AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 14, 1997
REGISTRATION STATEMENT NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
TOSCO CORPORATION
TOSCO FINANCING TRUST
(Exact name of registrant as specified in its charter)
NEVADA 95-1865716
DELAWARE Application Pending
(State or other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
72 Cummings Point Road
Stamford, Connecticut 06902
(203) 977-1000
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
WILKES MCCLAVE III, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
72 CUMMINGS POINT ROAD
STAMFORD, CONNECTICUT 06902
(203) 977-1000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
----------------------
COPIES TO:
MARTIN H. NEIDELL, ESQ. STUART BRESSMAN, ESQ.
STROOCK & STROOCK & LAVAN LLP ANDREWS & KURTH L.L.P.
180 Maiden Lane 425 Lexington Avenue
New York, New York 10038 New York, New York 10017
-------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after this Registration Statement becomes effective.
-------------------------------------
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, please check the following box. x/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434 under
the Securities Act, please check the following box|_|
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Proposed Proposed
Title of each Amount to Maximum Maximum Amount of
Class of be Offering Aggregate Registration
Securities to be Registered(4) Price Offering Fee
Registered Per Unit Price(1)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Convertible
Preferred
Securities of 6,000,000 $50.00 $300,000,000 $90,909
Tosco
Financing Trust
- ----------------------------------------------------------------------------------------------------------------------------------
5 3/4 % Convertible
Junior
Subordinated
Debentures
of Tosco
Corporation(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock of
Tosco
Corporation(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Preferred
Securities
Guarantee(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Total $90,909
6,000,000 $50.00 $300,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457 (c) of the Securities Act.
(2) Exclusive of accrued interest and distributions, if any.
(3) $300 million in aggregate principal amount of 5-3/4% Convertible
Junior Subordinated Debentures of Tosco Corporation were issued and
sold to Tosco Financing Trust in connection with the issuance by the
Trust of its 5-3/4% Convertible Preferred Securities. The Convertible
Junior Subordinated Debentures may be distributed, under certain
circumstances, to holders of the Convertible Preferred Securities for
no additional consideration.
(4) Such indeterminate number of shares of Tosco Common Stock as may be
issuable upon conversion of the Convertible Preferred Securities
registered hereunder including such shares as may be issued pursuant to
anti-dilution adjustments. No separate consideration will be received for
the Tosco Common Stock.
(5) No separate consideration will be received for the Preferred
Securities Guarantee.
</TABLE>
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES NAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED MARCH 14, 1997
6,000,000 TRUST CONVERTIBLE PREFERRED SECURITIES
TOSCO FINANCING TRUST
5-3/4% TRUST CONVERTIBLE PREFERRED SECURITIES
(Liquidation Amount $50 Per Convertible Preferred Security)
Guaranteed to the Extent Set Forth Herein by
TOSCO CORPORATION
The Convertible Preferred Securities offered hereby represent preferred
undivided beneficial interests in the assets of Tosco Financing Trust, a
statutory business trust formed under the laws of the State of Delaware ("Tosco
Financing Trust" or the "Trust"). The Convertible Preferred Securities were
issued and sold (the "Original Offering") on December 13, 1996 (the "Original
Offering Date") to the Initial Purchasers (as defined herein) and were
simultaneously sold by the Initial Purchasers in transactions exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), in the United States to persons reasonably believed by the
Initial Purchasers of the Convertible Preferred Securities to be "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act), to
institutional "accredited investors" (as defined in Rule 501(a) (1), (2), (3) or
(7) under the Securities Act) and outside the United States to non- US. persons
in off-shore transactions in reliance on Regulation S under the Securities Act.
Tosco Corporation, a Nevada corporation ("Tosco" or the "Company"), owns all the
common securities (the "Common Securities" and, together with the Convertible
Preferred Securities, the "Trust Securities") representing undivided beneficial
interests in the assets of Tosco Financing Trust. Tosco Financing Trust exists
for the sole purpose of issuing the Trust Securities and investing the proceeds
of the sale thereof in 5-3/4% Convertible Junior Subordinated Debentures (the
"Convertible Debentures") of Tosco in an aggregate principal amount equal to the
aggregate liquidation amount of Trust Securities. The Convertible Debentures are
unsecured, subordinated obligations of Tosco as described herein. Upon an event
of default under the Declaration (as defined herein), the holders of Convertible
Preferred Securities will have a preference over the holders of the Common
Securities with respect to payments in respect of distributions and payments
upon redemption, liquidation and otherwise.
The Convertible Preferred Securities, the Convertible Debentures, the Tosco
Common Stock issuable upon conversion thereof and the associated Guarantee (as
defined below) (collectively, the "Offered Securities") may be offered and sold
from time to time by the holders named herein or in an accompanying supplement
to this Prospectus (the "Prospectus Supplement") or by their transferees,
pledgees, donees or successors pursuant to this Prospectus. The Offered
Securities may be sold by the Selling Holders (as defined herein) from time to
time directly to purchasers or through agents, underwriters or dealers. See
"Plan of Distribution" and "Selling Holders." If required, the names of any such
agents or underwriters involved in the sale of the Offered Securities and the
applicable agent's commission, dealer's purchase price or underwriter's
discount, if any, will be set forth in a Prospectus Supplement. The Selling
Holders will receive all of the net proceeds from the sale of the Offered
Securities and will pay all underwriting discounts and selling commissions, if
any, applicable to any such sale. The Company is responsible for payment of
certain other expenses incident to the offer and sale of the Offered Securities.
The Selling Holders and any broker/dealers, agents or underwriters which
participate in the distribution of the Offered Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commission
received by them and any profit on the resale of the Offered Securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Plan of Distribution" for a description of
indemnification arrangements.
Holders of the Convertible Preferred Securities are entitled to receive
cumulative cash distributions at an annual rate of 5-3/4% of the liquidation
amount of $50 per Convertible Preferred Security, accruing from the first date
that any Convertible Preferred Securities were issued and payable quarterly in
arrears on March 15, June 15, September 15 and December 15 of each year,
commencing March 15, 1997 ("distributions"). The payment of distributions out of
monies held by Tosco Financing Trust and payments on liquidation of Tosco
Financing Trust or the redemption of Convertible Preferred Securities, as set
forth below, are guaranteed by Tosco (the "Guarantee") to the extent described
herein. The Guarantee covers payments of distributions and other payments on the
Convertible Preferred Securities only if and to the extent that Tosco Financing
Trust has funds available therefor, which will not be the case unless Tosco has
made corresponding payments of interest or principal or other payments on the
Convertible Debentures held by Tosco Financing Trust. The Guarantee, when taken
together with Tosco's obligations under the Convertible Debentures and the
Indenture (as defined herein) and its obligations under the Declaration,
including its liabilities to pay costs, expenses, debts and obligations of Tosco
Financing Trust (other than with respect to the Trust Securities), provide a
full and unconditional guarantee of amounts due on the Convertible Preferred
Securities. See "Risk Factors-Limitations of the Guarantee."
-----------------------
SEE "RISK FACTORS" BEGINNING ON PAGE 11 FOR CERTAIN INFORMATION
RELEVANT TO AN INVESTMENT IN THE CONVERTIBLE PREFERRED SECURITIES
APPLICATION WILL BE MADE TO LIST THE COMMON STOCK REGISTERED
PURSUANT HERETO ON THE NEW YORK STOCK EXCHANGE AND THE PACIFIC
STOCK EXCHANGE
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
----------------------
MARCH __, 1997
<PAGE>
(continued from previous page)
The obligations of Tosco under the Guarantee are subordinate and junior in
right of payment to all other liabilities of Tosco and pari passu with the most
senior preferred stock issued, from time to time, if any, by Tosco. The
obligations of Tosco under the Convertible Debentures are subordinate and junior
in right of payment to all present and future Senior Indebtedness (as defined
herein) of Tosco. As of January 31, 1997, the aggregate Senior Indebtedness of
Tosco was approximately $1.7 billion.
The Convertible Debentures purchased by the Trust on the Offering Date may
be distributed pro rata to holders of the Trust Securities in connection with
the dissolution of the Trust, upon the occurrence of certain events.
Each Convertible Preferred Security is convertible in the manner described
herein at the option of the holder, at any time beginning 90 days following the
latest date that any Convertible Preferred Securities were issued and prior to
the Conversion Expiration Date (as defined herein), into shares of common stock,
par value $.75 per share, of Tosco ("Tosco Common Stock"), at the rate of
1.51899 shares of Tosco Common Stock for each Convertible Preferred Security
(equivalent to a conversion price of $32.92 per share of Tosco Common Stock),
subject to adjustment in certain circumstances. See "Description of Convertible
Preferred Securities-Conversion Rights."
The distribution rate and the distribution payment date and other payment
dates for the Convertible Preferred Securities correspond to the interest rate
and interest payment date and other payment dates of the Convertible Debentures,
which are the sole assets of the Trust. As a result, if principal and interest
are not paid on the Convertible Debentures, no amounts will be paid on the
Convertible Preferred Securities.
So long as Tosco shall not be in default in the payment of interest on the
Convertible Debentures, Tosco has the right to defer payments of interest on the
Convertible Debentures by extending the interest payment period on the
Convertible Debentures at any time for up to 20 consecutive quarters (each, an
"Extension Period"). If interest payments are so deferred, distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law) at the distribution rate, compounded quarterly. During any
Extension Period, holders of Convertible Preferred Securities will be required
to include deferred interest income in their gross income for United States
federal income tax purposes in advance of receipt of the cash distributions with
respect to such deferred interest payments. There could be multiple Extension
Periods of varying lengths throughout the term of the Convertible Debentures.
See "Description of the Convertible Debentures-Option to Extend Interest
Payment Period," "Risk Factors-Delay of Interest Payments" and "United
States Federal Income Taxation-Potential Extension of Interest Payment
Period and Original Issue Discount."
The Convertible Debentures are redeemable by Tosco, in whole or in part,
from time to time, on or after December 18, 1999, at the prices set forth herein
(the "Redemption Price"), plus accrued and unpaid interest thereon to the date
fixed for redemption (the "Redemption Date"). In addition, in certain
circumstances upon the occurrence of a Special Event (as defined herein) the
Convertible Debentures may be redeemed by Tosco at 100% of the principal amount
thereof plus accrued and unpaid interest thereon. If Tosco redeems the
Convertible Debentures, the Trust must redeem Convertible Preferred Securities
having an aggregate liquidation amount equal to the aggregate principal amount
of the Convertible Debentures so redeemed. See "Description of the Convertible
Preferred Securities--Mandatory Redemption." The outstanding Convertible
Preferred Securities will be redeemed when the Convertible Debentures mature on
December 15, 2026.
Upon the occurrence of a Special Event arising from a change in law or a
change in legal interpretation, unless the Convertible Debentures are redeemed
in the limited circumstances described herein, the Trust may be dissolved (with
the consent of Tosco), with the result that the Convertible Debentures would be
distributed to the holders of the Convertible Preferred Securities, on a pro
rata basis, in lieu of any cash distribution. If Tosco declines to consent to
such dissolution and distribution, Tosco may incur an obligation to pay
additional interest. See "Description of the Convertible Preferred
Securities-Special Event Distribution; Tax Event Redemption" and "Description of
the Convertible Debentures-Additional Interest."
In the event of the involuntary dissolution, winding up or termination of
the Trust, the holders of the Convertible Preferred Securities will be entitled
to receive for each Convertible Preferred Security a liquidation amount of $50
plus accrued and unpaid distributions thereon (including interest thereon) to
the date of payment, unless, in connection with such dissolution, the
Convertible Debentures are distributed to the holders of the Convertible
Preferred Securities. See "Description of the Convertible Preferred
Securities-Liquidation Distribution Upon Dissolution."
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, as well as the following regional offices of the
Commission: Northwestern Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661; and 7 World Trade Center, Suite 1300, New York, NY 10048.
Copies of such material can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates
or from the Commission's Web site which contains reports, proxy and information
statements and other information regarding registrants that file electronically
(Tosco is an electronic filer) at http://www.sec.gov. Such materials can also be
inspected at the offices of the New York Stock Exchange, Inc. and the Pacific
Stock Exchange, Inc., on which exchanges the Company's Common Stock is listed.
Tosco has filed with the Commission a Registration Statement on Form S-3
(herein together with all amendments and exhibits thereto, called the
"Registration Statement") under the Securities Act with respect to the
securities offered by this Prospectus. This Prospectus does not contain all of
the information set forth or incorporated by reference in the Registration
Statement and the exhibits and schedules relating thereto, certain portions of
which have been omitted as permitted by the Rules and Regulations of the
Commission. For further information with respect to Tosco and the securities
offered by this Prospectus, reference is made to the Registration Statement and
the exhibits filed or incorporated as a part thereof, which are on file at the
offices of the Commission and may be obtained upon payment of the fee prescribed
by the Commission, or may be examined without charge at the offices of the
Commission or on the Commission's Web site. Statements contained in this
Prospectus as to the contents of any documents referred to are not necessarily
complete; with respect to any such document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
No separate financial statements of the Trust have been included herein.
The Company does not consider that such financial statements would be material
to holders of Convertible Preferred Securities because (i) all of the voting
securities of the Trust will be owned, directly or indirectly, by the Company, a
reporting company under the Exchange Act, (ii) the Trust has no independent
operations and exists for the sole purpose of issuing securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in the Convertible Debentures issued by the Company and (iii)
the Company's obligations described herein under the Declaration, the Guarantee,
the Convertible Debentures and the Indenture, taken together, constitute a full
and unconditional guarantee of payments due on the Convertible Preferred
Securities. See "Description of the Convertible Debentures" and "Description of
the Guarantee."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996;
(b) The Company's Proxy Statement dated January 10, 1997 for Special
Meeting of Stockholders.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Convertible Preferred Securities shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any or all
of the foregoing documents incorporated herein by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should be directed
to Investor Relations, Tosco Corporation, 72 Cummings Point Road, Stamford,
Connecticut 06902 (telephone (203) 977-1000).
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the matters discussed under the caption "Risk Factors" and
elsewhere in this Prospectus or in the information incorporated by reference
herein may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Reform Act") and as such
may involve known and unknown risks, uncertainties and other factors that may
cause the actual results, performance or achievements of Tosco to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. Some of the factors that may cause
such material differences are set forth herein under the caption "Risk Factors."
PROSPECTUS SUMMARY
The following summary does not purport to be complete and is qualified in
its entirety by the detailed information appearing elsewhere in the Prospectus
or incorporated by reference herein. All share and per share information set
forth in this Prospectus has been adjusted to reflect the Company's
three-for-one stock split distributed on February 25, 1997 to stockholders of
record on February 13, 1997.
THE COMPANY
Tosco is one of the largest independent refiners and marketers of petroleum
products in the United States, operating principally on the East and West Coasts
of the United States. Tosco, through its Avon Refinery located in the San
Francisco Bay Area, Ferndale Refinery located on Puget Sound north of Seattle,
and Bayway Refinery located in Linden, New Jersey, processes approximately
550,000 barrels per day of crude oil and other feedstocks into various petroleum
products. Tosco also owns a refinery located in Trainer, Pennsylvania, near
Philadelphia. Operations at this 150,000 barrel per day facility are currently
suspended and the plant is undergoing a modernization and upgrading program
which is expected to be completed by the summer of 1997, when operations are
expected to recommence. Through its retail distribution network, Tosco has
approximately 8,000,000 gallons per day of retail fuel sales. Upon completion of
the proposed acquisition of certain assets from Union Oil Company of California,
Tosco would be the largest independent refiner and marketer in the United States
with over 950,000 barrels per day of refining capacity and approximately
12,000,000 gallons per day of retail fuel sales through more than 5,300 sites.
Tosco has extensive distribution facilities and also engages in related
commercial activities throughout the United States and internationally. With the
acquisition of The Circle K Corporation in May 1996, Tosco is the nation's
largest operator of company-controlled convenience stores.
RECENT DEVELOPMENTS
On December 14, 1996, Tosco entered into a definitive Sale and Purchase
Agreement (the "Agreement") with Union Oil Company of California ("Unocal") to
acquire Unocal's West Coast petroleum refining, marketing and related supply and
transportation assets for a purchase price of approximately $1.4 billion, plus
the value of inventory as of the closing date (the "Acquisition"). In addition,
Unocal will be entitled to receive contingent participation payments over the
next seven years, up to a maximum amount of $250 million, if certain margins
exceed specified base indices. Consummation of the transaction is subject to a
number of conditions.
The assets to be acquired from Unocal include the following: two petroleum
refinery systems comprised of four sites in California with an aggregate
throughput capacity of 250,000 barrels per day; a retail gasoline system,
consisting of approximately 1,350 76-branded gasoline stations, approximately
1,100 of which are company- controlled, which currently sells over 100,000
barrels per day of gasoline and diesel fuel; a distribution system comprised of
13 company-owned oil storage terminals, three modern America-flag 40,000
deadweight-ton tankers and 1,500 miles of crude oil and product pipeline; the
worldwide rights to the "76" and "Union" brands, together with the
distinctive orange ball logo, in the petroleum refining and marketing
businesses; and Unocal's lubricants manufacturing, distribution and marketing
business.
<PAGE>
THE OFFERING
The Issuer....................... Tosco Corporation, a Nevada corporation, and
Tosco Financing Trust, a Delaware business
trust. The sole assets of the Trust consist
of the 5-3/4% Convertible Junior Subordinated
Debentures of Tosco.
Securities Offered................ 6,000,000 5-3/4% Trust Convertible Preferred
Securities, 5-3/4% Convertible Junior
Subordinated Debentures, Tosco Common Stock
issuable upon conversion, and the associated
Guarantee.
Selling Holders................... The Convertible Preferred Securities were
originally issued by the Trust and sold by
the Initial Purchasers in transactions exempt
from registration under the Securities Act to
persons reasonably believed to be "qualified
institutional buyers," "accredited
investors," or non-U.S. Persons in off-shore
transactions. These purchasers or their
transferees, pledgees, donees, or successors
may from time to time offer and sell,
pursuant to this Prospectus, the Offered
Securities. See "Selling Holders."
Distributions.................... Distributions on the Convertible Preferred
Securities will accrue from December 13,
1996, the first date of issuance of any
Convertible Preferred Securities, and will be
payable at the annual rate of 5-3/4% of the
liquidation amount of $50 per Convertible
Preferred Security. Subject to the
distribution deferral provisions described
below, distributions will be payable
quarterly in arrears on each March 15, June
15, September 15 and December 15, commencing
March 15, 1997. Because distributions on the
Convertible Preferred Securities constitute
interest for United States federal income tax
purposes, corporate holders thereof will not
be entitled to a dividends-received
deduction.
Distribution Deferral
Provisions....................... The ability of the Trust to pay distributions
on the Convertible Preferred Securities is
solely dependent on the receipt of interest
payments from Tosco on the Convertible
Debentures. Tosco has the right at any time,
and from time to time, to defer the interest
payments due on the Convertible Debentures
for successive Extension Periods not
exceeding 20 consecutive quarters each.
During an Extension Period, quarterly
distributions on the Convertible Preferred
Securities will be deferred by the Trust (but
will continue to accumulate quarterly and
will accrue interest) until the end of such
Extension Period. If a deferral of an
interest payment occurs, the holders of the
Convertible Preferred Securities will
continue to accrue income for United States
federal income tax purposes in advance of any
corresponding cash distribution. See "Risk
Factors-Delay of Interest Payments,"
United States Federal Income Taxation -
Potential Extension of Interest Payment
Period and Original Issue Discount,"
"Description of the Convertible Preferred
Securities-- Distributions" and "Description
of the Convertible Debentures-Option to
Extend Interest Payment Period."
Rights Upon Deferral of
Distribution..................... During any period in which interest payments
on the Convertible Debentures are deferred,
interest will accrue on the Convertible
Debentures and quarterly distributions will
continue to accumulate with interest thereon
at the distribution rate, compounded
quarterly. Tosco has agreed, among other
things, not to declare or pay any dividends,
on its capital stock during any Extension
Period. See "Risk Factors--Delay of Interest
Payments" and "Description of the Convertible
Debentures-Option to Extend Interest Payment
Period."
Conversion into Tosco Common
Stock........................... Each convertible Preferred Security is
convertible at any time beginning 90 days
following the latest date that any
Convertible Preferred Securities were issued
and prior to the close of business on the
Business Day prior to the maturity date of
the Convertible Debentures (or, in the case
of Convertible Preferred Securities called
for redemption, prior to the close of
business on the Business Day prior to the
Redemption Date) at the option of the holder
into shares of Tosco Common Stock, at the
rate of 1.51899 shares of Tosco Common Stock
for each Convertible Preferred Security
(equivalent to a conversion price of $32.92
per share of Tosco Common Stock), subject to
adjustment in certain circumstances. The
conversion price will be reset if the
acquisition by Tosco of Unocal Corporation's
West Coast petroleum refining, marketing and
related supply and transportation assets (the
"Acquisition") is terminated or not
consummated on or prior to December 31, 1997.
See "Description of the Convertible Preferred
Securities--Conversion Rights."
Liquidation Preference............ In the event of any liquidation of the Trust,
holders will be entitled to receive $50 per
Convertible Preferred Security plus an amount
equal to any accrued and unpaid distributions
thereon to the date of payment, unless
Convertible Debentures are distributed to
such holders. See "Description of the
Convertible Preferred Securities--Liquidation
Distribution upon Dissolution."
Redemption........................ The Convertible Debentures will be redeemable
for cash, at the option of the Company, in
whole or in part, from time to time on or
after December 18, 1999, at the prices
specified herein. The Convertible Debentures
may not be redeemed by Tosco if Tosco is in
arrears in payment of interest thereon. Upon
any redemption of the Convertible Debentures,
the Convertible Preferred Securities will be
redeemed at the Redemption Price plus accrued
and unpaid distributions thereon. The
Convertible Preferred Securities will not
have a stated maturity date, although they
will be subject to mandatory redemption upon
the repayment of the Convertible Debentures
at their stated maturity (December 15, 2026),
upon acceleration, earlier redemption or
otherwise. See "Description of the
Convertible Preferred Securities-Mandatory
Redemption" and "Description of the
Convertible Debentures-Redemption at the
Option of Tosco."
Guarantee........................ Tosco has irrevocably and unconditionally
guaranteed, to the extent set forth herein,
the payment in full of (i) distributions on
the Convertible Preferred Securities to the
extent the Trust has funds available
therefor, (ii) the amount payable upon
redemption of the Convertible Preferred
Securities to the extent the Trust has funds
available therefor and (iii) generally, the
liquidation preference of the Convertible
Preferred Securities to the extent the Trust
has assets available for distribution to
holders of Convertible Preferred Securities.
The Guarantee is unsecured, subordinate and
junior to all other liabilities of Tosco and
will rank pari passu in right of payments
with the most senior preferred stock issued,
from time to time, if any, by Tosco.
Voting Rights..................... Generally, holders of the Convertible
Preferred Securities will not have any voting
rights. However, if an Indenture Event of
Default (as defined herein) occurs and is
continuing, the holders of 25% of the
aggregate amount of the Convertible Preferred
Securities may direct the Institutional
Trustee (as defined herein) to declare the
principal of and interest on the Convertible
Debentures immediately due and payable. If
(i) the Institutional Trustee fails to
enforce its rights under the Convertible
Debentures or (ii) Tosco defaults under the
Guarantee with respect to the Convertible
Preferred Securities, a record holder of the
Convertible Preferred Securities may
institute a legal proceeding directly against
Tosco to enforce the Institutional Trustee's
rights without first instituting any legal
proceeding against the Trustee. See
"Description of the Convertible Preferred
Securities-Voting Rights."
Special Event Distribution;
Tax Event Redemption.............. Upon the occurrence of a Special Event (as
defined herein), Tosco may cause the Trust to
be dissolved and cause the Convertible
Debentures to be distributed to the holders
of the Convertible Preferred Securities. In
the case of a Tax Event (as defined herein),
Tosco may elect to cause the Convertible
Preferred Securities to remain outstanding
and pay Additional Interest (as defined
herein), if any, on the Convertible
Debentures. In certain circumstances upon the
occurrence of a Tax Event, the Convertible
Debentures may be redeemed by Tosco at 100%
of the principal amount thereof plus accrued
and unpaid interest thereon. See "Description
of the Convertible Preferred Securities -
Special Event Distribution; Tax Event
Redemption."
Convertible Junior Subordinated
Debentures of Tosco............... The Convertible Debentures will mature on
December 15, 2026, and bear interest at the
rate of 5-3/4% per annum, payable quarterly
in arrears. The Convertible Debentures will
have provisions with respect to interest,
optional redemption and conversion into Tosco
Common Stock and certain other terms
substantially similar or analogous to those
of the Convertible Preferred Securities. See
"Description of the Convertible Debentures"
and "Risk Factors- Subordinate Ranking of
Obligations Under the Guarantee and
Convertible Debentures."
Form, Denomination and
Registration...................... Convertible Preferred Securities may be
represented by a single, permanent global
security in fully registered form deposited
with the trustee and custodian for, and
registered in the name of a nominee of, DTC
(as defined herein) or purchasers may receive
definitive certificates for their securities.
Use of Proceeds................... The Selling Holders will receive all of the
proceeds from the sale of the Offered
Securities. Neither Tosco nor the Trust will
receive any proceeds from the sale of the
Offered Securities.
<PAGE>
RISK FACTORS
Prospective purchasers of Convertible Preferred Securities should carefully
review the information contained elsewhere in this Prospectus and should
particularly consider the following matters. Certain statements set forth below
under this caption constitute "forward-looking statements" within the meaning of
the Reform Act. See "Special Note Regarding Forward-Looking Statements" on page
5 for additional factors relating to such statements.
ACQUISITION OF UNOCAL REFINING AND MARKETING ASSETS
On December 14, 1996, Tosco entered into a definitive Sale and Purchase
Agreement (the "Agreement") with Unocal to acquire Unocal's West Coast petroleum
refining, marketing and related supply and transportation assets for a purchase
price of approximately $1.4 billion, plus the value of inventory as of the
closing date (the "Acquisition"). In addition, Unocal will be entitled to
receive contingent participation payments over the next seven years, up to a
maximum amount of $250 million, if the margin on dealer tank wagons exceeds a
base index and/or the differential between California Air Resources Board Phase
II gasoline and conventional gasoline exceeds a base index. For a period of 25
years, Unocal will be responsible for environmental liabilities arising out of
or relating to the period prior to the closing, except that Tosco will pay the
first $7 million of such environmental liabilities each year, plus 40% of any
amounts in excess of $7 million per year, with Unocal paying the remaining 60%
each year. The aggregate maximum amount that Tosco may have to pay in total for
25 years for such environmental liabilities is limited to $200 million.
Environmental liabilities assumed by Tosco pursuant to the Acquisition will be
reserved for at the time of Acquisition.
The assets to be acquired from Unocal include the following: two petroleum
refining systems comprised of four sites in California with an aggregate
throughput capacity of 250,000 barrels per day; a retail gasoline system,
consisting of approximately 1,350 76-branded gasoline stations, approximately
1,100 of which are company- controlled, which currently sells over 100,000
barrels per day of gasoline and diesel fuel; a distribution system comprised of
13 company-owned oil storage terminals, three modern American-flag 40,000
deadweight-ton tankers and 1,500 miles of crude oil and product pipeline; the
worldwide rights to the "76" and "Union" brands, together with the
distinctive orange ball logo, in the petroleum refining and marketing
businesses, except for pre-existing license grants relating to 76 Truckstops and
to Uno-Ven; and Unocal's lubricants manufacturing, distribution and marketing
business.
Consummation of the Acquisition is subject to the satisfaction of a number
of conditions, including obtaining governmental regulatory approvals and the
satisfaction of other conditions normally contained in transactions of this
type. Pursuant to the Agreement, on January 15, 1997, Tosco deposited into an
escrow account $1 billion in cash or equivalents and the right to receive $400
million of Common Stock of Tosco. Tosco will not be required to issue Common
Stock having a value of less than $15 per share. The number of shares of Common
Stock to which Unocal will be entitled will be determined based on the average
Tosco stock prices for the ten days preceding the date Unocal would be entitled
to receive such shares. If the price is below $15 per share, each of Tosco and
Unocal will have specified rights. If Unocal receives shares of Common Stock, it
will be granted registration rights to sell such shares and will enter into an
agreement with Tosco restricting its right to sell such shares or acquire
additional shares, agreeing to vote such shares at all stockholder meetings in
proportion to the votes of other stockholders and undertaking not to take or
influence the control of Tosco.
The Acquisition is presently expected to close around March 31, 1997. There
is no assurance that the Acquisition will be consummated or that it will be
consummated at that time. If the Acquisition is terminated or not consummated on
or prior to December 31, 1997, the conversion price of the Convertible Preferred
Securities will be reset. See "Description of the Convertible Preferred
Securities-Conversion Rights."
SUBORDINATE RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND CONVERTIBLE
DEBENTURES
Tosco's obligations under the Guarantee are subordinate and junior in right
of payment to all liabilities of Tosco and pari passu in right of payment with
the most senior preferred stock issued, from time to time, if any, by Tosco. The
obligations of Tosco under the Convertible Debentures are subordinate and junior
in right of payment to all present and future Senior Indebtedness (as defined
herein) of Tosco. No payment of principal (including redemption payments, if
any), premium, if any, or interest on the Convertible Debentures may be made if
(i) any Senior Indebtedness of Tosco is not paid when due and any applicable
grace period with respect to such default has ended with such default not having
been cured or waived or ceasing to exist or (ii) the maturity of any Senior
Indebtedness has been accelerated because of a default. Tosco also may not make
any payment upon or in respect of the Convertible Debentures if a default in the
payment of the principal of, premium, if any, interest or other obligations in
respect of Senior Indebtedness occurs and is continuing beyond any applicable
period of grace. There are no terms in the Convertible Preferred Securities, the
Convertible Debentures or the Guarantee that limit Tosco's ability to incur
additional indebtedness, including indebtedness that ranks senior to the
Convertible Debentures and the Guarantee, or to grant security interests to
secure outstanding or new indebtedness. As of January 31, 1997, Tosco has
approximately $1.7 billion of Senior Indebtedness outstanding. See "Description
of the Guarantee--Status of the Guarantee" and "Description of the Convertible
Debentures--Subordination."
LIMITATIONS OF THE GUARANTEE
The Guarantee Trustee (as defined herein) will hold the Guarantee for the
benefit of the holders of the Convertible Preferred Securities. Under the
Guarantee, Tosco guarantees payments to the holders of the Convertible Preferred
Securities to the extent of the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on the Convertible Preferred
Securities to the date of the payment to the extent the Trust has funds
available therefor or (b) the amount of assets of the Trust remaining available
for distribution to holders of the Convertible Preferred Securities in
liquidation of the Trust. Because the Guarantee is limited by the amount of the
funds in the Trust, if Tosco were to default on its obligation to pay amounts
payable on the Convertible Debentures, the Trust would lack available funds for
the payment of distributions or amounts payable on redemption of the Convertible
Preferred Securities or otherwise, and, in such event, holders of the
Convertible Preferred Securities would not be able to rely upon the Guarantee
for payment of such amounts. Instead, holders of the Convertible Preferred
Securities would rely on the enforcement (1) by the Institutional Trustee of its
rights as registered holder of the Convertible Debentures against Tosco pursuant
to the terms of the Convertible Debentures or (2) by such holder of its right of
Direct Action against Tosco as described below to enforce payments on the
Convertible Debentures. See "Description of the Guarantee-Events of Default."
The Declaration (as defined herein) provides that each holder of Convertible
Preferred Securities, by acceptance thereof, agrees to the provisions of the
Guarantee, including the subordination provisions thereof, and the Indenture.
LIMITATION OF ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF
CONVERTIBLE PREFERRED SECURITIES
If (i) Tosco Financing Trust falls to pay distributions in full on the
Convertible Preferred Securities (other than pursuant to a deferral) or (ii) a
Declaration Event of Default (as defined herein) occurs and is continuing, then
the holders of Convertible Preferred Securities would rely on the enforcement by
the Institutional Trustee of its rights as a holder of the Convertible
Debentures against Tosco. In addition, the holders of a majority in liquidation
amount of the Convertible Preferred Securities will have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Institutional Trustee or to direct the exercise of any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee to exercise the remedies available to
it as a holder of the Convertible Debentures. If the Institutional Trustee fails
to enforce its rights under the Convertible Debentures, a holder of Convertible
Preferred Securities may institute a legal proceeding directly against Tosco to
enforce the Institutional Trustee's rights under the Convertible Debentures
without first instituting any legal proceeding against the Institutional Trustee
or any other person or entity. Notwithstanding the foregoing, if a Declaration
Event of Default has occurred and is continuing and such event is attributable
to the failure of Tosco to pay interest or principal on the Convertible
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Convertible
Preferred Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the Convertible
Debentures having a principal amount equal to the aggregate liquidation amount
of the Convertible Preferred Securities of such holder (a "Direct Action") on or
after the respective due date specified in the Convertible Debentures. In
connection with such Direct Action, Tosco will be subrogated to the rights of
such holders of Convertible Preferred Securities under the Declaration to the
extent of any payment made by Tosco to such holder of Convertible Preferred
Securities in such Direct Action. The holders of Convertible Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of Convertible Debentures. See "Description of the Convertible
Preferred Securities--Declaration Events of Default."
DELAY OF INTEREST PAYMENTS
So long as Tosco shall not be in default in the payment of interest on the
Convertible Debentures, Tosco has the right under the Indenture to defer
payments of interest on the Convertible Debentures by extending the interest
payment period at any time, and from time to time, on the Convertible
Debentures. As a consequence of such an extension, quarterly distributions on
the Convertible Preferred Securities would be deferred by the Trust during any
such Extension Period. Prior to the termination of any such Extension Period,
Tosco may further extend such Extension Period; provided, that such Extension
Period, together will all such previous and further extensions thereof, may not
exceed 20 consecutive quarters or extend beyond the maturity of the Convertible
Debentures. Upon the termination of any Extension Period and the payment of all
amounts then due, Tosco may commence a new Extension Period, subject to the
above requirements. See "Description of the Convertible Preferred
Securities-Distributions" and "Description of the Convertible Debentures-Option
to Extend Interest Payment Period."
Should Tosco exercise its right to defer payments of interest by extending
the interest payment period, each holder of Convertible Preferred Securities
will continue to accrue income (as original issue discount ("OID")) in respect
of the deferred and compounded interest allocable to its Convertible Preferred
Securities for United States federal income tax purposes, which will be
allocated but not distributed to holders of record of Convertible Preferred
Securities. As a result, each such holder of Convertible Preferred Securities
will recognize income for United States federal income tax purposes in advance
of the receipt of cash and will not receive the cash from Tosco Financing Trust
related to such income if such holder disposes of its Convertible Preferred
Securities prior to the record date for the date on which distributions of such
amounts are made. Tosco has no current intention of exercising its right to
defer payments of interest by extending the interest payment period of the
Convertible Debentures. However, should Tosco determine to exercise such right
in the future, the market price of the Convertible Preferred Securities is
likely to be materially adversely affected. A holder that disposes of its
Convertible Preferred Securities during an Extension Period, therefore, might
not receive the same return on its investment as a holder that continues to hold
its Convertible Preferred Securities. In addition, as a result of the existence
of Tosco's right to defer interest payments, the market price of the Convertible
Preferred Securities (which represent an undivided beneficial interest in the
Convertible Debentures) may be more volatile than other OID securities that do
not have such interest deferral rights. See "United States Federal Income
Taxation-Potential Extension of Interest Payment Period and Original Issue
Discount."
ADVERSE CONSEQUENCES OF PROPOSED TAX LEGISLATION
President Clinton's fiscal 1998 budget proposal contains provisions which
if enacted would treat as equity for United States federal income tax purposes
instruments that have a maximum term of more than 15 years and that are not
shown as indebtedness on the balance sheet of the issuer, and would disallow
interest deductions on certain convertible debt instruments. Since these
proposals, if enacted in their current form, would apply with respect to
instruments issued after first committee action, it is not anticipated that such
proposals would apply to the Convertible Debentures if they are issued prior to
the date of such action. Similar proposals were contained in President Clinton's
fiscal 1997 budget proposal, but if enacted as then written would have had a
retroactive effect. There can be no assurance that any legislation enacted after
the date hereof will not adversely affect the tax treatment of the Convertible
Debentures.
If legislation is enacted that adversely affects the tax treatment of the
Convertible Debentures, such legislation could result in the distribution of the
Convertible Debentures to holders of the Convertible Preferred Securities or, in
certain limited circumstances, the redemption of such securities by the Company
and the distribution of the resulting cash in redemption of the Convertible
Preferred Securities. See "Description of the Convertible Preferred
Securities--Special Event Distribution; Tax Event Redemption."
SPECIAL EVENT DISTRIBUTION; TAX EVENT REDEMPTION
Upon the occurrence of a Special Event (as defined herein), Tosco Financing
Trust could be dissolved (with the consent of Tosco), except in the limited
circumstance described below, with the result that the Convertible Debentures
would be distributed to the holders of the Trust Securities in connection with
the liquidation of the Trust. In certain circumstances, Tosco would have the
right to redeem the Convertible Debentures, in whole or in part, in lieu of a
distribution of the Convertible Debentures by the Trust, in which event the
Trust would redeem the Trust Securities on a pro rata basis to the same extent
as the Convertible Debentures are redeemed by Tosco. See "Description of the
Convertible Preferred Securities-Special Event Distribution; Tax Event
Redemption."
Under current United States federal income tax law, a distribution of
Convertible Debentures upon the dissolution of Tosco Financing Trust would not
be a taxable event to holders of the Convertible Preferred Securities. Upon
occurrence of a Special Event, however, a dissolution of Tosco Financing Trust
in which holders of the Convertible Preferred Securities receive cash would be a
taxable event to such holders. See "United States Federal Income
Taxation-Receipt of Convertible Debentures or Cash Upon Liquidation of the
Trust."
There can be no assurance as to the market prices for the Convertible
Preferred Securities or the Convertible Debentures that may be distributed in
exchange for Convertible Preferred Securities if a dissolution or liquidation of
the Trust were to occur. Accordingly, the Convertible Preferred Securities that
an investor may purchase, whether pursuant to the offer made hereby or in the
secondary market, or the Convertible Debentures that a holder of Convertible
Preferred Securities may receive on dissolution and liquidation of the Trust,
may trade at a discount to the price that the investor paid to purchase the
Convertible Preferred Securities offered hereby. Because holders of Convertible
Preferred Securities may receive Convertible Debentures upon the occurrence of a
Special Event, prospective purchasers of Convertible Preferred Securities are
also making an investment decision with regard to the Convertible Debentures and
should carefully review all the information regarding the Convertible Debentures
contained herein. See "Description of the Convertible Preferred
Securities-Special Event Distribution; Tax Event Redemption" and "Description of
the Convertible Debentures-General."
ABSENCE OF VOTING RIGHTS
Generally, holders of the Convertible Preferred Securities will not have
any voting rights with respect to Tosco's governance, nor will they be entitled
to vote to appoint, remove or replace, or to increase or decrease the number of
TFT Trustees (as defined herein), which voting rights are vested exclusively in
the holder of the Common Securities. See "Description of the Convertible
Preferred Securities-Voting Rights."
