HIGH TIDES, or
any action on the part of the Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Trust
or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the HIGH TIDES;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred (without duplication of amounts paid by the Trust in
connection with any such settlement or compromise); or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.04. RIGHTS OF HOLDERS. The Guarantor expressly
acknowledges that: (i) this Guarantee Agreement will be deposited with the
Guarantee Trustee to be held for the benefit of the Holders; (ii) the Guarantee
Trustee has the right to enforce this Guarantee Agreement on behalf of the
Holders; (iii) the Holders of a Majority in liquidation amount of the HIGH TIDES
have the right among themselves, the other Holders, if any, and the Guarantee
Trustee to direct the time, method and place of conducting any proceeding for
any remedy available to the Guarantee Trustee in respect of this Guarantee
Agreement or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee Agreement; and (iv) any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Guarantee Agreement, without first instituting a legal proceeding against the
Trust or any other Person.
SECTION 5.05. GUARANTEE OF PAYMENT. This Guarantee Agreement creates
a guarantee of payment and not of collection. This Guarantee Agreement will not
be discharged except in the event of its termination in accordance with Section
7.01 hereof.
<PAGE>
SECTION 5.06. SUBROGATION. The Guarantor shall be subrogated to all
(if any) rights of the Holders against the Trust in respect of any amounts paid
to the Holders by the Guarantor under this Guarantee Agreement and shall have
the right to waive payment by the Trust pursuant to Section 5.01; PROVIDED,
HOWEVER, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
SECTION 5.07. INDEPENDENT OBLIGATIONS. The Guarantor acknowledges
that its obligations hereunder are independent of the obligations of the Trust
with respect to the HIGH TIDES and that the Guarantor shall (without duplication
of amounts paid by or on behalf of the Trust) be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this
Guarantee Agreement notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.03 hereof, but subject to
Section 6.01 hereof.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.01. SUBORDINATION. This Guarantee Agreement will
constitute an unsecured obligation of the Guarantor and will rank subordinate
and junior in right of payment only to all Secured Debt of the Guarantor in
accordance with the terms of Article XII of the Indenture, which terms
(including the definitions of all defined terms used therein) are incorporated
herein, MUTATIS MUTANDIS, by this reference.
SECTION 6.02. PARI PASSU GUARANTEES. This Guarantee Agreement shall
rank PARI PASSU with the most senior preferred or preference stock now or
hereafter issued by the Guarantor and with any guaranty now or hereafter entered
into by the Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor.
ARTICLE VII
TERMINATION
SECTION 7.01. TERMINATION. This Guarantee Agreement shall terminate
and be of no further force and effect upon (i) full payment of the Redemption
Price of all HIGH TIDES, (ii) the distribution of Debentures to the Holders in
exchange for all of the HIGH TIDES, (iii) full payment of the amounts payable in
accordance with the
<PAGE>
Declaration upon liquidation of the Trust or (iv) distribution of the
Guarantor's common stock to the Holders in respect of the conversion of all of
the HIGH TIDES. Notwithstanding the foregoing, this Guarantee Agreement will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder must repay any sums paid with respect to HIGH TIDES or this
Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. SUCCESSORS AND ASSIGNS. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders of the HIGH TIDES then outstanding. Except in connection
with a consolidation, merger or sale involving the Guarantor that is permitted
under Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 8.02. AMENDMENTS. Except with respect to any changes which
do not adversely affect the rights of the Holders in any material respect (in
which case no consent of the Holders will be required), this Guarantee Agreement
may only be amended with the prior approval of the Holders of not less than a
Majority in liquidation amount of the HIGH TIDES. The provisions of Article XII
of the Declaration concerning meetings of the Holders shall apply to the giving
of such approval.
SECTION 8.03. NOTICES. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied (confirmed by delivery
of the original) or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address set forth below or such
other address, facsimile number or to the attention of such other Person as
the Guarantor may give notice to the Holders:
The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
Telephone: (858) 552-9500
Facsimile No.: (858) 552-9759
Attention: General Counsel
<PAGE>
(b) if given to the Trust, in care of the Guarantor, at the Trust's
(and the Guarantee Trustee's) address set forth below or such other address
as the Trust may, at the Trust's direction, give notice to the Holders:
Titan Capital Trust
c/o The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
Telephone: (858) 552-9500
Facsimile No.: (858) 552-9759
Attention: General Counsel
with a copy to:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Administration
(c) if given to the Guarantee Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890-0001
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Administration
(d) if given to any Holder, at the address set forth on the books and
records of the Trust.
All notices hereunder shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 8.04. BENEFIT. This Guarantee Agreement is solely for the
benefit of the Holders (subject to the benefits inuring to the holders of
Secured Debt pursuant to the subordination provisions hereof) and is not
separately transferable from the HIGH TIDES.
<PAGE>
SECTION 8.05. INTERPRETATION. In this Guarantee Agreement, unless
the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined
in the preamble hereto have the respective meanings assigned to them in
Section 1.01;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or
amended from time to time;
(d) all references in this Guarantee Agreement to Articles and
Sections are to Articles and Sections of this Guarantee Agreement unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Guarantee Agreement unless otherwise defined in this
Guarantee Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa;
and
(g) the masculine, feminine or neuter genders used herein shall
include the masculine, feminine and neuter genders.
SECTION 8.06 GOVERNING LAW. This Guarantee Agreement shall be
governed by and construed in accordance with the laws of the State of New York
including, without limitation, Section 5-1401 of the New York General
Obligations Law.
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.
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first
above written.