TRADING PRICE
The Convertible Preferred Securities may trade at a price that does not
fully reflect the value of accrued but unpaid interest with respect to the
underlying Convertible Debentures. A holder who disposes of Convertible
Preferred Securities between record dates for payments of distributions thereon
will be required to include accrued but unpaid interest on the Convertible
Debentures through the date of disposition in income as ordinary income (i.e.,
OID), and to add such amount to the adjusted tax basis in the holder's pro rata
share of the underlying Convertible Debentures deemed disposed of. To the extent
the selling price is less than the holder's adjusted tax basis (which will
include, in the form of OID, all accrued but unpaid interest), a holder will
record a capital loss. Subject to certain limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes. See "United States Federal Income Taxation-Potential Extension of
Interest Payment Period and Original Issue Discount" and "-Sales of Convertible
Preferred Securities."
ABSENCE OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED SECURITIES ON RESALE
Although the Initial Purchasers have advised Tosco that they currently
intend to make a market in the Convertible Preferred Securities, they are not
obligated to do so and may discontinue such market making at any time without
notice. In addition, such market-making activity will be subject to the limits
imposed by the Securities Act and the Exchange Act. Accordingly, there can be no
assurance that any market for the Convertible Preferred Securities will develop
or, if one does develop, that it will be maintained. If an active market for the
Convertible Preferred Securities fails to develop or be sustained, the trading
price of such Convertible Preferred Securities could be materially adversely
affected.
ACCOUNTING TREATMENT
For financial reporting purposes, the Trust is treated as a subsidiary of
Tosco and, accordingly, the accounts of the Trust will be included in the
consolidated financial statements of Tosco. The Convertible Preferred Securities
will be presented as a separate line item in the consolidated balance sheet of
Tosco entitled "Company- obligated mandatorily redeemable convertible preferred
securities of Tosco Financing Trust holding solely 5 3/4% convertible junior
subordinated debentures of Tosco," and appropriate disclosures about the
Convertible Preferred Securities, the Guarantee and the Convertible Debentures
will be included in the notes to the Company's consolidated financial
statements. For financial reporting purposes, Tosco will record distributions
payable on the Convertible Preferred Securities as a charge to earnings in
Tosco's consolidated statement of operations.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the periods indicated.
- ------------------------------------------------------------------------------
YEARS ENDED DECEMBER 31,
- ------------------------------------------------------------------------------
1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------
3.00x 2.49x 2.83x 3.28x 2.71x
For the purpose of computing the above ratio, earnings consist of
consolidated income from operations before income taxes and fixed charges. Fixed
charges consist of interest on outstanding debt, one third (the proportion
deemed representative of the interest factor) of net rentals and amortization of
debt discount and expense.
THE COMPANY
Tosco is one of the largest independent refiners and marketers of petroleum
products in the United States, operating principally on the East and West Coasts
of the United States. Tosco, through its Avon Refinery located in the San
Francisco Bay Area, Ferndale Refinery located on Puget Sound north of Seattle,
and Bayway Refinery located in Linden, New Jersey, processes approximately
550,000 barrels per day of crude oil and other feedstocks into various petroleum
products. Tosco also owns a refinery located in Trainer, Pennsylvania, near
Philadelphia. Operations at this 150,000 barrel per day facility are currently
suspended and the plant is undergoing a modernization and upgrading program
which is expected to be completed by the summer of June 1997, when operations
are expected to recommence. Through its retail distribution network, Tosco has
approximately 8,000,000 gallons per day of retail fuel sales. Tosco has
extensive distribution facilities and also engages in related commercial
activities throughout the United States and internationally. With the
acquisition of The Circle K Corporation in May 1996, Tosco is the nation's
largest operator of company-controlled convenience stores.
On December 14, 1996, Tosco entered into a definitive agreement to acquire
the West Coast petroleum refining, marketing and related supply and
transportation assets of Union Oil Company of California ("Unocal"). Upon
completion of the proposed acquisition, Tosco would be the largest independent
refiner and marketer in the United States, with over 950,000 barrels per day of
refining capacity and approximately 12,000,000 gallons per day of retail fuel
sales through more than 5,300 sites.
Tosco was incorporated under the laws of the State of Nevada in 1955. Its
principal executive offices are located at 72 Cummings Point Road, Stamford,
Connecticut 06902 and its telephone number is (203) 977-1000.
TOSCO FINANCING TRUST
Tosco Financing Trust is a statutory business trust formed under Delaware
law pursuant to (i) the Declaration of Trust, dated as of December 4, 1996, as
amended by the Amended and Restated Declaration of Trust dated as of December
13, 1996 (the "Declaration") executed by Tosco, as sponsor (the "Sponsor"), and
the trustees of Tosco Financing Trust (the "TFT Trustees") and (ii) the filing
of a certificate of trust with the Secretary of State of the State of Delaware
on December 6, 1996. Tosco owns, directly or indirectly, all of the Common
Securities of the Trust, which have an aggregate liquidation amount equal to 3%
of the total capital of Tosco Financing Trust. Tosco Financing Trust exists for
the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust, (ii) investing the
gross proceeds of the Trust Securities in the Convertible Debentures and (iii)
engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of TFT Trustees is currently five.
Three of the TFT Trustees (the "Regular Trustees") are persons who are employees
or officers of or who are affiliated with Tosco. The fourth trustee is a
financial institution that maintains its principal place of business in the
state of Delaware (the "Delaware Trustee"). The fifth Trustee (the
"Institutional Trustee") is a financial institution that is unaffiliated with
Tosco and serves as institutional trustee under the Declaration and acts as
indenture trustee under the Declaration for the purposes of compliance with the
provisions of the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act"). The Bank of New York, a New York banking corporation, currently serves as
the Institutional Trustee until removed or replaced by the holder of the Common
Securities. The Bank of New York acts as trustee (the "Guarantee Trustee") under
the Guarantee and State Street Bank and Trust Company acts as Debt Trustee (as
defined herein) under the Indenture. The Bank of New York (Delaware), an
affiliate of the Institutional Trustee, acts as Delaware Trustee. See
"Description of the Convertible Preferred Securities-Voting Rights."
The Institutional Trustee holds title to the Convertible Debentures for the
benefit of the holders of the Trust Securities and the Institutional Trustee has
the power to exercise all rights, powers and privileges under the Indenture as
the holder of the Convertible Debentures. In addition, the Institutional Trustee
maintains exclusive control of a segregated non-interest bearing bank account
(the "Property Account") to hold all payments made in respect of the Convertible
Debentures for the benefit of the holders of the Trust Securities. The
Institutional Trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the Trust Securities out
of funds from the Property Account. The Guarantee Trustee holds the Guarantee
for the benefit of the holders of the Convertible Preferred Securities. Tosco,
as the direct or indirect holder of all of the Common Securities, has the right
to appoint, remove or replace any TFT Trustee and to increase or decrease the
number of TFT Trustees. Tosco pays all fees and expenses related to Tosco
Financing Trust and the offering of the Trust Securities. See "Description of
the Convertible Debentures-Miscellaneous."
The rights of the holders of the Convertible Preferred Securities,
including economic rights, rights to information and voting rights, are set
forth in the Declaration and the Delaware Business Trust Act (the "Trust Act").
The Declaration, the Indenture and the Guarantee also incorporate by reference
the terms of the Trust Indenture Act. The Declaration, the Indenture and the
Guarantee will be qualified under the Trust Indenture Act.
DESCRIPTION OF THE CONVERTIBLE PREFERRED SECURITIES
The Convertible Preferred Securities were issued pursuant to the terms of
the Declaration. The Declaration incorporates by reference terms of the Trust
Indenture Act. The Declaration will be qualified under the Trust Indenture Act.
The Institutional Trustee, The Bank of New York, acts as indenture trustee for
the Convertible Preferred Securities under the Declaration for purposes of
compliance with the provisions of the Trust Indenture Act. The terms of the
Convertible Preferred Securities include those stated in the Declaration and
those made part of the Declaration by the Trust Indenture Act. The following
summary of the material terms and provisions of the Convertible Preferred
Securities is subject to, and qualified in its entirety by reference to, the
Declaration, the Trust Act and the Trust Indenture Act.
GENERAL
The Declaration authorized the Regular Trustees to issue, on behalf of the
Trust, the Trust Securities, which represent undivided beneficial interests in
the assets of the Trust. All of the Common Securities are owned, directly or
indirectly, by Tosco. The Common Securities rank pari parsu, and payments will
be made thereon on a pro rata basis, with the Convertible Preferred Securities,
except that upon the occurrence and during the continuance of a Declaration
Event of Default, the rights of the holders of the Common Securities to receive
payment of periodic distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the Convertible
Preferred Securities. The Declaration does not permit the issuance by the Trust
of any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. Pursuant to the Declaration, the Institutional
Trustee holds the Convertible Debentures purchased by the Trust for the benefit
of the holders of the Trust Securities. The payment of distributions out of
money held by the Trust, and payments upon redemption of the Convertible
Preferred Securities or liquidation of the Trust, are guaranteed by Tosco to the
extent described under "Description of the Guarantee." The Guarantee is held by
The Bank of New York, the Guarantee Trustee, for the benefit of the holders of
the Convertible Preferred Securities. The Guarantee does not cover payment of
distributions when the Trust does not have sufficient available funds to pay
such distributions. In such event, the remedy of a holder of Convertible
Preferred Securities is to vote to direct the Institutional Trustee to enforce
the Institutional Trustee's rights under the Convertible Debentures or, in
certain limited circumstances, to take Direct Action. See "-Voting Rights" and
"-Declaration Events of Default."
DISTRIBUTIONS
Distributions on the Convertible Preferred Securities are fixed at a rate
per annum of 5 3/4% of the stated liquidation amount of $50 per Convertible
Preferred Security. Distributions in arrears for more than one quarter will
accrue interest thereon at the distribution rate, compounded quarterly. The term
"distribution" as used herein includes any such interest payable unless
otherwise stated. The amount of distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Distributions on the Convertible Preferred Securities will be cumulative,
will accrue from the first date that any Convertible Preferred Securities are
issued, and will be payable quarterly in arrears on March 15, June 15, September
15 and December 15 of each year, commencing March 15, 1997, when, as and if
available for payment. Distributions will be made by the Institutional Trustee,
except as otherwise described below.
So long as Tosco shall not be in default in the payment of interest on the
Convertible Debentures, Tosco has the right under the Indenture to defer
payments of interest on the Convertible Debentures by extending the interest
payment period from time to time on the Convertible Debentures, which, if
exercised, would defer quarterly distributions on the Convertible Preferred
Securities (though such distributions would continue to accumulate with interest
thereon at the distribution rate, compounded quarterly, since interest would
continue to accrue on the Convertible Debentures) during any such Extension
Period. Such right to extend the interest payment period for the Convertible
Debentures is limited to a period not exceeding 20 consecutive quarters and such
period may not extend beyond the maturity of the Convertible Debentures. In the
event that Tosco exercises this right, then (a) Tosco shall not declare or pay
dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
(other than (i) purchases or acquisitions of shares of Tosco Common Stock in
connection with the satisfaction by Tosco of its obligations under any employee
benefit plans, (ii) as a result of a reclassification of Tosco capital stock or
the exchange or conversion of one class or series of Tosco's capital stock for
another class or series of Tosco's capital stock or (iii) the purchase of
fractional interests in shares of Tosco's capital stock pursuant to the
conversion or exchange provisions of such Tosco capital stock or the security
being converted or exchanged for Tosco capital stock), (b) Tosco shall not make
any payment of interest, principal or premium, if any, on or repay, repurchase
or redeem any debt securities issued by Tosco that rank pari passu with or
junior to the Convertible Debentures and (c) Tosco shall not make any guarantee
payments with respect to the foregoing (other than pursuant to the Guarantee).
Prior to the termination of any such Extension Period, Tosco may further extend
the interest payment period; provided that such Extension Period, together with
all such previous and further extensions, may not exceed 20 consecutive quarters
or extend beyond the maturity of the Convertible Debentures. Upon the
termination of any Extension Period and the payment of all amounts then due,
Tosco may commence a new Extension Period, subject to the above requirements.
See "Description of the Convertible Debentures-Interest" and "-Option to Extend
Interest Payment Period." If distributions are deferred, the deferred
distributions and accrued interest thereon shall be paid to holders of record of
the Convertible Preferred Securities as they appear on the books and records of
the Trust on the record date next following the termination of such deferral
period.
Distributions on the Convertible Preferred Securities must be paid on the
date payable to the extent that the Trust has funds available for the payment of
such distributions. The Trust's funds available for distribution to the holders
of the Convertible Preferred Securities will be limited to payments received
from Tosco on the Convertible Debentures. See "Description of the Convertible
Debentures." The payment of distributions out of monies held by the Trust is
guaranteed by Tosco to the extent set forth under "Description of the
Guarantee."
Distributions on the Convertible Preferred Securities will be payable to
the holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which will be fifteen days prior to the relevant payment
dates. Such distributions will be paid through the Institutional Trustee who
will hold amounts received in respect of the Convertible Debentures for the
benefit of the holders of the Trust Securities. Subject to any applicable laws
and regulations and the provisions of the Declaration, each such payment will be
made as described under "-Form, Denomination and Registration" below. In the
event that any date on which distributions are to be made on the Convertible
Preferred Securities is not a Business Day, then payment of the distributions
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such record date. A "Business Day"
shall mean any day other than Saturday, Sunday or any other day on which banking
institutions in New York City are permitted or required by any applicable law to
close.
CONVERSION RIGHTS
General. The Convertible Preferred Securities are convertible at any time
beginning March 17, 1997 through the close of business on the Business Day prior
to the maturity date of the Convertible Debentures (or, in the case of
Convertible Preferred Securities called for redemption, prior to the close of
business on the Business Day prior to the Redemption Date) (the "Conversion
Expiration Date"), at the option of the holders thereof and in the manner
described below, into shares of Tosco Common Stock at an initial conversion rate
of 1.51899 shares of Tosco Common Stock for each Convertible Preferred Security
(equivalent to a conversion price (the "Conversion Price") of $32.92 per share
of Tosco Common Stock), subject to adjustment as described under "Conversion
Price Adjustments-General" below. The Conversion Price will be reset if Tosco's
agreement to consummate the Acquisition is terminated or if the Acquisition is
not consummated on or prior to December 31, 1997 (the "Date of Non-Completion").
Within one Business Day after the Date of Non-Completion, Tosco will provide
notice thereof (the "Notice of Non-Completion") to the holders of the
Convertible Preferred Securities. Upon the occurrence of the Date of
Non-Completion, the Conversion Price of the Convertible Preferred Securities
will be adjusted to the lower of (a) the Conversion Price in effect immediately
prior to the Date of Non-Completion and (b) the product of (i) the average of
the reported last sale price of a share of Tosco Common Stock on the New York
Stock Exchange for the ten trading days beginning two trading days after the
Date of Non-Completion and (ii) 125% (which represents the Conversion Price
divided by the reported last sale price of a share of Tosco Common Stock on the
New York Stock Exchange on December 10, 1996 (the "Ratio")); provided, however,
that in no event shall the Conversion Price be reset to less than $25.05
($20.04, the reported last sale price of a share of Tosco Common Stock on
November 15, 1996, the last trading day prior to the announcement of the
Acquisition, multiplied by the Ratio).
The terms of the Convertible Preferred Securities provide that a holder of
a Convertible Preferred Security wishing to exercise its conversion right shall
surrender such Convertible Preferred Security, together with an irrevocable
conversion notice, to the Institutional Trustee, as conversion agent (the
"Conversion Agent") which shall, on behalf of such holder, exchange such
Convertible Preferred Security for a portion of the Convertible Debentures and
immediately convert an equivalent amount of Convertible Debentures into Tosco
Common Stock. Holders may obtain copies of the required form of the conversion
notice from the Conversion Agent. Additional procedures for converting
book-entry Convertible Preferred Securities into shares of Tosco Common Stock
are described below under "-Form, Denomination and Registration."
Accrued distributions will not be paid on the Convertible Preferred
Securities that are converted, provided, however that if any Convertible
Preferred Security is converted on or after a record date for payment of
distributions thereon, the distributions payable on the related payment date
with respect to such Convertible Preferred Security shall be distributed to the
holder, despite such conversion; provided further, that if a Redemption Date
falls between such record date and the related distribution payment date, the
amount of such payment shall include distributions accrued to, but excluding,
such Redemption Date. Except as provided in the immediately preceding sentence,
neither the Trust nor Tosco shall make any payment, allowance or adjustment for
accumulated and unpaid distributions, whether or not in arrears, on converted
Convertible Preferred Securities. Tosco will make no payment or allowance for
distributions on the shares of Tosco Common Stock issued upon such conversion,
except to the extent that such shares of Tosco Common Stock are held of record
on the record date for any such distributions.
No fractional shares of Tosco Common Stock will be issued as a result of
conversion, but in lieu thereof such fractional interest will be paid by Tosco
in cash based on the current market price of Tosco Common Stock on the date such
Convertible Preferred Securities are surrendered for conversion.
Conversion Price Adjustments-General. The initial conversion price of
$32.92 per share of Tosco Common Stock is subject to adjustment (under formulae
set forth in the Indenture) in certain events, including (i) the issuance of
shares of Tosco Common Stock as a dividend or a distribution with respect to
Tosco Common Stock, (ii) certain subdivisions and combinations of Tosco Common
Stock, (iii) the issuance to all holders of Tosco Common Stock of certain rights
or warrants entitling them to subscribe for or purchase shares of Tosco Common
Stock, (iv) the distribution to all holders of Tosco Common Stock of shares of
capital stock (other than Tosco Common Stock) or evidences of indebtedness of
Tosco or of assets (including securities, but excluding those rights, warrants,
dividends and distributions referred to above or paid in cash), (v)
distributions consisting of cash, excluding any quarterly cash dividend on Tosco
Common Stock to the extent that the aggregate cash dividend per share of Tosco
Common Stock in any quarter does not exceed the greater of (x) the amount per
share of Tosco Common Stock of the next preceding quarterly dividend on Tosco
Common Stock to the extent that such preceding quarterly dividend did not
require an adjustment of the conversion rate pursuant to this clause (v) (as
adjusted to reflect subdivisions or combinations of Tosco Common Stock), and (y)
3.75% of the average of the daily Closing Price (as defined in the Indenture) of
Tosco Common Stock during the ten consecutive Trading Days (as defined in the
Indenture) immediately prior to the date of declaration of such dividend, and
excluding any dividend or distribution in connection with the liquidation,
dissolution or winding-up of Tosco, (vi) payment to holders of Tosco Common
Stock in respect of a tender or exchange offer by Tosco or any subsidiary for
Tosco Common Stock to the extent that the cash and value of any other
consideration included in such payment per share of Tosco Common Stock exceeds
the Closing Price (as defined in the Indenture) per share of Common Stock on the
Trading Day next succeeding the last date on which tenders or exchanges may be
made pursuant to such tender or exchange offer, and (vii) payment in respect of
a tender offer or exchange offer by a person other than Tosco or any subsidiary
of Tosco in which, as of the closing date of the offer, the Board of Directors
is not recommending rejection of the offer. If an adjustment is required to be
made as set forth in clause (v) above as a result of a distribution that is a
quarterly dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded pursuant to such clause (v). If an adjustment is required to be made
based upon the full amount of the distribution that is not a quarterly dividend,
such adjustment would be based upon the lull amount of the distribution. The
adjustment referred to in clause (vii) above will only be made (A) if the tender
offer or exchange offer is for an amount that increases that person's ownership
of Tosco Common Stock to more than 25% of the total shares of Tosco Common Stock
outstanding and (B) if the cash and value of any other consideration included in
such payment per share of Tosco Common Stock exceeds the Closing Price per share
of Tosco Common Stock on the Business Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender or exchange offer. The
adjustment referred to in clause (vii) above will not be made, however, if, as
of the closing of the offer, the offering documents with respect to such offer
disclose a plan or an intention to cause Tosco to engage in a consolidation or
merger of Tosco or a sale of all or substantially all of Tosco's assets. The
Convertible Debentures provide for corresponding anti-dilution adjustments.
Tosco from time to time may to the extent permitted by law reduce the
conversion price of the Convertible Debentures (and thus the conversion price of
the Convertible Preferred Securities) by any amount for any period of at least
20 days, in which case Tosco shall give at least 15 days' notice of such
reduction, if the Tosco Board of Directors has made a determination that such
reduction would be in the best interests of Tosco, which determination shall be
conclusive. Tosco may, at its option, make such reductions in the conversion
price, in addition to those set forth above, as the Tosco Board of Directors
deems advisable to avoid or diminish any income tax to holders of Tosco 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. See "United
States Federal Income Taxation-Adjustment of Conversion Price."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least one percent (1%) in the conversion
price then in effect; provided however that any adjustment that would not be
required to be made shall be carried forward and taken into account in any
subsequent adjustment. If any action would require adjustment of the conversion
price pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value to the holder of the Convertible Preferred
Securities. Except as stated above, the conversion price will not be adjusted
for the issuance of Tosco Common Stock or any securities convertible into or
exchangeable for Tosco Common Stock or carrying the right to purchase any of the
foregoing.
Conversion Price Adjustments-Merger, Consolidation or Sale of Assets of
Tosco. If any transaction shall occur (including without limitation (i) any
recapitalization or reclassification of shares of Tosco 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 Tosco Common
Stock), (ii) any consolidation or merger of Tosco with or into another person or
any merger of another person into Tosco (other than a merger that does not
result in a reclassification, conversion, exchange or cancellation of Tosco
Common Stock), (iii) any sale or transfer of all or substantially all of the
assets of Tosco, or (iv) any compulsory share exchange) pursuant to which either
shares of Tosco Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of Tosco, the holders of Tosco Common Stock
shall be entitled to receive other securities, cash or other property, then
appropriate provision shall be made so that the holder of each Convertible
Preferred Security then outstanding shall have the right thereafter to convert
such Convertible Preferred Security only into:
(x) in the case of any such transaction that does not constitute a Common
Stock Fundamental Change (as defined below) and subject to funds being legally
available for such purpose under applicable law at the time of such conversion,
the kind and amount of the securities, cash or other property that would have
been receivable upon such recapitalization, reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of
Tosco Common Stock issuable upon conversion of such Convertible Preferred
Security immediately prior to such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange, after giving effect, in
the case of any Non-Stock Fundamental Change (as defined below), to any
adjustment in the conversion price in accordance with clause (i) of the second
following paragraph, and
(y) in the case of any such transaction that constitutes a Common Stock
Fundamental Change, common stock of the kind received by holders of Tosco Common
Stock as a result of such Common Stock Fundamental Change in an amount
determined in accordance with clause (ii) of the second following paragraph.
The company formed by such consolidation or resulting from such merger or
that acquires assets or that acquires Tosco's shares, as the case may be, shall
make provisions 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 that,
for events subsequent to the effective date of such certificate or articles of
incorporation or other constituent documents, shall be as nearly equivalent as
may be practicable to the relevant adjustments provided for in the preceding
paragraphs and in this paragraph.
Notwithstanding any other provision in the preceding paragraphs to the
contrary, if any Fundamental Change (as defined below) occurs, then the
conversion price in effect will be adjusted immediately after such Fundamental
Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the conversion price of
the Convertible Preferred Securities immediately following such Non-Stock
Fundamental Change shall be the lower of (A) the conversion price in effect
immediately prior to such Non-Stock Fundamental Change, but after giving effect
to any other prior adjustments effected pursuant to the preceding paragraphs,
and (B) the product of (l) the greater of the Applicable Price (as defined
below) and the then applicable Reference Market Price (as defined below) and (2)
a fraction, the numerator of which is $50 and the denominator of which is (x)
the amount of the redemption price for one Convertible Preferred Security if the
redemption date were the date of such Non-Stock Fundamental Change (or, for the
twelve-month periods commencing December 18, 1996, December 18, 1997 and
December 18, 1998, the product of 105.750%, 105.175% and 104.600%, respectively,
times $50) plus (y) any then-accrued and unpaid distributions on one Convertible
Preferred Security; and
(ii) in the case of a Common Stock Fundamental Change, the conversion price
of Convertible Preferred Securities immediately following such Common Stock
Fundamental Change shall be the conversion price in effect immediately prior to
such Common Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to the preceding paragraphs, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price (as defined below)
and the denominator of which is the Applicable Price; provided however, that in
the event of a Common Stock Fundamental Change in which (A) 100% of the value of
the consideration received by a holder of Tosco Common Stock is common stock of
the successor, acquirer or other third party (and cash, if any, paid with
respect to any fractional interests in such common stock resulting from such
Common Stock Fundamental Change) and (B) all of the Tosco Common Stock shall
have been exchanged for, converted into or acquired for, common stock of the
successor, acquirer or other third party (and any cash with respect to
fractional interests), the conversion price of the Convertible Preferred
Securities immediately following such Common Stock Fundamental Change shall be
the conversion price in effect immediately prior to such Common Stock
Fundamental Change multiplied by a fraction, the numerator of which is one (1)
and the denominator of which is the number of shares of common stock of the
successor, acquirer or other third party received by a holder of one share of
Tosco Common Stock as a result of such Common Stock Fundamental Change.
Depending upon whether a Fundamental Change is a Non-Stock Fundamental
Change or a Common Stock Fundamental Change, a holder may receive significantly
different consideration upon conversion. In the event of a Non-Stock Fundamental
Change, the holder has the right to convert Convertible Preferred Securities
into the kind and amount of the shares of stock and other securities or property
or assets (including cash), except as otherwise provided above, as is determined
by the number of shares of Tosco Common Stock receivable upon conversion at the
conversion price as adjusted in accordance with clause (i) of the preceding
paragraph. However, in the event of a Common Stock Fundamental Change in which
less than 100% of the value of the consideration received by a holder of Tosco
Common Stock is common stock of the successor, acquirer or other third party, a
holder of a Convertible Preferred Security who converts such share following the
Common Stock Fundamental Change will receive consideration in the form of such
common stock only, whereas a holder who converted such share prior to the Common
Stock Fundamental Change would have received consideration in the form of such
common stock as well as any other securities or assets (which may include cash)
issuable upon conversion of such Convertible Preferred Security immediately
prior to such Common Stock Fundamental Change.
The term "Applicable Price" means (i) in the event of a Non-Stock
Fundamental Change in which the holders of Tosco Common Stock receive only cash,
the amount of cash received by a holder of one share of Tosco Common Stock and
(ii) in the event of any other Fundamental Change, the average of the daily
Closing Price (as defined in the Indenture) for one share of Tosco Common Stock
during the 10 Trading Days immediately prior to the record date for the
determination of the holders of Tosco Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change
or, if there is no such record date, prior to the date upon which the holders of
Tosco Common Stock shall have the right to receive such cash, securities,
property or other assets.
The term "Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of Tosco) of the consideration received by holders of Tosco Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) Tosco
continues to exist after the occurrence of such Fundamental Change and the
outstanding Convertible Preferred Securities continue to exist as outstanding
Convertible Preferred Securities, or (ii) not later than the occurrence of such
Fundamental Change, the outstanding Convertible Preferred Securities are
converted into or exchanged for shares of convertible preferred stock or
debentures of a corporation succeeding to the business of Tosco, which
convertible preferred stock has powers, preferences and relative, participating,
optional or other rights, and qualifications, limitations and restrictions
substantially similar to those of the Convertible Preferred Securities and which
debentures have terms substantially similar to those of the Convertible
Debentures.
The term "Fundamental Change" means the occurrence of any transaction or
event or series of transactions or events pursuant to which all or substantially
all of the Tosco Common Stock shall be exchanged for, converted into, acquired
for or shall constitute solely the right to receive cash, securities, property
or other assets (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the conversion price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Tosco
Common Stock shall have been exchanged for, converted into or acquired for, or
shall constitute solely the right to receive, such cash, securities, property or
other assets, but the adjustment shall be based upon the consideration that the
holders of Tosco Common Stock received in the transaction or event as a result
of which more than 50% of the Tosco Common Stock shal1 have been exchanged for,
converted into or acquired for, or shall constitute solely the right to receive,
such cash, securities, property or other assets.
The term "Non-Stock Fundamental Change" means any Fundamental Change other
than a Common Stock Fundamental Change.
The term "Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Tosco Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of Tosco Common Stock entitled to
receive such common stock or, if there is no such date, prior to the date upon
which the holders of Tosco Common Stock shall have the right to receive such
common stock.
The Term "Reference Market Price" shall initially mean $17.56 (which is an
amount equal to 66-2/3% of the reported last sale price for Tosco Common Stock
on the New York Stock Exchange on December 10,1996) and, in the event of any
adjustment to the conversion price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the conversion price after giving effect to any
such adjustment shall also be the same as the ratio of the initial Reference
Market Price to the initial conversion price of $32.92 per share.
MANDATORY REDEMPTION
The Convertible Debentures will mature on December 15, 2026, and may be
redeemed, in whole or in part, at any time on or after December 18, 1999, or at
any time in certain circumstances upon the occurrence of a Special Event (as
defined below). Upon the repayment of the Convertible Debentures, whether at
maturity or upon redemption, the proceeds from such repayment or payment shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the Convertible
Debentures so repaid or redeemed at the appropriate Redemption Price (expressed
as percentages of the principal amount of the Convertible Debentures) set forth
below, together with accrued and unpaid interest on the Convertible Debentures
to, but excluding, the redemption date, if redeemed during the 12-month period
beginning December 18 of the applicable year; provided, that holders of Trust
Securities shall be given not less than 30 nor more than 60 days notice of such
redemption. See "Description of the Convertible Debentures-Redemption at the
Option of Tosco." In the event that fewer than all of the outstanding
Convertible Preferred Securities are to be redeemed, the Convertible Preferred
Securities will be redeemed pro rata as described under "-Form, Denomination and
Registration" below.
YEAR REDEMPTION PRICE
1999..........................104.025%
2000..........................103.450
2001..........................102.875
2002..........................102.300
2003..........................101.725
2004..........................101.150
2005..........................100.575
and 100% if redeemed on or after December 18, 2006.
SPECIAL EVENT DISTRIBUTION; TAX EVENT REDEMPTION
"Tax Event" means that the Regular Trustees shall have received an opinion
of independent tax counsel experienced in such matters (a "Dissolution Tax
Opinion") to the effect that as a result of (a) any amendment to, clarification
of, or change (including any announced prospective change) in the laws, or any
regulations thereunder, of the United States or any political subdivision or
taxing authority thereof or therein, (b) any judicial decision, 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,
clarification of, or change in the official position or the interpretation of
such Administrative Action or judicial decision that differs from the
theretofore generally accepted position, in each case, by any legislative body,
court, governmental authority or regulatory body, irrespective of the manner in
which such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after December 10, 1996, there is the creation by
such change in tax law of more than an insubstantial risk that (i) the Trust is
or will be subject to United States federal income tax with respect to income
accrued or received on the Convertible Debentures, (ii) the Trust is, or will be
subject to more than a de minimus amount of taxes (other than withholding
taxes), duties or other governmental charges, or (iii) interest paid in cash by
Tosco to the Trust on the Convertible Debentures is not, or will not be,
deductible, in whole or in part, by Tosco for United States federal income tax
purposes. Notwithstanding the foregoing, a Tax Event shall not include any
change in tax law that requires Tosco for United States federal income tax
purposes to defer taking a deduction for any original issue discount ("OID")
that accrues with respect to the Convertible Debentures until the interest
payment related to such OID is paid by the Company in cash; provided, that such
change in tax law does not create more than an insubstantial risk that Tosco
will be prevented from taking a deduction for OID accruing with respect to the
Convertible Debentures at a date that is no later than the date the interest
payment related to such OID is actually paid by Tosco in cash.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of independent counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or a
written change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority on or after
December 10, 1996 (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
If, at any time, a Tax Event or an Investment Company Event (each, a
"Special Event") shall occur and be continuing, the Trust may with the consent
of Tosco, except in the limited circumstances described below, be dissolved with
the result that Convertible Debentures with an aggregate principal amount equal
to the aggregate stated liquidation amount of, with an interest rate identical
to the distribution rate of, and accrued and unpaid interest equal to accrued
and unpaid distributions on, the Trust Securities, would be distributed to the
holders of the Trust Securities in liquidation of such holders' interest in the
Trust on a pro rata basis within 90 days following the occurrence of the Special
Event; provided that such dissolution and distribution shall be conditioned on
(i) the Regular Trustees' receipt of an opinion of independent tax counsel
experienced in such matters (a "No Recognition Opinion"), which opinion may rely
on published revenue rulings of the Internal Revenue Service, to the effect that
the holders of the Trust Securities will not recognize any gain or loss for
United States federal income tax purposes as a result of such dissolution and
distribution of Convertible Debentures, (ii) Tosco or the Trust being unable to
avoid such Tax Event within such 90 day period by taking some ministerial action
or pursuing some other reasonable measure that will have no adverse effect on
the Trust, Tosco or the holders of the Trust Securities and (iii) Tosco's prior
written consent to such dissolution and distribution. If Tosco declines to
consent to the dissolution and distribution, Tosco may incur an obligation to
pay Additional Interest. See "Description of the Convertible
Debentures-Additional Interest." Furthermore, if after receipt of a Dissolution
Tax Opinion by the Regular Trustees (i) Tosco has received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent tax counsel
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that Tosco would be precluded from deducting the interest
on the Convertible Debentures for United States federal income tax purposes even
after the Convertible Debentures were distributed to the holders of Trust
Securities in liquidation of such holders' interests in the Trust as described
above, or (ii) the Regular Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion to the Trust, Tosco shall have
the right, upon not less than 30 nor more than 60 days notice, to redeem the
Convertible Debentures, in whole or in part, at 100% of the principal amount
thereof plus accrued and unpaid interest thereon for cash within 90 days
following the occurrence of such Tax Event. Following such redemption, Trust
Securities with an aggregate liquidation amount equal to the aggregate principal
amount of the Convertible Debentures so redeemed shall be redeemed by the Trust
at the liquidation amount thereof plus accrued and unpaid distributions thereon
to the redemption date on pro rata basis; provided however that if at the time
there is available to Tosco or the Trust the opportunity to eliminate, within
such 90 day period, the Tax Event by taking some ministerial action, such as
filing a form or making an election or pursuing some other similar reasonable
measure that will have no adverse effect on the Trust, Tosco or the holders of
Trust Securities, Tosco or the Trust will pursue such measure in lieu of
redemption.
After the date for any distribution of Convertible Debentures upon
dissolution of the Trust, (i) the Trust Securities will no longer be deemed to
be outstanding and (ii) certificates representing Trust Securities will be
deemed to represent Convertible Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of, with an interest rate
identical to the distribution rate of, and accrued and unpaid interest
(including Compound Interest) equal to accrued and unpaid distributions on such
Trust Securities until such certificates are presented to Tosco or its agent for
transfer or reissuance.
There can be no assurance as to the market price for the Convertible
Debentures which may be distributed in exchange for Trust Securities if a
dissolution and liquidation of the Trust were to occur. Accordingly, the
Convertible Debentures that the investor may subsequently receive on dissolution
and liquidation of the Trust may trade at a discount to the price of the Trust
Securities exchanged.
REDEMPTION PROCEDURES FOR REDEMPTION BY THE TRUST
The Trust may not redeem any of the outstanding Convertible Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Convertible Preferred Securities for all quarterly distribution periods
terminating on or prior to the date of redemption.
In the event of any redemption in part, the Trust shall not be required to
(i) issue, register the transfer of or exchange any Convertible Preferred
Securities during a period beginning at the opening of business 15 days before
any selection for redemption of Convertible Preferred Securities and ending at
the close of business on the earliest date in which the relevant notice of
redemption is deemed to have been given to all holders of Convertible Preferred
Securities to be so redeemed or (ii) register the transfer of or exchange any
Convertible Preferred Securities so selected for redemption, in whole or in
part, except for the unredeemed portion of any Convertible Preferred Securities
being redeemed in part.
If the Trust gives a notice of redemption in respect of Convertible
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York City time, on the redemption date, provided that Tosco has paid to the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption of the Convertible Debentures, the Trust will irrevocably deposit
with the Depositary funds sufficient to pay the amount payable on redemption of
all book-entry certificates and will give the Depositary irrevocable
instructions and authority to pay such amount in respect of Convertible
Preferred Securities represented by the Global Certificates (as defined herein)
and will irrevocably deposit with the paying agent for the Convertible Preferred
Securities funds sufficient to pay such amount in respect of any certificated
Convertible Preferred Securities and will give such paying agent irrevocable
instructions and authority to pay such amount to the holders of certificated
Convertible Preferred Securities upon surrender of their certificates. If notice
of redemption shall have been given and funds deposited as required, then,
immediately prior to the close of business on the redemption date, distributions
will cease to accrue and all rights of holders of such Convertible Preferred
Securities so called for redemption will cease, except the right of the holders
of such Convertible Preferred Securities to receive the Redemption Price plus
accrued and unpaid distributions on the Convertible Preferred Securities to be
redeemed, but without interest on such Redemption Price. In the event that any
date fixed for redemption of Convertible Preferred Securities is not a Business
Day, then payment of the Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (without any interest or other
payment in respect of any such delay) except that, if such Business Day falls in
the next calendar year, such payment will be made on the immediately preceding
Business Day. In the event that payment of the Redemption Price in respect of
Convertible Preferred Securities is improperly withheld or refused and not paid
either by the Trust, or by Tosco pursuant to the Guarantee, distributions on
such Convertible Preferred 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 Redemption Price.
In the event that fewer than all of the outstanding Convertible Preferred
Securities are to be redeemed, the Convertible Preferred Securities will be
redeemed pro rata.
Subject to the foregoing and applicable law (including without limitation,
United States federal securities laws), Tosco or its subsidiaries may at any
time, and from time to time, purchase outstanding Convertible Preferred
Securities by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a "Liquidation"), the then holders
of the Convertible Preferred Securities will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $50 per Convertible Preferred Security plus accrued and unpaid
distributions thereon to the date of payment (the "Liquidation Distribution"),
unless, in connection with such Liquidation, Convertible Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Convertible Preferred Securities have been distributed on a pro rata basis to
the holders of the Convertible Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Convertible Preferred Securities shall be paid on a pro rata basis.
The holders of the Common Securities will be entitled to receive distributions
upon any such dissolution pro rata with the holders of the Convertible Preferred
Securities, except that if a Declaration Event of Default has occurred and is
continuing, the Convertible Preferred Securities shall have a preference over
the Common Securities with regard to such distributions.
Pursuant to the Declaration, the Trust shall terminate (i) on December 15,
2036, the expiration of the term of the Trust, (ii) upon the bankruptcy of Tosco
or the holder of the Common Securities, (iii) upon the filing of a certificate
of dissolution or its equivalent with respect to the holder of the Common
Securities or Tosco, the filing of a certificate of cancellation with respect to
the Trust after obtaining the consent of the holders of at least a majority in
liquidation amount of the Trust Securities affected thereby voting together as a
single class to file such certificate of cancellation, or the revocation of the
charter of the holder of the Common Securities or Tosco and the expiration of 90
days after the date of revocation without a reinstatement thereof, (iv) upon the
distribution of Convertible Debentures upon the occurrence of a Special Event,
(v) upon the entry of a decree of a judicial dissolution of the holder of the
Common Securities, Tosco or the Trust, (vi) upon the redemption of all the Trust
Securities or (vii) upon the distribution of Tosco Common Stock to all holders
of Convertible Preferred Securities upon conversion of all outstanding
Convertible Preferred Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); provided, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Convertible Preferred
Securities have been so cured, waived, or otherwise eliminated. Until such
Declaration Events of Default with respect to the Convertible Preferred
Securities have been so cured, waived, or otherwise eliminated, the
Institutional Trustee will be deemed to be acting solely on behalf of the
holders of the Convertible Preferred Securities and only the holders of the
Convertible Preferred Securities will have the right to direct the Institutional
Trustee with respect to certain matters under the Declaration, and therefore the
Indenture.
If the Institutional Trustee fails to enforce its rights under the
Convertible Debentures, any holder of Convertible Preferred Securities may
institute a legal proceeding against any person to enforce the Institutional
Trustee's rights under the Convertible Debentures. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Tosco to pay interest or principal
on the Convertible Debentures on the date such interest or principal is
otherwise payable (or in the case of redemption, the redemption date), then a
holder of Convertible Preferred Securities may institute a Direct Action for
payment on or after the respective due date specified in the Convertible
Debentures. In connection with such Direct Action, Tosco will be subrogated to
the rights of such holders of Convertible Preferred Securities under the
Declaration to the extent of any payment made by Tosco to such holder of
Convertible Preferred Securities in such Direct Action. The holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Convertible Debentures.
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee as the sole holder of the Convertible Debentures will have the right
under the Indenture to declare the principal of and accrued and unpaid interest
on the Convertible Debentures to be immediately due and payable. Tosco and the
Trust are each required to file annually with the Institutional Trustee an
officer's certificate as to its compliance with all conditions and covenants
under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act and under the Trust
Indenture Act, and as otherwise required by law and the Declaration, the holders
of the Convertible Preferred Securities will have no voting rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of the next
paragraph, the holders of a majority in aggregate liquidation amount of the
Convertible Preferred Securities will have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Institutional Trustee, or direct the exercise of any trust or power conferred
upon the Institutional Trustee under the Declaration, including the right to
direct the Institutional Trustee, as holder of the Convertible Debentures, to
(i) exercise the remedies available under the Indenture with respect to the
Convertible Debentures, (ii) waive any past Indenture Event of Default that is
waivable under the Indenture, or (iii) exercise any right to rescind or annul a
declaration that the principal of all the Convertible Debentures shall be due
and payable; provided, however, that if an Indenture Event of Default has
occurred and is continuing then, the holders of 25% of the aggregate liquidation
amount of the Convertible Preferred Securities may direct the Institutional
Trustee to declare the principal of and interest on the Convertible Debentures
immediately due and payable; provided, further, that, where a consent or action
under the Indenture would require the consent or action of holders of more than
a majority in principal amount of the Convertible Debentures (a
"Super-Majority") affected thereby, only the holders of at least such Super
Majority in aggregate liquidation amount of the Convertible Preferred Securities
may direct the Institutional Trustee to give such consent or take such action.
The Institutional Trustee shall notify all holders of the Convertible
Preferred Securities of any notice of default received from the Debt Trustee
with respect to the Convertible Debentures. Such notice shall state that such
Indenture Event of Default also constitutes a Declaration Event of Default.
Except with respect to directing the time, method and place of conducting a
proceeding for a remedy, the Institutional Trustee shall not take any of the
actions described in clauses (i), (ii) or (iii) above unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Convertible Debentures, is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the holders of the Trust Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a majority
in liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super-Majority, the Institutional Trustee may only give such
consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super-Majority
represents of the aggregate principal amount of the Convertible Debentures
outstanding. The Institutional Trustee shall be under no obligation to take any
such action in accordance with the directions of the holders of the Trust
Securities unless the Institutional Trustee has obtained an opinion of
independent tax counsel experienced in such matters to the effect that for the
purposes of United States federal income tax the Trust will not be classified as
other than a grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Convertible Preferred
Securities may be given at a separate meeting of holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
holders of Trust Securities or pursuant to written consent. The Regular Trustees
will cause a notice of any meeting at which holders of Convertible Preferred
Securities are entitled to vote, or of any matter upon which action by written
consent of such holders is to be taken, to be mailed to each holder of record of
Convertible Preferred Securities. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description of any resolution
proposed for adoption at such meeting on which such holders are entitled to vote
or of such matter upon which written consent is sought; and (iii) instructions
for the delivery of proxies or consents. No vote or consent of the holders of
Convertible Preferred Securities will be required for the Trust to redeem and
cancel Convertible Preferred Securities or distribute Convertible Debentures in
accordance with the Declaration.
Notwithstanding that holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned at such time by Tosco or
any entity directly controlling or controlled by, or under direct or indirect
common control with, Tosco, shall not be entitled to vote or consent and shall,
for purposes of such vote or consent, be treated as if such Convertible
Preferred Securities were not outstanding.
The procedures by which holders of Convertible Preferred Securities may
exercise their voting rights are described below. See "-Form, Denomination and
Registration."
Holders of the Convertible Preferred Securities will have no rights to
appoint or remove the Regular Trustees, who may be appointed, removed or
replaced solely by Tosco as the indirect or direct holder of all of the Common
Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of the Declaration,
then the holders of the Trust Securities voting together as a single class will
be entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of at least a majority in
liquidation amount of the Trust Securities affected thereby; provided that, if
any amendment or proposal referred to in clause (i) above would adversely affect
only the Convertible Preferred Securities or the Common Securities, then only
the affected class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of a
majority in liquidation amount of such class of Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
be classified for purposes of United States federal income taxation as other
than a grantor trust, (ii) reduce or otherwise adversely affect the powers of
the Institutional Trustee or (iii) cause the Trust to be deemed an "investment
company" that is required to be registered under the 1940 Act.
PROPOSED TAX LEGISLATION
President Clinton's fiscal 1998 budget proposal contains provisions which
if enacted would treat as equity for United States federal income tax purposes
instruments that have a maximum term of more than 15 years and that are not
shown as indebtedness on the balance sheet of the issuer, and would disallow
interest deductions on certain convertible debt instruments. Since these
proposals, if enacted in their current form, would apply with respect to
instruments issued after first committee action, it is not anticipated that such
proposals would apply to the Convertible Debentures if they are issued prior to
the date of such action. Similar proposals were contained in President Clinton's
fiscal 1997 budget proposal, but if enacted as then written would have had a
retroactive effect. There can be no assurance that any legislation enacted after
the date hereof will not adversely affect the tax treatment of the Convertible
Debentures.
If legislation is enacted that adversely affects the tax treatment of the
Convertible Debentures, such legislation could result in the distribution of the
Convertible Debentures to holders of the Convertible Preferred Securities or, in
certain limited circumstances, the redemption of such securities by the Company
and the distribution of the resulting cash in redemption of the Convertible
Preferred Securities. See "Description of the Convertible Preferred
Securities-Special Event Distribution; Tax Redemption."
MERGERS, CONSOLIDATIONS OR AMALGAMATION
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. The Trust may, with the consent of the Regular Trustees and
without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a Trust organized as such
under the laws of any State: provided, that (i) such successor entity either (x)
expressly assumes all of the obligations of the Trust under the Trust Securities
or (y) substitutes for the Convertible Preferred Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Trust
Securities with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) Tosco expressly acknowledges a trustee of such
successor entity possessing the same powers and duties as the Institutional
Trustee as the holder of the Convertible Debentures, (iii) such merger,
consolidation, amalgamation or replacement does not cause the Convertible
Preferred Securities (including any Successor Securities) to be downgraded by
any nationally recognized statistical rating organization, (iv) such merger,
consolidation, amalgamation or replacement does not adversely affect the rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (v) such successor entity
has a purpose identical to that of the Trust, (vi) prior to such merger,
consolidation, amalgamation or replacement, Tosco has received an opinion of
independent counsel to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the Trust
Securities (including any Successor Securities) in any material respect (other
than with respect to any dilution of the holders' interest in the new entity)
and (B) following such merger, consolidation, amalgamation or replacement,
neither the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act, (vii) following such merger,
consolidation, amalgamation or replacement, the Trust (or such successor entity)
will continue to be classified as a grantor trust for United States federal
income tax purposes and (viii) Tosco guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee and the Common Securities Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of holders of 100% in
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or be replaced by 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 the successor entity to be classified as other than a grantor
trust for United States federal income tax purposes.
REGISTRATION RIGHTS
Tosco and the Trust (together, the "Registrants") entered into a
registration rights agreement with the Initial Purchasers (the "Registration
Rights Agreement") pursuant to which the Registrants, at Tosco's expense, would,
for the benefit of the holders, (i) file with the Commission the Shelf
Registration Statement covering resale of the Registrable Securities by March
17, 1997, (ii) use their best efforts to cause the Shelf Registration Statement
to become effective promptly and (iii) use their best efforts to keep the Shelf
Registration Statement effective until the earlier of (a) the sale pursuant to
the Shelf Registration Statement or Rule 144 under the Securities Act of all the
Registrable Securities and (b) the expiration of the holding period applicable
to sales of Registrable Securities under Rule 144 (k) under the Securities Act,
or any successor provision. The Registrants will be permitted to suspend the use
of the prospectus which is a part of the Shelf Registration Statement for a
period not to exceed 30 days in any three month period or two periods not to
exceed an aggregate of 60 days in any 12-month period under certain
circumstances relating to pending corporate developments, public filings with
the Commission and similar events. The Registrants agreed to pay liquidated
damages to holders of Registrable Securities who have requested to sell pursuant
to the Shelf Registration Statement if the Shelf Registration Statement is not
timely filed or if the prospectus is unavailable for periods in excess of those
permitted above until such time as the Shelf Registration Statement is filed or
the prospectus is again made available, as the case may be. The Company has
further agreed, if such failure to file or unavailability continues for an
additional thirty-day period, to pay liquidated damages to all holders of
Registrable Securities, whether or not any such holder has requested to sell
pursuant to the Shelf Registration Statement, until such time as the Shelf
Registration Statement is filed or the prospectus is again made available, as
the case may be. A holder who sells Registrable Securities pursuant to the Shelf
Registration Statement generally will be required to be named as a selling
stockholder in the related prospectus or prospectus supplement, deliver a
prospectus to purchasers and be bound by those provisions of the Registration
Rights Agreement that are applicable to such holder (including indemnification
provisions). Tosco agreed to pay all expenses of the Shelf Registration
Statement, provide to each registered holder copies of such prospectus, notify
each registered holder when the Shelf Registration Statement has become
effective and take certain other actions as are required to permit, subject to
the foregoing, unrestricted resales of the Registrable Securities. The plan of
distribution of the Shelf Registration Statement will permit resales of
Registrable Securities by selling securityholders through brokers and dealers.
However, neither Tosco nor the Trust will be obligated under the Registration
Rights Agreement to pay certain costs and expenses such as opinions of counsel
of such selling securityholders, or accountants' "cold comfort" letters, and
neither the officers and directors of Tosco nor the trustees of the Trust will
be obligated under the Registration Rights Agreement to participate in marketing
efforts on behalf of such selling securityholders.
Tosco agreed in the Registration Rights Agreement to use its best efforts
to cause the Common Stock issuable upon conversion of the Convertible Securities
to be listed on the New York Stock Exchange and the Pacific Stock Exchange (or
such other national securities exchange on which the Tosco Common Stock may be
listed at such time) upon effectiveness of the Shelf Registration Statement.
The summary herein of certain provisions of the Registration Rights
Agreement is subject to, and is qualified in its entirety by reference to, all
the provisions of the Registration Rights Agreement, a copy of which is
available upon request to Tosco.
FORM, DENOMINATION AND REGISTRATION
Convertible Preferred Securities will be issued in fully registered form,
without coupons.
Global Convertible Preferred Securities; Book-Entry Form.
Convertible Preferred Securities held by "qualified institutional buyers,"
as defined in Rule 144A under the Securities Act ("QIBs"), will be evidenced by
a Global Convertible Preferred Security (the "144A Global Security"), which will
be deposited with, or on behalf of, The Depository Trust Company, New York, New
York ("DTC") and registered in the name of Cede & Co. ("Cede"), as DTC's
nominee.
Convertible Preferred Securities held by persons who acquired such
Convertible Preferred Securities in compliance with Regulation S under the
Securities Act (a "Non-U.S. Person") will be evidenced by one or more Global
Convertible Preferred Securities (collectively, the "Regulation S Global
Security"), which will be deposited with, or on behalf of DTC and registered in
the name of Cede, as DTC's nominee, for the accounts of the Euroclear System
("Euroclear") and Cedel Bank, societe anonyme ("Cedel Bank"). Beneficial
interests in the Regulation S Global Security may only be held through Euroclear
or Cedel bank, and any resale or transfer of such interests to U.S. persons
shall only be permitted as described under "Transfer Restrictions" below. The
144A Global Security and the Regulation S Global Security are hereinafter
collectively referred to as the "Global Security." Except as set forth below,
the record ownership of the Global Security may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee. In
the event the Convertible Preferred Securities sold in offshore transactions in
reliance on Regulation S are not evidenced by a Regulation S Global Security,
physical delivery of the certificates representing such Convertible Preferred
Securities will be made.
QIBs may hold their interests in the 144A Global Security directly through
DTC, or indirectly through organizations which are participants in DTC
("Participants"). Transfers between Participants will be effected in the
ordinary way in accordance with DTC rules and will be settled in immediately
available funds. Non-U.S. Persons may hold their interest in the Regulation S
Global Security directly through Cedel Bank or Euroclear, or indirectly through
organizations that are participants in Cedel Bank or Euroclear ("Cedel
Participants" and "Euroclear Participants," respectively). Cedel Bank and
Euroclear will hold interests in the Regulation S Global Security on behalf of
their participants through DTC. Transfers between Cedel Participants and between
Euroclear Participants will be effected in the ordinary way in accordance with
their respective rules and operating procedures.
Cross-market transfers between DTC, on the one hand, and directly or
indirectly through Euroclear or Cedel Bank participants, on the other hand, will
be effected in DTC in accordance with DTC rules on behalf of Euroclear or Cedel
Bank, as the case may be, by its respective depositary; however, such
cross-market transactions will require delivery of instructions to Euroclear or
Cedel Bank, as the case may be, by the counterparty in such system in accordance
with its rules and procedures and within its established deadlines (Brussels
time). Euroclear or Cedel Bank, as the case may be, will, if the transaction
meets its settlement requirements, deliver instructions to its respective
depositary to take action to effect final settlement on its behalf by delivering
or receiving beneficial interests in the relevant Global Security in DTC, and
making or receiving payment in accordance with normal procedures for same-day
funds settlement applicable to DTC. Cedel Bank participants and participants in
Euroclear may not deliver instructions directly to the depositories for Cedel
Bank or Euroclear.
Because of time zone differences, the securities account of a Euroclear or
Cedel Bank participant purchasing a beneficial interest in a Global Security
from a DTC participant will be credited during the securities settlement
processing day immediately following the DTC settlement date and such credit of
any transactions in beneficial interests in such Global Security settled during
such processing will be reported to the relevant Euroclear or Cedel Bank
participant on such business day. Cash received in Euroclear or Cedel Bank as a
result of sales of beneficial interests in a Global Security by or through a
Euroclear or Cedel Bank participant to a DTC participant will be received with
value on the DTC settlement date but will be available in the relevant Euroclear
or Cedel Bank cash account only as of the business day following settlement in
DTC.
QIBs and Non-U.S. Persons who are not Participants may beneficially own
interests in the Global Security held by DTC only through Participants,
including Euroclear and Cedel Bank, or certain banks, brokers, dealers, trust
companies and other parties that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly ("Indirect
Participants"). So long as Cede, as the nominee of DTC, is the registered owner
of the Global Security, Cede for all purposes will be considered the sole holder
of the Global Security. Except as provided below, owners of beneficial interests
in the Global Security will not be entitled to have certificates registered in
their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form, and will not be considered the holder thereof.
Distributions on the Global Security will be made to Cede, the nominee for
DTC, as the registered owner of the Global Security by wire transfer of
immediately available funds. None of Tosco, the Trust or any Trustee will have
any responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DTC's practice is to credit Participants' accounts on the relevant payment
date with payments in amounts proportionate to their respective beneficial
interests in the Convertible Preferred Securities represented by the Global
Security as shown on the records of DTC (adjusted as necessary so that such
payments are made with respect to whole Convertible Preferred Securities only),
unless DTC has reason to believe that it will not receive payment on such
payment date. Payments by Participants to owners of beneficial interests in
Convertible Preferred Securities represented by the Global Security held through
such Participants will be the responsibility of such Participants, as is now the
case with securities held for the accounts of customers registered in "street
name."
Beneficial holders of Convertible Preferred Securities who desire to
convert them into Underlying Common Stock should contact their brokers or other
Participants or Indirect Participants to obtain information on procedures,
including proper forms and cut-off times, for submitting such request. Because
DTC can only act on behalf of Participants, who in turn act on behalf of
Indirect Participants, the ability of a person having a beneficial interest in
the Convertible Preferred Securities represented by the Global Security to
pledge such interest to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interest, may be affected
by the lack of a physical certificate evidencing such interest.
None of Tosco, the Trust or any Trustee (or any registrar, paying agent or
conversion agent) will have any responsibility for the performance by DTC,
Euroclear or Cedel Bank or their Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised Tosco and the Trust that it will take any action
permitted to be taken by a holder of Convertible Preferred Securities
(including, without limitation, the presentation of Convertible Preferred
Securities for conversion) only at the direction of one or more Participants to
whose account with DTC interests in the Global Security are credited.
DTC has advised Tosco and the Trust as follows: DTC 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 Participants and to facilitate the clearance and settlement
of securities transactions between Participants through electronic book-entry
changes to accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchasers. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with a Participant, either directly or indirectly.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the Global Security.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants and Indirect Participants to beneficial
owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements that may be in effect from time to time. Redemption
notices shall be sent to Cede & Co. If less than all of the Convertible
Preferred Securities are being redeemed, DTC will reduce the amount of the
interest of each Participant in such Convertible Preferred Securities in
accordance with its procedures.
Although voting with respect to the Convertible Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor Cede will
itself consent or vote with respect to Convertible Preferred Securities. 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 Cede consenting or
voting rights to those Participants to whose accounts the Convertible Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy). Tosco and the Trust believe that the arrangements among DTC,
the Participants and Indirect Participants, and beneficial owners will enable
the beneficial owners to exercise rights equivalent in substance to the rights
that can be directly exercised by a holder of a beneficial interest in the
Trust.
DTC may discontinue providing its services as securities depositary with
respect to the Convertible Preferred Securities at any time by giving reasonable
notice to the Trust. Under such circumstances, in the event that a successor
securities depositary is not obtained, certificates for the Convertible
Preferred Securities are required to be printed and delivered. Additionally, the
Regular Trustees (with the consent of Tosco) may decide to discontinue use of
the system of book-entry transfers through DTC (or any successor depositary)
with respect to the Convertible Preferred Securities. In that event,
certificates for the Convertible Preferred Securities will be printed and
delivered.
Certificated Convertible Preferred Securities.
Convertible Preferred Securities sold to investors that are neither QIBs
nor Non-U.S. Persons were issued in definitive registered form and are not
represented by the Global Security. QIBs and Non-U.S. Persons may request that
any certificated Convertible Preferred Securities they hold in definitive
registered form be exchanged for interests in the applicable Global Security.
Certificated Convertible Preferred Securities may be issued in exchange for
Convertible Preferred Securities represented by a Global Security if a
depositary is unwilling or unable to continue as a depositary for the Global
Security as set forth above.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Tosco and the Trust believe to be reliable,
but neither Tosco nor the Trust takes responsibility for the accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with
respect to the Trust Securities and after the curing of any defaults that may
have occurred, undertakes to perform only such duties as are specifically set
forth in the Declaration and, after default, shall exercise the same degree of
care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Institutional Trustee is under no
obligation to exercise any of the powers vested in it by the Declaration at the
request of any holder of Convertible Preferred Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The holders of Convertible Preferred Securities
will not be required to offer such indemnity in the event such holders, by
exercising their voting rights, direct the Institutional Trustee to take any
action it is empowered to take under the Declaration following a Declaration
Event of Default. The Institutional Trustee also serves as trustee under the
Guarantee.
Conversion Agent, Paying Agent, Registrar and Transfer Agent.
The Institutional Trustee acts as Registrar, Transfer Agent, Conversion
Agent and Paying Agent for the Convertible Preferred Securities.
Registration of transfers of Convertible Preferred Securities will be
effected without charge by or on behalf of the Trust, but upon payment (with the
giving of such indemnity as the Trust or Tosco may require) in respect of any
tax or other government charges that may be imposed in relation to it.
The Trust is not required to register or cause to be registered the
transfer of Convertible Preferred Securities after such Convertible Preferred
Securities have been called for redemption.
GOVERNING LAW
The Declaration and the Convertible Preferred Securities are governed by,
and construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate the Trust in
such a way so that the Trust will not be required to register as an "investment
company" under the 1940 Act or characterized as other than a grantor trust for
United States federal income tax purposes. Tosco is authorized and directed to
conduct its affairs so that the Convertible Debentures will be treated as
indebtedness of Tosco for United States federal income tax purposes. In this
connection, Tosco and the Regular Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the articles of incorporation of Tosco, that each of Tosco and the Regular
Trustees determine in their discretion to be necessary or desirable to achieve
such end, as long as such action does not adversely affect the interests of the
holders of the Convertible Preferred Securities or vary the terms thereof.
Holders of the Convertible Preferred Securities have no preemptive rights.
DESCRIPTION OF THE GUARANTEE
Set forth below is a summary of information concerning the Guarantee which
was executed and delivered by Tosco for the benefit of the holders from time to
time of Convertible Preferred Securities. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the Guarantee. The Guarantee incorporates by
reference the terms of the Trust Indenture Act. The Guarantee will be qualified
under the Trust Indenture Act. The Bank of New York, as the Guarantee Trustee,
holds the Guarantee for the benefit of the holders of the Convertible Preferred
Securities.
GENERAL
Pursuant to and to the extent set forth in the Guarantee, Tosco has agreed
to pay in full to the holders of the Convertible Preferred Securities (except to
the extent paid by the Trust), as and when due, regardless of any defense, right
of set-off or counterclaim which the Trust may have or assert, the following
payments (the "Guarantee Payments"), without duplication: (i) any accrued and
unpaid distributions that are required to be paid on the Convertible Preferred
Securities to the extent the Trust has funds available therefor, (ii) the
Redemption Price plus accrued and unpaid distributions, with respect to any
Convertible Preferred Securities called for redemption by the Trust, to the
extent the Trust has funds available therefor and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Trust (other than in
connection with the distribution of Convertible Debentures to the holders of
Convertible Preferred Securities or the redemption of all the Convertible
Preferred Securities), the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on the Convertible Preferred Securities
to the date of payment to the extent the Trust has funds available therefor and
(b) the amount of assets of the Trust remaining available for distribution to
holders of Convertible Preferred Securities upon the liquidation of the Trust.
The holders of a majority in liquidation amount of the Convertible Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee or to direct the
exercise of any trust or power conferred upon the Guarantee Trustee under the
Guarantee. Any holder of Convertible Preferred Securities may directly institute
a legal proceeding against Tosco to enforce the obligations of the Guarantor
under the Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. If Tosco were to
default on its obligation to pay amounts payable on the Convertible Debentures,
the Trust would lack available funds for the payment of distributions or amounts
payable on redemption of the Convertible Preferred Securities or otherwise, and
in such event holders of the Convertible Preferred Securities would not be able
to rely upon the Guarantee for payment of such amounts. Instead, a holder of the
Convertible Preferred Securities would be required to rely on the enforcement
(l) by the Institutional Trustee of its rights, as registered holder of the
Convertible Debentures, against Tosco pursuant to the terms of the Convertible
Debentures or (2) by such holder of Convertible Preferred Securities of its
rights against Tosco to enforce payments on Convertible Debentures. See
"Description of the Convertible Debentures." The Declaration provides that each
holder of Convertible Preferred Securities, by acceptance thereof, agrees to the
provisions of the Guarantee, including the subordination provisions thereof, and
the Indenture.
The Guarantee does not apply to any payment of distributions or Redemption
Price, or to payments upon the dissolution, winding-up or termination of the
Trust, except to the extent the Trust shall have funds available therefor. If
Tosco does not make interest payments on the Convertible Debentures, the Trust
will not pay distributions on the Convertible Preferred Securities and will not
have funds available therefor. See "Risk Factors-Limitations of the Guarantee"
and "Description of the Convertible Debentures." The Guarantee, when taken
together with Tosco's obligations under the Convertible Debentures, the
Indenture and the Declaration, including its obligations to pay costs, expenses,
debts and liabilities of the Trust (other than with respect to the Trust
Securities) will provide a full and unconditional guarantee on a subordinated
basis by Tosco of payments due on the Convertible Preferred Securities.
Tosco also agreed separately to irrevocably and unconditionally guarantee
the obligations of the Trust with respect to the Common Securities (the "Common
Securities Guarantee") to the same extent as the Guarantee, except that upon the
occurrence and during the continuation of a Declaration Event of Default,
holders of Convertible Preferred Securities shall have priority over holders of
Common Securities with respect to distributions and payments on liquidation,
redemption or otherwise.
CERTAIN COVENANTS OF TOSCO
In the Guarantee, Tosco has covenanted that, so long as any Convertible
Preferred Securities remain outstanding, if (i) the Company has exercised its
option to defer interest payments on the Convertible Debentures by extending the
interest payment period and such extension shall be continuing, (ii) the Company
shall be in default with respect to its payment or other obligations under the
Guarantee or (iii) there shall have occurred and be continuing any event that,
with the giving of notice would constitute a Declaration Event of Default, then
the Company (a) shall not declare or pay dividends on, make distributions with
respect to, or redeem, purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (other than (i) purchases or acquisitions
of shares of Tosco Common Stock in connection with the satisfaction by Tosco of
its obligations under any employee benefit plans, (ii) as a result of a
reclassification of Tosco's capital stock or (iii) the purchase of fractional
interests in shares of Tosco's capital stock pursuant to the conversion or
exchange provisions of such capital stock of Tosco or the security being
converted or exchanged for capital stock of Tosco) or make any guarantee
payments with respect to the foregoing and (b) shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities (including guarantees) of the Company that rank pari passu with
or junior to the Convertible Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Convertible Preferred Securities (in which case no vote
will be required), the Guarantee may be amended only with the prior approval of
the holders of at least a majority in liquidation amount of all the outstanding
Convertible Preferred Securities. The manner of obtaining any such approval of
holders of the Convertible Preferred Securities will be as set forth under
"Description of the Convertible Preferred Securities-Voting Rights." All
guarantees and agreements contained in the Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Tosco and shall inure to the
benefit of the holders of the Convertible Preferred Securities then outstanding.
Except in connection with any permitted merger or consolidation of Tosco with or
into another entity or any permitted sale, transfer or lease of Tosco's assets
to another entity as described under "Description of the Convertible
Debentures-Certain Covenants," the Company may not assign its rights or delegate
its obligations under the Guarantee without the prior approval of the holders of
at least a majority of the aggregate stated liquidation amount of the
Convertible Preferred Securities then outstanding.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate as to each holder of Convertible Preferred
Securities upon (i) full payment of the Redemption Price and accrued and unpaid
distributions with respect to all Convertible Preferred Securities, (ii) upon
distribution of the Convertible Debentures held by the Trust to the holders of
the Convertible Preferred Securities, (iii) upon liquidation of the Trust or
(iv) upon the distribution of Company Common Stock to such holder in respect of
the conversion of such holder's Convertible Preferred Securities into Tosco
Common Stock and will terminate completely upon full payment of the amounts
payable in accordance with the Declaration.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon (a) the failure of
Tosco to perform any of its payment or other obligations thereunder or (b) if
applicable, the failure by Tosco to deliver Tosco Common Stock upon an
appropriate election by the holder or holders of Convertible Preferred
Securities to convert the Convertible Preferred Securities into shares of Tosco
Common Stock.
The holders of a majority in liquidation amount of Convertible Preferred
Securities relating to the Guarantee 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 Convertible Preferred
Securities. If the Guarantee Trustee fails to enforce the Guarantee, any holder
of Convertible Preferred Securities relating to such Guarantee may institute a
legal proceeding directly against Tosco to enforce the Guarantee Trustee's
rights under the Guarantee, without first instituting a legal proceeding against
the Trust, the Guarantee Trustee or any other person or entity. Notwithstanding
the foregoing, if Tosco has failed to make a guarantee payment, a holder of
Convertible Preferred Securities may directly institute a proceeding against
Tosco for enforcement of the Guarantee for such payment. Tosco waives any right
or remedy to require that any action be brought first against the Trust or any
other person or entity before proceeding directly against Tosco.
STATUS OF THE GUARANTEE
The Guarantee constitutes an unsecured obligation of Tosco and ranks (i)
subordinate and junior in right of payment to all other liabilities of Tosco,
(ii) pari passu with the most senior preferred or preference stock now or
hereafter issued by Tosco and with any guarantee now or hereafter entered into
by Tosco in respect of any preferred or preference stock of any affiliate of
Tosco, and (iii) senior to Tosco Common Stock. The terms of the Convertible
Preferred Securities provide that each holder of Convertible Preferred
Securities issued by the Trust by acceptance thereof agrees to the subordination
provisions and other terms of the Guarantee relating thereto.
The Guarantee constitutes a guarantee of payment and not of collection
(that is, the guaranteed party may institute a legal proceeding directly against
the guarantor to enforce its rights under the guarantee without instituting a
legal proceeding against any other person or entity).
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, prior to the occurrence of a default with respect to
the Guarantee, has undertaken to perform only such duties as are specifically
set forth in the Guarantee and, after default with respect to the Guarantee,
shall exercise the same degree of care as a prudent man would exercise in the
conduct of his own affairs. Subject to such 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 Convertible Preferred Securities unless it is
offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
GOVERNING LAW
The Guarantee is governed by, and construed in accordance with, the laws of
the State of New York.
DESCRIPTION OF THE CONVERTIBLE DEBENTURES
Set forth below is a description of the specific terms of the Convertible
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. The following description does not purport to be
complete and is subject to, and is qualified in its entirety by reference to the
indenture dated as of May 1,1996, as supplemented by the Supplemental Indenture,
dated as of December 13,1996 (collectively the "Indenture"), between Tosco and
State Street Bank and Trust Company, as Trustee (the "Debt Trustee"), a copy of
which may be obtained from Tosco upon request. Certain capitalized terms used
herein are defined in the Indenture. The Indenture will be qualified under the
Trust Indenture Act.
Under certain circumstances involving the dissolution of the Trust
following the occurrence of a Special Event, Convertible Debentures may be
distributed to the holders of the Trust Securities in liquidation of the Trust.
See "Description of the Convertible Preferred Securities-Special Event
Distribution; Tax Event Redemption."
GENERAL
The Convertible Debentures were issued as unsecured debt under the
Indenture. The Convertible Debentures were limited in aggregate principal amount
to approximately $309,000,000, such amount being the sum of the aggregate stated
liquidation amount of the Convertible Preferred Securities and the capital
contributed by Tosco in exchange for the Common Securities (the "Tosco
Payment").
The Convertible Debentures are not subject to a sinking fund provision. The
entire principal amount of the Convertible Debentures will mature and become due
and payable, together with any accrued and unpaid interest thereon including
compound interest and Additional Interest (as defined herein), if any, on
December 15, 2026.
If Convertible Debentures are distributed to holders of Convertible
Preferred Securities in liquidation of such holders' interests in the Trust,
such Convertible Debentures will initially be issued in the same form as the
Convertible Preferred Securities that such Convertible Debentures replace. Under
certain limited circumstances, Convertible Debentures may be issued in
certificated form in exchange for a Global Security. See "-Book-Entry and
Settlement" below. In the event that Convertible Debentures are issued in
certificated form, such Convertible Debentures will be in denominations of $50
and integral multiples thereof and may be transferred or exchanged at the
offices described below. Payments on Convertible Debentures issued as a Global
Security will be made to DTC, a successor depositary or, in the event that no
depositary is used, to a Paying Agent for the Convertible Debentures: With
respect to Convertible Debentures issued in certificated form, principal and
interest will be payable, the transfer of the Convertible Debentures will be
registrable and Convertible Debentures will be exchangeable for Convertible
Debentures of other denominations of a like aggregate principal amount at the
corporate trust office of the Institutional Trustee at 101 Barclay Street, 21st
floor, New York, New York, 10286; provided that payment of interest may be made
at the option of Tosco by check mailed to the address of the holder entitled
thereto or by wire transfer to an account appropriately designated by the holder
entitled thereto. Notwithstanding the foregoing, so long as the holder of any
Convertible Debenture is the Institutional Trustee, the payment of principal and
interest on such Convertible Debenture will be made at such place and to such
account as may be designated by the Institutional Trustee.
The Indenture does not contain provisions that afford holders of the
Convertible Debentures protection in the event of a highly leveraged transaction
involving Tosco that would adversely affect such holders.
INTEREST
Each Convertible Debenture shall bear interest at the rate of 5 3/4% per
annum from December 10, 1996, payable quarterly in arrears on March 15, June 15,
September 15 and December 15 of each year (each an "Interest Payment Date"),
commencing March 15, 1997, to the person in whose name such Convertible
Debenture is registered, subject to certain exceptions, 15 days prior to such
Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. 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 per 30-day
month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as Tosco shall not be in default in the payment of interest on the
Convertible Debentures, Tosco shall have the right at any time, and from time to
time, during the term of the Convertible Debentures to defer payments of
interest by extending the interest payment period for a period not exceeding 20
consecutive quarters, at the end of which Extension Period Tosco shall pay all
interest then accrued and unpaid (including any Additional Interest, as herein
defined) together with interest thereon compounded quarterly at the rate
specified for the Convertible Debentures to the extent permitted by applicable
law ("Compound Interest"); provided that during any such Extension Period, (a)
Tosco shall not declare or pay dividends on, make any distribution with respect
to, or redeem, purchase, acquire or make a liquidation payment with respect to
any of its capital stock (other than (i) purchases or acquisitions of shares of
Tosco Common Stock in connection with the satisfaction by Tosco of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of Tosco's capital stock or the exchange or conversion of one
class or series of Tosco's capital stock for another class or series of Tosco
capital stock or (iii) the purchase of fractional interests in shares of Tosco's
capital stock pursuant to the conversion or exchange provisions of such Tosco
capital stock or the security being converted or exchanged for Tosco capital
stock), (b)Tosco shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities issued by Tosco
that rank pari passu with or junior to the Convertible Debentures and (c) Tosco
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to the Guarantee). Prior to the termination of any such Extension
Period, Tosco may further defer payments of interest by extending the interest
payment period; provided, however, that, such Extension Period, including all
such previous and further extensions, may not exceed 20 consecutive quarters or
extend beyond the maturity of the Convertible Debentures. Upon the termination
of any Extension Period and the payment of all amounts then due, Tosco may
commence a new Extension Period, subject to the terms set forth in this section.
No interest during an Extension Period, except at the end thereof, shall be due
and payable. Tosco has no present intention of exercising its right to defer
payments of interest by extending the interest payment period on the Convertible
Debentures. If the Institutional Trustee shall not be the sole holder of the
Convertible Debentures, Tosco shall give the Regular Trustees, the Institutional
Trustee and the Debt Trustee notice of its selection of such Extension Period
one Business Day prior to the earlier of (i) the date distributions on the
Convertible Preferred Securities are payable or (ii) the date the Regular
Trustees are required to given notice to any applicable self-regulatory
organization or to holders of the Convertible Debentures of the record or
payment date of such related interest payment.
ADDITIONAL INTEREST
If at any time the Trust shall be required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, Tosco will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental charges will be not less than the amounts the Trust would have
received had no such taxes, duties, assessments or other governmental charges
been imposed.
PROPOSED TAX LEGISLATION
Please refer to discussion above under the heading "Description of the
Convertible Preferred Securities-Proposed Tax Legislation."
SUBORDINATION
The Indenture provides that the Convertible Debentures are subordinated and
junior in right of payment to all Senior Indebtedness of Tosco. No payment of
principal (including redemption payments, if any), premium, if any, or interest
on the Convertible Debentures may be made (i) if any Senior Indebtedness of
Tosco is not paid when due and any applicable grace period with respect to such
default has ended and such default has not been cured or waived or ceased to
exist or (ii) if the maturity of any Senior Indebtedness of Tosco has been
accelerated because of a default. Tosco also may not make any payment upon or in
respect of the Convertible Debentures if a default in the payment of the
principal of, premium, if any, interest or other obligations in respect of
Senior Indebtedness occurs and is continuing beyond any applicable period of
grace.
Upon any distribution of assets of Tosco to creditors upon any dissolution,
winding-up, liquidation or reorganization, whether voluntary or involuntary, or
in bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest due or to become due on all Senior Indebtedness of
Tosco must be paid in full before the holders of Convertible Debentures are
entitled to receive or retain any payment. Upon satisfaction of all claims of
all Senior Indebtedness then outstanding, the rights of the holders of the
Convertible Debentures will be subrogated to the rights of the holders of Senior
Indebtedness of Tosco to receive payments or distributions applicable to Senior
Indebtedness until all amounts owing on the Convertible Debentures are paid in
full.
The term "Senior Indebtedness" means, with respect to Tosco, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor, for money borrowed under any credit agreements, notes, guarantees or
similar documents and (B) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by such obligor, (ii) all capital
lease obligations of such obligor, (iii) all obligations of such obligor issued
or assumed as the deferred purchase price of property, all conditional sale
obligations of such obligor and all obligations of such obligor under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement on any letter of credit, bankers' acceptance, security purchaser
facility or similar credit transaction, (v) all obligations of such obligor
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements, oil or gas commodity hedge transactions or other similar
instruments or agreements or foreign currency hedge, exchange, purchase or
similar instruments or agreements, (vi) all obligations of the types referred to
in clauses (i) through (v) above of other persons for the payments of which such
obligor is responsible or liable as obligor, guarantor or otherwise and (vii)
all obligations of the types referred to in clauses (i) through (vi) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), whether outstanding
on the date of the Indenture or thereafter created, incurred, assumed,
guaranteed or in effect guaranteed by such obligor, except for (1) any such
indebtedness that is by its terms subordinated to or pari passu with the
Convertible Debentures and (2) any indebtedness between or among such obligor or
its affiliates, including all other debt securities and guarantees in respect of
those debt securities, issued to any trust, or a trustee of such trust,
partnership or other entity affiliated with Tosco that is a financing vehicle of
Tosco (a "financing entity") in connection with the issuance by such financing
entity of Convertible Preferred Securities or other securities that rank pari
passu with or junior to, the Convertible Preferred Securities. Such Senior
Indebtedness shall continue to be Senior Indebtedness and be entitled to the
benefits of the subordination provisions irrespective of any deferrals,
renewals, extensions or refundings of, or amendments, modifications, supplements
or waivers of any term of such Senior Indebtedness. At January 31, 1997, Tosco
had outstanding approximately $1.7 billion of Senior Indebtedness, including
$300 million of first mortgage bonds collateralized by its Avon Refinery, $150
million of first mortgage bonds collateralized by its Bayway Refinery, an
unsecured revolving credit facility (the "Credit Agreement") of up to $1
billion, $5 million of other collateralized debt, $125 million of 7% notes due
2000, $240 million of 7.5% notes due 2006, $200 million of 7.25% notes due 2007,
$300 million of 7.80% debentures due 2027 and $100 million of 7.90% debentures
due 2047. At December 31, 1996, Tosco had no cash borrowings and outstanding
letters of credit of approximately $112,000 under the Credit Agreement.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by Tosco.
CERTAIN COVENANTS
In the Indenture, Tosco has covenanted that, so long as any Convertible
Debentures are outstanding, if (i) there shall have occurred any event that
would constitute an Event of Default, (ii) Tosco shall be in default with
respect to its payment of any obligations under the Guarantee, or (iii) Tosco
shall have given notice of its election to defer interest payments on the
Convertible Debentures by extending the interest payment period and such period,
or any extension thereof, shall be continuing, then Tosco (a) shall not declare
or pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to, any of its capital stock
other than (i) purchases or acquisitions of shares of Common Stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plans, (ii) as a result of a classification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock, or
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock of
the Company or the security being converted or exchanged for Tosco capital stock
or make any guarantee payments with respect to the foregoing, and (b) shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities including guarantees), issued by Tosco
that rank pari passu with or junior to the Convertible Debentures.