The Titan Corporation
by
--------------------------------------
Name:
Title:
Wilmington Trust Company, as Guarantee Trustee,
by
--------------------------------------
Name:
Title:
<PAGE>
Exhibit 5.1
[LETTERHEAD]
April 20, 2000
The Titan Corporation
Titan Capital Trust
c/o The Titan Corporation
3033 Science Park Road
San Diego, CA 92121
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as amended
(the "Act"), pursuant to the Registration Statement on Form S-3 (the
"Registration Statement") to be filed with the Securities and Exchange
Commission, of (a) 5,000,000 shares of 5-3/4% Convertible Preferred Securities,
Remarketable Term Income Deferrable Equity Securities (the "HIGH TIDES") of
Titan Capital Trust, a Delaware business trust, (b) $257,732,000 in aggregate
principal amount of the 5-3/4% Convertible Subordinated Debentures due 2030 (the
"Debentures") of The Titan Corporation, a Delaware corporation (the "Company"),
(c) 5,038,000 shares of Common Stock, par value $.001 per share (the "Shares"),
of the Company, and (d) the Preferred Securities Guarantee, dated as of February
9, 2000, of the HIGH TIDES (the "Guarantee") by the Company, we have reviewed
such corporate records, certificates and other documents, and such questions of
law, as we have considered necessary or appropriate for the purposes of this
opinion.
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Amended and
Restated Certificate of Incorporation and Bylaws and the originals or copies
certified to our satisfaction of such records, documents, certificates,
memoranda and other instruments as in our judgment are necessary or appropriate
to enable us to render the opinion expressed below.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares have been duly authorized and reserved for issuance upon
conversion of the Debentures, and when issued in accordance with the terms of
the Debentures, will be validly issued, fully paid and nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in the
Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ Barbara L. Borden
Barbara L. Borden
<PAGE>
April 20, 2000
The Titan Corporation
3033 Science Road
San Diego, CA 92121-1199
Titan Capital Trust
3033 Science Road
San Diego, CA 92121-1199
Re: REGISTRATION STATEMENT ON FORM S-3 OF THE TITAN CORPORATION
AND TITAN CAPITAL TRUST
Ladies and Gentlemen:
We have acted as special New York counsel to The Titan
Corporation, a Delaware corporation (the "Company"), in connection with the
Registration Statement on Form S-3 of the Company and Titan Capital Trust, a
statutory business trust formed under the laws of the State of Delaware (the
"Trust") (the "Registration Statement") to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"), relating to (i) 5,000,000 of the 5 3/4% Convertible Preferred
Securities, Remarketable Term Income Deferrable Equity Securities (HIGH
TIDES(sm)) of the Trust; (ii) $257,732,000 aggregate principal amount of the 5
3/4% Convertible Senior Subordinated Debentures due 2030 of the Company (the
"Debentures") issued pursuant to the Indenture (the "Indenture") dated February
9, 2000, between the Company and Wilmington Trust Company (the "Debenture
Trustee"); (iii) the shares of common stock, par value $.01 per share, of the
Company (the "Common Stock") issuable upon the conversion of the Debentures and
(iv) the Preferred Securities Guarantee Agreement dated Februay 9, 2000, between
the Company and Wilmington Trust Company pursuant to which the Company has
guaranteed the Trust's obligations under the High Tides on a subordinated basis
(the "Guarantee"), all as more fully described in the Registration Statement and
the prospectus included as part of the Registration Statement.
This opinion is being furnished in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings ascribed to them in the Registration Statement.
<PAGE>
The Titan Corporation
Titan Capital Trust
April 20, 2000
Page 2
In connection with the rendering of this opinion, we have
examined and are familiar with originals or copies, certified or otherwise
identified to our satisfaction, of all such documents as we have deemed
necessary or appropriate as a basis for the opinions set forth herein, including
without limitation (i) the Registration Statement (including the prospectus
included as part of the Registration Statement); (ii) the Indenture; (iii) the
Debentures; (iv) the Guarantee; and (v) such other certificates, instruments and
documents as we considered necessary or appropriate for the purposes of this
opinion.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such copies. In giving this opinion, we
have assumed that each of the Company, the Trust and the Debenture Trustee is
and was at all relevant times duly and validly organized under the laws of the
jurisdiction of its formation and has and had at all relevant times the power,
corporate and other, to enter into and perform all obligations under such of the
Indenture, the Debenture and the Guarantee (the "Documents") to which it was a
party and we also have assumed the due authorization by all requisite action,
corporate and other, and execution and delivery by such parties of such
Documents and the validity and binding effect thereof on such parties. As to any
facts material to the opinion expressed herein which we have not independently
established or verified, we have relied upon statements and representations of
officers and other representatives of the Company and others and of public
officials.
We express no opinion as to the legality, validity, binding
effect and enforceability of any provision of the Documents waiving rights
granted by law, to the extent a court or other tribunal of competent
jurisdiction determines that such waivers are against public policy or
prohibited by law.
Based upon and subject to the foregoing, we are of the opinion
that:
1. The Debentures, assuming they have been authenticated by
the Debenture Trustee in accordance with the terms of the Indenture and
delivered to, and paid for by, the Trust, constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
2. The Guarantee, assuming the due execution, authentication
and delivery of, and payment for, the Debentures, constitutes a valid and
binding obligation of the Company enforceable against the Company with respect
to the Debentures in accordance with its terms.
<PAGE>
The Titan Corporation
Titan Capital Trust
April 20, 2000
Page 3
The opinions set forth above with respect to enforceability
are subject to the effect of (a) any applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, rehabilitation, liquidation,
conservatorship, receivership, moratorium and other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally, (b)
public policy and (c) general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity).
We are members of the Bar of the State of New York and we do
not express any opinion herein concerning any law other than the law of the
State of New York.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement and to the reference to us under the heading
"Legal Matters" in the prospectus that is part of such Registration Statement.
In giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations promulgated thereunder.
Very truly yours,
/s/ Morgan, Lewis & Backius
<PAGE>
Exhibit 5.3
Titan Capital Trust
c/o The Titan Corporation
3033 Science Park Road
San Diego, California 92121-1199
Re: TITAN CAPITAL TRUST
Ladies and Gentlemen:
We have acted as special Delaware counsel for The Titan Corporation, a
Delaware corporation (the "Company"), and Titan Capital Trust, a Delaware
business trust (the "Trust"), in connection with the matters set forth herein.
At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated January 19, 2000 (the
"Certificate"), as filed in the office of the Secretary of State of the State of
Delaware (the "Secretary of State") on January 19, 2000;
(b) The Declaration of Trust of the Trust, dated as of January 19, 2000,
among the Company and the trustees of the Trust named therein;
(c) A form of Amended and Restated Declaration of Trust of the Trust
(including Annex I and Exhibits A-1 and A-2 thereto) (the "Declaration"), to be
entered into among the Company, as depositor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust, attached as an exhibit to the Registration Statement
(as defined below);
(d) The Registration Statement on Form S-3 (the "Registration Statement"),
including a prospectus (the "Prospectus"), relating to the Convertible Preferred
Securities, Remarketable Term Income Deferrable Equity Securities (HIGH TIDES)
(liquidation amount $50 per HIGH TIDES) of the Trust representing undivided
beneficial interests in the assets of the Trust (each, a "Preferred Security"
and collectively, the "Preferred Securities"), as proposed to be filed by the
Company and the Trust with the Securities and Exchange Commission on or about
April 20, 2000; and
(e) A Certificate of Good Standing for the Trust, dated April 18, 2000,
obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular, we
have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not
<PAGE>
Titan Capital Trust
April 20, 2000
Page 2
reviewed that is inconsistent with the opinions stated herein. We have conducted
no independent factual investigation of our own but rather have relied solely
upon the foregoing documents, the statements and information set forth therein
and the additional matters recited or assumed herein, all of which we have
assumed to be true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
and the Certificate are in full force and effect and have not been amended, (ii)
except to the extent provided in paragraph 1 below, that each of the parties to
the documents examined by us has been duly created, organized or formed, as the
case may be, and is validly existing in good standing under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the legal
capacity of natural persons who are parties to the documents examined by us,
(iv) that each of the parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its obligations under, such
documents, (v) that each of the parties to the documents examined by us has duly
authorized, executed and delivered such documents, (vi) the receipt by each
Person to whom a Preferred Security is to be issued by the Trust (collectively,
the "Preferred Security Holders") of a preferred security certificate
(substantially in the form of Exhibit A-1 to the Declaration) for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Declaration and the Registration Statement, and (vii) that
the Preferred Securities are issued and sold to the Preferred Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder that are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Business Trust Act.
<PAGE>
Titan Capital Trust
April 20, 2000
Page 2
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that we
come within the category of Persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as stated above,without
our prior written consent, this opinion may not be furnished or quoted to, or
relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
<PAGE>
Exhibit 8.1
[LETTERHEAD]
April 20, 2000
Credit Suisse First Boston
Donaldson, Lufkin & Jenrette Securities Corporation
c/o Credit Suisse First Boston Corporation
11 Madison Avenue
New York, NY 10010-3629
Ladies and Gentlemen:
We have acted as counsel to The Titan Corporation (the "Company") and Titan
Capital Trust (the "Trust") in connection with the filing of a Registration
Statement on Form S-3 (Registration No. 333-_____) with the Securities and
Exchange Commission (the "Registration Statement") covering the resale of (i) up
to 5,000,000 Remarketable Term Income Deferrable Equity Securities (the "HIGH
TIDES") of the Trust, (ii) up to $257,732,000 in aggregate principal amount of
5-3/4% Convertible Senior Subordinated Debentures due 2030 (the "Subordinated
Debentures"), (iii) up to 5,038,000 shares of the Company's Common Stock
issuable upon conversion of the Subordinated Debentures (the "Shares"), and (iv)
the guarantee of the Company pursuant to the Guarantee Agreement, executed and
delivered by the Company and the Wilmington Trust Company for the benefit of the
holders of the HIGH TIDES (the "Preferred Securities Guarantee Agreement").
Capitalized terms used herein that are not otherwise defined herein have the
meaning assigned to such terms in the Indenture.
In rendering the opinion set forth below, we have examined copies, certified or
otherwise identified to our satisfaction, of the following executed documents
and are relying upon the truth and accuracy of the statements, covenants,
representations and warranties set forth therein:
1. The Registration Statement;
2. The Indenture;
3. The Subordinated Debentures;
4. The Amended and Restated Declaration of Trust among the Trust, the
Company and Wilmington Trust Company as Delaware Trustee and Property
Trustee (the "Declaration");
5. The HIGH TIDES;
6. The Remarketing Agreement among the Company, the Trust, Wilmington
Trust Company as Tender Agent and Credit Suisse First Boston
Corporation (the "Remarketing Agreement");
<PAGE>
Credit Suisse First Boston Corporation
April 20, 2000
Page Two
7. The Preferred Securities Guarantee Agreement;
8. The Common Securities Guarantee Agreement, executed and delivered by
the Company for the benefit of the holders of the Common Securities
(the "Common Securities Guarantee Agreement");
9. Certain statements and representations contained in the Company's
Representation Certificate attached hereto; and
10. Such other agreements and documents as we have considered necessary or
appropriate for the purpose of rendering the opinion set forth below.
In addition, we have assumed that (i) each of the Indenture, the Subordinated
Debentures, the Declaration, the HIGH TIDES, the Remarketing Agreement, the
Preferred Securities Guarantee Agreement and the Common Securities Guarantee
Agreement will not be amended in any material respect; and (ii) the Trust will
at all times be operated in accordance with the terms of the Declaration.
Based on and subject to the foregoing, we are of the opinion that:
(a). The Trust will not be classified as a partnership, or as an association or
publicly traded partnership taxable as a corporation for United States federal
income tax purposes and, instead, under Subpart E, Part I of Subchapter J of the
Internal Revenue Code of 1986, as amended (the "Code"), will be treated as a
grantor trust, and the beneficial owners of the HIGH TIDES will be treated as
owning undivided pro rata interests in the income and corpus of the Trust; and
(b). Subject to the qualifications and limitations contained therein, the
discussion set forth in the Registration Statement under the caption "Certain
United States Federal Income Tax Consequences" fairly presents the current
United States federal income tax law applicable to the Trust and the material
United States federal tax consequences to a United States person of the
purchase, ownership and disposition of the HIGH TIDES, and insofar as it relates
to statements of law or legal conclusions is correct in all material respects.