Tosco has agreed (i) to directly or indirectly maintain 100% ownership of
the Trust Common Securities; provided, however that any permitted successor of
Tosco under the Indenture may succeed to Tosco's ownership of such Trust Common
Securities, (ii) to use its reasonable efforts to cause the Trust (x) to remain
a statutory business trust, except in connection with the distribution of
Convertible Debentures to the holders of Trust Securities in liquidation of the
Trust, the redemption of all the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration,
and (y) to continue to be classified as a grantor trust for United States
federal income tax purposes and (iii) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Convertible Debentures.
Tosco may not merge or consolidate or sell or convey all or substantially
all of its assets unless the successor corporation (if other than Tosco) is a
domestic corporation and assumes Tosco's obligations on the Convertible
Debentures and under the Indenture, and unless after giving effect to such
transaction Tosco or the successor corporation would not be in default under the
Indenture.
REDEMPTION AT THE OPTION OF TOSCO
Tosco shall have the right to redeem the Convertible Debentures, in whole
or in part, from time to time, on or after December 18, 1999, upon not less than
30 nor more than 60 days notice, at the following prices (expressed as
percentages of the principal amount of the Convertible Debentures) together with
accrued and unpaid interest, including Compound Interest to, but excluding, the
redemption date, if redeemed during the 12-month period beginning December 18 of
the applicable year as set forth below:
YEAR REDEMPTION PRICE
1999 104.025%
2000 103.450
2001 102.875
2002 102.300
2003 101.725
2004 101.150
2005 100.575
and 100% if redeemed on or after December 18, 2006.
The Convertible Debentures may not be redeemed by Tosco if Tosco is in
arrears in payment of interest thereon. If Convertible Debentures are redeemed
on any March 15, June 15, September 15, or December 15, accrued and unpaid
interest shall be payable to holders of record on the relevant record date.
Tosco shall also have the right to redeem the Convertible Debentures at any
time in certain circumstances upon the occurrence of a Special Event as
described under "Description of the Convertible Preferred Securities-Special
Event Distribution; Tax Event Redemption" at 100% of the principal amount
thereof together with accrued and unpaid interest (including Compound Interest)
to the redemption date.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of the Convertible Debentures will
be used to redeem the Convertible Preferred Securities.
CONVERSION OF THE CONVERTIBLE DEBENTURES
The Convertible Debentures are convertible into Tosco Common Stock at the
option of the holders of the Convertible Debentures at any time beginning March
13, 1997 and prior to the close of business on the Business Day prior to the
maturity date of the Convertible Debentures (or, in the case of Convertible
Debentures called for redemption, the close of business on the Business Day
prior to the Redemption Date) at an initial conversion rate of 1.51899 shares of
Tosco Common Stock for each Convertible Debenture (equivalent to a conversion
price of $32.92 per share of Tosco Common Stock), subject to adjustment and
reset as described under "Description of the Convertible Preferred
Securities-Conversion Rights." The Trust has agreed not to convert Convertible
Debentures held by it except pursuant to a notice of conversion delivered to the
Conversion Agent by a holder of Convertible Preferred Securities. Upon surrender
of a Convertible Preferred Security to the Conversion Agent for conversion, the
Trust will distribute Convertible Debentures to the Conversion Agent on behalf
of the holder of the Convertible Preferred Securities so converted, whereupon
the Conversion Agent will convert such Convertible Debentures into Tosco Common
Stock on behalf of such holder. Tosco's delivery to the holders of the
Convertible Debentures (through the Conversion Agent) of the fixed number of
shares of Tosco Common Stock into which the Convertible Debentures are
convertible (together with the cash payment, if any, in lieu of fractional
shares) will be deemed to satisfy Tosco's obligation to pay the principal amount
of the Convertible Debentures so converted, and the accrued and unpaid interest
thereon attributable to the period from the last date to which interest has been
paid or duly provided for; provided, however that if any Convertible Debenture
is converted on or after a record date for payment of interest, the interest
payable on the related interest payment date with respect to such Convertible
Debenture shall be paid to the Trust (which will distribute such interest to the
converting holder) or other holder of Convertible Debentures, as the case may
be, despite such conversion; provided further that if a Redemption Date falls
between such record date and the related interest payment date, the amount of
such payment shall include interest accrued to, but excluding, such Redemption
Date.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events, which has occurred and is continuing, constitutes an "Event of Default"
with respect to the Convertible Debentures: (i) failure for 30 days to pay
interest on the Convertible Debentures, including any Additional Interest,
Compound Interest and Liquidated Damages in respect thereof, when due; provided
that a valid extension of an interest payment period will not constitute a
default in the payment of interest (including any Additional Interest, Compound
Interest or Liquidated Damages) for this purpose; or (ii) failure to pay
principal of or premium, if any, on the Convertible Debentures when due whether
at maturity, upon redemption, by declaration or otherwise; or (iii) failure by
Tosco to deliver shares of Tosco Common Stock upon an election by a holder of
Convertible Preferred Securities to convert such Convertible Preferred
Securities; (iv) failure to observe or perform any other covenant contained in
the Indenture for 30 days after notice to Tosco by the Debt Trustee or by the
holders of at least 25% in aggregate outstanding principal amount of the
Convertible Debentures; (v) the dissolution, winding up or termination of the
Trust, except in connection with the distribution of Convertible Debentures to
the holders of Convertible Preferred Securities in liquidation of the Trust upon
the redemption of all outstanding Convertible Preferred Securities and in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration; or (vi) certain events of bankruptcy, insolvency or
reorganization of Tosco which are voluntary or, if involuntary, continue for a
period of 90 days.
If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Convertible Debentures, will have
the right to declare the principal of and the accrued and unpaid interest on the
Convertible Debentures (including any Compound Interest and Additional Interest,
if any) and any other amounts payable under the Indenture to be forthwith due
and payable and to enforce its other rights as a creditor with respect to the
Convertible Debentures. An Indenture Event of Default also constitutes a
Declaration Event of Default. The holders of Convertible Preferred Securities in
certain circumstances have the right to direct the Institutional Trustee to
exercise its rights as the holder of the Convertible Debentures. See
"Description of the Convertible Preferred Securities-Declaration Events of
Default" and "-Voting Rights." Notwithstanding the foregoing, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of Tosco to pay interest or principal on the Convertible Debentures on
the date such interest or principal is otherwise payable (or in the case of
redemption, the redemption date), then a holder of Convertible Preferred
Securities may institute a Direct Action for payment on or after the respective
due date specified in the Convertible Debentures. Notwithstanding any payments
made to such holder of Convertible Preferred Securities by Tosco in connection
with a Direct Action, Tosco shall remain obligated to pay the principal of or
interest on the Convertible Debentures held by the Trust or the Institutional
Trustee of the Trust, and Tosco shall be subrogated to the rights of the holder
of such Convertible Preferred Securities with respect to payments on the
Convertible Preferred Securities to the extent of any payments made by Tosco to
such holder in any Direct Action. The holders of Convertible Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Convertible Debentures.
The Indenture contains provisions permitting the holders of a majority in
aggregate principal amount of the Convertible Debentures, on behalf of all of
the holders of the Convertible Debentures, to waive any past default in the
performance of any of the covenants contained in the Indenture, except a default
in the payment of the principal of or premium, if any, or interest on any of the
Convertible Debentures.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Convertible Preferred Securities in connection
with the involuntary or voluntary dissolution, winding-up or liquidation of the
Trust as a result of the occurrence of a Special Event, the Convertible
Debentures will be issued in the same form as the Convertible Preferred
Securities that such Convertible Debentures replace. Except under the limited
circumstances described below, Convertible Debentures represented by a Global
Security will not be exchangeable for, and will not otherwise be issuable as,
Convertible Debentures in definitive form. The Global Securities described above
may not be transferred except by DTC to a nominee of DTC or by a nominee of DTC
to DTC or another nominee of DTC or to successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in a Global
Security.
Except as provided below, owners of beneficial interests in a Global
Security will not he entitled to receive physical delivery of Convertible
Debentures in definitive form and will not be considered the holders (as defined
in the Indenture) thereof for any purpose under the Indenture, and no Global
Security representing Convertible Debentures shall be exchangeable, except for
another Global Security of like denomination and tenor to be registered in the
name of DTC or its nominee or to a successor depositary or its nominee.
Accordingly, each beneficial owner must rely on the procedures of DTC or if such
person is not a Participant, on the procedures of the Participant through which
such person owns its interest to exercise any rights of a holder under the
Indenture.
THE DEPOSITARY
If Convertible Debentures are distributed to holders of Convertible
Preferred Securities in liquidation of such holders' interests in the Trust and
a global security is issued, DTC will act as securities depositary for the
Convertible Debentures represented by such global security. For a description of
DTC and the specific terms of the depositary arrangements, see "Description of
the Convertible Preferred Securities-Form, Denomination and Registration-Global
Convertible Preferred Securities; Book-Entry Form." As of the date of this
Prospectus, the description therein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Convertible Preferred Securities apply in all material respects
to any debt obligations represented by one or more global securities held by
DTC. Tosco may appoint a successor to DTC or any successor depositary in the
event DTC or such successor depositary is unable or unwilling to continue as a
depositary for such global securities.
None of Tosco, the Trust, the Institutional Trustee, any paying agent and
any other agent of Tosco or the Debt Trustee will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a global security for such Convertible
Debentures or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Convertible Debentures
registered in the names of persons other than DTC or its nominee only if (i) DTC
notifies Tosco that it is unwilling or unable to continue as a depositary for
such Global Security and no successor depositary shall have been appointed, (ii)
DTC, at any time, ceases to be a clearing agency registered under the Exchange
Act when DTC is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) Tosco, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such
Convertible Debentures. Any Global Security that is exchangeable pursuant to the
preceding sentence shall be exchangeable for Convertible Debentures registered
in such names as DTC shall direct. It is expected that such instructions will be
based upon directions received by DTC from its Participants with respect to
ownership of beneficial interests in such Global Security.
MODIFICATIONS AND AMENDMENTS OF THE INDENTURE
The Indenture contains provisions permitting the Company and the Debt
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the outstanding Convertible Debentures, to modify
the Indenture or the rights of the holders of Convertible Debentures; provided
however that no such modification may, without the consent of the holder of each
outstanding Convertible Debenture affected thereby, (i) extend the stated
maturity of the Convertible Debentures 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 adversely affect the right
to convert Convertible Debentures or the subordination provisions of the
Indenture, or (ii) reduce the percentage in aggregate principal amount of
outstanding Convertible Debentures, the holders of which are required to consent
to any such supplemental indenture.
In addition, the Company and the Debt Trustee may execute, without the
consent of any holder of Convertible Debentures, any supplemental indenture to
cure any ambiguities, comply with the Trust Indenture Act and for certain other
customary purposes.
INFORMATION CONCERNING THE DEBT TRUSTEE
The Debt Trustee, prior to default, has undertaken to perform only such
duties as are specifically set forth in the Indenture and, after default, shall
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to such provision, the Debt Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Convertible Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debt Trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debt Trustee reasonably believes that repayment
or adequate indemnity is not reasonably assured to it.
The Indenture also contains limitations on the right of the Debt Trustee,
as a creditor of Tosco, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. In addition, the Debt Trustee may be deemed to have a conflicting
interest and may be required to resign as Debt Trustee if at the time of a
default under the Indenture it is a creditor of Tosco. The Company may from time
to time maintain deposit accounts and conduct its banking transactions with the
Debt Trustee in the ordinary course of business.
GOVERNING LAW
The Indenture and the Convertible Debentures are governed by, and construed
in accordance with, the internal laws of the State of New York.
MISCELLANEOUS
The Indenture provides that Tosco will pay all fees and expenses related to
(i) the offering of the Trust Securities and the Convertible Debentures, (ii)
the organization, maintenance and dissolution of the Trust, (iii) the retention
of the TFT Trustees and (iv) the enforcement by the Institutional Trustee of the
rights of the holders of the Convertible Preferred Securities. The payment of
such fees and expenses will be fully and unconditionally guaranteed by Tosco.
Tosco has the right at all times to assign any of its respective rights or
obligations under the Indenture to a direct or indirect wholly-owned subsidiary
of Tosco; provided that, in the event of any such assignment, Tosco will remain
liable for all of its obligations. Subject to the foregoing, the Indenture will
be binding upon and inure to the benefit of the parties thereto and their
respective successors and assigns. The Indenture provides that it may not
otherwise be assigned by the parties thereto.
EFFECT OF OBLIGATIONS UNDER THE
CONVERTIBLE DEBENTURES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of the Trust is to issue
the Trust Securities evidencing undivided beneficial interests in the assets of
the Trust, and to invest the proceeds from such issuance and sale in the
Convertible Debentures.
As long as payments of interest and other payments are made when due on the
Convertible Debentures, such payments will be sufficient to cover distributions
and payments due on the Trust Securities because of the following factors: (i)
the aggregate principal amount of Convertible Debentures will be equal to the
sum of the aggregate stated liquidation amount of the Trust Securities; (ii) the
interest rate and the interest and other payment dates on the Convertible
Debentures will match the distribution rate and distribution and other payment
dates for the Convertible Preferred Securities; (iii) Tosco shall pay, and the
Trust shall not be obligated to pay, directly or indirectly, all costs,
expenses, debt and obligations of the Trust (other than with respect to the
Trust Securities); and (iv) the Declaration further provides that the TFT
Trustees shall not take or cause or permit the Trust to, among other things,
engage in any activity that is not consistent with the purposes of the Trust.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Convertible Preferred Securities (to the extent funds
therefor are available) are guaranteed by Tosco as and to the extent set forth
under "Description of the Guarantee" herein. If Tosco does not make interest
payments on the Convertible Debentures purchased by the Trust, it is expected
that the Trust will not have sufficient funds to pay distributions on the
Convertible Preferred Securities. The Guarantee is a full guarantee on a
subordinated basis with respect to the Convertible Preferred Securities issued
by the Trust from the time of its issuance but does not apply to any payment of
distributions unless and until the Trust has sufficient funds for the payment of
such distributions. The Guarantee covers the payment of distributions and other
payments on the Convertible Preferred Securities only if and to the extent that
Tosco has made a payment of interest or principal on the Convertible Debentures
held by the Trust as its sole asset. See "Risk Factors-Limitations of the
Guarantee." The Guarantee, when taken together with Tosco's obligations under
the Convertible Debentures, the Indenture and the Declaration, including its
obligations to pay costs, expenses, debts and liabilities of the Trust (other
than with respect to the Trust Securities), provides a full and unconditional
guarantee of amounts on the Convertible Preferred Securities.
If Tosco fails to make interest or other payments on the Convertible
Debentures when due (taking account of any Extension Period), the Declaration
provides a mechanism whereby a holder of the Convertible Preferred Securities,
using the procedures described in "Description of the Convertible Preferred
Securities-Voting Rights," may direct the Institutional Trustee to enforce its
rights under the Convertible Debentures. Notwithstanding the foregoing, in such
circumstances a holder of Convertible Preferred Securities may institute a
Direct Action for payment on or after the respective due date specified in the
Convertible Debentures. In connection with such Direct Action, Tosco will be
subrogated to the rights of such holder of Convertible Preferred Securities
under the Declaration to the extent of any payment made by Tosco to such holder
of Convertible Preferred Securities in such Direct Action. Tosco, under the
Guarantee, acknowledges that Guarantee Trustee shall enforce the Guarantee on
behalf of holders of the Convertible Preferred Securities. If Tosco fails to
make payments under the Guarantee, the Guarantee provides a mechanism whereby
the holders of the Convertible Preferred Securities may direct the Guarantee
Trustee to enforce its rights thereunder. Any holder of Convertible Preferred
Securities may institute a legal proceeding directly against Tosco to enforce
such holder's right to receive payment under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity.
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of Tosco consists of 250 million shares of
Common Stock, $.75 par value, and 12 million shares of Preferred Stock, $1.00
par value (the "Preferred Stock"). As of February 28, 1997 there were
131,021,499 shares of Common Stock outstanding. Tosco Common Stock is listed on
the NYSE and the Pacific Stock Exchange under the symbol "TOS." No shares of
Preferred Stock are outstanding.
COMMON STOCK
The holders of Common Stock are entitled to one vote for each share held
and have the sole right and power to vote in all matters on which a vote of
stockholders is taken, except as otherwise provided by statute and subject to
voting rights of any holders of Preferred Stock. Subject to the rights of any
holders of Preferred Stock, the holders of shares of Common Stock are entitled
to receive dividends when, as and if declared by Tosco's Board of Directors, out
of funds legally available therefor and to share pro rata in any distribution to
stockholders. Upon liquidation, dissolution, or winding up of Tosco, subject to
the rights of the holders of any shares of Preferred Stock, the holders of
Common Stock are entitled to receive the net assets of Tosco in proportion to
the respective number of shares held by them. The holders of Common Stock do not
have any preemptive right to subscribe for or purchase any shares of any class
of stock. The outstanding shares of Common Stock are not subject to further call
or redemption and all outstanding shares of Common Stock are, and the Common
Stock into which the Convertible Preferred Securities may be converted will upon
issuance be, validly issued, fully paid and non-assessable.
PREFERRED STOCK
Tosco is authorized to issue 12 million shares of Preferred Stock. Such
shares may be issued from time to time at the discretion of Tosco's Board of
Directors, without stockholder approval. Tosco's Board of Directors is
authorized to issue such shares in different series and with respect to each
series to determine the dividend rate, the redemption provisions, voting rights,
conversion provisions, liquidation preferences, and such other rights and
privileges not in conflict with Tosco's Articles of Incorporation and any
qualifications, limitations or restrictions on such shares.
UNITED STATES FEDERAL INCOME TAXATION
GENERAL
The following is a summary of certain material United States federal income
tax consequences pertaining to the purchase, ownership, disposition, and
conversion of Convertible Preferred Securities. Unless otherwise stated, this
summary deals only with Convertible Preferred Securities held as capital assets
by holders who purchased the securities upon original issuance. This summary
does not deal with special classes of holders such as banks, thrifts, real
estate investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, tax-exempt investors, persons which hold
the Convertible Preferred Securities as a position in a "straddle", as part of a
"synthetic security" or "hedge", as part of a "conversion transaction" or as
other than a capital asset. This summary does not address the tax consequences
to persons which have a functional currency other than the U.S. Dollar or the
tax consequences to shareholders, partners, or beneficiaries of a holder of
Convertible Preferred Securities. Further, this summary does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government which may be applicable
to the Convertible Preferred Securities. This summary is based on the Internal
Revenue Code of 1986, as amended (the "Code"), Treasury Regulations promulgated
thereunder, and administrative and judicial interpretations thereof, as of the
date hereof, all of which are subject to change, possibly on a retroactive
basis.
CLASSIFICATION OF CONVERTIBLE DEBENTURES
The Company believes that the Convertible Debentures will be classified for
United States federal income tax purposes as indebtedness of the Company under
current law, and by acceptance of a Convertible Preferred Security, each holder
covenants to treat the Convertible Debentures as indebtedness and the
Convertible Preferred Securities as evidence of an indirect beneficial ownership
interest in the Convertible Debentures. No assurance can be given, however, that
such position of the Company will not be challenged by the Internal Revenue
Service (the "Service") or, if challenged, that such a challenge will not be
successful. The remainder of this discussion assumes that the Convertible
Debentures will be classified as indebtedness of the Company for United States
federal income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Convertible Preferred Securities,
Stroock & Stroock & Lavan LLP, counsel to the Company and the Trust, will render
its opinion generally to the effect that, under then current law and assuming
full compliance with the terms of the Declaration and 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 an association taxable as a corporation.
Accordingly, for United States federal income tax purposes, each holder of
Convertible Preferred Securities generally will be considered to be the owner of
an undivided interest in the Convertible Debentures, and each holder will be
required to include in its gross income any original issue discount accrued with
respect to its allocable share of those Convertible Debentures.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL
ISSUE DISCOUNT
Because the Company has the option, under the terms of the Convertible
Debentures, to defer payments of interest by extending interest payment periods
for up to 20 quarters, all payments on the Convertible Debentures may be
considered part of the stated redemption price at maturity and, consequently,
the Convertible Debentures would be treated as issued with "original issue
discount." The Company intends to report to the Service and to holders, and the
remaining discussion under "United States Federal Income Taxation" assumes, that
all payments on the Convertible Debentures are part of their stated redemption
price at maturity. The Service may contend that the Convertible Debentures
should be treated as contingent payment debt instruments. However, because the
Service has reserved on its treatment of instruments the payments on which are
subject to timing contingencies, the Company does not intend to treat the
Convertible Debentures as, and this discussion assumes that the Convertible
Debentures are not, contingent payment debt instruments. Holders of debt
instruments issued with OID must include that discount in income on an economic
accrual basis regardless of their method of tax accounting, and without regard
to whether such accrual causes amounts to be included in income prior to the
receipt of cash attributable to the interest. Generally, all of a holder's
taxable interest income with respect to the Convertible Debentures will be
accounted for as OID. Actual payments and distributions of stated interest will
not, however, be separately reported as includable in taxable income. The amount
of OID which accrues in any quarter will approximately equal the amount of the
interest which accrues on the Convertible Debentures in that quarter at the
stated interest rate. In the event the interest payment period is extended,
holders will continue to accrue OID approximately equal to the amount of the
interest payment due at the end of the extended interest payment period on a
economic accrual basis over the length of the extended interest payment. Upon
conversion of Convertible Preferred Securities into Tosco Common Stock, the
holder will no longer be required to accrue OlD.
Because interest on the Convertible Preferred Securities will constitute
OID, corporate holders of Convertible Preferred Securities will not be entitled
to a dividends-received deduction with respect to any income recognized with
respect to the Convertible Preferred Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of the Convertible Preferred Securities, other than a holder who
purchased the Convertible Preferred Securities upon original issuance, may be
considered to have acquired their undivided interests in the Convertible
Debentures with "market discount" or "acquisition premium" as such terms are
defined for United States federal income tax purposes. Such holders are advised
to consult their tax advisors as to the income tax consequences associated with
the acquisition, ownership, and disposition of the Convertible Preferred
Securities.
RECEIPT OF CONVERTIBLE DEBENTURES OR CASH UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption "Description of
the Convertible Preferred Securities-Special Event Distribution; Tax
Redemption," Convertible Debentures may be distributed to holders in exchange
for the Convertible Preferred Securities 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 Convertible Debentures equal
to such holder's aggregate tax basis in its Convertible Preferred Securities. A
holder's holding period in the Convertible Debentures so received in liquidation
of the Trust would include the period during which the Convertible Preferred
Securities were held by such holder. If, however, the related Special Event is 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 Convertible Preferred Securities as if they sold the exchanged
Convertible Preferred Securities for cash, in which event the Company could, at
its option, redeem the Convertible Debentures and distribute the resulting cash
in liquidation of the Trust. See "Sale or Redemption of Convertible Preferred
Securities" below.
Under certain circumstances described herein (see "Description of the
Convertible Preferred Securities"), the Convertible Debentures may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Convertible Preferred Securities. Under current law, such a
redemption would, for United States federal income tax purposes, constitute a
taxable disposition of the redeemed Convertible Preferred Securities, and a
holder would recognize gain or loss as if it had sold such redeemed Convertible
Preferred Securities for cash. See "Sale or Redemption of Convertible Preferred
Securities" below.
SALE OR REDEMPTION OF CONVERTIBLE PREFERRED SECURITIES
A holder which sells Convertible Preferred Securities (or whose Convertible
Preferred Securities are redeemed) will recognize gain or loss equal to the
difference between the amount realized on the sale or redemption of the
Convertible Preferred Securities and the holder's adjusted tax basis in such
Convertible Preferred Securities. A holder's adjusted tax basis in the
Convertible Preferred Securities generally would be equal to its initial
purchase price increased by OID previously includable in such holder's gross
income to the date of disposition and decreased by payments received on the
Convertible Preferred Securities to the date of the disposition. Such gain or
loss will be a capital gain or loss and will be long-term gain or loss if the
Convertible Preferred Securities have been held for more than one year at the
time of disposition.
The Convertible Preferred Securities may trade at a price which does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Convertible Debentures. A holder which disposes of or converts its
Convertible Preferred Securities between record dates for payments of
distribution thereon will be required to include in its income as ordinary
income, the accrued but unpaid interest on the Convertible Debentures through
the date of disposition or conversion, and to add such amount to its adjusted
tax basis in its pro rata share of the underlying Convertible Debentures which
will be deemed disposed of or converted. To the extent the selling price is less
than the holder's adjusted tax basis (which basis will include, in the form of
OID, all accrued but unpaid interest),a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes.
CERTAIN NON-U.S. HOLDERS
For purposes of this discussion, the term "Non-U.S. Holder" means any
person who for federal income tax purposes is not (i) a citizen or resident of
the United States, (ii) a corporation, partnership or other entity created or
organized in or under the laws of the United States or of any State, or (iii) a
domestic trust or estate.
Under present United States federal income tax law, interest on the
Convertible Debentures and the Convertible Preferred Securities, including OID,
will generally be classified as "portfolio interest" to a Non-U.S. Holder of a
Convertible Preferred Security. As a result, payments by Tosco of interest on
the Convertible Debentures and payments by the Trust or any of its paying agents
of stated interest to a holder of a Convertible Preferred Security who or which
is a Non-U.S. Holder generally will not be subject to withholding of United
States federal income tax provided:
(a) the beneficial owner of the Convertible Preferred Security does
not actually or constructively (including by virtue of its interest in the
underlying Convertible Debentures) own 10% or more of the total combined
voting power of all classes of stock of Tosco entitled to vote, which
ownership is determined after the application of certain attribution rules;
(b) the beneficial owner of the Convertible Preferred Security is not
a controlled foreign corporation which is related to Tosco through stock
ownership;
(c) either (i) the beneficial owner of the Convertible Preferred
Security certifies to the Trust or its agent, under penalties of perjury
that it is not a United States person, and provides its address to the
Trust or its agent or (ii) a securities clearing organization, a bank, or
other financial institution which holds customers' securities in the
ordinary course of its trade or business and which holds the Convertible
Preferred Security in such capacity certifies to the Trust or its agent,
under penalties of perjury, that such statement has been received from the
beneficial owner by it or by a qualifying intermediary and furnishes a copy
of the statement to the Trust or its agent; and
(d) the income from the Convertible Debenture is not effectively
connected with the conduct of a trade or business of the holder within the
United States.
If the beneficial owner of a Convertible Preferred Security who is a
Non-U.S. Holder is engaged in a trade or business within the United States any
capital gain realized upon the sale or exchange of the Convertible Preferred
Security (including upon its retirement or upon receipt of cash in lieu of
fractional shares upon conversion into Company Common Stock) and any interest
(including OID) on the Convertible Preferred Security will be subject to United
States federal income tax, and, in the case of a corporate holder, the branch
profits tax may also apply.
The Company does not believe that it currently should be classified as a
"United States real property holding corporation" for United States tax
purposes. While the Company believes that its interpretations and procedures
employed in reaching such conclusion are reasonable, there can be no assurance
that the Internal Revenue Service would reach the same conclusion. If the
Company were so classified, capital gain income realized by a Non-U.S. Holder
upon the disposition of a Convertible Preferred Security or of Company Common
Stock received upon conversion of a Convertible Preferred Security would in
certain cases be treated as income effectively connected with the conduct of a
trade or business within the United States and would be taxed at regular United
States capital gains rates. A Non-U.S. Holder would generally be subject to
withholding of United States federal income tax in an amount equal to 10% of the
amount realized on the disposition of a Convertible Preferred Security. Non-U.S.
Holders are encouraged to contact their tax advisors regarding the possible
classification of the Company as a "United States real property holding
corporation," and the tax implications that would arise from such
classification.
In April 1996, the U.S. Treasury Department issued proposed regulations
that if finalized could affect the procedures to be followed to establish
Non-U.S. Holder status. These regulations are proposed to be effective for
payments made after December 31, 1997. Non-U.S. Holders should consult their tax
advisors regarding the status of the proposed regulations.
PROPOSED TAX LEGISLATION
President Clinton's fiscal 1998 budget proposal contains provisions which
if enacted would treat as equity for United States federal income tax purposes
instruments that have a maximum term of more than 15 years and that are not
shown as indebtedness on the balance sheet of the issuer, and would disallow
interest deductions on certain convertible debt instruments. Since these
proposals, if enacted in their current form, would apply with respect to
instruments issued after first committee action, it is not anticipated that such
proposals would apply to the Convertible Debentures if they are issued prior to
the date of such action. Similar proposals were contained in President Clinton's
fiscal 1997 budget proposal, but if enacted as then written would have had a
retroactive effect. There can be no assurance that any legislation enacted after
the date hereof will not adversely affect the tax treatment of the Convertible
Debentures.
If legislation is enacted that adversely affects the tax treatment of the
Convertible Debentures, such legislation could result in the distribution of the
Convertible Debentures to holders of the Convertible Preferred Securities or, in
certain limited circumstances, the redemption of such securities by the Company
and the distribution of the resulting cash in redemption of the Convertible
Preferred Securities. See "Description of the Convertible Preferred
Securities-Special Event Distribution; Tax Redemption."
CONVERSION OF CONVERTIBLE PREFERRED SECURITIES INTO CONVERTIBLE
DEBENTURES OR COMPANY COMMON STOCK
A holder will not recognize gain or loss upon the conversion, through the
Conversion Agent, of Convertible Preferred Securities for a proportionate share
of the Convertible Debentures held by the Trust, although certain filing
requirements may be required to avoid a withholding tax in the case of certain
Non-U.S. Holders.
A holder will not recognize gain, or loss upon the conversion, through the
Conversion Agent, of Convertible Debentures into Company Common Stock. A holder
will, however, recognize gain upon the receipt of cash in lieu of a fractional
share of Company Common Stock equal to the amount of cash received less the
holder's tax basis in such fractional share. A holder's tax basis in the Company
Common Stock received upon exchange and conversion should generally be equal to
the holder's tax basis in the Convertible Preferred Securities delivered to the
Conversion Agent for exchange less the basis allocated to any fractional share
for which cash is received, and a holder's holding period in the Company Common
Stock received upon exchange and conversion should generally begin on the date
the holder acquired the Convertible Preferred Securities delivered to the
Conversion Agent for exchange.
ADJUSTMENT OF CONVERSION PRICE
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Convertible Preferred Securities as having received a constructive
distribution from the Company in the event the conversion ratio of the
Convertible Debentures is adjusted if (i) as a result of such adjustment, the
proportionate interest (measured by the quantum of Company Common Stock into or
for which the Convertible Debentures are convertible or exchangeable) of the
holder's Convertible Preferred Securities in the assets or earnings and profits
of the Company is increased, and (ii) the adjustment is not made pursuant to a
bona fide, reasonable, anti-dilution formula. An adjustment in the conversion
ratio would not be considered made pursuant to such formula if the adjustment is
made to compensate for certain taxable distributions with respect to the Company
Common Stock. Thus, under certain circumstances, a reduction in the conversion
price of the holders may result in deemed dividend income to holders to the
extent of the current or accumulated earnings and profits of the Company.
Holders of the Convertible Preferred Securities would be required to include
their allocable share of such deemed dividend income in gross income but would
not receive any cash related thereto.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Generally, income on the Convertible Preferred Securities will be reported
to holders on Forms 1099, which forms should be mailed to holders of Convertible
Preferred Securities by January 31 following each calendar year.
Payments made on, and proceeds from the sale of, the Convertible Preferred
Securities may be subject to a "backup" withholding tax of 3l% unless the holder
complies with certain identification requirements. Any withheld amounts will be
allowed as a credit against the holder's United States federal income tax,
provided the required information is provided to the Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF THE
CONVERTIBLE PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE,
LOCAL, FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS WITH POSSIBLE RETROACTIVE EFFECTS.
SELLING HOLDERS
The Convertible Preferred Securities were originally issued by the Trust
and sold by Morgan Stanley & Co. Incorporated, Donaldson, Lufkin & Jenrette
Securities Corporation and Furman Selz LLC (the "Initial Purchasers"), in
transactions exempt from the registration requirements of the Securities Act, to
persons reasonably believed by such Initial Purchasers to be "qualified
institutional buyers" (as defined in Rule 144A of the Securities Act), to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3), or
(7) under the Securities Act) or outside the United States to non-U.S. persons
in off-shore transactions in reliance on Regulation S under the Securities Act.
These purchasers, or their transferees, pledgees, donees or successors (the
"Selling Holders") may from time to time offer and sell pursuant to this
Prospectus any or all of the Convertible Preferred Securities, the Convertible
Subordinated Debentures, Tosco Common Stock issued upon conversion of the
Convertible Preferred Securities, and the associated Guarantee.
The Offered Securities have been registered pursuant to the Registration
Rights Agreement which provides that the Company file a registration statement
with regard to the Offered Securities by March 17, 1997 and keep such
registration statement effective until the earlier of (i) the sale pursuant to
the Shelf Registration Statement or Rule 144(a) under the Securities Act of all
the Registrable Securities, and (ii) the expiration of the holding period
applicable to sales of Registrable Securities under Rule 144(k) under the
Securities Act, or any successor provision. Although none of the Selling Holders
have advised the Company that they currently intend to sell all or any of the
Offered Securities pursuant to this Prospectus, the Selling Holders may choose
to sell the Offered Securities from time to time upon notice to Tosco and the
Trust. See "Plan of Distribution."
Prior to any use of this Prospectus in connection with an offering of the
Offered Securities, this Prospectus will be supplemented to set forth the name
and number of shares beneficially owned by the Selling Holder intending to sell
such Offered Securities, and the number of Offered Securities to be offered. The
Prospectus Supplement will also disclose whether any Selling Holder selling in
connection with such Prospectus Supplement has held any position or office with,
been employed by or otherwise has a material relationship with, Tosco or any of
its affiliates during the three (3) years prior to the date of the Prospectus
Supplement.
PLAN OF DISTRIBUTION
The Offered Securities may be sold from time to time to purchasers directly
by the Selling Holders. Alternatively, the Selling Holders may from time to time
offer the Offered 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 such
securities for whom they may act as agents. The Selling Holders and any
underwriters, broker/dealers or agents that participate in the distribution of
Offered 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 Offered Securities may be sold from time to time in one or more
transactions at fixed prices, at the prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
This sale of the Offered Securities may be effectuated in transactions (which
may involve crosses or block transactions) (i) on any national securities
exchange or quotation service on which the Offered Securities may be listed or
quoted at the time of sale, (ii) in the over-the-counter market, (iii) in
transactions otherwise than on such exchanges or in the over-the-counter market,
or (iv) through the writing and exercise of options. At the time a particular
offering of the Offered Securities is made, a Prospectus Supplement, if
required, will be distributed which will set forth the aggregate amount of the
type of Offered 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 Offered Securities will be offered or sold in
such jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the Offered 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 thereunder, which provisions may limit
the timing of purchases and sales of any of the Offered Securities by the
Selling Holders. The foregoing may affect the marketability of such securities.
Pursuant to the Registration Rights Agreement, the Company shall pay all
expenses of the registration of the Offered Securities including, without
limitation, commission filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Holders will
pay all underwriting discounts and selling commissions, if any. The Selling
Holders will be indemnified by the Company and the Trust, jointly and severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith. The
Company and the Trust will be indemnified by the Selling Holders severally
against certain civil liabilities, including certain liabilities under the
Securities Act, or will be entitled to contribution in connection therewith.
LEGAL MATTERS
The validity of the Offered Securities and certain United States federal
income taxation matters will be passed upon for Tosco and Tosco Financing Trust
by Stroock & Stroock & Lavan LLP, New York, New York.
EXPERTS
The consolidated financial statements of Tosco and its subsidiaries have
been incorporated by reference herein and in the registration statement in
reliance upon the report of Coopers & Lybrand L.L.P, independent certified
public accountants, also incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
<PAGE>
NO DEALER, SALES PERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY, THE ISSUER OR ANY OF THEIR AGENTS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY OR THE ISSUER SINCE SUCH DATE.
TABLE OF CONTENTS
PAGE
Available Information ..............................4
Incorporation of Certain Documents by
Reference .....................................4
Special Note Regarding Forward-Looking
Statements ....................................5
Prospectus Summary .................................6
Risk Factors ......................................10
Accounting Treatment ..............................16
Ratio of Earnings to Fixed Charges 16
The Company........................................16
Tosco Financing Trust .............................17
Description of the Convertible
Preferred Securities .........................18
Description of the Guarantee ......................34
Description of the Convertible
Debentures ...................................37
Effect of Obligations Under the
Convertible Debentures and the
Guarantee ....................................44
Description of Capital Stock ......................45
United States Federal Income
Taxation .....................................47
Selling Holders ...................................52
Plan of Distribution ..............................52
Legal Matters .....................................53
Experts ...........................................53
TOSCO FINANCING TRUST
6,000,000
5-3/4% TRUST CONVERTIBLE PREFERRED SECURITIES
(LIQUIDATION AMOUNT $50 PER
CONVERTIBLE PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
TOSCO CORPORATION
Dated March 1997.
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the distribution of the Offered
Securities (all of which shall be paid by the Registrant) being registered
hereunder (other than underwriting discounts) are set forth in the following
table (all amounts except the SEC registration fee are estimated):
Securities and Exchange Commission Registration Fee....................$90,909
Accounting Fees and
Expenses..............................................................$ 20,000
Trustee Fees and Expenses.............................................$ 10,000
Legal Fees and
Expenses..............................................................$ 50,000
Printing
Expenses..............................................................$ 50,000
Miscellaneous.........................................................$ 4,091
Total.................................................................$225,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Restated Articles of Incorporation of the Registrant provide that the
Registrant shall, to the fullest extent provided by the Nevada General
Corporation Law (the "Nevada GCL"), indemnify any and all persons whom it shall
have the power to indemnify under the Nevada GCL from and against any and all of
the expenses, liabilities or other matters referred to in or covered by the
Nevada GCL. The indemnification provided for in the Registrant's Restated
Articles of Incorporation shall not be deemed exclusive of any other rights to
which those indemnified may be entitled under any By-Law, agreement, vote of
stockholders or disinterested Directors, statute, rule or by common law or
otherwise.
The By-Laws of the Registrant also provide certain indemnification rights
to the Directors and officers of the Registrant.
The Registrant continues to maintain Directors and officers liability
insurance policies. The Registrant presently carries $15 million of such
coverage under a policy maintained with a wholly-owned subsidiary of the
Registrant engaged in the insurance business in Bermuda. In addition, the
Registrant carries $50,000,000 of Directors and officers liability coverage
under policies maintained with private unaffiliated insurance carriers. The
insurance subsidiary has deposited in trust the insurance premiums received by
it from the Registrant which will be used to pay losses which are covered by the
insurance policy issued by such subsidiary.
The Restated Articles of Incorporation of the Registrant include a
provision which eliminates the liability of Directors and officers to the
Registrant or its stockholders for damages for breaches of their fiduciary duty,
except for liability (i) for acts or omissions which involve intentional
misconduct, fraud or a knowing violation of law; or (ii) for the payment of
dividends in violation of the provisions of the Nevada GCL which provide that
directors who, willfully or with gross negligence, permit the payment of a
dividend or the making of a distribution other than as permitted by the Nevada
GCL are jointly and severally liable for the lesser of the amount of the
dividend or the loss sustained by reason of the dividend or other distribution
to stockholders.
Under Nevada law, absent the foregoing provision, Directors and officers
would be liable for negligence or misconduct in the performance of their duties
to the Registrant. The provision absolves Directors and officers of liability
for negligence, including gross negligence, in the performance of their duties.
They will remain liable for acts or omissions which involve intentional
misconduct, fraud, a knowing violation of law or a violation of the provision
referred to above concerning payment of dividends. The provision has no effect
on the availability of equitable remedies such as injunction or rescission upon
breach of such duty. In addition, the Registrant understands that the Commission
takes the position that the provision will not affect the liability of such
persons under the federal securities laws. The Commission's position appears to
be that (1) the Nevada law authorizing this provision by its terms only permits
the elimination or limitation for breach of fiduciary duty as a director or
officer, which is a state law liability and not one imposed by the federal
securities laws, and (2) the federal securities laws preempt attempts by the
states to limit liability for violations of such laws. However, these issues
have not been litigated and are unresolved at the present time. The Nevada law
authorizing this provision does not state whether charter amendments adopted
pursuant thereto will apply prospectively only or whether they will also apply
to acts or omissions which are alleged to have occurred prior to their adoption
and the Nevada courts have not addressed such issue. In the event that such
amendments are determined by the Nevada courts to apply retroactively, the
Registrant intends the provision to have such retroactive application.
Registrant has entered into indemnification agreements with its Directors
which provide them with certain indemnification rights.
ITEM 16. EXHIBITS.
4.1 Registration Rights Agreement dated as of December 13,
1996 between Registrant and Morgan Stanley & Co.
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and Furman Selz LLC.
4.2 -- Certificate of Trust of Tosco Financing Trust.
4.3 -- Amended and Restated Declaration of Trust of Tosco
Financing Trust dated as of December 13, 1996 among the
Regular Trustees, the Delaware Trustee, the
Institutional Trustee and Tosco Corporation, as Sponsor
and Debenture issuer.
4.4 -- Indenture dated as of May 1, 1996, between Tosco
Corporation and State Street Bank and Trust Company, as
the Indenture Trustee. Incorporated by reference to
Exhibit 4.1 to Registration Statement filed by
Registrant on Form S-3 dated April 15, 1996 (No.
333-521).
4.5 -- Supplemental Indenture dated as of December 13, 1996,
between Tosco Corporation and State Street Bank and
Trust Company.
4.6 -- Form of 53/4% Convertible Preferred Securities.
4.7 -- Form of 5 3/4% Convertible Junior Subordinated
Debentures.
4.8 -- Preferred Securities Guarantee Agreement dated December
13, 1996 between Tosco Corporation, as Guarantor, and
the Bank of New York, as Guarantee Trustee
5.1 -- Opinion of Stroock & Stroock & Lavan LLP as to the
legality of the Tosco Corporation Common Stock, 5 3/4%
Convertible Junior Subordinated Debentures, the 5 3/4%
Convertible Preferred Securities and Preferred
Securities Guarantee being registered hereby and as to
certain tax matters.
8.1 -- Opinion of Stroock & Stroock & Lavan LLP as to certain
tax matters (included in Exhibit 5.1)
12.1 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Coopers & Lybrand, LLP.
23.2 -- Consent of Stroock & Stroock & Lavan LLP (included as
part of Exhibit 5.1 and incorporated herein by
reference).
24. -- Power of Attorney (included on signature page of this
Registration Statement).
25.1 -- Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of State Street Bank and Trust
Company, as Indenture Trustee under the Indenture.
25.2 -- Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of the Bank of New York, as
Institutional Trustee under the Amended and Restated
Declaration of Trust.
25.3 -- Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of the Bank of New York, as
Preferred Guarantee Trustee under the Preferred
Securities Guarantee Agreement.
- ---------------
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
Registration Statement is on Form S-3 or Form S-8 and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, 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.
(2) For the purpose of determining any liability under the Securities Act,
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.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
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 Registrant 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 it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(e) The undersigned Registrant hereby undertakes (1) to use its best
efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at that time meets the requirements of Section 10(a) of the Securities Act, and
relating to the securities offered at competitive bidding, as contained in the
Registration Statement, together with any supplements thereto, and (2) to file
an amendment to the Registration Statement reflecting the results of bidding,
the terms of the reoffering and related matters to the extent required by the
applicable form, not later than the first use, authorized by the Registrant
after the opening of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such securities by the
Registrant and no reoffering of such securities by the purchasers is proposed to
be made.
(f) The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act of 1939, as amended
(the "Act"), in accordance with the rules and regulations prescribed by the
Commission under Section 305(b)(2) of the Act.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Stamford, State of Connecticut, on March 13, 1997.
TOSCO CORPORATION
BY: /s/_______________________
Thomas D. O'Malley
Chairman of the Board
of Directors
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Thomas D. O'Malley, Jefferson F. Allen and Wilkes
McClave III, and each of them, 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 or all amendments
(including post-effective amendments) of and supplements to this Registration
Statement and any Registration Statement relating to any offering made pursuant
to this Registration Statement that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto such attorney-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 and about the premises, to all intents and
purposes and as fully as they might or could do in person, hereby ratifying and
confirming all that such attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<PAGE>
Signature TITLE DATE
Chairman of the Board of
/s/ Thomas D. O'Malley Directors and Chief March 13, 1997
Thomas D. O'Malley Executive Officer
/s/ Jefferson F. Allen Principal Financial
Jefferson F. Allen Officer and Director March 13, 1997
/s/ Robert I. Santo Principal Accounting
Robert I. Santo Officer March 13, 1997
/s/ Joseph B. Carr
Joseph B. Carr Director March 13, 1997
/s/ Patrick M. deBarros
Patrick M. deBarros Director March 13, 1997
Houston I. Flournoy Director March , 1997
/s/ Clarence G. Frame
Clarence G. Frame Director March 13, 1997
/s/ Edmund A. Hajim
Edmund A. Hajim Director March 13, 1997
/s/ Joseph P. Ingrassis
Joseph P. Ingrassia Director March 13, 1997
/s/ Charles J. Luellen
Charles J. Luellen Director March 13, 1997
_____________________
Mark R. Mulvoy Director March , 1997
<PAGE>
EXHIBIT INDEX
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION OF EXHIBIT PAGE
4.1 -- Registration Rights Agreement dated as of December 13,
1996 between Registrant and Morgan Stanley & Co.
Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation and Furman Selz LLC.
4.2 -- Certificate of Trust of Tosco Financing Trust.
4.3 -- Amended and Restated Declaration of Trust of Tosco
Financing Trust dated as of December 13, 1996 among the
Regular Trustees, the Delaware Trustee, the
Institutional Trustee and Tosco Corporation, as Sponsor
and Debenture issuer.
4.4 -- Indenture dated as of May 1, 1996, between Tosco
Corporation and State Street Bank and Trust Company, as
the Indenture Trustee. Incorporated by reference to
Exhibit 4.1 to Registration Statement filed by
Registrant on Form S-3 dated April 15, 1996 (No.
333-521).
4.5 -- Supplemental Indenture dated as of December 13, 1996,
between Tosco Corporation and State Street Bank and
Trust Company.
4.6 -- Form of 5 3/4% Convertible Preferred Securities.
4.7 -- Form of 5 3/4% Convertible Junior Subordinated
Debentures.
4.8 -- Preferred Securities Guarantee Agreement dated December
13, 1996 between Tosco Corporation, as Guarantor, and
the Bank of New York, as Guarantee Trustee
5.1 -- Opinion of Stroock & Stroock & Lavan LLP as to the
legality of the Tosco Corporation Common Stock, 5 3/4%
Convertible Junior Subordinated Debentures, the 5 3/4%
Convertible Preferred Securities and Preferred
Securities Guarantee being registered hereby and as to
certain tax matters.
8.1 -- Opinion of Stroock & Stroock & Lavan LLP as to certain
tax matters (included in Exhibit 5.1)
12.1 -- Computation of Ratio of Earnings to Fixed Charges
23.1 -- Consent of Coopers & Lybrand, LLP.
23.2 -- Consent of Stroock & Stroock & Lavan LLP (included as
part of Exhibit 5.1 and incorporated herein by
reference).
24. -- Power of Attorney (included on signature page of this
Registration Statement).
25.1 Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of State Street Bank and Trust
Company, as Indenture Trustee under the Indenture.
25.2 Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of the Bank of New York, as
Institutional Trustee under the Amended and Restated
Declaration of Trust.
25.3 -- Statement of Eligibility Under the Trust Indenture Act
of 1939 on Form T-1 of the Bank of New York, as
Preferred Guarantee Trustee under the Preferred
Securities Guarantee Agreement.
EXHIBIT 4.1
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 13, 1996, by and among Tosco Corporation, a Nevada
corporation ("Tosco"), Tosco Financing Trust, a special purpose business trust
formed under the laws of the State of Delaware (the "Trust"), and Morgan Stanley
& Co. Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and
Furman Selz LLC (collectively, the "Initial Purchasers") pursuant to the
Placement Agreement, dated as of December 10, 1996 (the "Placement Agreement"),
among Tosco, the Trust and the Initial Purchasers. In order to induce the
Initial Purchasers to enter into the Placement Agreement, Tosco and the Trust
have agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Placement
Agreement.
Tosco and the Trust agree with the Initial Purchasers, (i) for their
benefit as Initial Purchasers and (ii) for the benefit of the holders from time
to time of the Registrable Securities (including the Initial Purchasers) (each
of the foregoing a "Holder" and together the "Holders"), as follows:
SECTION 1. Definitions.
Capitalized terms used herein without definition shall have their respective
meanings set forth in the Placement Agreement. As used in this Agreement, the
following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified person, (i)
any other person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such specified person or (ii) any
officer or director of such other person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or indirect, of
the power (whether or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
Applicable Conversion Price: The Applicable Conversion Price as of any
date of determination means the Conversion Price, as may be adjusted from time
to time, in effect as of such date of determination or, if no Convertible
Debentures are then outstanding, the Conversion Price that would be in effect
were Convertible Debentures then outstanding.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.75 par value per share, of
Tosco and any other shares of common stock as may constitute "Common Stock" for
purposes of the Indenture, including the Underlying Common Stock.
Conversion Price: Conversion Price shall have the meaning assigned
such term in Section 6.1 of the Supplemental Indenture.
Convertible Debentures: The 5 3/4% Convertible Junior Subordinated
Debentures of Tosco to be purchased by the Trust pursuant to the Debenture
Purchase Agreement, dated December 13, 1996, between Tosco and the Trust.
Convertible Preferred Securities: The 5 3/4% Trust Convertible
Preferred Securities of the Trust.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each payment date under the Declaration, in the
case of Convertible Preferred Securities, each Interest Payment Date (as defined
in the Indenture), in the case of Convertible Debentures, and each September 15,
December 15, March 15 and June 15, in the case of Underlying Common Stock.
Declaration: The Amended and Restated Declaration of Trust dated as of
December 13, 1996 of the Trust.
Deferral Period: See Section 2(d)(ii) hereof.
Effectiveness Period: The period commencing with the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.
Event: See Section 2(e) hereof.
Event Termination Date: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Guarantee: The guarantee by Tosco of the Convertible Preferred
Securities pursuant to the Preferred Securities Guarantee Agreement dated as of
the date hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of May 1, 1996, between Tosco and
State Street Bank and Trust Company, as trustee, pursuant to which the
Convertible Debentures are being issued, as amended by the Supplemental
Indenture, dated December 13, 1996, between Tosco and State Street Bank and
Trust Company, as trustee.
Initial Purchasers: Morgan Stanley & Co. Incorporated, Donaldson,
Lufkin & Jenrette Securities Corporation and Furman Selz LLC.
Initial Shelf Registration: See Section 2(a) hereof.
Losses: See Section 6 hereof.
Notice Holder: See Section 2(d)(i) hereof.
Placement Amount: See the first paragraph of this Agreement.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Registrable Securities: The Convertible Preferred Securities, the
Guarantee, the Convertible Debentures and the Underlying Common Stock, whether
or not such securities have been converted or exchanged, and at all times
subsequent to any such conversion or exchange, and any security issued with
respect thereto upon any stock dividend, split or similar event until, in the
case of any such security, (i) it is effectively registered under the Securities
Act and disposed of in accordance with the Registration Statement covering its
offering and sale, (ii) it is saleable by the Holder thereof pursuant to Rule
144(k) or (iii) it is sold to the public pursuant to Rule 144 and, as a result
of the event or circumstance described in any of the foregoing clauses (i)
through (iii), the legends with respect to transfer restrictions required under
the Declaration and the Indenture are removed or removable in accordance with
the terms of the Declaration or the Indenture, as the case may be.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of Tosco or the
Trust which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
Restricted Securities: As this term is defined in Rule 144.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Andrews & Kurth L.L.P. or such other successor
counsel as shall be specified by the Holders of a majority of the Registrable
Securities, the fees and expenses of which will be paid by Tosco pursuant to
Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Bank of New York (or any successor entity), the
Institutional Trustee under the Declaration or, in the event the Convertible
Debentures are distributed to holders of the Convertible Preferred Securities
upon dissolution of the Trust, the Trustee under the Indenture.
Underlying Common Stock: The Common Stock of Tosco into which the
Convertible Debentures are convertible.
SECTION 2. Registration.
a. Shelf Registration. Tosco and the Trust shall prepare and
file with the SEC, as soon as practicable, but in any event within ninety (90)
days after the latest date of original issuance of the Convertible Preferred
Securities (the "Filing Date"), a Registration Statement for an offering to be
made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act
(a "Shelf Registration") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "Initial Shelf Registration").
The Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by such
Holders in the manner or manners designated by them. Tosco and the Trust shall
use their best efforts to cause the Initial Shelf Registration to become
effective under the Securities Act as promptly as is practicable and to keep the
Initial Shelf Registration continuously effective under the Securities Act until
the end of the Effectiveness Period.
b. If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason at any
time during the Effectiveness Period (other than because all Registrable
Securities shall have ceased to be Registrable Securities), Tosco and the Trust
shall use their best efforts to obtain the prompt withdrawal of any order
suspending the effectiveness thereof, and in any event shall within thirty (30)
days of such cessation of effectiveness amend the Shelf Registration in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration covering all of
the Registrable Securities (a "Subsequent Shelf Registration"). If a Subsequent
Shelf Registration is filed, Tosco and the Trust shall use their best efforts to
cause the Subsequent Shelf Registration to become effective as promptly as is
practicable after such filing and to keep such Registration Statement
continuously effective until the end of the Effectiveness Period.
c. Tosco and the Trust shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by Tosco and the Trust for such Shelf Registration,
if required by the Securities Act, or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of the Registrable
Securities covered by such Registration Statement.
d. Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). Each Holder of Registrable Securities agrees to give written
notice to Tosco and the Trust at least three (3) Business Days prior to any
intended distribution of Registrable Securities under the Shelf Registration,
which notice shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and the intended
distribution of Registrable Securities by such Holder required to amend or
supplement the Registration Statement with respect to such intended distribution
of Registrable Securities by such Holder. As promptly as is practicable after
the date such notice is provided, and in any event within two (2) Business Days
after such date, Tosco and the Trust shall either:
i. (A) prepare and file with the Commission a
post-effective amendment to the Shelf Registration or a supplement to
the related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document
so that such Registration Statement 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 so that, as thereafter delivered to purchasers of the
Registrable Securities being sold thereunder, such Prospectus 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, in the light of the circumstances under which they
were made, not misleading; (B) provide the Holders of the Registrable
Securities who gave such notice copies of any documents filed pursuant
to Section 2(d)(i)(A); and (C) inform each such Holder that Tosco and
the Trust have complied with its obligations in Section 2(d)(i)(A) (or
that, if Tosco and the Trust have filed a post-effective amendment to
the Shelf Registration which has not yet been declared effective, Tosco
and the Trust will notify each such Holder to that effect, will use
their best efforts to secure the effectiveness of such post-effective
amendment and will immediately notify each such Holder pursuant to
Section 2(d)(i)(A) hereof when the amendment has become effective);
each Holder who has given notice of intention to distribute such
Holder=s Registrable Securities in accordance with Section 2(d) hereof
(a "Notice Holder") will sell all or any or such Registrable Securities
pursuant to the Shelf Registration and related Prospectus only during
the 45-day period commencing with the date on which Tosco and the Trust
give notice, pursuant to Section 2(d)(i)(A), that the Registration
Statement and Prospectus may be used for such purpose (such 45-day
period is referred to as a "Selling Period"); the Notice Holders will
not sell any Restricted Securities pursuant to such Registration
Statement or Prospectus after such Selling Period without giving a new
notice of intention to sell pursuant to Section 2(d) hereof and
receiving a further notice from Tosco and the Trust pursuant to Section
2(d)(i)(A) hereof; or
ii. in the event (A) of the happening of any event of
the kind described in Section 2(e)(ii), 2(e)(iii) or 2(e)(iv) hereof or
(B) that, in the judgment of Tosco, it is advisable to suspend use of
the Prospectus for a discrete period of time due to pending material
corporate developments or similar material events that have not yet
been publicly disclosed and as to which Tosco believes public
disclosure will be prejudicial to Tosco or the Trust, Tosco shall
deliver a certificate in writing, signed by its Chief Executive Officer
or Chief Financial Officer, to the Notice Holders and the Special
Counsel to the effect of the foregoing and, upon receipt of such
certificate, each such Notice Holder=s Selling Period will not commence
until such Notice Holder=s receipt of copies of the supplemented or
amended Prospectus provided for in Section 2(d)(i)(A) hereof, or until
it is advised in writing by Tosco and the Trust that the Prospectus may
be used, and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in
such Prospectus. Tosco and the Trust will use their best efforts to
ensure that the use of the Prospectus may be resumed, and the Selling
Period will commence, as promptly as is practicable and, in the case of
a pending development or event referred to in Section 2(d)(ii)(B)
hereof, as soon as the earlier of (x) public disclosure of such pending
material corporate development or similar material event or (y) in the
judgment of Tosco, public disclosure of such material corporate
development or similar material event would not be prejudicial to Tosco
or the Trust. Notwithstanding the foregoing, Tosco and the Trust shall
not under any circumstances be entitled to exercise their right under
this Section 2(d)(ii) to defer the commencement of a Selling Period
more than one (1) time in any three (3) month period or two (2) times
in any twelve (12) month period, and the period during which a Selling
Period is suspended shall not exceed thirty (30) days unless Tosco and
the Trust shall deliver to such Notice Holders a second notice to the
effect set forth above, which shall have the effect of extending the
period during which such Selling Period is deferred by up to an
additional thirty (30) days, or such shorter period of time as is
specified in such second notice; provided that the period during which
a Selling Period is deferred, a "Deferred Period," shall not exceed
sixty (60) days in any twelve (12) month period.
e. The parties hereto agree that the Holders of Registrable Securities will
suffer damages, and that it would not be feasible to ascertain the extent of
such damages with precision, if (i) the Initial Shelf Registration has not been
filed on or prior to the Filing Date, (ii) prior to the end of the Effectiveness
Period, the SEC shall have issued a stop order suspending the effectiveness of
the Shelf Registration or proceedings have been initiated with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act, (iii) the
aggregate number of days in any one Deferral Period exceeds the number permitted
pursuant to Section 2(d)(ii) hereof or (iv) the number of Deferral Periods
exceeds the number permitted pursuant to Section 2(d)(ii) hereof (each of the
events of a type described in any of the foregoing clauses (i) through (iv) are
individually referred to herein as an "Event," and the Filing Date in the case
of clause (i), the date on which the effectiveness of the Shelf Registration has
been suspended or proceedings with respect to the Shelf Registration under
Section 8(d) or 8(e) of the Securities Act have been commenced in the case of
clause (ii), the date on which the duration of a Deferral Period exceeds the
number of days permitted by Section 2(d)(ii) hereof in the case of clause (iii),
and the date of the commencement of a Deferral Period that causes the limit on
the number of Deferral Periods under Section 2(d)(ii) hereof to be exceeded in
the case of clause (iv), being referred to herein as an "Event Date"). Events
shall be deemed to continue until the "Event Termination Date," which shall be
the following dates with respect to the respective types of Events: the date the
Initial Registration Statement is filed in the case of an Event of the type
described in clause (i), the date that all stop orders suspending effectiveness
of the Shelf Registration have been removed and the proceedings initiated with
respect to the Shelf Registration under Section 8(d) or (e) of the Securities
Act have terminated, as the case may be, in the case of Events of the types
described in clause (ii), termination of the Deferral Period which caused the
limit on the duration of a Deferred Period set forth in Section 2(d)(ii) to be
exceeded in the case of the commencement of an Event of the type described in
clause (iii), and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods permitted by Section 2(d)(ii) to be
exceeded in the case of Events of the type described in clause (iv).
Accordingly, upon the occurrence of any Event and until such time as there
are no Events that have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, Tosco agrees to pay, as liquidated damages, and not as a penalty, an
additional amount (the "Liquidated Damages Amount"): (A) (i) to each Holder of
(x) a Convertible Preferred Security or (y) in the event that the Convertible
Debentures are distributed to holders of Convertible Preferred Securities upon
dissolution of the Trust in accordance with the Declaration, a Convertible
Debenture (in each case that is a Notice Holder), accruing at a rate equal to
one-quarter of one percent per annum (25 basis points) on an amount equal to the
liquidation amount of such Convertible Preferred Security or principal amount of
such Convertible Debenture, as the case may be, held by such Notice Holder and
(ii) to each Holder of Underlying Common Stock that is a Notice Holder, accruing
at a rate equal to one- quarter of one percent per annum (25 basis points)
calculated on an amount equal to the product of (x) the Applicable Conversion
Price as of the Business Day immediately prior to the applicable Damages Payment
Date times (y) the number of shares of Common Stock that are Registrable
Securities held by such Notice Holder; and (B) if the Damages Accrual Period
continues for in excess of thirty (30) days, from and after the end of such
thirty (30) day period until the applicable Event Termination Date, (i) to each
Holder of a (x) Convertible Preferred Security or (y) in the event that the
Convertible Debentures are distributed to holders of Convertible Preferred
Securities upon dissolution of the Trust in accordance with the Declaration, a
Convertible Debenture (in each case whether or not a Notice Holder), accruing at
a rate equal to one-quarter of one percent per annum (25 basis points) on an
amount equal to the liquidation amount of such Convertible Preferred Security or
principal amount of such Convertible Debenture, as the case may be, held by such
Holder and (ii) to each Holder of Underlying Common Stock (whether or not a
Notice Holder), accruing at a rate equal to one- quarter of one percent per
annum (25 basis points) calculated on an amount equal to the product of (x) the
Applicable Conversion Price as of the Business Day immediately prior to the
applicable Damages Payment Date times (y) the number of shares of Common Stock
that are Registrable Securities held by such Holder. Notwithstanding the
foregoing, no Liquidated Damages Amounts shall accrue (1) under clause (A) of
the preceding sentence during any period for which Liquidated Damages Amounts
accrue under clause (B) of the foregoing sentence as to any Registrable Security
from and after the earlier of (x) the date such security is no longer a
Registrable Security, and (y) expiration of the Effectiveness Period.
Notwithstanding the foregoing, no Damages Accrual Period with respect to any
Event described in clause (ii) of paragraph 2(e) shall commence unless and until
a Holder or Holders has given notice in accordance with Section 2(d) hereof. The
rate of accrual of the Liquidated Damages Amount with respect to any period
shall not exceed the rate provided for in this paragraph notwithstanding the
occurrence of multiple concurrent Events.
Tosco shall pay the liquidated damages due on any Convertible Preferred
Security, Convertible Debenture or Underlying Common Stock by depositing with
the Trustee, in trust for the benefit of the Holders of Convertible Preferred
Securities, Convertible Debentures or Underlying Common Stock, as the case may
be, entitled thereto, at least one (1) Business Day prior to the applicable
Damages Payment Date, sums sufficient to pay the liquidated damages accrued or
accruing from and including the last preceding Damages Payment Date to, but not
including, such Damages Payment Date. The Liquidated Damages Amount due shall be
payable on each Damages Payment Date to the Holders of Registrable Securities
entitled thereto holding such Registrable Securities on the record date for such
Damages Payment Date; provided that accrued Liquidated Damages Amounts shall be
paid on the applicable redemption date upon the redemption of any Convertible
Debenture or Convertible Preferred Security (to the extent accrued with respect
to such Convertible Debenture or Convertible Preferred Security). The Trustee
shall be entitled, on behalf of the Notice Holders and the Holders of
Convertible Preferred Securities, Convertible Debentures or Underlying Common
Stock, to seek any available remedy for the enforcement of this Agreement,
including for the payment of such liquidated damages. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a violation of
the terms of this Agreement with respect to which liquidated damages are
expressly provided shall be such liquidated damages. Nothing shall preclude a
Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.
All of Tosco's obligations set forth in this Section 2(e) which are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 9(o)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
SECTION 3. Registration Procedures.
In connection with the registration obligations of Tosco and the Trust
under Section 2 hereof, Tosco and the Trust shall effect such registrations to
permit the sale of the Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto Tosco and the
Trust shall as expeditiously as possible:
a. Prepare and file with the SEC a Registration Statement on
any appropriate form under the Securities Act available for the sale of the
Registrable Securities by the Holders thereof in accordance with the intended
method or methods of distribution thereof, and use their best efforts to cause
each such Registration Statement to become effective and remain effective as
provided herein; provided, that before filing any such Registration Statement or
Prospectus or any amendments or supplements thereto (other than documents that
would be incorporated or deemed to be incorporated therein by reference and that
Tosco or the Trust is required by applicable securities laws or stock exchange
requirements to file) Tosco and the Trust shall furnish to the Initial
Purchasers and the Special Counsel of such offering, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review of
the Initial Purchasers and the Special Counsel, and Tosco and the Trust shall
not file any such Registration Statement or amendment thereto or any Prospectus
or any supplement thereto (other than such documents which, upon filing, would
be incorporated or deemed to be incorporated by reference therein and that Tosco
or the Trust is required by applicable securities laws or stock exchange
requirements to file) to which the Initial Purchasers or the Special Counsel
shall reasonably object in writing within two (2) full Business Days.
b. Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary to
keep such Registration Statement continuously effective for the applicable
period specified in Section 2; cause the related Prospectus to be supplemented
by any required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 (or any similar provisions then in force) under the
Securities Act; and comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during the applicable period in accordance with the intended methods
of disposition by the sellers thereof set forth in such Registration Statement
as so amended or such Prospectus as so supplemented.
c. Promptly notify the Notice Holders and, following the
giving of notice pursuant to Section 2(d), the Initial Purchasers and the
Special Counsel promptly, and (if requested by any such person) confirm such
notice in writing, (i) when a Prospectus, any Prospectus supplement, a
Registration Statement or a post-effective amendment to a Registration Statement
has been filed with the SEC and, with respect to a Registration Statement or any
post- effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the receipt by Tosco or the Trust of
any notification with respect to the suspension of the qualification or
exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and (vi) of the
determination by Tosco that a post-effective amendment to a Registration
Statement would be appropriate.
d. Use its best efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
e. If reasonably requested by the Initial Purchasers, the
Special Counsel, or the Holders of a majority of the Registrable Securities
being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel, or such Holders, in connection with any
offering of Registrable Securities, agree should be included therein as required
by applicable law, and (ii) make all required filings of such Prospectus
supplement or such post-effective amendment as promptly as is practicable after
Tosco and the Trust have received notification of the matters to be incorporated
in such Prospectus supplement or post-effective amendment; provided, that Tosco
and the Trust shall not be required to take any actions under this Section 3(e)
that are not, in the reasonable opinion of counsel for Tosco, in compliance with
applicable law.
f. Furnish to each selling Holder, the Special Counsel and the
Initial Purchasers, without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including financial statements
but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless requested in writing by such
Holder, counsel or Initial Purchasers).
g. Deliver to each selling Holder, the Special Counsel and the
Initial Purchasers in connection with any offering of Registrable Securities,
without charge, as many copies of the Prospectus or Prospectuses relating to
such Registrable Securities (including each preliminary prospectus) and any
amendment or supplement thereto as such persons may reasonably request; and
Tosco and the Trust hereby consent to the use of such Prospectus or each
amendment or supplement thereto by each of the selling Holders of Registrable
Securities in connection with any offering and sale of the Registrable
Securities covered by such Prospectus or any amendment or supplement thereto.
h. Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders and the Special
Counsel in connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any selling Holder reasonably requests in writing; keep each
such registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, that neither Tosco nor the Trust will be
required to (i) qualify generally to do business in any jurisdiction where it is
not then so qualified or (ii) take any action that would subject it to general
service of process in suits or to taxation in any such jurisdiction where it is
not then so subject.
i. Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States (except as may be
required solely as a consequence of the nature of such selling Holder, in which
case Tosco and the Trust will cooperate in all reasonable respects with the
filing of such Registration Statement and the granting of such approvals) as may
be necessary to enable the selling Holder or Holders thereof to consummate the
disposition of such
Registrable Securities.
j. During any Selling Period (other than during a Deferral
Period), immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus shall contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, promptly prepare and file a post-effective amendment to
each Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
(such as a Current Report on Form 8-K) that would be incorporated by reference
into the Registration Statement so that the Registration Statement shall not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, and so that the Prospectus will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, as thereafter
delivered to the purchasers of the Registrable Securities being sold thereunder,
and, in the case of a post-effective amendment to a Registration Statement, use
their best efforts to cause it to become effective as promptly as is
practicable.
k. Enter into such agreements and take all such other actions in
connection therewith in order to expedite or facilitate the disposition of such
Registrable Securities and in such connection (i) make such representations and
warranties, subject to the ability of Tosco and the Trust to do so, to the
Holders of such Registrable Securities with respect to the business of Tosco and
its subsidiaries and the Trust, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if any,
in each case, in form, substance and scope as shall be reasonably satisfactory
to the Special Counsel and the Holders of a majority of the Registered
Securities being sold, and (ii) deliver such documents and certificates as may
be reasonably requested by the Holders of a majority of the Registrable
Securities being sold and the Special Counsel to evidence the continued validity
of the representations and warranties of Tosco and its subsidiaries and the
Trust made pursuant to clause (i) above. The plan of distribution of the
Registration Statement and the Prospectus included therein shall permit resales
of Registrable Securities to be made by selling security holders through brokers
and dealers. However, neither Tosco nor the Trust will be obligated hereunder to
pay the costs and expenses of opinions of counsel of such selling security
holders, or accountants' "cold comfort" letters and neither the officers and
directors of Tosco nor the trustees of the Trust will be obligated hereunder to
participate in marketing efforts on behalf of such selling securityholders.
l. If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for inspection
by a representative of the Holders of Registrable Securities being sold, and any
Special Counsel or accountant retained by such selling Holders, financial and
other records, pertinent corporate documents and properties of Tosco and the
Trust and its subsidiaries, and cause the executive officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by any such representative, Special Counsel or accountant
in connection with such disposition; subject to reasonable assurances by each
such person that such information will only be used in connection with matters
relating to such Registration Statement.
m. Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited) satisfying the provisions of Section 11 (a) of the Securities
Act and Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12- month period (or
90 days after the end of any 12-month period if such period is a fiscal year)
commencing on the first day of the first fiscal quarter of Tosco commencing
after the effective date of a Registration Statement, which statements shall
cover said 12-month periods.
n. Cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as the Holders may request.
o. Provide a CUSIP number for all Registrable Securities not later
than the effective date of the Registration Statement and provide the Trustee
and the transfer agent for the Common Stock with printed certificates for the
Registrable Securities which are in a form eligible for deposit with the
Depositary Trust Company.
p. Cause all Underlying Common Stock covered by the Registration
Statement to be listed on each securities exchange or quotation system on which
Tosco's Common Stock is then listed no later than the date the Registration
Statement is declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g., the filing of a
Registration Statement on Form 8-A) and to have such filings declared effective
thereunder.
q. Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
SECTION 4. Holder's Obligations.
Each Holder agrees, by acquisition of the Registrable Securities, that no
Holder of Registrable Securities shall be entitled to sell any of such
Registrable Securities pursuant to a Registration Statement or to receive a
Prospectus relating thereto, unless such Holder has furnished Tosco and the
Trust with the notice required pursuant to Section 2(d) hereof (including the
information required to accompany such notice) and, promptly after the request
by Tosco and the Trust, such other information regarding such Holder and the
distribution of such Registrable Securities as Tosco and the Trust may from time
to time reasonably request. Tosco and the Trust may exclude from such
registration the Registrable Securities of any Holder who does not furnish such
information provided above for so long as such information is not so furnished.
Each Holder of Registrable Securities as to which any Registration Statement is
being effected agrees promptly to furnish to Tosco and the Trust all information
required to be disclosed in order to make the information previously furnished
to Tosco and the Trust by such Holder not misleading. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to
such Holder or its plan of distribution and that such Prospectus does not as of
the time of such sale omit to state any material fact relating to such Holder or
its plan of distribution necessary to make the statements in such Prospectus, in
the light of the circumstances under which they were made, not misleading.
SECTION 5. Registration Expenses.
Subject to Section 3(k) hereof, all fees and expenses incident to the
performance by Tosco and the Trust of or compliance with this Agreement shall be
borne by Tosco whether or not any of the Registration Statements become
effective. Such fees and expenses shall include, without limitation, (i) all
registration and filing fees (including, without limitation, fees and expenses
(x) with respect to filings required to be made with the National Association of
Securities Dealers, Inc. and (y) of compliance with federal and state securities
or Blue Sky laws (including, without limitation, fees and disbursements of
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Holders of a majority of
the Registrable Securities being sold may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depositary Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the Special Counsel or the Holders of a majority of the Registrable
Securities included in any Registration Statement), (iii) messenger, telephone
and delivery expenses, (iv) reasonable fees and disbursements of counsel for
Tosco and the Trust and the Special Counsel in connection with the Shelf
Registration (provided that Tosco shall not be liable for the fees and expenses
of more than one separate firm for all parties participating in any transaction
hereunder), and (v) Securities Act liability insurance obtained by Tosco in its
sole discretion. In addition, Tosco shall pay the internal expenses of Tosco and
the Trust (including, without limitation, all salaries and expenses of officers
and employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Underlying Common Stock and the fees and expenses of any person, including
special experts, retained by Tosco or the Trust. Notwithstanding the provisions
of this Section 5, each seller of Registrable Securities shall pay all
registration expenses to the extent Tosco is prohibited by applicable Blue Sky
laws from paying such expenses for or on behalf of such seller of Registrable
Securities, and shall pay all individual selling expenses of such seller,
including such seller's brokers' commissions.
SECTION 6. Indemnification.
a. Indemnification by Tosco. Tosco shall indemnify and hold harmless
each Holder and each person, if any, who controls any Holder (within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act)
from and against all losses, liabilities, claims, damages and expenses
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim)
(collectively, "Losses"), arising out of or based upon any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
Losses arise out of or based upon the information relating to any Holder
furnished to Tosco in writing by such Holder expressly for use therein;
provided, that Tosco shall not be liable to any Holder of Registrable Securities
(or any person controlling such Holder) to the extent that any such Losses arise
out of or are based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any preliminary prospectus if either (A)
(i) such Holder failed to send or deliver a copy of the Prospectus with or prior
to the delivery of written confirmation of the sale by such Holder to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have corrected such untrue statement or alleged untrue statement or such
omission or alleged omission, or (B) (x) such untrue statement or alleged untrue
statement, omission or alleged omission is corrected in an amendment or
supplement to the Prospectus and (y) having previously been furnished by or on
behalf of Tosco or the Trust with copies of the Prospectus as so amended or
supplemented, such Holder thereafter fails to deliver such Prospectus as so
amended or supplemented, with or prior to the delivery of written confirmation
of the sale of a Registrable Security to the person asserting the claim from
which such Losses arise. Tosco shall also indemnify each broker-dealer
participating in the offering and sale of Registrable Securities and each person
who controls such person (within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act) to the same extent and with the same
limitations as provided above with respect to the indemnification of the Holders
of Registrable Securities.
b. Indemnification by Holder of Registrable Securities. Each Holder
agrees severally and not jointly to indemnify and hold harmless Tosco and the
Trust, Tosco's directors, Tosco's officers who sign a Registration Statement,
the trustees of the Trust, and each person, if any, who controls Tosco or the
Trust (within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act), from and against all losses arising out of or based
upon any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or arising out of or based upon
any omission of a material fact required to be stated therein or necessary to
make the statements therein not misleading, to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
relating to such Holder so furnished in writing by such Holder to Tosco and the
Trust expressly for use in such Registration Statement or Prospectus. In no
event shall the liability of any selling Holder of Registrable Securities
hereunder be greater in amount than the dollar amount of the proceeds received
by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
c. Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for all Holders
and all persons, if any, who control any Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, and (b) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for Tosco and the Trust, Tosco's directors, Tosco's officers who sign a
Registration Statement, the trustees of the Trust and each person, if any, who
controls Tosco or the Trust within the meaning of either such Section, and that
all such fees and expenses shall be reimbursed as they are incurred. In the case
of any such separate firm for Tosco and the Trust, and such directors, officers,
trustees and control persons of Tosco or the Trust, such firm shall be
designated in writing by Tosco. In the case of any such separate firm for the
Initial Purchasers, such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated. The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnity could have been sought hereunder by such indemnified party,
unless such settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such
proceeding.
d. Contribution. To the extent that the indemnification provided for
in this Section 6 is unavailable to an indemnified party under Section 6(a) or
6(b) hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, (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 or parties on the other
hand 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 indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by Tosco and the Trust shall be deemed to be equal to the
total net proceeds from the initial placement (before deducting expenses) of the
Convertible Preferred Securities pursuant to the Placement Agreement. Benefits
received by any Holder shall be deemed to be equal to the value of receiving
Registrable Securities that are registered under the Securities Act. The
relative fault of the Holders on the one hand and Tosco and the Trust on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by Tosco or the Trust and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method, or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of
Tosco and the Trust hereunder shall be in addition to any liability Tosco or the
Trust may otherwise have hereunder, under the Placement Agreement or otherwise.
The provisions of this Section 6 shall survive, notwithstanding any transfer of
the Registrable Securities by any Holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or Tosco or the Trust, Tosco's
officers or Tosco's directors or the trustees of the Trust or any person
controlling Tosco or the Trust and (iii) the sale of any Registrable Securities
by any Holder.
SECTION 7. Information Requirements.
a. Tosco and the Trust shall file the reports required to be
filed by it under the Securities Act and the Exchange Act, and if at any time
Tosco or the Trust is not required to file such reports, it will, upon the
request of any Holder of Registrable Securities, make publicly available other
information so long as necessary to permit sales of Registrable Securities
pursuant to Rule 144 and Rule 144A under the Securities Act. Tosco and the Trust
further covenant that they will cooperate with any Holder of Registrable
Securities and take such further reasonable action as any Holder of Registrable
Securities may reasonably request (including, without limitation, making such
reasonable representations as any such Holder may reasonably request), all to
the extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 and Rule 144A under the Securities Act.
Upon the request of any Holder of Registrable Securities, each of Tosco and the
Trust shall deliver to such Holder a written statement as to whether it has
complied with such filing requirements. Notwithstanding the foregoing, nothing
in this Section 7 shall be deemed to require Tosco or the Trust to register any
of its securities (other than the Common Stock) under any section of the
Exchange Act.
b. Tosco and the Trust shall file the reports required to be
filed by it under the Exchange Act and shall use its best efforts to comply with
all other requirements set forth in the instructions to Form S-3 in order to
allow it to be eligible to file registration statements on Form S-3.