We express no opinion as to other tax issues affecting the holders of the HIGH
TIDES or the other parties to the transactions described in the Registration
Statement. Nor does our opinion address state, local or foreign tax consequences
that may result from such transactions.
Our opinion represents only our best judgment regarding the application of
United States federal income tax laws under the Code, existing judicial
decisions, administrative regulations and published rulings and procedures. Our
opinion is not binding upon the Internal Revenue Service or the courts, and
there is no assurance that the Internal Revenue Service will not successfully
assert contrary positions. Furthermore, no assurance can be given that future
legislation, judicial
<PAGE>
Credit Suisse First Boston Corporation
April 20, 2000
Page Three
decisions or administrative changes, applicable either on a prospective or
retroactive basis, might not materially alter our opinion.
We consent to the reference to our firm under the caption "Certain United States
Federal Income Tax Consequences" and to the filing of this opinion as an exhibit
to the Registration Statement.
This opinion is given as of the date hereof solely for your benefit and may not
be relied upon, circulated, quoted or otherwise referred to for any purpose
without our prior written consent.
Very truly yours,
COOLEY GODWARD LLP
/s/ Susan Cooper Philpot
- ------------------------
Susan Cooper Philpot
<PAGE>
Exhibit 12.1
THE TITAN CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
1999
-----------------------------
1995 1996 1997 1998 ACTUAL PROFORMA
------------- ------------ ------------ ------------- ------------ ---------------
Earnings:
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes $2,551 $7,945 $2,802 $11,368 $59,183 $48,511
Fixed charges 5,718 7,168 9,225 9,964 11,955 37,224
Capitalized interest 0 0 (509) (550) (275) (275)
------------- ------------ ------------ ------------- ------------ ---------------
Earnings $8,269 $15,113 $11,518 $20,782 $70,863 $85,460
============= ============ ============ ============= ============ ===============
Fixed charges:
Interest expense $2,817 $4,764 $6,643 $7,377 $9,633 $33,635
Capitalized interest 0 0 509 550 275 275
Interest factor included in rents 2,901 2,404 2,073 2,037 2,047 3,314
------------- ------------ ------------ ------------- ------------ ---------------
Fixed charges $5,718 $7,168 $9,225 $9,964 $11,955 $37,224
============= ============ ============ ============= ============ ===============
Ratio of earnings to fixed charges 1.45 2.11 1.25 2.09 5.93 2.30
</TABLE>
COMPUTATION OF RATIO OF COMBINED FIXED CHARGES AND
PREFERENCE DIVIDENDS TO EARNINGS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------------------------
1999
-----------------------------
1995 1996 1997 1998 ACTUAL PROFORMA
------------- ------------ ------------ ------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
Total fixed charges $5,718 $7,168 $9,225 $9,964 $11,955 $37,224
Pre-tax earnings required for
preference dividends 914 1,217 1,389 1,235 1,103 1,103
------------- ------------ ------------ ------------- ------------ ---------------
Total fixed charges and preference
dividend requirements $6,632 $8,385 $10,614 $11,199 $13,058 $38,327
============= ============ ============ ============= ============ ===============
Earnings $8,269 $15,113 $11,518 $20,782 $70,853 $85,450
============= ============ ============ ============= ============ ===============
Ratio of combined fixed charges and
preference dividends to earnings 0.80 0.55 0.92 0.54 0.18 0.45
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated January 31, 2000
(except with respect to the matters discussed in Note 16, as to which the
date is March 24, 2000) included in The Titan Corporation's Form 10-K for the
year ended December 31, 1999 and to all references to our Firm included in
this Registration Statement.
/s/ Arthur Andersen
San Diego, California
April 20, 2000
<PAGE>
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated December 28, 1999
on the financial statements of Transnational Partners II, LLC included in The
Titan Corporation's Form 8-K/A dated January 24, 2000 and to all references
to our Firm included in this Registration Statement.
/s/ Arthur Andersen
San Diego, California
April 20, 2000
<PAGE>
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our reports dated February 4,
2000 and December 28, 1999 on the financial statements of JB Systems, Inc.
(d.b.a. Mainsaver), included in The Titan Corporation's Form 8-K/A dated
April 17, 2000 and The Titan Corporation's Form 8-K/A dated January 24, 2000,
respectively, and to all references to our Firm included in this Registration
Statement.
/s/ Arthur Andersen
San Diego, California
April 20, 2000
<PAGE>
Exhibit 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of our report dated November 12,
1999 related to the financial statements of Advanced Communication Systems,
Inc. for the fiscal year ended September 30, 1999 included in the Titan
Corporation's Form 8-K/A dated April 17, 2000 and to all references to our
Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Vienna, Virginia
April 17, 2000
<PAGE>
Exhibit 23.5
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of The Titan
Corporation and Titan Capital Trust for the registration of 5,000,000 5 3/4%
Convertible Preferred Securities, Remarketable Term Income Deferrable Equity
Securities ("HIGH TIDES") of Titan Capital Trust and the other securities
being registered therein and to the incorporation by reference therein of our
report dated May 28, 1999 (except Note 9, as to which the date is September
22, 1999), with respect to the financial statements of Assist Cornerstone
Technologies, Inc. at December 31, 1998 and 1997 and for each of the three
years in the period ended December 31, 1998, included in the Form 8-K/A of
The Titan Corporation dated January 24, 2000 and our report dated February
11, 2000, with respect to the financial statements of Assist Cornerstone
Technologies, Inc. at December 12, 1999 and December 31, 1998 and for the
period ended December 12, 1999 and each of the two years in the period ended
December 31, 1998, included in the Form 8-K/A of The Titan Corporation dated
April 17, 2000 filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Salt Lake City, Utah
April 18, 2000
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS
The Board of Directors
SFG Technologies Inc.