SECTION 8. Submission to Jurisdiction.
Each of Tosco and the Trust irrevocably consents and agrees, for the benefit
of the Holders, that any legal action, suit or proceeding against it with
respect to its obligations, liabilities or any other matter arising out of or in
connection with this Agreement may be brought in the courts of the State of New
York or the courts of the United States located in The City of New York and
hereby irrevocably consents and submits to the non-exclusive jurisdiction of
each such court in personam, generally and unconditionally, with respect to any
such action, suit or proceeding for itself and in respect of its properties,
assets and revenues.
Each of Tosco and the Trust has irrevocably designated, appointed and
empowered C T Corporation System, as its designee, appointee and agent to
receive, accept and acknowledge for and on its behalf, and its properties,
assets and revenues, service of any and all legal process, summons, notices and
documents which may be served in any such action, suit or proceeding referred to
in the preceding paragraph of this Section 8 brought in any United States or
State court that may be made on such designee, appointee and agent in accordance
with legal procedures prescribed for such courts. Said designation and
appointment shall be irrevocable until the end of the Effectiveness Period,
provided, however, that if for any reason such designee, appointee and agent
hereunder shall cease to be available to act as such, Tosco and the Trust agree
to designate a new designee, appointee and agent in The City of New York on the
terms and for the purposes of this Section 8 satisfactory to the Initial
Purchasers. Each of Tosco and the Trust further hereby irrevocably consents and
agrees to the service of any and all legal process, summons, notices and
documents out of any of the aforesaid courts in any such action,
suit or proceeding by serving a copy thereof upon the relevant agent for
service of process referred to in this Section 8 (whether or not the appointment
of such agent shall for any reason prove to be ineffective or such agent shall
accept or acknowledge such service) or by mailing copies thereof by registered
or certified air mail, postage prepaid, to each of Tosco and the Trust at its
address specified in or designated pursuant to Section 9 of this Agreement. Each
of Tosco and the Trust agrees that the failure of such designee, appointee and
agent to give any notice of such service to it shall not impair or affect in any
way the validity of such service or any judgment rendered in any action or
proceeding based thereon. Nothing herein shall in any way be deemed to limit the
ability of the Notice Holders or the Holders of the Registrable Securities, to
serve any such legal process, summons, notices and documents in any other manner
permitted by applicable law or to obtain jurisdiction over Tosco or the Trust or
bring actions, suits or proceedings against Tosco or the Trust in such other
jurisdictions, and in such manner, as may be permitted by applicable law. Each
of Tosco and the Trust hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection which it may now, or until the
end of the Effectiveness Period, have to the laying of venue or any of the
aforesaid actions, suits or proceedings arising out of or in connection with
this Agreement brought in the United States Federal courts located in The City
of New York or the courts of the State of New York and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
The provisions of this Section 8 shall survive any termination of this
Agreement, in whole or in part.
SECTION 9. Miscellaneous.
a. Remedies. In the event of a breach by Tosco or the Trust
of its obligations under this Agreement, each Holder of Registrable Securities,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement, provided, that the sole damages payable for a violation of
the terms of this Agreement for which liquidated damages are expressly provided
pursuant to Section 2(e) hereof shall be such liquidated damages. Each of Tosco
and the Trust agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the provisions of
this Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
b. No Conflicting Agreements. Neither Tosco nor the Trust has,
as of the date hereof, entered into, nor shall Tosco or the Trust, on or after
the date of this Agreement, enter into, any agreement with respect to its
securities which conflicts with the rights granted to the Holders of Registrable
Securities in this Agreement. Each of Tosco and the Trust represents and
warrants that the rights granted to the Holders of Registrable Securities
hereunder do not in any way conflict with the rights granted to the Holders of
Tosco's or the Trust's securities under any other agreements.
c. Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless Tosco and the Trust have obtained the written consent
of Holders of a majority of the then outstanding Underlying Common Stock
constituting Registrable Securities (with Holders of Convertible Preferred
Securities deemed to be the Holders, for purposes of this Section, of the number
of outstanding shares of Underlying Common Stock into which such Convertible
Preferred Securities are convertible or exchangeable). Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect
to a matter that relates exclusively to the rights of Holders of Registrable
Securities whose securities are being sold pursuant to a Registration Statement
and that does not directly or indirectly affect the rights of other Holders
of Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders; provided, that the provisions
of this sentence may not be amended, modified, or supplemented except in
accordance with the provisions of the immediately preceding sentence.
d. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing and shall be
deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if
made by telecopier or (iii) one (1) Business Day after being deposited with a
reputable next-day courier, postage prepaid, to the parties as follows (provided
that with respect to any notice of intention to sell given by a Holder to Tosco
and the Trust pursuant to Section 2(d) hereof in accordance with this Section
9(d) which is given on or after December 24 of any year and on or prior to
January 1 of the next year, such notice shall only be deemed given upon the
earlier of actual receipt of such notice by Tosco and the Trust or the first
Business Day next succeeding such January 1):
(A) if to a Holder of Registrable Securities, at the most
current address given by such Holder to Tosco and the Trust in
accordance with the provisions of Section 9(e);
(B) if to Tosco, to:
Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: Wilkes McClave, III, General Counsel
Telecopy No.: (203) 964-3187
(C) if to the Trust, to:
Tosco Financing Trust
c/o Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: Wilkes McClave, III, General Counsel
Telecopy No.: (203) 964-3187
and
(D) if to the Special Counsel, to:
Andrews & Kurth L.L.P.
425 Lexington Avenue
New York, New York 10017
Attention: Stuart Bressman
Telecopy No.: (212) 850-2929
or to such other address as such person may have furnished to the other persons
identified in this Section 9(d) in writing in accordance herewith.
e. Owner of Registrable Securities. Tosco and the Trust will maintain,
or will cause its registrar and transfer agent to maintain, a register with
respect to the Registrable Securities in which all transfers of Registrable
Securities of which Tosco or the Trust has received notice will be recorded.
Tosco and the Trust may deem and treat the person in whose name Registrable
Securities are registered in such register of Tosco and the Trust as the owner
thereof for all purposes, including, without limitation, the giving of notices
under this Agreement.
f. Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by Tosco, the Trust or their respective affiliates
(as such term is defined in Rule 405 under the Securities Act) (other than the
Initial Purchasers or subsequent Holders of Registrable Securities if such
subsequent Holders are deemed to be such affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the Holders of such required
percentage.
g. Successors and Assigns. Any person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of such Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.
h. 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 original and all of which taken together
shall constitute one and the same agreement.
i. Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
j. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
k. Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, void or unenforceable.
l. Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by Tosco and the Trust with respect to the Registrable Securities sold
pursuant to the Placement Agreement. Except as provided in the Placement
Agreement, there are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein, with respect to the
registration rights granted by Tosco and the Trust with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights.
m. Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
n. Further Assurances. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
o. Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
TOSCO CORPORATION
By: /S/
Name: Jefferson F. Allen
Title: Executive Vice
President and Chief
Financial Officer
TOSCO FINANCIAL TRUST
By: /S/
Name: Jefferson F. Allen
Title: Trustee
Solely as trustee and not
in his individual capacity
Accepted as of the date first
above written,
MORGAN STANLEY & CO. INCORPORATED
DONALDSON, LUFKIN AND JENRETTE
SECURITIES CORPORATION
FURMAN SELZ LLC
By: MORGAN STANLEY & CO. INCORPORATED
By: /S/
Name: Lisa A. Genova
Title: Principal
EXHIBIT 4.2
CERTIFICATE OF TRUST
OF
TOSCO FINANCING TRUST
1. The name of the business trust being formed hereby is:
TOSCO FINANCING TRUST
2. The name and address of the trustee which has its principal place of
business in the State of Delaware is as follows:
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware 19711
3. This Certificate of Trust shall be effective as of the date of filing.
Executed this 4th day of December 1996.
THE BANK OF NEW YORK
/s/_______________________
Name: Walter N. Gitlin
Title: Vice President
THE BANK OF NEW YORK
(DELAWARE)
/s/_____________Joseph G. Ernst
Assistant Vice President
TOSCO CORPORATION, a Nevada Corporation
By:/s/_____________
Name: Wilkes McClave III
Title: Senior Vice President, Secretary & General Counsel
By:/s/_______________
Name: Jefferson F. Allan
Title: Executive Vice President and Chief Financial Officer
By:/s/________________
Name: Craig R. Deasy
Title: Vice President and Treasurer
TRUSTEES
EXHIBIT 4.3
<PAGE>
AMENDED AND RESTATED DECLARATION
OF TRUST
TOSCO FINANCING TRUST
DATED AS OF DECEMBER 13, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1. Definitions.................................................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application.............................7
SECTION 2.2 Lists of Holders of Securities...............................7
SECTION 2.3 Reports by the Institutional Trustee.........................7
SECTION 2.4 Periodic Reports to Institutional Trustee....................7
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............8
SECTION 2.6 Events of Default; Waiver....................................8
SECTION 2.7 Event of Default; Notice.....................................9
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.......................................................10
SECTION 3.2 Office.....................................................10
SECTION 3.3 Purpose....................................................10
SECTION 3.4 Authority..................................................10
SECTION 3.5 Title to Property of the Trust.............................11
SECTION 3.6 Powers and Duties of the Regular Trustees..................11
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.......14
SECTION 3.8 Powers and Duties of the Institutional Trustee.............14
SECTION 3.9 Certain Duties and Responsibilities of the
Institutional Trust.......................................16
SECTION 3.10 Certain Rights of Institutional Trustee....................17
SECTION 3.11 Delaware Trustee...........................................19
SECTION 3.12 Execution of Documents.....................................19
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.....20
SECTION 3.14 Duration of Trust..........................................20
SECTION 3.15 Mergers....................................................20
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.....................21
SECTION 4.2 Responsibilities of the Sponsor.............................21
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.........................................22
SECTION 5.2 Delaware Trustee...........................................22
SECTION 5.3 Institutional Trustee; Eligibility.........................23
SECTION 5.4 Certain Qualifcations of Regular Trustees and
Delaware Trustee Generally................................23
SECTION 5.5 Regular Trustees...........................................24
SECTION 5.6 Appointment, Removal and Resignation of Trustees...........24
SECTION 5.7 Vacancies Among Trustees...................................25
SECTION 5.8 Effect of Vacancies........................................25
SECTION 5.9 Meetings...................................................26
SECTION 5. 10 Delegation of Power....................................26
SECTION 5.11 Merger, Conversion, Consolidation or Succession
to Business...............................................26
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions..............................................27
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities....................27
SECTION 7.2 Execution and Authentication...............................27
SECTION 7.3 Form and Dating............................................28
SECTION 7.4 Paying Agent...............................................28
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.......................................29
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.....................................30
SECTION 9.2 Transfer of Certificates...................................32
SECTION 9.3 Deemed Security Holders....................................32
SECTION 9.4 Book Entry Interests.......................................32
SECTION 9.5 Notices to Clearing Agency.................................34
SECTION 9.6 Appointment of Successor Clearing Agency...................34
SECTION 9.7 Definitive Convertible Preferred Security
Certificates Under
Certain Circumstances......................................34
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen
Certificates..............................................35
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
SECTION 10.1 Liability.................................................36
SECTION 10.2 Exculpation...............................................36
SECTION 10.3 Fiduciary Duty............................................37
SECTION 10.4 Indemnification...........................................37
SECTION 10.5 Outside Business..........................................40
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year...............................................40
SECTION 11.2 Certain Accounting Matters................................40
SECTION 11.3 Banking...................................................41
SECTION 11.4 Withholding...............................................41
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments...............................................41
SECTION 12.2 Meetings of the Holders of Securities; Action
by Written Consent......................................43
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND
DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional
Trustee.................................................44
SECTION 13.2 Representations and Warranties of Delaware
Trustee.................................................45
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices..................................................45
SECTION 14.2 Governing Law............................................46
SECTION 14.3 Intention of the Parties.................................46
SECTION 14.4 Headings.................................................46
SECTION 14.5 Successors and Assign....................................47
SECTION 14.6 Partial Enforceability...................................47
SECTION 14.7 Counterparts.............................................47
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
OF 1939, AS AMENDED DECLARATION
310(a).......................................................5.3(a)
310(c).......................................................Inapplicable
311(c).......................................................Inapplicable
312(a).......................................................2.2(a)
312(b).......................................................2.2(b)
313..........................................................2.3
314(a).......................................................2.4
314(b).......................................................Inapplicable
314(c).......................................................2.5
314(d).......................................................Inapplicable
314(f).......................................................Inapplicable
315(a).......................................................3.9(b)
315(c).......................................................3.9(a)
315(d).......................................................3.9(a)
316(a).......................................................Annex I
316(c).......................................................3.6(e)
- ------------
* This Cross-reference table does not constitute part of the
Declaration and shall not affect the interpretation of any of
its terms or provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TOSCO FINANCING TRUST
December 13, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of December 13, 1996, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Tosco Financing Trust
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of December 4, 1996 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of the State of
Delaware on December 6, 1996, for the sole purpose of issuing and selling
certain securities representing undivided beneficial interests in the assets of
the Trust and investing the proceeds thereof in certain Debentures of the
Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitutes the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are
to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits of or to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"144A Global Certificate" has the meaning assigned such term in
Section 9.4(b).
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent or Conversion Agent.
"Authorized Officer" of a Person means any Person that is authorized to
bind such Person.
"Base Indenture" means the Indenture dated as of May 1, 1996, among the
Debenture Issuer and the Debenture Trustee.
"Book Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as
described in Section 9.4.
"Business Day" means any day other than a Saturday. Sunday or any other
day on which banking institutions in New York, New York are permitted or
required by any applicable law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Certificate" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Convertible Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Convertible
Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" means December 13, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security" has the meaning specified in Section 7.1.
"Common Securities Guarantee" means the guarantee agreement to be dated
as of December 13, 1996 of the Sponsor in respect of the Common Securities.
"Common Security Certificate" means a definitive certificate in fully
registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Common Stock" means the common stock of Tosco Corporation, a Nevada
corporation, par value $.75 per share, and any other shares of common stock as
may constitute "Common Stock" under the Indenture.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
"Conversion Agent" has the meaning specified in Section 7.4.
"Convertible Preferred Securities Guarantee" means the guarantee
agreement to be dated as of December 13, 1996, of the Sponsor in respect of the
Convertible Preferred Securities.
"Convertible Preferred Security" has the meaning specified in
Section 7. 1.
"Convertible Preferred Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of such Book
Entry Interest, as reflected on the books of the Clearing Agency, or on the
books of a Person maintaining an account with such Clearing Agency (directly as
a Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Convertible Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-l.
"Corporate Trust Office" means the office of the Institutional Trustee
at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 101 Barclay Street, Floor 21 West, New
York, New York 10286, Attention: Corporate Trust Division.
"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 Issuer" means Tosco Corporation, a Nevada corporation, in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means State Street Bank and Trust Company, as
trustee under the Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Institutional Trustee, a
specimen certificate for such series of
Debentures being Exhibit B.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Definitive Convertible Preferred Security Certificates" has the
meaning set forth in Section 9.4.
"Distribution" means a distribution payable to Holders of Securities in
accordance with Section 6.1 .
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4(b).
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Base Indenture as supplemented by the
Supplemental Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Institutional Trustee Account" has the meaning set forth in Section
3.8(c).
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in Annex I hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Liquidated Distribution" has the meaning specified in the terms of the
Securities as set forth in Annex I.
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Convertible
Preferred Securities or Holders of outstanding Common Securities voting
separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"Non-U.S. Person" means a Person other than a U.S. person (as such
term is defined in Regulation S).
"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:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Option Closing Date" means the date of closing of any sale of
Additional Securities (as defined in the Placement Agreement).
"Payment Amount" has the meaning set forth in Section 6.1.
"Paying Agent" has the meaning specified in Section 3.8(h).
"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.
"Placement Agreement" means the Placement Agreement for the offering
and sale of Convertible Preferred Securities in the form of Exhibit C.
"PORTAL Market" means the Private Offerings, Resales and Trading
through Automated Linkages Market operated by the National Association of
Securities Dealers, Inc. or any successor thereto.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there are only
two Regular Trustees, both of them.
"Registration Rights Agreement" means the Registration Rights Agreement
dated December 13, 1996, among Tosco Corporation, the Trust and Morgan Stanley &
Co. Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation and Furman
Selz LLC, as Initial Purchasers.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Regulation S" means Regulation S under the Securities Act or any
successor provision.
"Regulation S Global Certificate" has the meaning assigned such term in
Section 9.4(b).
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Institutional Trustee,
any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Institutional Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Restricted Security" has the meaning specified in Section 9.1(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act, or
any successor rule.
"Rule 144(k)" means Rule 144(k) as promulgated under the Securities
Act, or any successor rule.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule.
"Securities" means the Common Securities and the Convertible Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" or "Tosco" means Tosco Corporation, a Nevada corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Supplemental Indenture" means the Supplemental Indenture dated as of
December 13, 1996 between the Debenture Issuer and the Debenture Trustee
pursuant to which the Debentures are to be issued.
"Tax Event" has the meaning set forth in Annex I hereto.
"10% in liquidation amount of the Securities" means, except as provided
in the terms of the Convertible Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Convertible Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Transfer Restriction Termination Date" means the first date on which
the Securities and any Common Stock issued or issuable upon the conversion or
exchange thereof (other than (i) Securities acquired by the Trust or any
Affiliate thereof and (ii) Common Stock issued upon the conversion or exchange
of any Security described in clause (i) above) may be sold pursuant to
Rule 1 44(k).
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act: Application.
This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
The Institutional Trustee shall be the only Trustee which is a Trustee
for the purposes of the Trust Indenture Act.
If, and to the extent that, any provision of this Declaration limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such duties imposed under the Trust Indenture Act
shall control.
The application of the Trust Indenture Act to this Declaration shall
not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Institutional Trustee (i) within 14 days after each
record date for payment of Distributions, a list in such form as the
Institutional Trustee may reasonably require of the names and addresses of the
Holders of the Securities ("List of Holders") as of such record date, provided
that, neither the Sponsor nor the Regular Trustees on behalf of the Trust shall
be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Institutional
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and (ii)
at any other time, within 30 days of receipt by the Trust of a written request
for a List of Holders as of a date no more than 14 days before such List of
Holders is given to the Institutional Trustee. The Institutional Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided that, the Institutional
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Institutional Trustee shall comply with its obligations under
ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
Within 60 days after May 15 of each year, the Institutional Trustee
shall provide to the Holders of the Convertible Preferred Securities such
reports as are required by ss. 313 of the Trust Indenture Act, if any, in the
form and in the manner provided by ss. 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of ss. 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such documents, reports and
information as required by ss. 314 (if any) and the compliance certificate
required by ss. 314 of the Trust Indenture Act in the form, in the manner and at
the times required by ss. 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the
Institutional Trustee is for informational purposes only and the Institutional
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Institutional Trustee is entitled to rely exclusively on
Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Institutional Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to ss.
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Convertible
Preferred Securities may by vote on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect of
the Convertible Preferred Securities and its consequences, provided that, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the 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 Convertible Preferred
Securities that the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Convertible Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or an Event of Default with respect to the
Convertible Preferred Securities or impair any right consequent thereon. Any
waiver by the Holders of the Convertible Preferred Securities of an Event of
Default with respect to the Convertible Preferred Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Event of Default with respect to the Common Securities for all purposes of
this Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have waived such Event
of Default under the Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of 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 2.6(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;
provided further, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Convertible Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the Holders of the Convertible Preferred Securities and only
the Holders of the Convertible Preferred Securities will have the right to
direct the Institutional Trustee in accordance with the terms of the Securities.
The foregoing provisions of this Section 2.6(b) shall be in lieu of ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such 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
Institutional Trustee at the direction of the Holders of the Convertible
Preferred Securities, constitutes a waiver of the corresponding Event of Default
under this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default, Notice.
(a) The Institutional Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Institutional
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures or in the
payment of any sinking fund installment established for the Debentures, the
Institutional Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Institutional Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.
(b) The Institutional Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.1 (a) and 5. l (b) of
the Indenture; or
(ii) any default as to which the Institutional Trustee shall
have received written notice or of which a Responsible Officer of the
Institutional Trustee charged with the administration of the
Declaration shall have
actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Tosco Financing Trust" as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the name of
the Trust or any other name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Tosco
Corporation, 72 Cummings Point Road, Stamford, Connecticut 06902. On at least
ten Business Days written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration and to the
specific duties of the Institutional Trustee, the Regular Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(d) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and
the Institutional Trustee Account or as otherwise provided in this Declaration,
legal title to all assets of the Trust shall be vested in the Trust. The Holders
of Securities shall not have legal title to any part of the assets of the Trust,
but shall have an undivided beneficial interest in the assets of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and authority
to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that the Trust may issue no more than one series
of Convertible Preferred Securities and no more than one series of Common
Securities, and provided further, that there shall be no interests in the Trust
other than the Securities, and the issuance of Securities shall be limited to a
simultaneous issuance of both Convertible Preferred Securities and Common
Securities on the Closing Date and Option Closing Date, if any;
(b) in connection with the issue and sale of the Convertible Preferred
Securities, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, an offering memorandum
(the "Offering Memorandum") in preliminary and final form prepared by
the Sponsor, in relation to the offering and sale of Convertible
Preferred Securities to qualified institutional buyers in reliance on
Rule 144A under the Securities Act, to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) and outside the United States to non-U.S. persons in
offshore transactions in reliance on Regulation S under the Securities
Act and to execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement filed on Form S-3
prepared by the Sponsor, including any amendments thereto in relation
to the Convertible Preferred Securities;
(ii) execute and file an application, prepared by the
Sponsor, to the Private Offerings, Resale and Trading through
Automated Linkages ("PORTAL") Market;
(iii) to execute and deliver letters, documents, or
instruments with The Depository Trust Company relating to the
Convertible Preferred Securities;
(iv) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor relating to
the registration of the Convertible Preferred Securities under Section
12(b) of the Exchange Act;
(v) execute and enter into the Placement Agreement,
Registration Rights Agreement and other related agreements
providing for the sale of the Convertible Preferred
Securities;
(vi) execute and file with the Commission a registration
statement on Form S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the resale from time to time of Convertible
Preferred Securities; and
(vii) execute and file any documents prepared by the Sponsor,
or take any acts as determined by the Sponsor to be necessary in order
to qualify or register all or part of the Convertible Preferred
Securities in any State in which the Sponsor has determined to qualify
or register such Convertible Preferred Securities for sale or resale,
as the case may be;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Institutional Trustee for the benefit of the
Holders of the Convertible Preferred Securities and the Holders of Common
Securities;
(d) to give the Sponsor and the Institutional Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Institutional Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss. 316 (c) of the Trust Indenture Act, Distributions,
voting rights, redemptions and exchanges, and to issue relevant notices to the
Holders of Convertible Preferred Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Institutional Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Institutional Trustee, which certificate may be executed by
any Regular Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(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 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;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(p) to take any action, not inconsistent with this Declaration or with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the activities of the Trust as set out in
this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust; and
(iii) cooperating with the 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
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Regular Trustees, on behalf of the
Trust.
The Regular Trustees must exercise the powers set forth in this Section
3.6 in a manner that is consistent with the purposes and functions of the Trust
set out in Section 3.3, and the Regular Trustees shall not take any action that
is inconsistent with the purposes and functions of the Trust set forth in
Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Institutional Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this Section
3.6 shall be reimbursed by the Sponsor.
The Trust initially appoints the Institutional Trustee as transfer
agent and registrar for the Convertible Preferred Securities.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Institutional
Trustee) shall not, engage in any activity other than as required or authorized
by this Declaration. In particular the Trust shall not and the Trustees
(including the Institutional Trustee) shall not cause the Trust to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities in any way
whatsoever;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this 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 not waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the effect that
such modification will not cause more than an insubstantial risk that
(x) the Trust will be deemed an Investment Company required to be
registered under the Investment Company Act or (y) for United States
federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.8 Powers and Duties of the Institutional Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Holders of the Securities. The right, title and interest of the Institutional
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Institutional Trustee in accordance with Section 5.7.
Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware Trustee
(if the Institutional Trustee does not also act as Delaware Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Institutional Trustee Account") in the name of and
under the exclusive control of the Institutional Trustee on behalf of
the Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the Institutional
Trustee, deposit such funds into the Institutional Trustee Account and
make payments to the Holders of the Convertible Preferred Securities
and Holders of the Common Securities from the Institutional Trustee
Account in accordance with Section 6.1. Funds in the Institutional
Trustee Account shall be held uninvested until disbursed in accordance
with this Declaration. The Institutional Trustee Account shall be an
account that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Convertible Preferred Securities (or, if the
Convertible Preferred Securities are not rated, the rating assigned to
Tosco's senior debt) by a "nationally recognized statistical rating
organization," as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Convertible
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of Distribution issued by the
Regular Trustees in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined in the
terms of the Securities) arising from a change in law or a change in
legal interpretation or other specified circumstances pursuant to the
terms of the Securities.
(d) The Institutional Trustee shall take all actions and perform such
duties as may be specifically required of the Institutional Trustee pursuant to
the terms of the Securities.
(e) The Institutional Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or the Institutional Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided however, that if a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal on the Debentures on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Convertible Preferred Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Convertible Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of
Convertible Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Convertible Preferred Securities in such
Direct Action. Except as provided in the preceding sentences, the Holders of
Convertible Preferred Securities will not be able to exercise directly any other
remedy available to the holders of the Debentures.
(f) The Institutional Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of
Securities pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance
with Section 5.7.
(g) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer of
the Institutional Trustee occurs and is continuing, the Institutional Trustee
shall, for the benefit of Holders of the Securities, enforce its rights as
holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Institutional Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or Liquidation
Distributions on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any Paying
Agent may be removed by the Institutional Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee.
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Institutional Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Institutional Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Institutional
Trustee shall be determined solely by the express provisions
of this Declaration and the Institutional Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into
this Declaration against the Institutional Trustee; and
(B) in the absence of bad faith on the part of the
Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
Trustee against such risk or liability is not reasonably assured to it;
(v) the Institutional Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Institutional Trustee Account shall be to deal with such property
in a similar manner as the Institutional Trustee deals with similar
property for its own account, subject to the protections and
limitations on liability afforded to the Institutional Trustee under
this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or sufficiency
of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Institutional Trustee
need not be segregated from other funds held by it except in relation
to the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Regular Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved
or established before taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Sponsor or
the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel of its
selection or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion. Such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Institutional Trustee security and indemnity,
reasonably satisfactory to the Institutional Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Institutional Trustee's agents, nominees or custodians)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Institutional Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Institutional Trustee,
in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and the
Institutional Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Institutional Trustee shall deem it desirable to receive written
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
written instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same proportion in
liquidation amount of the Securities as would be entitled to direct the
Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or
acting in or accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration; and
(xii) the Institutional Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty
or obligation on the Institutional Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Institutional Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Regular Trustees or the Institutional Trustee described in this Declaration.
Except as set forth in Section 5.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of ss. 3807 of the
Business Trust Act.
SECTION 3.12 Execution of Documents.
Except as otherwise required by the Business Trust Act, any Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6; provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for forty (40) years from December 4, 1996.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.1 5(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the
Institutional Trustee, consolidate, amalgamate, merge with or into, or be
replaced by a trust organized as such under the laws of any State; provided that
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Convertible Preferred
Securities other securities having substantially the same
terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same
as the Convertible Preferred Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of
the Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) such merger, consolidation, amalgamation or replacement
does not cause the Convertible Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(iv) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect;
(v) such Successor Entity has a purpose identical to that of
the Trust;
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of independent counsel
to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
successor Securities) in any material respect;
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(vii) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will continue to be
classified as a grantor trust for United States federal income tax
purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other 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
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Convertible Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) prepare and execute, if necessary, the Offering Memorandum in
preliminary and final form, in relation to the offering and sale by the Trust of
Convertible Preferred Securities to qualified institutional buyers in reliance
on Rule 144A under the Securities Act, to institutional "accredited investors"
(as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
outside the United States to Non-U.S. persons in offshore transactions in
reliance on Regulation S under the Securities Act;
(b) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Convertible Preferred
Securities and the Convertible Preferred Securities Guarantees, including any
amendments thereto;
(c) prepare for execution and filing by the Trust of an application,
prepared by the Sponsor, to the PORTAL Market;
(d) prepare for execution and filing by the Trust of documents, or
instruments to be delivered to The Depository Trust Company relating to the
Convertible Preferred Securities;
(e) prepare for execution and filing by the Trust of a registration
statement on Form 8-A including any amendments thereto, prepared by the Sponsor
relating to the registration of the Convertible Preferred Securities under
Section 1 2(b) of the Exchange Act;
(f) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Convertible Preferred Securities
and the Convertible Preferred Securities Guarantees and to do any and all such
acts, other than actions which must be taken by the Trust, and advise the Trust
of actions it must take, and prepare for execution and filing any documents to
be executed and filed by the Trust, as the Sponsor deems necessary or advisable
in order to comply with the applicable laws of any such States;
(g) to negotiate the terms of the Placement Agreement providing for the
sale of the Convertible Preferred Securities; and
(h) to negotiate the terms of the Registration Rights Agreement
providing for, among other things, the registration under the Securities Act of
resales from time to time of the Convertible Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further, that (i) 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 (the "Delaware Trustee"); (ii) there
shall be at least one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (a "Regular Trustee"); and (iii) one Trustee shall be the
Institutional Trustee at such time and for so long as this Declaration is
required to qualify as an indenture under the Trust Indenture Act, and such
Trustee may also serve as Delaware Trustee if it meets the applicable
requirements.
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law;
provided that, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable law,
then the Institutional Trustee shall also be the Delaware Trustee and Section
3.1.1 shall have no application.
The Initial Delaware Trustee shall be: The Bank of New York
(Delaware).
SECTION 5.3 Institutional Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by federal, state, territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 5.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
5.7(c).
(c) If the Institutional Trustee has or shall acquire any "conflicting
interest" within the meaning of ss. 310(b) of the Trust Indenture Act, the
Institutional Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Convertible 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 Institutional Trustee shall be:
The Bank of New York.
SECTION 5.4 Certain Qualifcations of Regular Trustees and
Delaware Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the Institutional
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Jefferson F. Allen
Wilkes McClave III
Craig R. Deasy
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees; and
(c) a Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.6(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as Institutional Trustee shall
not be removed in accordance with Section 5.6(a) until a Successor
Institutional Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Institutional Trustee and delivered to the Regular Trustees and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections
5.2 and 5.4 (a "Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by such
Successor Delaware Trustee and delivered to the Regular Trustees and
the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as
the Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust,
the Sponsor and the resigning Delaware Trustee.
(d) the Holders of the Common Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Institutional
Trustee as the case may be if the Institutional Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.6.
(e) If no Successor Institutional Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.6 within 60 days after delivery of an instrument of resignation or
removal, the Institutional Trustee or Delaware Trustee resigning or being
removed, as applicable, may petition any court of competent jurisdiction for
appointment of a Successor Institutional Trustee or Successor Delaware Trustee.
Such court may thereupon, after prescribing such notice, if any, as it may deem
proper and prescribe, appoint a Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Institutional Trustee or Successor
Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies Among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Regular Trustees or, if there
are more than two, a majority of the Regular Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Trust. Whenever a vacancy in the number of Regular
Trustees shall occur, until such vacancy is filled by the appointment of a
Regular Trustee in accordance with Section 5.6, the Regular Trustees in of fine,
regardless of their number, shall have all the powers granted to the Regular
Trustees and shall discharge all the duties imposed upon the Regular Trustees by
this Declaration.
SECTION 5.9 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustee or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Institutional Trustee or the Delaware Trustee, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders of Securities shall receive Distributions (as defined herein)
in accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Convertible Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compound Interest (as defined in the Indenture) and
Additional Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed, to
the extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Convertible Preferred Securities") and one class of convertible common
securities representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common Securities").
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Convertible Preferred Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
(d) Every Person, by virtue of having become a Holder or a Convertible
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of and shall be bound by this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trusts although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Convertible Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Convertible Preferred Security shall not be valid until
authenticated by the manual signature of an authorized signatory of the
Institutional Trustee. The signature shall be conclusive evidence that the
Convertible Preferred Security has been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Institutional Trustee shall authenticate the Convertible Preferred Securities
for original issue.
The Institutional Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Convertible Preferred Securities. An
authenticating agent may authenticate Convertible Preferred Securities whenever
the Institutional Trustee may do so. Each reference in this Declaration to
authentication by the Institutional Trustee includes authentication by such
agent. An authenticating agent has the same rights as the Institutional Trustee
to deal with the Company or an Affiliate.
SECTION 7.3 Form and Dating.
The Convertible Preferred Securities and the Institutional Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. Certificates may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Regular
Trustees, as evidenced by their execution thereof. The Securities may have
letters, numbers, notations or other marks of identification or designation and
such legends or endorsements required by law, stock exchange rule, agreements to
which the Trust is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Trust). The Trust at the
direction of the Sponsor shall furnish any such legend not contained in Exhibit
A-1 to the Institutional Trustee in writing. Each Convertible Preferred Security
Certificate shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Annex I and the forms of Securities
set forth in Exhibits A-1 and A-2 are part of the terms of this Declaration and,
to the extent applicable, the Institutional Trustee and the Sponsor, by their
execution and delivery of this Declaration expressly agree to such terms and
provisions and to be bound thereby.
SECTION 7.4 Paying Agent.
The Trust shall maintain in the Borough of Manhattan, City of New
York, State of New York, an office or agency where Convertible Preferred
Securities not held in book-entry only form may be presented for payment
("Paying Agent"). The Trust shall maintain an office or agency where Securities
may be presented for conversion ("Conversion Agent"). The Trust may appoint the
Paying Agent and the Conversion Agent and may appoint one or more additional
paying agents and one or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent" includes any additional
paying agent and the term "Conversion Agent" includes any additional conversion
agent. The Trust may change any Paying Agent or Conversion Agent without prior
notice to any Holder. The Trust shall notify the Institutional Trustee in
writing of the name and address of any Agent not a party to this Declaration. If
the Trust fails to appoint or maintain another entity as Paying Agent or
Conversion Agent, the Institutional Trustee shall act as such. The Trust or any
of its Affiliates may act as Paying Agent or Conversion Agent. The Trust shall
act as Paying Agent and Conversion Agent for the Common Securities.
The Trust initially appoints the Institutional Trustee as Paying Agent
and Conversion Agent for the Convertible Preferred Securities.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the filing of a certificate of
cancellation with respect to the Trust after having obtained the
consent of a Majority in liquidation amount of the Securities voting
together as a single class to file such certificate of cancellation or
the revocation of the Sponsor' s charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities;
(v) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall have been dissolved in accordance
with the terms of the Securities and all of the Debentures held by the
Institutional Trustee shall have been distributed to the Holders of
Securities in exchange for all of the Securities;
(vi) upon the distribution of the Sponsor's Common
Stock to all Holders of Convertible Preferred Securities
upon conversion of all outstanding Convertible Preferred
Securities;
(vii) the expiration of the term of the Trust on
December 4, 2036; or
(viii) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 8.1(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities shall
be freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of independent counsel
experienced in such matters that such transfer would not cause more than an
insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company required to
register under the Investment Company Act or the transferee would
become an Investment Company required to register under the Investment
Company Act.
(d) Each Security that bears or is required to bear the legend set
forth in this Section 9.1 (d) (a "Restricted Security") shall be subject to the
restrictions on transfer provided in the legend set forth in this Section 9.1
(d), unless such restrictions on transfer shall be waived by the written consent
of the Regular Trustees, and the Holder of each Restricted Security, by such
securityholder's acceptance thereof, agrees to be bound by such restrictions on
transfer. As used in this Section 9.1(d) and in Section 9.1(e), the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Security shall bear a legend in substantially the following forrn,
unless otherwise agreed by the Regular Trustees (with written notice thereof to
the Indenture Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER ( 1 ) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY, ISSUABLE
UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO TOSCO CORPORATION OR
ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR
THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, AS TRUSTEE (OR, IF THIS
CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON STOCK), A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE
CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, AS TRUSTEE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
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). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
TOSCO MAY REASONABLY REQUIRE 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. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO THE SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Security or
security issued in exchange or substitution therefor (other than (i) Securities
acquired by Tosco or any Affiliate and (ii) Common Stock issued upon the
conversion or exchange of any Security described in clause (i) above) may upon
surrender of such Security for exchange to any Regular Trustee on behalf of the
Trust in accordance with the provisions of this Section 9.1, be exchanged for a
new Security or Securities, of like tenor and aggregate liquidation amount,
which shall not bear the restrictive legend required by this Section 9.8(d).
Any Convertible Preferred Security or Common Stock issued upon the
conversion or exchange of a Convertible Preferred Security that, prior to the
Transfer Restriction Termination Date, is purchased or owned by the Company or
any Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Preferred Securities or Common Stock, as the case may be, no
longer being "restricted securities" (as defined under Rule 144).
SECTION 9.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge, but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
(a) So long as Convertible Preferred Securities are eligible for
book-entry settlement with the Clearing Agency or unless otherwise required by
law, all Convertible Preferred Securities that are so eligible may be
represented by one or more fully registered Convertible Preferred Security
Certificates (each a "Global Certificate") in global form to be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee of DTC, and no Convertible Preferred
Security Beneficial Owner will receive a definitive Convertible Preferred
Security Certificate representing such Convertible Preferred Security Beneficial
Owner's interests in such Global Certificates, except as provided in Section 9.7
below. The transfer and exchange of beneficial interests in any such Security in
global form shall be effected through the Clearing Agency in accordance with
this Declaration and the procedures of the Clearing Agency therefor.
(b) Convertible Preferred Securities that upon initial issuance are
beneficially owned by QIBs may, at the option of the trust, be represented by a
Global Certificate (a "144A Global Security"), and Convertible Preferred
Securities that upon initial issuance are beneficially owned by Non-U.S. Persons
may, at the option of the trust, be represented by another Global Certificate (a
"Regulation S Global Security"). Transfers of interests in the Convertible
Preferred Securities between any 144A Global Security and any Regulation S
Global Security will be made in accordance with the standing instructions and
procedures of the Clearing Agency and its participants. The Institutional
Trustee shall make appropriate endorsements to reflect increases or decreases in
the amount of such Convertible Preferred Securities in global form to reflect
any such transfers.
Except as provided below, beneficial owners of a Convertible Preferred
Security in global form shall not be entitled to have certificates registered in
their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Convertible Preferred Security in global forrn.
(c) So long as the Convertible Preferred Securities are eligible for
book-entry settlement and to the extent Convertible Preferred Securities held by
QIBs or Non-U.S. Persons, as the case may be, are held in a global form, or
unless otherwise required by law, upon any transfer of a definitive Convertible
Preferred Security to a QIB in accordance with Rule 144A or to a Non-U.S. Person
in accordance with Regulation S, unless otherwise requested by the transferor,
and upon receipt of the definitive Convertible Preferred Security or Convertible
Preferred Securities being so transferred, together with a certification from
the transferor that the transfer is being made in compliance with Rule 144A or
Regulation S, as the case may be (or other evidence satisfactory to the
Institutional Trustee on behalf of the Trust), the Institutional Trustee on
behalf of the Trust shall make an endorsement on any 144A Global Security or any
Regulation S Global Security, as the case may be, to reflect an increase in the
number of Convertible Preferred Securities represented by such Global
Certificate, and the Institutional Trustee on behalf of the Trust shall cancel
such definitive Convertible Preferred Security or Convertible Preferred
Securities in accordance with the standing instructions and procedures of the
Clearing Agency, the number of Convertible Preferred Securities represented by
such Convertible Preferred Security in global form to be increased accordingly;
provided that no definitive Convertible Preferred Security, or portion thereof,
in respect of which the Trust or an Affiliate of the Trust held any beneficial
interest shall be included in such Convertible Preferred Security in global form
until such definitive Convertible Preferred Security is freely tradeable in
accordance with Rule 144(k); provided further that the Trust shall issue
Convertible Preferred Securities in definitive form upon any transfer of a
beneficial interest in the Convertible Preferred Security in global form to the
Company or any Affiliate of the Company.