We consent to the use of our report dated January 31, 2000 with respect to
the consolidated balance sheets of SFG Technologies Inc. as at December 21,
1999 and December 31, 1998 and the consolidated statements of operations,
deficit, and cash flows for the period from January 1, 1999 to December 21,
1999, eight months ended December 31, 1998 and the years ended April 30, 1998
and 1997 included in the form 8-K/A of The Titan Corporation dated April 17,
2000 and of our report dated June 22, 1999 except as to note 13 which is as
of November 26, 1999, with respect to the consolidated balance sheets of SFG
Technologies Inc. as at December 31, 1998 and April 30, 1998 and the
consolidated statements of operations, deficit, and cash flows for the eight
months period ended December 31, 1998 and for each of the years in the three
year period ended April 30, 1998 included in The Titan Corporation 8-K/A
filed on January 24, 2000, both incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Chartered Accountants
Vancouver, Canada
April 17, 2000
<PAGE>
Registration No.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
THE TITAN CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 95-2588754
(State of incorporation) (I.R.S. employer identification no.)
3033 Science Park Road
San Diego, California 92121-1199
(Address of principal executive offices) (Zip Code)
5 3/4% Convertible Senior Subordinated Debentures
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th day
of January, 2000.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/
----------------------------------- --------
Name: Donald G. MacKelcan
Title: Vice President
NOTE: REMOVE CONFORMED SIGNATURES BEFORE SENDING AS DRAFT.
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of
<PAGE>
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences of
debt, to receive deposits of money, or securities for money,
to buy gold and silver bullion and foreign coins, to buy and
sell bills of exchange, and generally to use, exercise and
enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may
<PAGE>
receive and manage any sinking fund therefor on such terms
as may be agreed upon between the two parties, and in like
manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country;
<PAGE>
to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or
<PAGE>
could do, to purchase or otherwise acquire, to hold, own, to
mortgage, sell, convey or otherwise dispose of, real and
personal property, of every class and description, in any
State, District, Territory or Colony of the United States,
and in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of
<PAGE>
the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or series
of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of
<PAGE>
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
<PAGE>
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors
<PAGE>
or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 14 days
nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if
less than 21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as prescribed, to
the Secretary of the Corporation not later than the close of the
seventh day following the day on which notice of the meeting was
mailed to stockholders. Notice of nominations which are proposed by
the Board of Directors shall be given by the Chairman on behalf of
the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
<PAGE>
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
<PAGE>
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of
<PAGE>
the Corporation which were at any time within two years
prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an
<PAGE>
agreement, arrangement or understanding with another as to
the matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business combination
or the consideration received for the issuance or transfer
of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 20, 2000
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank. No more than two Directors may
also be employees of the Company or any affiliate thereof.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
1
<PAGE>
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer
2
<PAGE>
elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
3
<PAGE>
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of
not more than nine members who shall be selected by the Board of Directors from
its own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such times to
be determined by a majority of its members, or at the call of the Chairman of
the Executive Committee or at the call of the Chairman of the Board of
Directors. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs and
business of the Company by its directors and officers as contemplated by these
By-Laws any two available members of the Executive Committee as constituted
immediately prior to such disaster shall constitute a quorum of that Committee
for the full conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-Laws; and if less
than three members of the Trust Committee is constituted immediately prior to
such disaster shall be available for the transaction of its business, such
Executive Committee shall also be empowered to exercise all of the powers
reserved to the Trust Committee under Article III Section 2 hereof. In the event
of the unavailability, at such time, of a minimum of two members of such
Executive Committee, any three available directors shall constitute the
Executive Committee for the full conduct and management of the affairs and
business
4
<PAGE>
of the Company in accordance with the foregoing provisions of this Section. This
By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought to its
attention by the officer in charge of the Audit Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board of Directors
from its own members who are not officers of the Company and who shall hold
office during the pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the management of the
Company, major organizational matters, including salaries and employee benefits
and specifically shall administer the Executive Incentive Compensation Plan.
5
<PAGE>
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
6
<PAGE>
Section 4. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all matters
brought to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
7
<PAGE>
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
8
<PAGE>
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to
9
<PAGE>
receive payment of any dividend, or to any allotment or rights, or to exercise
any rights in respect of any change, conversion or exchange of capital stock, or
in connection with obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days proceeding the date
of any meeting of stockholders or the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors
10
<PAGE>
and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred
in defending any proceeding in advance of its final disposition, PROVIDED,
HOWEVER, that the payment of expenses incurred by a Director or officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined that
the Director or officer is not entitled to be indemnified under this Article or
otherwise.
11
<PAGE>
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
12
<PAGE>
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: By: /s/
--------------------------------- --------
Name: Donald G. MacKelcan
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
<TABLE>
<S><C>
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- --------------------------------------------- --------------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins 213,700
Interest-bearing balances 0
Held-to-maturity securities 30,232
Available-for-sale securities 1,628,889
Federal funds sold and securities purchased under agreements
to resell 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . 4,374,777
LESS: Allowance for loan and lease losses. . . . 71,368
LESS: Allocated transfer risk reserve. . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve 4,303,409
Assets held in trading accounts 0
Premises and fixed assets (including
capitalized leases) 122,273
Other real estate owned 576
Investments in unconsolidated subsidiaries and associated companies 1,511
Customers' liability to this bank on acceptances outstanding 0
Intangible assets 5,100
Other assets 133,449
Total assets 6,829,789
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices 5,186,079
Noninterest-bearing . . . . . . . . 986,667
Interest-bearing. . . . . . . . . . 4,199,412
Federal funds purchased and Securities sold under agreements to repurchase 269,343
Demand notes issued to the U.S. Treasury 95,000
Trading liabilities (from Schedule RC-D) 0
Other borrowed money: ///////
With original maturity of one year or less 670,000
With original maturity of more than one year 43,000
Bank's liability on acceptances executed and outstanding 0
Subordinated notes and debentures 0
Other liabilities (from Schedule RC-G) 151,436
Total liabilities 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common Stock 500
Surplus (exclude all surplus related to preferred stock) 62,118
Undivided profits and capital reserves 386,485
Net unrealized holding gains (losses) on available-for-sale securities (34,172)
Total equity capital 414,931
Total liabilities, limited-life preferred stock, and equity capital 6,829,789
</TABLE>
<PAGE>
Registration No.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
TITAN CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware applied for
(State of incorporation) (I.R.S. employer identification no.)