(d) Any Global Certificate may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Declaration as may be required by the Clearing Agency, by
any national securities exchange or by the National Association of Securities
Dealers, Inc. in order for the Convertible Preferred Securities to be tradeable
on the PORTAL Market or as may be required for the Convertible Preferred
Securities to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or required to comply with any applicable law
or any regulation thereunder or with the rules and regulations of any securities
exchange upon which the Convertible Preferred Securities may be listed or traded
or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Convertible Preferred
Securities are subject.
(e) Unless and until definitive, fully registered Convertible
Preferred Security Certificates (the "Definitive Convertible Preferred Security
Certificates") have been issued to the Convertible Preferred Security Beneficial
Owners of a Convertible Preferred Security in global form pursuant to Section
9.7:
(i) the provisions of this Section 9.4 shall be in full
force and effect with respect to such Convertible Preferred
Securities;
(ii) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of such
Convertible Preferred Securities and the sole holder of the Global
Certificates and shall have no obligation to the Convertible Preferred
Security Beneficial Owners of such Convertible Preferred Securities;
(iii) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(iv) the rights of the Convertible Preferred Security
Beneficial Owners of Convertible Preferred Securities in global form
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Convertible Preferred Security Beneficial Owners and the Clearing
Agency and/or the Clearing Agency Participants. The Clearing Agency
will make book-entry transfers among Clearing Agency Participants and
receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book
entry transfers among the Clearing Agency Participants.
(f) Notwithstanding any other provisions of this Declaration (other
than the provisions set forth in this Section 9.4(f)), a Convertible Preferred
Security in global form may not be transferred as a whole except by the Clearing
Agency to a nominee of the Clearing Agency or by a nominee of the Clearing
Agency to the Clearing Agency or another nominee to a successor Clearing Agency
or a nominee of such successor Clearing Agency.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Convertible Preferred
Security Holders is required under this Declaration, unless and until Definitive
Convertible Preferred Security Certificates shall have been issued to the
Convertible Preferred Security Beneficial Owners pursuant to Section 9.7, the
Regular Trustees shall give all such notices and communications specified herein
to be given to the Convertible Preferred Security Holders to the Clearing
Agency, and shall have no notice obligations to the Convertible Preferred
Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Convertible Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Convertible Preferred Securities.
SECTION 9.7 Definitive Convertible Preferred Security Certificates Under
Certain Circumstances.
If:
(a) a Clearing Agency elects to discontinue its services as securities
depositary with respect to the Convertible Preferred Securities and a successor
Clearing Agency is not appointed within 90 days after such discontinuance
pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Convertible Preferred Securities in global form,
then:
(c) Definitive Convertible Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Convertible Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Convertible Preferred Security
Beneficial Owners of such Convertible Preferred Securities in accordance with
the instructions of the Clearing Agency. Neither the Trustees nor the Trust
shall be liable for any delay in delivery of such instructions and each of them
may conclusively rely on and shall be protected in relying on, said instructions
of the Clearing Agency. The Definitive Convertible Preferred Security
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Regular Trustees, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or endorsements as
the Regular Trustees may deem appropriate, or as may be required to comply with
any law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Convertible Preferred Securities may
be listed, or to conform to usage.
At such time as all interests in a Convertible Preferred Security in
global form have been redeemed, converted, exchanged, repurchased or canceled,
such Convertible Preferred Security in global form shall be, upon receipt
thereof, canceled by the Trust in accordance with standing procedures and
instructions of the Clearing Agency.
Convertible Preferred Securities that upon initial issuance are
beneficially owned by persons that are neither QIBs nor Non-U.S. Persons will be
issued as Definitive Convertible Preferred Security Certificates and may not be
represented by a Global Certificate. Convertible Preferred Securities that upon
initial issuance are beneficially owned by persons that are Non-U.S. Persons
may, at the option of the Trust, be issued as Definitive Convertible Preferred
Security Certificates.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Institutional Trustee or the
Regular Trustees such security or indemnity as may be required by them to keep
each of them harmless,
then:
in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, the Institutional Trustee or any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for, or in
lieu of, any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Institutional Trustee or the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this Declaration, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) be required to pay to the Trust or to any Holder
of Securities any deficit upon dissolution of the Trust or
otherwise.
(b) The 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 ss. 3803(a) of the Business Trust Act, the Holders of
the Convertible Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any Holder of Securities, the Indemnified
Person shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any
applicable generally accepted accounting practices or principles. In
the absence of bad faith by the Indemnified Person, the resolution,
action or term so made, taken or provided by the Indemnified Person
shall not constitute a breach of this Declaration or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 10.4 Indemnification.
(a) (i) the Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that
his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of Delaware or
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section l0.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person is
proper in the circumstances because he has met the applicable standard
of conduct set forth in paragraphs (i) and (ii). Such determination
shall be made (1) by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who were not parties to such
action, suit or proceeding, (2) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion, or (3) by
the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture
Issuer as authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer if a
determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Regular Trustees so directs,
by independent legal counsel in a written opinion or (iii) by the
Common Security Holder of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Common Security Holder at the
time such determination is made, such Company Indemnified Person acted
in bad faith or in a manner that such person did not believe to be in
or not opposed to the best interests of the Trust, or, with respect to
any criminal proceeding, that such Company Indemnified Person believed
or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Regular
Trustees, independent legal counsel or Common Security Holder
reasonably determine that such person deliberately breached his duty to
the Trust or its Common or Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Convertible Preferred Security
Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 10.4(a) shall
be deemed to be provided by a contract between the Debenture Issuer and
each Company Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or modification of
this Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions
of this Section 10.4(a)
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 10.4(a) shall, unless
otherwise provided when authorized or ratified continue as to a person
who has ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration or
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or investigating
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The obligation to indemnify as set forth in this
Section 10.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 10.5 Outside Business.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware
Trustee, or the Institutional Trustee shall be obligated to present any
particular investment or other opportunity to the Trust even if such opportunity
is of a character that, if presented to the Trust, could be taken by the Trust,
and any Covered Person, shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar
year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books, records and supporting
documents, which shall reflect in detail, each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting in
compliance with generally accepted accounting principles, consistently applied.
The Trust shall use the accrual method of accounting for the United States
federal income tax purposes. The books of account and the records of the Trust
shall be examined by and reported upon as of the end of each Fiscal Year of the
Trust by a firm of independent certified public accountants selected by the
Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related income or
loss.
(c) The Regular Trustees shall cause to be duly prepared and delivered
to each of the Holders of Securities, any annual United States federal income
tax information statement, required by the Code, containing such information
with regard to the Securities held by each Holder as is required by the Code and
the Treasury Regulations. Notwithstanding any right under the Code to deliver
any such statement at a later date, the Regular Trustees shall endeavor to
deliver all such statements within 30 days after the end of each Fiscal Year of
the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name and for
the sole benefit of the Trust; provided however, that all payments of funds in
respect of the Debentures held by the Institutional Trustee shall be made
directly to the Institutional Trustee Account and no other funds of the Trust
shall be deposited in the Institutional Trustee Account. The sole signatories
for such accounts shall be designated by the Regular Trustees; provided,
however, that the Institutional Trustee shall designate the signatories for the
Institutional Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
claimed over-withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding. Furthermore, if withholding is imposed on
payments of interest on the Debentures, to the extent such withholding is
attributable to ownership by a specific Holder of Convertible Preferred
Securities, the amount withheld shall be deemed a distribution in the amount of
the withholding to such specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
Except as otherwise provided in this Declaration or by any applicable
terms of the Securities,
(a) this Declaration may only be amended by a written instrument
approved and executed by:
(i) the Regular Trustees (or, if there are more than
two Regular Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Institutional
Trustee, the Institutional Trustee; and
(iii) if the amendment affects the rights. powers,
duties obligations or immunities of the Delaware Trustee,
the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Institutional Trustee in contravention
of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(c) at such time after the Trust has issued any securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder of Securities may be effected only with such
additional requirements as may be set forth in the terms of such Securities;
(d) Section 9.1 (c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the Holders
of a Majority in liquidation amount of the Common Securities;
(f) the rights of the holders of the Common Securities under Article V
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
declaration that may be defective or inconsistent with any
other provision of this Declaration;
(iii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iv) to conform to any change in Rule 3a-5 or written change
in interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the right, preferences or
privileges of the Holders.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting. Whenever a
vote, consent or approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any stock exchange on
which the Convertible Preferred Securities are listed or admitted for
trading, such vote, consent or approval may be given at a meeting of
the Holders of Securities. Any action that may be taken at a meeting of
the Holders of Securities may be taken without a meeting if a consent
in writing setting forth the action so taken is signed by the Holders
of Securities owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders of Securities having a right
to vote thereon were present and voting. Prompt notice of the taking of
action without a meeting shall be given to the Holders of Securities
entitled to vote who have not consented in writing. The Regular
Trustees may specify that any written ballot submitted to the Security
Holder for the purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of Securities executing it. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless 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 Convertible Preferred Securities are
then listed or trading, otherwise provides, the Regular Trustees, in
their sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
The Trustee that acts as initial Institutional Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Institutional Trustee represents and warrants, as applicable, to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a New York banking corporation with
trust powers, duly organized, validly existing and in good standing, with trust
power and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by the
Institutional Trustee does not conflict with or constitute a breach of the
charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any New York or federal banking authority is required for the
execution, delivery or performance by the Institutional Trustee, of the
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee' s acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking corporation with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver and to carry out and perform its
obligations under the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legally valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities)
Tosco Financing Trust
c/o Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: General Counsel
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 1971 1
Attention: Corporate Trust Department
(c) if given to the Institutional Trustee, at its Corporate Trust
Office to the attention of Corporate Trust Trustee Administration (or such other
address as the Institutional Trustee may give notice of to the Holders of the
Securities).
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attention: General Counsel
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted to further this intention of the
parties.
SECTION 14.4 Headings.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 Successors and Assign.
Whenever in this Declaration any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/_______________________________
Jefferson F. Allen, as Regular
Trustee
/s/_______________________________
Wilkes McClave III, as Regular
Trustee
/s/_______________________________
Craig R. Deasy, as Regular Trustee
THE BANK OF NEW YORK
(DELAWARE), as Delaware Trustee
By: /s/ Joseph G. Ernst
------------------------------
Name: Joseph G. Ernst
Title: Asssistant Vice President
THE BANK OF NEW YORK, as
Institutional Trustee
By: /s/
------------------------------
Name: Byron Merino
Title: Treasurer
TOSCO CORPORATION, as Sponsor
By: /s/
-----------------------------
Jefferson F. Allen
Executive Vice President and Chief
Financial Officer
EXHIBIT 4.5
- -----------------------------------------------------------------------------
SUPPLEMENTAL INDENTURE
BETWEEN
TOSCO CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY
DATED AS OF DECEMBER 13, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
SECTION 1.1 Amendment to Section 1.1 of the Indenture......................2
SECTION 1.2 Amendment to Section 2.7 of the Indenture......................7
SECTION 1.3 Amendment to Article III of the Indenture......................8
SECTION 1.4 Amendment to Section 5.1 of the Indenture.....................10
SECTION 1.5 Amendment to Section 5.9 of the Indenture.....................11
SECTION 1.6 Defined Terms.................................................12
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.1 Designation and Principal Amount..............................13
SECTION 2.2 Maturity......................................................13
SECTION 2.3 Form and Payment..............................................13
SECTION 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary.............14
SECTION 2.5 Interest......................................................18
SECTION 2.6 No Satisfaction and Discharge.................................19
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1 Special Event Redemption.....................................19
SECTION 3.2 Optional Redemption by Company...............................20
SECTION 3.3 No Sinking Fund..............................................22
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 Extension of Interest Payment Period.........................22
SECTION 4.2 Notice of Extension..........................................23
SECTION 4.3 Limitation of Transactions...................................23
ARTICLE V
EXPENSES
SECTION 5.1 Payment of Expenses..........................................24
SECTION 5.2 Payment Upon Resignation or Removal..........................24
ARTICLE VI
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 6.1 Conversion Rights............................................25
SECTION 6.2 Conversion Procedures........................................25
SECTION 6.3 Conversion Price Adjustments.................................27
SECTION 6.4 Merger, Consolidation or Sale of Assets......................32
SECTION 6.5 Notice of Adjustments of Conversion Price....................34
SECTION 6.6 Prior Notice of Certain Events...............................34
SECTION 6.7 Certain Additional Rights....................................35
SECTION 6.8 Trustee Not Responsible for Determining
Conversion Price or Adjustments.............................36
SECTION 6.9 Reservation of Shares of Common Stock........................36
SECTION 6.10 Payment of Certain Taxes upon Conversion.....................37
SECTION 6.11 Nonassessability.............................................37
ARTICLE VII
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 7.1 Original Issue of Convertible Debentures.....................37
ARTICLE VIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
SECTION 8.1 Convertible Debentures Subordinate to Senior Indebtedness....37
SECTION 8.2 Payment Over of Proceeds upon Dissolution, Etc...............38
SECTION 8.3 Prior Payment to Senior Indebtedness upon Acceleration of
Convertible Debentures......................................39
SECTION 8.4 No Payment When Senior Indebtedness in Default...............39
SECTION 8.5 Payment Permitted in Certain Situations......................40
SECTION 8.6 Subrogation to Rights of Holders of Senior Indebtedness......40
SECTION 8.7 Provisions Solely to Define Relative Rights..................41
SECTION 8.8 Trustee to Effectuate Subordination..........................41
SECTION 8.9 No Waiver of Subordination Provisions........................41
SECTION 8.10 Notice to Trustee............................................42
SECTION 8.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.......................................................42
SECTION 8.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.....43
SECTION 8.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustees Rights.............................43
SECTION 8.14 Article Applicable to Paying Agents..........................43
SECTION 8.15 Certain Conversions Deemed Payment...........................43
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Conflict of Any Provision of Indenture with Trust Indenture
Act of 1939.................................................44
SECTION 9.2 New York Law to Govern.......................................44
SECTION 9.3 Counterparts.................................................44
SECTION 9.4 Effect of Headings...........................................45
SECTION 9.5 Severability of Provisions...................................45
SECTION 9.6 Successors and Assigns.......................................45
SECTION 9.7 Benefit of Supplemental Indenture............................45
SECTION 9.8 Acceptance by Trustee........................................45
SECTION 9.9 Ratification of Indenture; Supplemental Indenture
Controls; Scope of Supplemental Indenture...................45
<PAGE>
SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE dated as of December 13, 1996 (the "Supplemental
Indenture", to the Indenture, dated as of May 1, 1996 (the "Indenture", between
TOSCO CORPORATION, a Nevada corporation (hereinafter called the "Company", and
STATE STREET BANK AND TRUST COMPANY, a trust company organized under the laws of
the Commonwealth of Massachusetts (hereinafter called the "Trustee".
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
the Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (hereinafter called the
"Securities" to be issued in one or more series, as in the Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Supplemental Indenture in order to
establish and provide for the issuance by the Company of a series of Securities
designated as its 5:% Convertible Junior Subordinated Debentures (the
"Convertible Debentures", a specimen copy of which is attached hereto as Exhibit
A, on the terms set forth herein;
WHEREAS, Tosco Financing Trust, a Delaware statutory business trust
("Tosco Trust or the "Trust", has offered to Morgan Stanley & Co. Incorporated,
Donaldson, Lufkin & Jenrette Securities Corporation and Furman Selz LLC (the
"Initial Purchasers" in a private placement $265,000,000 ($300,000,000 if the
Initial Purchasers over-allotment option is exercised) aggregate liquidation
amount of its 5:% Trust Convertible Preferred Securities (the "Convertible
Preferred Securities", representing undivided beneficial interests in the assets
of the Trust, and proposes to invest the proceeds from such offering, together
with the proceeds of the issuance and sale by the Trust to the Company of
$7,950,000 ($9,000,000 if the Initial Purchasers option is exercised) aggregate
liquidation amount of its Common Securities, in $272,950,000 ($309,000,000 if
the Initial Purchasers over-allotment option is exercised) aggregate principal
amount of the Convertible Debentures; and
WHEREAS, Section 8.1 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee without the consent
of any holder of any Securities to, inter alia, (a) establish the terms of any
Securities as permitted by Sections 2.1 and 2.3 of the Indenture, provided
certain conditions are met, (b) add to the covenants of the Company and (c)
change certain provisions of the Indenture when there is no Outstanding Security
of any Series under the Indenture;
WHEREAS, the conditions set forth in the Indenture for the execution
and delivery of this Supplemental Indenture have been complied with; and
WHEREAS, all things necessary to make this Supplemental Indenture a
valid agreement of the Company and the Trustee, in accordance with its terms,
and a valid amendment of, and supplement to, the Indenture have been done.
NOW, THEREFORE:
There is hereby established a series (as that term is used in Section
2.3 of the Indenture) of Securities to be issued under the Indenture, which
series of Securities shall have the terms set forth herein and in the
Convertible Debentures, and in consideration of the premises and the purchase
and acceptance of the Convertible Debentures by the holders thereof, the Company
mutually covenants and agrees with the Trustee, for the equal and proportionate
benefit of all holders of the Convertible Debentures, that the Indenture is
supplemented and amended, to the extent and for the purposes expressed herein,
as follows:
ARTICLE 1.
AMENDMENTS TO THE INDENTURE; DEFINITION OF TERMS
SECTION 1.1. Amendment to Section 1.1 of the Indenture
Section 1.1 of the Indenture is hereby amended by adding the following
definitions in their proper alphabetical order:
"Additional Interest" shall have the meaning set forth in
Section 2.5(c).
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Price" means (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 holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the average of the daily Closing Price for one
share of Common Stock during the 10 Trading Days immediately prior to the record
date for the determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such Fundamental
Change or, if there is no such record date, prior to the date upon which the
holders of the Common Stock shall have the right to receive such cash,
securities, property or other assets.
"Bank Credit Facility" means the bank facility provided for under the
Third Amended and Restated Credit Agreement, dated as of April 8, 1996, among
the Company and the banks that are or become parties from time to time thereto,
as it may be amended, supplemented or otherwise modified from time to time, and
any successor or replacement bank facility thereto.
"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.
"Closing Price" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the New York Stock Exchange or, if the
common stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange on which such common stock is listed or
admitted to trading, or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors of the Company for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the Board of
Directors.
"Common Securities" means undivided beneficial interests in the assets
of the Tosco Trust which rank pari passu with Preferred Securities issued by
such Tosco Trust; provided, however, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Common Securities Guarantee" means any guarantee that the Company
enters into that operates directly or indirectly for the benefit of holders of
Common Securities of Tosco Trust.
"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. Subject to the
anti-dilution provisions of any convertible Security, however, shares of Tosco
Common Stock issuable on conversion of a Security shall include only shares of
the class designated as Common Stock of the Company at the date of any
supplemental indenture, Board Resolution or other instrument authorizing such
Security or shares of any class or classes resulting from any reclassification
or reclassifications thereof and which have no preference in respect of the
payment of dividends or the distribution of assets upon 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 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 such classes resulting from all such
reclassifications.
"Common Stock Fundamental Change" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Debentures continue to exist as outstanding
Convertible Debentures, or (ii) not later than the occurrence of such
Fundamental Change, the outstanding Convertible Debentures are converted into or
exchanged for debentures of a corporation succeeding to the business of the
Company, which debentures have terms substantially similar to those of the
Convertible Debentures.
"Compound Interest" shall have the meaning specified in Section 4.1.
"Convertible Preferred Securities" has the meaning specified in the
recitals to this Supplemental Indenture.
"Conversion Price" has the meaning set forth in Section 6.1.
"Coupon" means any interest coupon appertaining to a Security.
"Declaration" means the Amended and Restated Declaration of Trust of
Tosco Financing Trust, a Delaware statutory business trust, dated as of December
13, 1996.
"Deferred Interest" has the meaning specified in Section 4.1.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"Extended Interest Payment Period" has the meaning specified in
Section 4.1.
"Fundamental Change" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets.
"Global Debenture" has the meaning specified in Section 2.4(a).
"Guarantor" means the Company in its capacity as guarantor under any
Trust Securities Guarantees.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Maturity Date" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Compound Interest and Additional
Interest, if any.
"Non Book-Entry Convertible Preferred Securities" has the meaning set
forth in Section 2.4.
"Non-Stock Fundamental Change" means any Fundamental Change other than
a Common Stock Fundamental Change.
"Optional Redemption Price" has the meaning specified in Section 3.2.
"Predecessor Security" of a Security of any series means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such Security; and, for the purposes of this definition, Security of any
series authenticated and delivered under Section 2.9 of the Indenture 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" means undivided beneficial interests in the
assets of Tosco Trust which rank pari passu with Common Securities issued by
such Tosco Trust; provided, however, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means any guarantee that the Company
may enter into with The Bank of New York or other Persons that operates directly
or indirectly for the benefit of holders of Preferred Securities of such Tosco
Trust.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however designated)
that ranks prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Purchaser Stock Price" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Stock in such Common Stock
Fundamental Change during the 10 Trading Days immediately prior to the date
fixed for the determination of the holders of Common Stock entitled to receive
such common stock or, if there is no such date, prior to the date upon which the
holders of Common Stock shall have the right to receive such common stock.
"Reference Market Price" initially means $52.67 and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving effect to any
such adjustment shall always be the same as the ratio of the initial Reference
Market Price to the initial Conversion Price.
"Representative" means the (a) indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative (i) in the case of such Senior Indebtedness issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company, including, without
limitation, all indebtedness and all obligations of the Company to pay fees and
other amounts, under the Bank Credit Facility, and any refinancing of the Bank
Credit Facility in the bank credit market (including institutional participants
therein), including interest accruing on or after a bankruptcy or other similar
event, whether or not an allowed claim therein; (ii) all capital lease
obligations of the Company (including any Synthetic Leases, as defined in the
Bank Credit Facility); (iii) all obligations of the Company issued or assumed as
the deferred purchase price of property, all conditional sale obligations of the
Company and all obligations of the Company under any title retention agreement
(but excluding trade accounts payable arising in the ordinary course of
business); (iv) all obligations of the Company for the reimbursement on any
letter of credit, bankers acceptance, security purchase facility or similar
credit transaction; (v) all obligations of the Company (contingent or otherwise)
with respect to interest rate or other swap, cap or collar agreements, oil or
gas commodity hedge transactions or other similar instruments or agreements or
foreign currency hedge, exchange, purchase or similar instruments or agreements;
(vi) all obligations of the types referred to in clauses (i) through (v) of
other Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vii) all obligations of the types referred
to in clauses (i) through (vi) of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether outstanding on the date of the Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
except for (A) any such indebtedness that is by its terms subordinated to or
pari passu with the Convertible Debentures, and (B) any indebtedness between or
among the Company or its Affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (a) Tosco Trust or a
trustee of such trust and (b) any other trust, or a trustee of such trust,
partnership or other entity affiliated with the Company that is a financing
vehicle of the Company (a "Financing Entity" in connection with the issuance by
such Financing Entity of preferred securities or other securities that rank pari
passu with, or junior to, such preferred securities.
"Tosco Trust" or the "Trust" means Tosco Financing Trust, a Delaware
statutory business trust, or any substantially similar Delaware statutory
business trust sponsored by the Company.
"Trading Day" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
"Transfer Restriction Termination Date" means the first date on which
the Preferred Securities, the Convertible Debentures and any Common Stock issued
or issuable upon the conversion or exchange thereof (other than (i) such
securities acquired by the Company or any Affiliate thereof since the Issue Date
of the Preferred Securities and (ii) Common Stock issued upon the conversion or
exchange of any such security described in clause (i) above) may be sold
pursuant to Rule 144(k) (or any successor provision).
"Trust Securities" means Common Securities and Preferred Securities of
Tosco Trust.
"Trust Securities Guarantees" means the Common Securities Guarantee
and the Preferred Securities Guarantee.
"United States Alien" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
nonresident alien fiduciary of a foreign estate or trust of a foreign
partnership.
SECTION 1.2. Amendment to Section 2.7 of the Indenture
Section 2.7 of the Indenture is hereby amended by adding the following
paragraph at the end of Section 2.7:
In the case of any Convertible Debenture which is converted into
Common Stock of the Company after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Debenture whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Convertible Debenture (or one or more Predecessor Securities) is registered at
the close of business on such record date. However, if a Redemption Date falls
between a record date and the subsequent Interest Payment Date, the amount of
such payment shall include accumulated and unpaid interest accrued to, but
excluding, such Redemption Date. Except as otherwise expressly provided in the
first two sentences of this paragraph, in the case of any Convertible Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Convertible Debenture shall not be payable.
SECTION 1.3. Amendment to Article III of the Indenture
Article III of the Indenture is hereby amended by adding the following
sections:
SECTION 3.5 Limitation on Dividends; Transactions with Affiliates.
If Securities of any Series are issued to a Tosco Trust or a trustee
of such trust in connection with the issuance of Trust Securities by such Tosco
Trust and (a) there shall have occurred any event that would constitute an Event
of Default, (b) the Guarantor shall be in default with respect to its payment of
any obligations under the Preferred Securities Guarantee or the Common
Securities Guarantee relating to such Tosco Trust, or (c) the Company shall have
given notice of its election to defer payments of interest on Securities of such
Series by extending the interest payment period as provided herein and such
period, or any extension thereof, shall be continuing, then (y) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of Common
Stock of the Company in connection with the satisfaction by the Company of its
obligations under any employee benefit plans, (ii) as a result of a
reclassification of capital stock of the Company or the exchange or conversion
of one class or Series of the Companys capital stock for another class or Series
of capital stock of the Company or, (iii) the purchase of fractional interests
in shares of the Companys capital stock pursuant to the conversion or exchange
provisions of such capital stock of the Company or the security being converted
or exchanged) or make any guarantee payments with respect to the foregoing, and
(z) the Company shall not make any payment of interest, principal or premium, if
any, on or repay. repurchase or redeem any debt securities (including
guarantees) issued by the Company which rank pari passu with or junior to
Securities of such Series.
SECTION 3.6 Covenants as to Tosco Trust.
In the event Securities are issued to a Tosco Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such Tosco
Trust, for so long as such Trust Securities remain outstanding, the Company will
(a) maintain 100% direct or indirect ownership of the Common Securities of such
Tosco Trust; provided, however, that any permitted successor of the Company
under the Indenture may succeed to the Companys ownership of the Common
Securities, (b) use its reasonable efforts to cause such Tosco Trust (i) to
remain a statutory business trust, except in connection with a distribution of
Securities of such Series to the holders of Trust Securities in liquidation of
such Tosco Trust, the redemption of all of the Trust Securities of such Tosco
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration of such Tosco Trust, and (ii) to continue to be classified as a
grantor trust for United States federal income tax purposes and (iii) to use its
reasonable efforts to cause each holder of Trust Securities to be treated as
owning an undivided beneficial interest in the Securities of such Series.
SECTION 3.7 Additional Amounts.
If the Securities of any Series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such Series or
any Coupon appertaining thereto additional amounts as provided therein. Whenever
in this Indenture there is mentioned, in any context, the payment of the
principal of or any premium or interest on, or in respect of any Security of any
Series or payment of any related Coupon or the net proceeds received on the sale
or exchange of any Security of any Series, such mention shall be deemed to
include mention of the payment of additional amounts provided for in this
Section to the extent that, in such context additional amounts are, were or
would be payable in respect thereof pursuant to the provisions of this Section
and express mention of the payment of additional amounts (if applicable) in any
provisions hereof shall not be construed as excluding additional amounts in
those provisions hereof where such express mention is not made.
If the Securities of any Series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with respect
to Securities of such Series (or if the Securities of such Series will not bear
interest prior to Maturity, the first day on which a payment of principal and
any premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with respect
to the matters set forth in the below-mentioned Officers Certificate, the
Company will furnish the Trustee and the Companys principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal of and any premium or interest on the Securities of such
Series shall be made to Holders of Securities of such Series or any Coupons
appertaining thereto who are United States Aliens without withholding for or on
account of any tax assessment or other governmental charge described in the
Securities of such Series. If any such withholding shall be required, then such
Officers Certificate shall specify by country the amount, if any, required to be
withheld on such payments to such Holders of Securities of such Series or any
Coupons appertaining thereto and the Company will pay to the Trustee or such
Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or willful misconduct on their part arising out of or in connection
with actions taken or omitted by any of them in reliance on any Officers
Certificate furnished pursuant to this Section.
SECTION 3.8 Existence
Subject to Article IX, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 3.9 Calculation of Original Issue Discount.
The Company shall file with the Trustee promptly at the end of each
year a written notice specifying the amount of Original Issue Discount (as
defined in the Internal Revenue Code of 1986, as amended) (including daily rates
and accrual periods) accrued on Outstanding Securities as of the end of such
year.
SECTION 1.4. Amendment to Section 5.1 of the Indenture
Section 5.1 of the Indenture is hereby amended by
i. deleting paragraph (a) in its entirety and substituting the
following:
(a) default in the payment of any interest upon or any
additional amounts payable in respect of any Securities of such Series
when it becomes due and payable, and continuance of such default for a
period of 30 days (whether or not such payment is prohibited by the
subordination provisions set forth in any indenture supplemental
hereto); provided, however, that a valid extension of an interest
payment period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in the
payment of interest for this purpose; or
ii. deleting paragraph (b) in its entirety and substituting the
following:
(b) default in the payment of the principal of (or premium, if
any, on) any Securities of such Series as and when the same shall
become due and payable whether at maturity, upon redemption, by
declaration or otherwise, or in any payment required by any sinking or
analogous fund established with respect to that series (whether or not
such payment is prohibited by the subordination provisions set forth in
any indenture supplemental hereto); provided, however, that a valid
extension of the maturity of the Securities of such Series in
accordance with the terms of any indenture supplemental hereto shall
not constitute a default in the payment of principal or premium, if
any; or
iii. adding the following paragraphs at the end of Section 5.1:
(i) if the Securities of such Series are convertible or
exchangeable into or for shares of Common Stock of the Company or other
securities, cash or other property pursuant to any supplemental
indenture, Board Resolution or other instrument authorizing Securities
of such Series, failure by the Company to convert such Securities
(whether or not conversion or exchange is prohibited by the
subordination provisions set forth in any indenture supplemental
hereto); or
(j) in the event Securities of any Series are issued to a
Tosco Trust or a trustee of such trust in connection with the issuance
of Trust Securities by such Tosco Trust, such Tosco Trust shall have
voluntarily or involuntarily dissolved, wound-up its business or
otherwise terminated its existence except in connection with (i) the
distribution of Securities of such Series to holders of Trust
Securities in liquidation of their interest in such Tosco Trust, (ii)
the redemption of all of the outstanding Trust Securities of such Tosco
Trust or (iii) certain mergers, consolidations or amalgamations, each
as permitted by the Declaration of such Tosco Trust.
iv. deleting paragraphs (d) and (e) in their entirety.
SECTION 1.5. Amendment to Section 5.9 of the Indenture
Section 5.9 of the Indenture is hereby amended by deleting the words
in the payment of the principal of or interest on any of the Securities of such
Series at the end of the first paragraph and substituting the following:
(a) in the payment of the principal of (or premium, if any) or
any interest on any Security of such Series as and when the same shall
become due by the terms of Securities of such Series otherwise than by
acceleration (unless such default has been cured and sums sufficient to
pay all matured installments of interest and principal and any premium
has been deposited with the Trustee (in accordance with Section 5.1)),
or
(b) in the covenants contained in Section 3.5, or
(c) in respect of a covenant or provision hereof which under
Article VIII cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such Series affected;
provided, however, that if the Securities of such Series are held by a
Tosco Trust or a trustee of such trust, such waiver or modification to
such waiver shall not be effective until the holders of a majority in
liquidation preference of Trust Securities of the applicable Tosco
Trust shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the Holder of each
Outstanding Security of such Series is required, such waiver shall not
be effective until each holder of the Trust Securities of the
applicable Tosco Trust shall have consented to such waiver.
SECTION 1.6. Defined Terms
For all purposes of the Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
i. the terms which are defined in the Indenture have the
same meanings when used in this Supplemental Indenture;
ii. the terms defined in this Article have the meaning
assigned to them in this Article and include the plural as well
as the singular;
iii. all other terms used herein which are defined in the
Trust Indenture Act, whether directly or by reference therein,
have the meanings assigned to them therein;
iv. all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as otherwise
herein expressly provided, the term generally accepted accounting principles
with respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of America
at the date of such computation;
v. a reference to a Section or Article is to a Section or
Article of this Supplemental Indenture unless otherwise
specified;
vi. the words "herein" "hereof" and "hereunder" and other
words of similar import refer to this Supplemental Indenture as
a whole and not to any particular Article, Section or other
subdivision;
vii. headings are for convenience of reference only and do
not affect interpretation; and
viii. the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Common Stock; (iv)
Conversion Agent; (v) Convertible Preferred Security Certificate; (vi) Delaware
Trustee; (vii) Dissolution Tax Opinion; (viii) Distribution; (ix) DTC; (x)
Institutional Trustee; (xi) Investment Company Event; (xii) No- Recognition
Opinion; (xiii) Non-U.S. Person; (xiv) Placement Agreement; (xv) PORTAL Market;
(xvi) QIB; (xvii) Rule 144A; (xviii) Regulation S; (xix) Rule 144(k); (xx)
Redemption Tax Opinion; (xxi) Regular Trustees; (xxii) Special Event; and
(xxiii) Tax Event.
ARTICLE 2.
GENERAL TERMS AND CONDITIONS
OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. Designation and Principal Amount
There is hereby authorized a series of Debentures designated the 5:%
Convertible Junior Subordinated Debentures, limited in aggregate principal
amount to $309,000,000 which amount shall be as set forth in any written order
of the Company for the authentication and delivery of Convertible Debentures
pursuant to Section 2.4 of the Indenture.
SECTION 2.2. Maturity
The Maturity Date is December 15, 2026
SECTION 2.3. Form and Payment
i. Except as provided in Section 2.4, the Convertible Debentures shall
be issued to the Trust in fully registered certificated form without coupons in
denominations of $50 in principal amount and integral multiples thereof.
Principal and interest on the Convertible Debentures issued in certificated form
will be payable, the transfer of such Convertible Debentures will be registrable
and such Convertible Debentures will be exchangeable for Convertible Debentures
bearing identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compound Interest and Additional Interest,
if any) on such Convertible Debentures held by the Institutional Trustee will be
made at such place and to such account as may be designated by the Institutional
Trustee.
ii. In accordance with Section 2.3 of the Indenture, the Convertible
Debentures are subject to the terms set forth in this Supplemental Indenture
including, without limitation, Exhibit A hereto, the terms of which are hereby
incorporated in their entirety by reference. In addition to the other terms of
the Convertible Debentures which are set forth elsewhere in this
Supplemental Indenture and Exhibit A hereto, the Convertible Debentures are
subject to all of the provisions of the Indenture as supplemented by this
Supplemental Indenture, except as otherwise provided in this Supplemental
Indenture.
iii. The Convertible Debentures as the Trustees Certificate of
Authentication to be endorsed thereon due to be substantially in the form of
EXHIBIT A to this Supplemental Indenture.
SECTION 2.4. Exchange and Registration of Transfer of
Convertible Debentures; Restrictions on Transfers;
Depositary.
If distributed to holders of Convertible Preferred Securities in
connection with a Dissolution Event, the Convertible Debentures will be issued
to such holders in the same form as the Convertible Preferred Securities that
such Convertible Debentures replace in accordance with the following procedures:
i. So long as Convertible Debentures are eligible for
book-entry settlement with the Depositary, or unless otherwise
required by law, all Convertible Debentures that are so eligible
may be represented by one or more Convertible Debentures in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in any such Convertible Debenture in global form shall be effected
through the Depositary in accordance with the Indenture and the procedures of
the Depositary therefor.
Convertible Debentures that are distributed to QIBs in replacement of
Convertible Preferred Securities represented by a global convertible Preferred
Security will be represented by a global Convertible Debenture (the "144A Global
Debenture". Convertible Debentures that are distributed to Non-U.S. Persons in
replacement of Convertible Preferred Securities represented by a global
Convertible Preferred Security will be represented by a global Convertible
Debenture (the "Regulation S Global Debenture". Each of the 144A Global
Debenture and the Regulation S Global Debenture shall be referred to herein as a
Global Debenture. Convertible Debentures that are distributed to QIBs or to
Non-U.S. Persons in replacement of Certificated Convertible Preferred Securities
will be represented by definitive Convertible Debentures as set forth in Section
2.4(b). If Global Debentures are issued, transfers of interests in the
Convertible Debentures between the 144A Global Debenture and the Regulation S
Global Debenture will be made in accordance with the standing instructions and
procedures of the Depositary and its participants and the Trustee shall make
appropriate endorsements to reflect increases or decreases in the principal
amounts of such Global Debentures to reflect any such transfers.
Except as provided below, beneficial owners of a Convertible Debenture
in global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Convertible Debentures in global form.
ii. Convertible Preferred Securities held in certificated form, except
for certificates representing Convertible Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its nominee),
shall upon presentation to the Trustee by the Institutional Trustee or by the
holder thereof or by the Institutional Trustee on behalf of such holders shall
be exchanged for Convertible Debentures in fully registered certificated form of
like aggregate principal amount and tenor.
iii. So long as the Convertible Debentures are eligible for book-entry
settlement, and to the extent that Convertible Debentures are held by QIBs or
Non-U.S. Persons, as the case may be, in a Global Debenture, or unless otherwise
required by law, upon any transfer of a definitive Convertible Debenture to a
QIB in accordance with Rule 144A or to a Non-U.S. Person in accordance with
Regulation S, unless otherwise requested by the transferor, and upon receipt of
the definitive Convertible Debenture or Convertible Debentures being so
transferred, together with a certification from the transferor that the transfer
is being made in compliance with Rule 144A or Regulation S, as the case may be
(or other evidence satisfactory to the Trustee), the Trustee shall make an
endorsement on any 144A Global Debenture or any Regulation S Global Debenture,
as the case may be, to reflect an increase in the aggregate principal amount of
the Convertible Debentures represented by such Global Debenture, and the Trustee
shall cancel such definitive Convertible Debenture or Convertible Debentures in
accordance with the standing instructions and procedures of the Depositary, the
aggregate principal amount of Convertible Debentures represented by such Global
Debenture to be increased accordingly; provided that no definitive Convertible
Debenture, or portion thereof, in respect of which the Company or an Affiliate
of the Company held any beneficial interest shall be included in such Global
Debenture until such definitive Convertible Debenture is freely tradable in
accordance with Rule 144(k); provided further that the Trustee shall, at the
written request of the Company, issue Convertible Debentures in definitive form
upon any transfer of a beneficial interest in the Global Debenture to the
Company or any Affiliate of the Company.