3033 Science Park Road
San Diego, California 92121-1199
(Address of principal executive offices) (Zip Code)
5 3/4% Convertible Preferred Securities, Remarketable Term Income
Deferrable Equity Securities
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th day
of January, 2000.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/
------------------------------------ -------
Name: Donald G. MacKelcan
Title: Vice President
NOTE: REMOVE CONFORMED SIGNATURES BEFORE SENDING AS DRAFT.
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of
<PAGE>
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences of
debt, to receive deposits of money, or securities for money,
to buy gold and silver bullion and foreign coins, to buy and
sell bills of exchange, and generally to use, exercise and
enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may
<PAGE>
receive and manage any sinking fund therefor on such terms
as may be agreed upon between the two parties, and in like
manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country;
<PAGE>
to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or
<PAGE>
could do, to purchase or otherwise acquire, to hold, own, to
mortgage, sell, convey or otherwise dispose of, real and
personal property, of every class and description, in any
State, District, Territory or Colony of the United States,
and in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of
<PAGE>
the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or series
of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of
<PAGE>
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
<PAGE>
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors
<PAGE>
or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 14 days
nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if
less than 21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as prescribed, to
the Secretary of the Corporation not later than the close of the
seventh day following the day on which notice of the meeting was
mailed to stockholders. Notice of nominations which are proposed by
the Board of Directors shall be given by the Chairman on behalf of
the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
<PAGE>
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
<PAGE>
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of
<PAGE>
the Corporation which were at any time within two years
prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an
<PAGE>
agreement, arrangement or understanding with another as to
the matters referred to in paragraph (3) of section (c), or
(4) whether the assets subject to any business combination
or the consideration received for the issuance or transfer
of securities by the Corporation, or any Subsidiary has an
aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 20, 2000
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank. No more than two Directors may
also be employees of the Company or any affiliate thereof.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
1
<PAGE>
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer
2
<PAGE>
elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
3
<PAGE>
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of
not more than nine members who shall be selected by the Board of Directors from
its own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such times to
be determined by a majority of its members, or at the call of the Chairman of
the Executive Committee or at the call of the Chairman of the Board of
Directors. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs and
business of the Company by its directors and officers as contemplated by these
By-Laws any two available members of the Executive Committee as constituted
immediately prior to such disaster shall constitute a quorum of that Committee
for the full conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-Laws; and if less
than three members of the Trust Committee is constituted immediately prior to
such disaster shall be available for the transaction of its business, such
Executive Committee shall also be empowered to exercise all of the powers
reserved to the Trust Committee under Article III Section 2 hereof. In the event
of the unavailability, at such time, of a minimum of two members of such
Executive Committee, any three available directors shall constitute the
Executive Committee for the full conduct and management of the affairs and
business
4
<PAGE>
of the Company in accordance with the foregoing provisions of this Section. This
By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought to its
attention by the officer in charge of the Audit Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board of Directors
from its own members who are not officers of the Company and who shall hold
office during the pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the management of the
Company, major organizational matters, including salaries and employee benefits
and specifically shall administer the Executive Incentive Compensation Plan.
5
<PAGE>
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
6
<PAGE>
Section 4. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all matters
brought to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
7
<PAGE>
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
8
<PAGE>
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to
9
<PAGE>
receive payment of any dividend, or to any allotment or rights, or to exercise
any rights in respect of any change, conversion or exchange of capital stock, or
in connection with obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days proceeding the date
of any meeting of stockholders or the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors
10
<PAGE>
and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred
in defending any proceeding in advance of its final disposition, PROVIDED,
HOWEVER, that the payment of expenses incurred by a Director or officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined that
the Director or officer is not entitled to be indemnified under this Article or
otherwise.
11
<PAGE>
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
12
<PAGE>
EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: By: /s/
-------------------------- -------
Name: Donald G. MacKelcan
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
<TABLE>
<S><C>
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------- --------------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins 213,700
Interest-bearing balances 0
Held-to-maturity securities 30,232
Available-for-sale securities 1,628,889
Federal funds sold and securities purchased under agreements to
resell 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . 4,374,777
LESS: Allowance for loan and lease losses. . . . . 71,368
LESS: Allocated transfer risk reserve. . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve 4,303,409
Assets held in trading accounts 0
Premises and fixed assets (including
capitalized leases) 122,273
Other real estate owned 576
Investments in unconsolidated subsidiaries and associated companies 1,511
Customers' liability to this bank on acceptances outstanding 0
Intangible assets 5,100
Other assets 133,449
Total assets 6,829,789
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices 5,186,079
Noninterest-bearing . . . . . . . . 986,667
Interest-bearing. . . . . . . . . . 4,199,412
Federal funds purchased and Securities sold under agreements to repurchase 269,343
Demand notes issued to the U.S. Treasury 95,000
Trading liabilities (from Schedule RC-D) 0
Other borrowed money: ///////
With original maturity of one year or less 670,000
With original maturity of more than one year 43,000
Bank's liability on acceptances executed and outstanding 0
Subordinated notes and debentures 0
Other liabilities (from Schedule RC-G) 151,436
Total liabilities 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common Stock 500
Surplus (exclude all surplus related to preferred stock) 62,118
Undivided profits and capital reserves 386,485
Net unrealized holding gains (losses) on available-for-sale securities (34,172)
Total equity capital 414,931
Total liabilities, limited-life preferred stock, and equity capital 6,829,789
</TABLE>
<PAGE>
Registration No.:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
THE TITAN CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 95-2588754
(State of incorporation) (I.R.S. employer identification no.)
3033 Science Park Road
San Diego, California 92121-1199
(Address of principal executive offices) (Zip Code)
Guarantee of the High Tides
(Title of the indenture securities)
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority
to which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor
is not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which
includes the certificate of authority of Wilmington Trust
Company to commence business and the authorization of
Wilmington Trust Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section
321(b) of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 10th day
of January, 2000.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Patricia A. Evans By: /s/
--------------------------------- -------
Name: Donald G. MacKelcan
Title: Vice President
NOTE: REMOVE CONFORMED SIGNATURES BEFORE SENDING AS DRAFT.
2
<PAGE>
EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of
<PAGE>
Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold, purchase, convey, mortgage or
otherwise deal in real and personal estate and property, and
to appoint such officers and agents as the business of the
Corporation shall require, to make by-laws not inconsistent
with the Constitution or laws of the United States or of
this State, to discount bills, notes or other evidences of
debt, to receive deposits of money, or securities for money,
to buy gold and silver bullion and foreign coins, to buy and
sell bills of exchange, and generally to use, exercise and
enjoy all the powers, rights, privileges and franchises
incident to a corporation which are proper or necessary for
the transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may
<PAGE>
receive and manage any sinking fund therefor on such terms
as may be agreed upon between the two parties, and in like
manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other instrument issued by any state, municipality,
body politic, corporation, association or person, either
alone or in conjunction with any other person or persons,
corporation or corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country;
<PAGE>
to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds,
mortgages, debentures, notes, shares of capital stock,
securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable
instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or
<PAGE>
could do, to purchase or otherwise acquire, to hold, own, to
mortgage, sell, convey or otherwise dispose of, real and
personal property, of every class and description, in any
State, District, Territory or Colony of the United States,
and in any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of
<PAGE>
the preference or relation, if any, of such dividends to the
dividends payable on any other class or classes, or series
of the same or other class of stock and whether such
dividends shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of
<PAGE>
whatever kind available for distribution to stockholders
ratably in proportion to the number of shares of Common
Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of Directors in the
resolution or resolutions adopted pursuant to authority granted in
section (b) of this Article Fourth and the consent, by class or
series vote or otherwise, of the holders of such of the series of
Preferred Stock as are from time to time outstanding shall not be
required for the issuance by the Board of Directors of any other
series of Preferred Stock whether or not the powers, preferences and
rights of such other series shall be fixed by the Board of Directors
as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided,
however, that the Board of Directors may provide in the resolution
or resolutions as to any series of Preferred Stock adopted pursuant
to section (b) of this Article Fourth that the consent of the
holders of a majority (or such greater proportion as shall be
therein fixed) of the outstanding shares of such series voting
thereon shall be required for the issuance of any or all other
series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
<PAGE>
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class shall be elected to hold office for a term
expiring at the second succeeding annual meeting and directors of
the third class shall be elected to hold office for a term expiring
at the third succeeding annual meeting. Any vacancies in the Board
of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the
Board of Directors, acting by a majority of the directors then in
office, although less than a quorum, and any directors so chosen
shall hold office until the next annual election of directors. At
such election, the stockholders shall elect a successor to such
director to hold office until the next election of the class for
which such director shall have been chosen and until his successor
shall be elected and qualified. No decrease in the number of
directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the By-Laws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors
<PAGE>
or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing,
delivered or mailed by first class United States mail, postage
prepaid, to the Secretary of the Corporation not less than 14 days
nor more than 50 days prior to any meeting of the stockholders
called for the election of directors; provided, however, that if
less than 21 days' notice of the meeting is given to stockholders,
such written notice shall be delivered or mailed, as prescribed, to
the Secretary of the Corporation not later than the close of the
seventh day following the day on which notice of the meeting was
mailed to stockholders. Notice of nominations which are proposed by
the Board of Directors shall be given by the Chairman on behalf of
the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so
determine, he shall so declare to the meeting and the defective
nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agents and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
<PAGE>
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
Fourteenth: - Meetings of the Directors may be held outside
of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
<PAGE>
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to in any one or more of clauses (A) through
(E) of paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation or By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of
<PAGE>
the Corporation which were at any time within two years
prior thereto beneficially owned by any Interested
Stockholder, and such assignment or succession shall have
occurred in the course of a transaction or series of
transactions not involving a public offering within the
meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter defined) beneficially own, directly
or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect on December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an
<PAGE>
agreement, arrangement or understanding with another as
to the matters referred to in paragraph (3) of section (c),
or (4) whether the assets subject to any business
combination or the consideration received for the issuance
or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000
or more.
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 20, 2000
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
DIRECTORS
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank. No more than two Directors may
also be employees of the Company or any affiliate thereof.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971. The Chairman of the
Board of Directors shall not be qualified to continue to serve as a Director
upon the termination for any reason of his or her services in that office.
1
<PAGE>
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer
2
<PAGE>
elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
3
<PAGE>
ARTICLE III
COMMITTEES
Section 1. Executive Committee
(A) The Executive Committee shall be composed of
not more than nine members who shall be selected by the Board of Directors from
its own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the
powers of the Board of Directors when it is not in session to transact all
business for and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the
principal office of the Company or elsewhere in its discretion at such times to
be determined by a majority of its members, or at the call of the Chairman of
the Executive Committee or at the call of the Chairman of the Board of
Directors. The majority of its members shall be necessary to constitute a quorum
for the transaction of business. Special meetings of the Executive Committee may
be held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive
Committee shall be kept and submitted to the Board of Directors at its next
meeting.
(E) The Executive Committee shall advise and
superintend all investments that may be made of the funds of the Company, and
shall direct the disposal of the same, in accordance with such rules and
regulations as the Board of Directors from time to time make.
(F) In the event of a state of disaster of
sufficient severity to prevent the conduct and management of the affairs and
business of the Company by its directors and officers as contemplated by these
By-Laws any two available members of the Executive Committee as constituted
immediately prior to such disaster shall constitute a quorum of that Committee
for the full conduct and management of the affairs and business of the Company
in accordance with the provisions of Article III of these By-Laws; and if less
than three members of the Trust Committee is constituted immediately prior to
such disaster shall be available for the transaction of its business, such
Executive Committee shall also be empowered to exercise all of the powers
reserved to the Trust Committee under Article III Section 2 hereof. In the event
of the unavailability, at such time, of a minimum of two members of such
Executive Committee, any three available directors shall constitute the
Executive Committee for the full conduct and management of the affairs and
business
4
<PAGE>
of the Company in accordance with the foregoing provisions of this Section. This
By-Law shall be subject to implementation by Resolutions of the Board of
Directors presently existing or hereafter passed from time to time for that
purpose, and any provisions of these By-Laws (other than this Section) and any
resolutions which are contrary to the provisions of this Section or to the
provisions of any such implementary Resolutions shall be suspended during such a
disaster period until it shall be determined by any interim Executive Committee
acting under this section that it shall be to the advantage of the Company to
resume the conduct and management of its affairs and business under all of the
other provisions of these By-Laws.
Section 2. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general
supervision over the Audit Division in all matters however subject to the
approval of the Board of Directors; it shall consider all matters brought to its
attention by the officer in charge of the Audit Division, review all reports of
examination of the Company made by any governmental agency or such independent
auditor employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and
wherever the majority of its members shall deem it to be proper for the
transaction of its business, and a majority of its Committee shall constitute a
quorum.
Section 3. Compensation Committee
(A) The Compensation Committee shall be composed of
not more than five (5) members who shall be selected by the Board of Directors
from its own members who are not officers of the Company and who shall hold
office during the pleasure of the Board.
(B) The Compensation Committee shall in general
advise upon all matters of policy concerning the Company brought to its
attention by the management and from time to time review the management of the
Company, major organizational matters, including salaries and employee benefits
and specifically shall administer the Executive Incentive Compensation Plan.
5
<PAGE>
(C) Meetings of the Compensation Committee may be
called at any time by the Chairman of the Compensation Committee, the Chairman
of the Board of Directors, or the President of the Company.
6
<PAGE>
Section 4. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to
attend all directors meetings and participate in the discussion of all matters
brought to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 5. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any
member of any Committee created under Article III of the By-Laws of this
Company, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member.
ARTICLE IV
OFFICERS
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. THE VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
7
<PAGE>
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
8
<PAGE>
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
STOCK AND STOCK CERTIFICATES
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to
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receive payment of any dividend, or to any allotment or rights, or to exercise
any rights in respect of any change, conversion or exchange of capital stock, or
in connection with obtaining the consent of stockholders for any purpose, which
record date shall not be more than 60 nor less than 10 days proceeding the date
of any meeting of stockholders or the date for the payment of any dividend, or
the date for the allotment of rights, or the date when any change or conversion
or exchange of capital stock shall go into effect, or a date in connection with
obtaining such consent.
ARTICLE VI
SEAL
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner circle
the words "Wilmington, Delaware."
ARTICLE VII
FISCAL YEAR
Section 1. The fiscal year of the Company shall be the calendar
year.
ARTICLE VIII
EXECUTION OF INSTRUMENTS OF THE COMPANY
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors
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and/or the Executive Committee.
ARTICLE IX
COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
INDEMNIFICATION
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred
in defending any proceeding in advance of its final disposition, PROVIDED,
HOWEVER, that the payment of expenses incurred by a Director or officer in his
capacity as a Director or officer in advance of the final disposition of the
proceeding shall be made only upon receipt of an undertaking by the Director or
officer to repay all amounts advanced if it should be ultimately determined that
the Director or officer is not entitled to be indemnified under this Article or
otherwise.
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(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this
Article X shall not be exclusive of any other rights which such person may have
or hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
AMENDMENTS TO THE BY-LAWS
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
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EXHIBIT C
SECTION 321(b) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: By: /s/
---------------------------------- -------
Name: Donald G. MacKelcan
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings
banks with state publication requirements. It has not been
approved by any state banking authorities. Refer to your
appropriate state banking authorities for your state publication
requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
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<S><C>
WILMINGTON TRUST COMPANY of WILMINGTON
- -------------------------------------------- ---------------
Name of Bank City
in the State of DELAWARE , at the close of business on December 31, 1999.
ASSETS
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins 213,700
Interest-bearing balances 0
Held-to-maturity securities 30,232
Available-for-sale securities 1,628,889
Federal funds sold and securities purchased under agreements to resell 390,650
Loans and lease financing receivables:
Loans and leases, net of unearned income. . . . . . . 4,374,777
LESS: Allowance for loan and lease losses. . . . . 71,368
LESS: Allocated transfer risk reserve. . . . . . 0
Loans and leases, net of unearned income, allowance, and reserve 4,303,409
Assets held in trading accounts 0
Premises and fixed assets (including
capitalized leases) 122,273
Other real estate owned 576
Investments in unconsolidated subsidiaries and
associated companies 1,511
Customers' liability to this bank on acceptances
outstanding 0
Intangible assets 5,100
Other assets 133,449
Total assets 6,829,789
CONTINUED ON NEXT PAGE
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LIABILITIES
Deposits:
In domestic offices 5,186,079
Noninterest-bearing . . . . . . . . 986,667
Interest-bearing. . . . . . . . . . 4,199,412
Federal funds purchased and Securities sold under agreements to repurchase 269,343
Demand notes issued to the U.S. Treasury 95,000
Trading liabilities (from Schedule RC-D) 0
Other borrowed money: ///////
With original maturity of one year or less 670,000
With original maturity of more than one year 43,000
Bank's liability on acceptances executed and outstanding 0
Subordinated notes and debentures 0
Other liabilities (from Schedule RC-G) 151,436
Total liabilities 6,414,858
EQUITY CAPITAL
Perpetual preferred stock and related surplus 0
Common Stock 500
Surplus (exclude all surplus related to
preferred stock) 62,118
Undivided profits and capital reserves 386,485
Net unrealized holding gains (losses) on available-for-sale
securities (34,172)
Total equity capital 414,931
Total liabilities, limited-life preferred stock,
and equity capital 6,829,789
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