Any Global Debenture may be endorsed with or have incorporated in the
text thereof such legends or recitals or changes not inconsistent with the
provisions of the Indenture as may be required by the Depositary, by the New
York Stock Exchange or by the National Association of Securities Dealers, Inc.
in order for the Convertible Debentures to be tradeable on the PORTAL Market or
as may be required for the Convertible Debentures to be tradeable on any other
market developed for trading of securities pursuant to Rule 144A or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Convertible Debentures
may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Convertible Debentures are subject.
iv. Each Convertible Debenture that bears or is required to bear the
legend set forth in this Section 2.4(d) (a "Restricted Security" shall be
subject to the restrictions on transfer provided in the legend set forth in this
Section 2.4(d), unless such restrictions on transfer shall be waived by the
written consent of the Company, and the Holder of each Restricted Security, by
such securityholders acceptance thereof, agrees to be bound by such restrictions
on transfer. As used in this Section 2.4(d) and in Section 2.4(e), the term
"transfer" encompasses any sale, pledge, transfer or other disposition of any
Restricted Security.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Convertible Debenture shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT", AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A AQUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR" OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES
THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK,
IF ANY, ISSUABLE UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT
(A) TO TOSCO CORPORATION OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE
THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE
COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY
EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE
SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO
THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET
BANK AND TRUST COMPANY, AS TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES
COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE 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). IF THIS CERTIFICATE
DOES NOT EVIDENCE COMMON STOCK AND THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S.
PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO STATE
STREET BANK AND TRUST COMPANY, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS TOSCO MAY REASONABLY REQUIRE 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. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF
HOLDING PERIOD APPLICABLE TO THE SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S." PERSON HAVE THE
MEANINGS GIVEN TO THEM BY REGULATIONS UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date or the sale of a
Convertible Debenture pursuant to an effective registration statement or Rule
144 (or any successor provision) under the Securities Act, any Convertible
Debenture or security issued in exchange or substitution therefor (other than
(i) Convertible Debentures acquired by the Company or any Affiliate thereof
since the issue date of the Convertible Preferred Securities and (ii) Common
Stock issued upon the conversion or exchange of any Convertible Debenture
described in clause (i) above) may upon surrender of such Convertible Debenture
for exchange to the Security registrar in accordance with the provisions of this
Section 2.4, be exchanged for a new Convertible Debenture or Convertible
Debentures, of like tenor and aggregate principal amount, which shall not bear
the restrictive legend required by this Section 2.4(d).
Notwithstanding any other provisions of the Indenture (other than the
provisions set forth in this Section 2.4(d)), a Global Debenture may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints The Depository Trust Company to act
as Depositary with respect to the Convertible Debentures in global form.
Initially, the Global Debentures shall be issued to the Depositary, registered
in the name of Cede & Co., as the nominee of the Depositary, and deposited with
the Trustee as custodian for Cede & Co.
If at any time the Depositary for the Global Debentures notifies the
Company that it is unwilling or unable to continue as Depositary for such
Convertible Debentures, the Company may appoint a successor Depositary with
respect to such Convertible Debentures. If a successor Depositary for the
Convertible Debentures is not appointed by the Company within 90 days after the
Company receives such notice, the Company will execute, and the Trustee, upon
receipt of an Officers Certificate for authentication and delivery of
Convertible Debentures, will authenticate and deliver, Convertible Debentures in
definitive form, in an aggregate principal amount equal to the principal amount
of the Global Debentures, in exchange for the Global Debentures.
Definitive Convertible Debentures issued in exchange for all or a part
of a Global Debenture pursuant to this Section 2.4(d) shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such definitive Convertible Debentures to the person in whose names such
definitive Convertible Debentures are so registered.
At such time as all interests in a Global Debenture have been
redeemed, converted, exchanged, repurchased or canceled, such Global Debenture
shall be, upon receipt thereof, canceled by the Trustee in accordance with
standing procedures and instructions of the Depositary. At any time prior to
such cancellation, if any interest in a Global Debenture is exchanged for
definitive Convertible Debentures, redeemed, converted, exchanged, repurchased
by the Company pursuant to Article III or canceled, or transferred for part of a
Global Debenture, the principal amount of such Global Debenture shall, in
accordance with the standing procedures and instructions of the Depositary be
reduced or increased, as the case may be, and an endorsement shall be made on
such Global Debenture by, or at the direction of, the Trustee to reflect such
reduction or increase.
v. Any Convertible Debenture or Common Stock issued upon the
conversion or exchange of a Convertible Debenture that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Debentures or Common Stock, as the case may be, no longer
being Arestricted securities (as defined under Rule 144).
SECTION 2.5. Interest
i. Each Convertible Debenture will bear interest at the rate of 5:% per
annum (the ACoupon Rate" from December 13, 1996 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 15, June
15, September 15 and December 15 of each year (each, an "Interest Payment Date",
commencing on March 15, 1997, to the Person in whose name such Convertible
Debenture or any predecessor Convertible Debenture is registered, at the close
of business on the record date for such interest installment, which shall be the
close of business on the fifteenth day prior to that Interest Payment Date.
ii. 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 per 30-day month. In the event that
any date on which interest is payable on the Convertible Debentures is not a
Business Day, then payment of interest payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
iii. If, at any time while the Institutional Trustee is the Holder of
any Convertible Debentures, the Trust or the Institutional Trustee is required
to pay any taxes, duties, assessments or governmental charges of whatever nature
(other than withholding taxes) imposed by the United States, or any other taxing
authority, then, in any such case, the Company will pay as additional interest
("Additional Interest" on the Convertible Debentures held by the Institutional
Trustee, such additional amounts as shall be required so that the net amounts
received and retained by the Trust and the Institutional Trustee after paying
such taxes, duties, assessments or other governmental charges will be equal to
the amounts the Trust and the Institutional Trustee would have received had no
such taxes, duties, assessments or other government charges been imposed.
SECTION 2.6. No Satisfaction and Discharge.
The Convertible Debentures are not entitled to the benefit of the
Satisfaction and Discharge provisions of Article X of the Indenture.
ARTICLE 3.
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. Special Event Redemption
If a Special Event has occurred and is continuing and:
i. the Company has received a Redemption Tax Opinion; or
ii. after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax Opinion
that a No-Recognition Opinion cannot be delivered to the Trust, then,
notwithstanding Section 3.2(a) but subject to Section 3.2(b), the Company shall
have the right upon not less than 30 days nor more than 60 days notice to the
Holders of the Convertible Debentures to redeem the Convertible Debentures, in
whole or in part, for cash within 90 days following the occurrence of such Tax
Event (the A90-Day Period" at a redemption price equal to 100% of the principal
amount to be redeemed plus any accrued and unpaid interest thereon to the date
of such redemption (the "Redemption Price", provided that if at the time there
is available to the Company or the Trust the opportunity to eliminate, within
the 90-Day Period, the Tax Event by taking some ministerial action ("Ministerial
Action", such as filing a form or making an election, or pursuing some other
similar reasonable measure which has no adverse effect on the Company, the Trust
or the Holders of the Trust Securities issued by the Trust, the Company shall
pursue such Ministerial Action in lieu of redemption, and, provided, further,
that the Company shall have no right to redeem the Convertible Debentures while
the Trust is pursuing any Ministerial Action pursuant to its obligations under
the Declaration. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price prior to the redemption date.
SECTION 3.2. Optional Redemption by Company
i. Subject to the provisions of Section 3.2(b) and to the provisions of
Article XII of the Indenture, except as otherwise may be specified in Section
3.1 or elsewhere in this Supplemental Indenture, the Company shall have the
right to redeem the Convertible Debentures, in whole or in part, from time to
time, on or after December 18, 1999. Any redemption pursuant to this paragraph
will be made upon not less than 30 days nor more than 60 days notice to the
Holders of the Convertible Debentures, at the following prices (expressed as
percentages of the principal amount of the Convertible Debentures) (the
"Optional Redemption Price" together with accrued and unpaid interest, including
Compounded and Additional Interest to, but excluding, the Redemption Date, if
redeemed during the 12-month period beginning December 18:
YEAR REDEMPTION PRICE
---- ----------------
1999 104.025%
2000 103.450
2001 102.875
2002 102.300
2003 101.725
2004 101.150
2005 100.575
and 100% if redeemed on or after December 18, 2006.
If Convertible Debentures are redeemed on any March 15, June 15,
September 15, or December 15, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
The Convertible Debentures may not be redeemed by the Company if the
Company is in arrears in payment of interest thereon.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of the Convertible Debentures will
be used to redeem Convertible Preferred Securities.
If the Convertible Debentures are only partially redeemed pursuant to
this Section 3.2, the Convertible Debentures will be selected for redemption by
any method utilized by the Trustee. The Optional Redemption Price, together with
any required interest payment, shall be paid prior to 12:00 noon, New York time,
on the Redemption Date or at such earlier time as the Company determines
provided that the Company shall deposit with the Trustee an amount sufficient to
pay the Optional Redemption Price, together with any required interest payment,
by 10:00 a.m., New York time, on the date such amounts are to be paid. Partial
redemptions must be in an amount not less than $1,000,000 principal amount of
Debentures.
If Convertible Debentures selected for partial redemption are converted
in part before termination of the conversion right with respect to the portion
of the Convertible Debenture of such series so selected, the converted portion
of the Convertible Debentures of such series shall be deemed (so far as may be)
to be the portion selected for redemption. Convertible Debentures (or portions
thereof) which have been converted during a selection of Convertible Debentures
to be redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection. In any case where more than one Convertible Debenture of such
series is registered in the same name, the Trustee in its discretion may treat
the aggregate principal amount so registered as if it were represented by one
Convertible Debenture of such series.
The notice of redemption to be made to the Holders of the Convertible
Debentures shall specify, in addition to those items specified in Section 12.2
of the Indenture, the conversion rate or price, the date on which the right to
convert the Convertible Debentures to be redeemed will terminate and the place
or places where such Convertible Debentures may be surrendered for conversion.
In addition to the notice of redemption to be provided to the Holders
of Securities pursuant to Section 12.2 of the Indenture, the Company or the
Trust shall give public notice of any such redemption by the issuance of a press
release through the services of the Dow Jones Broad Tape, Reuters News Service
and Bloomberg News Service.
If any Convertible Debenture called for redemption is converted into
Common Stock of the Company, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Convertible Debenture shall (subject to any right of the Holder of such
Convertible Debenture or any Predecessor Security to receive interest as
provided in the last paragraph of Section 2.7 of the Indenture, as amended by
this Supplemental Indenture) be paid to the Company upon the Companys request
or, if then held by the Company, shall be discharged from such trust.
ii. If a partial redemption of the Convertible Debentures would result
in the delisting of the Convertible Preferred Securities issued by the Trust
from any national securities exchange or other organization on which the
Convertible Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Convertible
Debentures in whole.
SECTION 3.3. No Sinking Fund
The Convertible Debentures are not entitled to the benefit of any
sinking fund.
ARTICLE 4.
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. Extension of Interest Payment Period
As long as an Event of Default under Section 5.1(a) of the Indenture
shall not have occurred and be continuing, the Company shall have the right, at
any time and from time to time during the term of the Convertible Debentures, to
defer payments of interest by extending the interest payment period of such
Convertible Debentures for a period not exceeding 20 consecutive quarters (the
"Extended Interest Payment Period", during which Extended Interest Payment
Period no interest shall be due and payable; provided that no Extended Interest
Payment Period may extend beyond the Maturity Date or any earlier Redemption
Date. To the extent permitted by applicable law, interest, the payment of which
has been deferred because of the extension of the interest payment period
pursuant to this Section 4.1, will bear interest thereon at the Coupon Rate
compounded quarterly for each quarter of the Extended Interest Payment Period
("Compound Interest". At the end of the Extended Interest Payment Period, the
Company shall pay all interest accrued and unpaid on the Convertible Debentures,
including any Additional Interest and Compound Interest (together, "Deferred
Interest" that shall be payable to the Holders of the Convertible Debentures in
whose names the Convertible Debentures are registered in the Debenture Register
on the first record date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment 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 the Maturity Date or any earlier Redemption Date. Upon the termination of
any Extended Interest Payment Period and upon the payment of all Deferred
Interest then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extended Interest Payment Period, except at the end thereof,
but the Company may prepay at any time all or any portion of the interest
accrued during an Extended Interest Payment Period.
SECTION 4.2. Notice of Extension
i. If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give written notice to the Regular Trustees,
the Institutional Trustee and the Trustee of its selection of such Extended
Interest Payment Period one Business Day before the earlier of (i) the next
succeeding date on which Distributions on the Trust Securities issued by the
Trust are payable, or (ii) the date the Trust is required to give notice of the
record date, or the date such Distributions are payable, to the New York Stock
Exchange or other applicable self-regulatory organization or to holders of the
Convertible Preferred Securities issued by the Trust, but in any event at least
one Business Day before such record date.
ii. If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extended Interest
Payment Period, the Company shall give the Holders of the Convertible Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
Holders of the Convertible Debentures.
iii. The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 consecutive
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. Limitation of Transactions
If the Company shall exercise its right to defer payment of interest
as provided in Section 4.1, then (i) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
(other than (A) purchases or acquisitions of shares of its common stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plans, (B) as a result of a reclassification of its capital
stock or the exchange or conversion of one class or series of its capital stock
for another class or series of its capital stock or (C) the purchase of
fractional interests in shares of its capital stock pursuant to the conversion
or exchange provisions of such capital stock or security being converted or
exchanged), (ii) the Company shall not make any payment of interest, principal
or premium, if any, on or repay, repurchase or redeem any debt securities issued
by the Company which rank pari passu with or junior to the Convertible
Debentures and (iii) the Company shall not make any guarantee payments with
respect to the foregoing (other than pursuant to the Trust Securities
Guarantees).
ARTICLE 5.
EXPENSES
SECTION 5.1. Payment of Expenses
In connection with the offering, sale and issuance of the Convertible
Debentures to the Institutional Trustee and in connection with the sale of the
Trust Securities by the Trust, the Company, in its capacity as borrower with
respect to the Convertible Debentures, shall:
i. pay all costs and expenses relating to the offering, sale and
issuance of the Convertible Debentures, including commissions to the purchasers
payable pursuant to the Placement Agreement and compensation of the Trustee
under the Indenture in accordance with the provisions of Section 6.7 of the
Indenture;
ii. pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
fees and expenses of the Institutional Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
iii. pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Convertible Preferred
Securities;
iv. be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
v. 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.
SECTION 5.2. Payment Upon Resignation or Removal
Upon termination of this Supplemental Indenture or the Indenture or the
removal or resignation of the Trustee pursuant to Section 6.8 of the Indenture,
the Company shall pay to the Trustee all amounts accrued to the date of such
termination, removal or resignation. Upon termination of the Declaration or the
removal or resignation of the Delaware Trustee or the Institutional Trustee, as
the case may be, pursuant to Section 5.6 of the Declaration, the Company shall
pay to the Delaware Trustee or the Institutional Trustee, and their respective
counsel, as the case may be, all amounts accrued to the date of such
termination, removal or resignation.
ARTICLE 6.
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 6.1. Conversion Rights
Subject to and upon compliance with the provisions of this Article VI,
the Convertible Debentures are convertible, at the option of the Holder, at any
time beginning March 13, 1997 through the close of business on December 15, 2026
(or, in the case of Convertible Debentures called for redemption, prior to the
close of business on the Business Day prior to the corresponding Redemption
Date) into fully paid and nonassessable shares of Common Stock of the Company at
an initial conversion rate of 0.50633 shares of Common Stock for each $50 in
aggregate principal amount of Convertible Debentures (equal to a conversion
price of $98.75 per share of Common Stock (the "Conversion Price"), subject to
adjustment and reset as described in this Article VI. A Holder of Convertible
Debentures may convert any portion of the principal amount of the Convertible
Debentures into that number of fully paid and nonassessable shares of Common
Stock obtained by dividing the principal amount of the Convertible Debentures to
be converted by such Conversion Price. All calculations under this Article VI
shall be made to the nearest cent or to the nearest 1/100th of a share, as the
case may be.
The Conversion Price will be reset if the Companys agreement to
consummate the acquisition of Unocal Corporations West Cost petroleum refining,
marketing and related supply and transportation assets pursuant to a letter of
intent dated November 17, 1996 (the "Acquisition" is terminated or if the
Acquisition is not consummated on or prior to December 31, 1997 (the "Date of
Non-Completion". Within one Business Day after the Date of Non- Completion, the
Company and the Trust will provide notice thereof (the "Notice of Non-
Completion" to the Holders of the Convertible Preferred Securities. Upon the
occurrence of the Date of Non-Completion, the Conversion Price of the
Convertible Preferred Securities will be adjusted to the lower of (i) the
Conversion Price in effect immediately prior to the Date of Non- Completion and
(ii) the product of (A) the average of the reported last sale price of a share
of Common Stock on the New York Stock Exchange for the ten trading days
beginning two trading days after the Date of Non-Completion and (B) 125% (which
represents the Conversion Price divided by the reported last sale price of a
share of Common Stock on the New York Stock Exchange on December 10, 1996);
provided, however, that in no event shall the Conversion Price be reset to less
than $75.16.
SECTION 6.2. Conversion Procedures
i. In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable Notice
of Conversion setting forth the principal amount of Convertible Debentures to be
converted, together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion and, if such
Convertible Debentures are definitive Convertible Debentures, surrender to the
Conversion Agent the Convertible Debentures to be converted, duly endorsed or
assigned to the Company or in blank. In addition, a holder of Convertible
Preferred Securities may exercise its right under the Declaration to convert
such Convertible Preferred Securities into Common Stock by delivering to the
Conversion Agent an irrevocable Notice of Conversion setting forth the
information called for by the preceding sentence and directing the Conversion
Agent (i) to exchange such Convertible Preferred Security for a portion of the
Convertible Debentures held by the Trust (at an exchange rate of $50 principal
amount of Convertible Debentures for each Convertible Preferred Security) and
(ii) to immediately convert such Convertible Debentures, on behalf of such
holder, into Common Stock of the Company pursuant to this Article VI and, if
such Convertible Preferred Securities are in definitive form, surrendering such
Convertible Preferred Securities, duly endorsed or assigned to the Company or in
blank. So long as any Convertible Preferred Securities are outstanding, the
Trust shall not convert any Convertible Debentures except pursuant to a Notice
of Conversion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the 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 Convertible Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. However, if a Redemption Date falls
between a record date and the subsequent Interest Payment Date, the Holder will
be entitled to receive, on such Interest Payment Date, the interest accrued to,
but excluding, the Redemption Date. Except as otherwise provided in the first
and second sentences of this paragraph, in the case of any Convertible Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date" by the Conversion Agent from the Holder or from a holder of
the Convertible Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
ii. The Companys delivery upon conversion of the fixed number of
shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Companys obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Compound Interest) accrued on such Convertible Debentures at
the time of such conversion.
iii. 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 Convertible
Debentures 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 Convertible
Debentures or the holder of the Convertible Preferred Securities so converted.
iv. In the event of the conversion of any Convertible Debenture in
part only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to or on the order of the Holder thereof, at the expense
of the Company, a new Convertible Debenture or Convertible Debentures in the
aggregate principal amount equal to the unconverted portion thereof.
v. In effecting the conversion transactions described in this Section
6.2, the Conversion Agent is acting as agent of the holders of Convertible
Preferred Securities (in the exchange of Convertible Preferred Securities for
Convertible Debentures) and as agent of the Holders of Convertible Debentures
(in the conversion of Convertible Debentures into Common Stock), as the case may
be. The Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Convertible Preferred
Securities in connection with the conversion of such Convertible Preferred
Securities in accordance with this Article VI and (ii) to convert all or a
portion of the Convertible Debentures into Common Stock and thereupon to deliver
such shares of Common Stock in accordance with the provisions of this Article VI
and to deliver to the Trust a new Convertible Debenture or Convertible
Debentures for any resulting unconverted principal amount.
SECTION 6.3. Conversion Price Adjustments
The Conversion Price shall be adjusted from time to time as follows:
i. In case the Company shall, while any of the Convertible Debentures
are outstanding, (i) pay a dividend or make a distribution with respect to
Common Stock in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, (iii) combine outstanding shares of Common Stock into a smaller
number of shares or (iv) issue by reclassification of its shares of Common Stock
any shares of capital stock of the Company, the conversion privilege and the
Conversion Price for the Convertible Debentures shall be adjusted so that the
Holder of any Convertible Debenture thereafter surrendered for conversion shall
be entitled to receive the number of shares of capital stock of the Company
which such Holder would have owned immediately following such action had such
Convertible Debenture been converted immediately prior thereto. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if a
record date shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any Convertible
Debenture thereafter surrendered for conversion shall become entitled to receive
shares of two or more classes or series of capital stock of the Company, the
Board of Directors (whose determination shall be conclusive and shall be
described in a Board Resolution filed with the Trustee) shall determine the
allocation of the adjusted Conversion Price for the Convertible Debentures
between or among shares of such classes or series of capital stock.
ii. In case the Company shall, while any of the Convertible Debentures
are outstanding, issue rights or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share of Common Stock (as
determined pursuant to subsection (g) below) on the record date mentioned below,
the Conversion Price for the Convertible Debentures shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of such rights or warrants by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered for subscription or purchase would purchase at such current market
price, and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights or
warrants. To the extent that no shares of Common Stock are so delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. For the purposes of this subsection, the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company. The Company shall not issue any rights or warrants
in respect of shares of Common Stock held in the treasury of the Company. In
case any rights or warrants referred to in this subsection in respect of which
an adjustment shall have been made shall expire unexercised within 45 days after
the same shall have been distributed or issued by the Company, the Conversion
Price shall be readjusted at the time of such expiration to the Conversion Price
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
iii. Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock, cash or assets or rights or warrants to subscribe for or purchase any of
its securities (excluding any rights or warrants referred to in subsection (b),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subsection (a) of this Section 6.3), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(c) by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (g)) of the Common Stock on the date
fixed for the payment of such distribution (the "Reference Date" less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed or of such
subscription rights or warrants 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; provided, however, that in the event
the numerator shall be less than one, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Convertible Debentures
shall have the right to receive upon conversion the amount of such distribution
such Holder would have received had such Holder converted each Convertible
Debenture immediately prior to the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Directors determines
the fair market value of any distribution for purposes of this subsection (c) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per share
of Common Stock (determined as provided in subsection (g)). For purposes of this
subsection (c), any dividend or distribution that includes shares of Common
Stock or rights or warrants to subscribe for or purchase shares of Common Stock
shall be deemed instead to be (i) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such shares of
Common Stock or such rights or warrants (making any Conversion Price reduction
required by this subsection (c)) immediately followed by (ii) a dividend or
distribution of such shares of Common Stock or such rights or warrants (making
any further Conversion Price reduction required by subsection (a) or (b)),
except (A) the Reference Date of such dividend or distribution as defined in
this subsection (c) shall be substituted as (1) Athe record date in the case of
a dividend or other distribution, and (2) Athe record date for the determination
of stockholders entitled to receive such rights or warrants and (3) the date
fixed for such determination within the meaning of subsections (a) and (b) and
(B) any shares of Common Stock included in such dividend or distribution shall
not be deemed outstanding for purposes of computing any adjustment of the
Conversion Price in subsection (a).
iv. In case the Company shall pay or make a dividend or other
distribution on its Common Stock exclusively in cash (excluding any quarterly
cash dividend on Common Stock to the extent that the aggregate cash dividend per
share of Common Stock in any quarter does not exceed the greater of (i) the
amount per share of Common Stock of the next preceding quarterly dividend on
Common Stock to the extent such preceding quarterly dividend did not require an
adjustment of the Conversion Price pursuant to this subsection (d) (as adjusted
to reflect subdivisions or combinations of Common Stock), and (ii) 3.75% of the
current market price per share determined as provided in subsection (g), and
excluding any dividend or distribution in connection with the liquidation,
dissolution or winding-up of the Company), the Conversion Price shall be reduced
so that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (d) by a fraction of which the
numerator shall be the current market price per share (determined as provided in
subsection (g)) 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 (determined as
provided in subsection (g)), 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 subsection
(g)) of the Common Stock on the record date mentioned above, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder of
shares of Convertible Debentures shall have the right to receive upon conversion
the amount of cash such Holder would have received had such Holder converted
each Convertible Debenture immediately prior to the record date for the
distribution of the cash. If an adjustment is required to be made pursuant to
this subsection (d) as a result of a distribution that is a quarterly dividend,
such adjustment shall be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be excluded as
provided above. If an adjustment is required to be made pursuant to this
subsection (d) as a result of a distribution that is not a quarterly dividend,
such adjustment shall be based upon the full amount of the distribution. In the
event that no such dividend or distribution is so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such Record Date had not been fixed.
v. 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 Companys 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 the Closing Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(e) by a fraction (which shall not be greater than one) 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 Closing
Price of the Common Stock on the Trading Day next succeeding the Expiration Time
and the denominator shall be the sum of (i) 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 (ii) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become retroactively effective
immediately prior to the opening of business on the day following the Expiration
Time.
vi. In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company 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
applicable Expiration Time that exceeds the Closing Price of the Common Stock on
the Trading Day next succeeding the applicable Expiration Time in which as of
the closing date of the offer the Board of Directors of the Company is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (f) by a fraction (which shall not be
greater than one) 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 Closing Price of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of (i) 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, (ii) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the Closing Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, such reduction to
become retroactively effective immediately prior to the opening of business on
the day following the Expiration Time; provided, however, that the reduction of
the Conversion Price contemplated by this subsection (f) will only be made if
the tender offer or exchange offer is made for an amount which increases that
Persons ownership of Common Stock to more than 25% of the total shares of Common
Stock outstanding and provided, further, that the reduction of the Conversion
Price contemplated by this subsection (f) will not be made if as of the close of
the offer, the offering documents with respect to such offer disclose a plan or
an intention to cause the Company to engage in a consolidation or merger of the
Company or a sale of all or substantially all of the assets of the Company.
vii. For the purpose of any computation under subsection (b), (c) or
(d), 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
Trading Day period ending on the earlier of the day in question and, if
applicable, the day before the ex date with respect to the issuance or
distribution requiring such computation; provided, however, that if more than
one event occurs that would require an adjustment pursuant to subsections (a)
through (f), inclusive, the Board of Directors may make such adjustments to the
Closing Prices during such ten Trading Day period as it deems appropriate to
effectuate the intent of the adjustments in this Section 6.3, in which case any
such determination by the Board of Directors shall be set forth in a Board
Resolution and shall be conclusive. For purposes of this paragraph, the term ex
date, (1) when used with respect to any issuance or distribution, means the
first date on which the Common Stock trades regular way on the New York Stock
Exchange or on such successor securities exchange as the Common Stock may be
listed or in the relevant market from which the Closing Prices were obtained
without the right to receive such issuance or distribution, and (2) when used
with respect to any tender or exchange offer means the first date on which the
Common Stock trades regular way on such securities exchange or in such market
after the Expiration Time of such offer.
viii. The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Directors 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. The Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least twenty (20) days, the reduction is irrevocable during the period,
and the Board of Directors shall have made a determination that such reduction
would be in the best interest of the Company, which determination shall be
conclusive. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall mail to Holders of record of the Convertible
Debentures a notice of the reduction at least 15 days prior to the date the
reduced Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
ix. No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
x. If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder ofConvertible Debentures.
SECTION 6.4. Merger, Consolidation or Sale of Assets
i. In the event that the Company shall be a party to any transaction
(including without limitation (i) 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), (ii) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (iii) any sale or transfer of all or substantially all of the
assets of the Company or (iv) any compulsory share exchange) pursuant to which
either shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
lawful provision shall be made as part of the terms of such transaction whereby
the Holder of each Convertible Debenture then outstanding shall have the right
thereafter to convert such Convertible Debenture only into:
(1) in the case of any such transaction that does not
constitute a Common Stock Fundamental Change and subject to funds being
legally available for such purpose under applicable law at the time of
such conversion, the kind and amount of the securities, cash or other
property that would have been receivable upon such recapitalization,
reclassification, consolidation, merger, sale, transfer or share
exchange by a holder of the number of shares of Common Stock issuable
upon conversion of such Convertible Debenture immediately prior to such
recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the Conversion Price
in accordance with clause (i) of subsection (c) of this Section 6.4;
and
(2) in the case of any such transaction that constitutes 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 in accordance with clause (ii) of
subsection (c) of this Section 6.4.
ii. The company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Companys 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 VI. The above provisions shall similarly apply to successive
transactions of the foregoing type.
iii. Notwithstanding any other provision of this Section 6.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(1) in the case of a Non-Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Non-Stock Fundamental Change shall be the lower of (A) the
Conversion Price in effect immediately prior to such Non- Stock
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 6.3, and (B) the product of
(1) the greater of the Applicable Price and the then applicable
Reference Market Price and (2) a fraction, the numerator of which is
$50 and the denominator of which is (x) the amount of the Optional
Redemption Price set forth in Section 3.2 for $50 in principal amount
of Convertible Debentures if the redemption date were the date of such
Non-Stock Fundamental Change (or, for the twelve-month periods
commencing December 18, 1996, December 18, 1997 and
December 18, 1998, the product of 105.750%, 105.175% and 104.600%,
respectively, times $50) plus (y) any then-accrued and unpaid interest
on $50 principal amount of Convertible Debentures; and
(2) in the case of a Common Stock Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Stock Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Stock Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant to
Section 6.3, multiplied by a fraction, the numerator of which is the
Purchaser Stock Price and the denominator of which is the Applicable
Price; provided, however, that in the event of a Common Stock
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Stock is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in such common stock resulting from such
Common Stock Fundamental Change) and (B) all of the Common Stock shall
have been exchanged for, converted into or acquired for, common stock
of the successor, acquiror or other third party (and any cash with
respect to fractional interests), the Conversion Price of the
Convertible Debentures immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change multiplied by a fraction,
the numerator of which is one (1) and the denominator of which is the
number of shares of common stock of the successor, acquiror
or other third party received by a holder of one share of Common Stock
as a result of such Common Stock Fundamental Change.
SECTION 6.5. Notice of Adjustments of Conversion Price
Whenever the Conversion Price is adjusted as herein provided:
i. the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or the Treasurer of
the Company setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Trustee and the transfer agent for
the Convertible Preferred Securities and the Convertible Debentures; and
ii. a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Convertible Preferred Securities
and the Convertible Debentures at their last addresses as they appear upon the
transfer books of the Company and the Trust.
SECTION 6.6. Prior Notice of Certain Events
In case:
i. the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in shares
of Common Stock or (B) a dividend payable in cash that would not require an
adjustment pursuant to Section 6.3(c) or (d) or (ii) authorize a tender or
exchange offer that would require an adjustment pursuant to Section 6.3(e);
ii. 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;
iii. 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
iv. of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such 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 (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of 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). If at any time
the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
SECTION 6.7. Certain Additional Rights
In case the Company shall, by dividend or otherwise, declare or make a
distribution on the Common Stock referred to in Section 6.3(c) or 6.3(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 6.3(e)), the Holder of the Convertible Debentures, upon
the conversion thereof subsequent to the close of business on the date fixed for
the determination of stockholders entitled to receive such distribution and
prior to the effectiveness of the Conversion Price adjustment in respect of such
distribution, shall also be entitled to receive for each share of Common Stock
into which the Convertible Debentures are converted, the portion of the shares
of Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Common Stock;
provided, however, that, at the election of the Company (whose election shall be
evidenced by a resolution of the Board of Directors) with respect to all Holders
so converting, the Company may, in lieu of distributing to such Holder any
portion of such distribution not consisting of cash or securities of the
Company, pay such Holder an amount in cash equal to the fair market value
thereof (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a resolution of the Board of
Directors). If any conversion of Convertible Debentures described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Directors) to distribute to such
Holder a due bill for the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash or assets to which such Holder is so
entitled, provided, that such due bill (a) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded and (b) requires payment or delivery of such shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets no later than the date of payment or delivery thereof to
holders of shares of Common Stock receiving such distribution.
SECTION 6.8. Trustee Not Responsible for Determining
Conversion Price or Adjustments
Neither the Trustee nor any Conversion Agent shall at any time be under
any duty or responsibility to any Holder of any Convertible Debenture to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed, or whether this Supplemental
Indenture need be entered into. Neither the Trustee nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind 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 Convertible
Debenture; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property upon the surrender of any
Convertible Debenture for the purpose of conversion. All Convertible Debentures
delivered for conversion shall be delivered to the Trustee to be cancelled by or
at the discretion of the Trustee, which shall dispose of the same as provided in
Section 2.10 of the Indenture.
SECTION 6.9. Reservation of Shares of Common Stock
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose of effecting the conversion of Convertible Debentures,
the full number of shares of Common Stock of the Company then issuable upon the
conversion of all outstanding Convertible Debentures of any series that has
conversion rights.
SECTION 6.10. Payment of Certain Taxes upon Conversion
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Stock on conversion of
Convertible Debentures pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of its Common Stock in a name other than
that of the Holder of the Convertible Debenture or Convertible Debentures to be
converted, and no such issue or delivery shall be made unless and until the
person requesting such issue has paid to the Company the amount of any such tax,
or has established, to the satisfaction of the Company, that such tax has been
paid.
SECTION 6.11. Nonassessability
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Convertible Debentures will upon issue in accordance
with the terms hereof be duly and validly issued and fully paid and
nonassessable.
ARTICLE 7.
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 7.1. Original Issue of Convertible Debentures
Convertible Debentures in the aggregate principal amount of up to
$309,000,000 may, upon execution of this Supplemental Indenture, be executed by
the Company and delivered to the Trustee for authentication, and the Trustee
shall thereupon authenticate and make available for delivery said Convertible
Debentures to or upon the written order of the Company, signed by its Chairman,
its Vice Chairman, its Executive Vice President, its President, or any Vice
President and its Treasurer, an Assistant Treasurer, Secretary or any Assistant
Secretary, without any further action by the Company.
ARTICLE 8.
SUBORDINATION OF CONVERTIBLE DEBENTURES
SECTION 8.1. Convertible Debentures Subordinate to Senior
Indebtedness
The Company covenants and agrees, and each Holder of a Convertible
Debenture, by the Holders acceptance thereof, likewise covenants and agrees,
that, to the extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Convertible Debentures and the payment of the
principal of (and premium, if any) and interest on each and all of the
Convertible Debentures are hereby expressly made subordinate and junior in right
of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of this Supplemental Indenture or
thereafter incurred. No provision of this Article shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 8.2. Payment Over of Proceeds upon Dissolution, Etc.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Convertible
Debentures; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Convertible Debentures or the Trustee would be entitled
to receive from the Company, except for the provisions of this Article, shall be
paid by the Company or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, or by the
Holders of the Convertible Debentures or by the Trustee under the Indenture if
received by them or it, directly to the holders of Senior Indebtedness of the
Company (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, as calculated by the Company) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay such Senior Indebtedness in full, in money or moneys worth,
after giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness, before any payment or distribution is made
to the Holders of the Convertible Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, 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 which are subordinated
in right of payment to all Senior Indebtedness which may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Convertible Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article IX of the Indenture
shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section if the Person formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer such properties and assets substantially as an
entirety, as the case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth in Article IX of
the Indenture.
SECTION 8.3. Prior Payment to Senior Indebtedness upon
Acceleration of Convertible Debentures
In the event that any Convertible Debentures are declared due and
payable before their Stated Maturity, then and in such event the holders of
Senior Indebtedness shall be entitled to receive payment in full of all amounts
due or to become due on or in respect of all Senior Indebtedness or provision
shall be made for such payment in cash, before the Holders of the Convertible
Debentures are entitled to receive any payment (including any payment which may
be payable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Convertible Debentures) by the Company
on account of the principal of (or premium, if any) or interest on the
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Convertible Debenture
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 6.2 would be applicable.
SECTION 8.4. No Payment When Senior Indebtedness in Default
In the event and during the continuation of any default by the Company
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the Company, as the case may be, beyond any applicable
grace period with respect thereto, or in the event that the maturity of any
Senior Indebtedness of the Company, as the case may be, has been accelerated
because of a default, then, in any such case, no payment shall be made by the
Company with respect to the principal (including redemption and sinking fund
payments) of, or premium, if any, or interest on the Convertible Debentures
until such default is cured or waived or ceases to exist or any such
acceleration or demand for payment has been rescinded.
SECTION 8.5. Payment Permitted in Certain Situations
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Convertible Debentures shall prevent (a) the Company, at any time
except during the pendency of any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or any
bankruptcy, insolvency, receivership or other proceedings of the Company
referred to in Section 8.2 or under the conditions described in Section 8.3 or
8.4, from making payments at any time of principal of or premium, if any, or
interest on the Convertible Debentures, or (b) the application by the Trustee of
any money deposited with it hereunder to the payment of or on account of the
principal of, or premium, if any, or interest on the Convertible Debentures or
the retention of such payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such payment would
have been prohibited by the provisions of this Article.
SECTION 8.6. Subrogation to Rights of Holders of Senior
Indebtedness
Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Indebtedness, the rights of the Holders of
Convertible Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of indebtedness
of the Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Convertible Debentures are
subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Convertible Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
Convertible Debentures or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to or for the benefit of the holders of Senior Indebtedness by
Holders of Convertible Debentures or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Convertible Debentures, be deemed to be a payment or distribution by the Company
to or on account of the Senior Indebtedness.
SECTION 8.7. Provisions Solely to Define Relative Rights
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of Convertible Debentures
on the one hand and the holders of Senior Indebtedness on the other hand.
Nothing contained in this Article or elsewhere in this Indenture or in the
Convertible Debentures is intended to or shall (a) impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Convertible Debentures, the obligation of the Company, which is absolute and
unconditional (and which, subject to the rights under this Article of the
holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders of Convertible
Debentures the principal of (and premium, if any) and interest on the
Convertible Debentures as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of Convertible Debentures and creditors of the Company,
as the case may be, other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Convertible Debenture from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder.
SECTION 8.8. Trustee to Effectuate Subordination
Each Holder of a Convertible Debenture by such Holders acceptance
thereof authorizes and directs the Trustee on such Holders behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee such Holders attorney-in-fact
for any and all such purposes.
SECTION 8.9. No Waiver of Subordination Provisions
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Senior Indebtedness do any one or more
of the following (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 8.10. Notice to Trustee
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the making
of any payment to or by the Trustee in respect of the Convertible Debentures
pursuant to the provisions of this Article. Notwithstanding the provisions of
this Article 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 to or by the Trustee in respect of the Convertible
Debentures pursuant to the provisions of this Article, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.2 of the Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall have not received the notice provided for in this
Section at least two Business Days prior to the date upon which by the terms
hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Convertible Debentures, 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 that may be received by it
within two Business Days prior to such date.
Subject to the provisions of Section 6.2 of the Indenture, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
SECTION 8.11. Reliance on Judicial Order or Certificate of
Liquidating Agent
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.2 of the
Indenture, and the Holders of Convertible Debentures shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Convertible Debentures, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 8.12. Trustee Not Fiduciary for Holders of Senior
Indebtedness
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of such Senior Indebtedness shall be
read into the Indenture against the Trustee. Except with respect to Section 8.4,
the Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders or creditors if
it shall in good faith pay over or distribute to Holders of Convertible
Debentures or to the Company or to any other Person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 8.13. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustees Rights
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article VIII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7 of the Indenture.
SECTION 8.14. Article Applicable to Paying Agents
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term Trustee as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Section 8.13 shall not apply to the Company or any Affiliate of the Company if
it or such Affiliate acts as Paying Agent.
SECTION 8.15. Certain Conversions Deemed Payment
For purposes of this Article only, (a) the issuance and delivery of
junior securities (or cash paid in lieu of fractional shares) upon conversion of
Convertible Debentures in accordance with Article VI, or pursuant to the terms
set forth in an Officers Certificate shall not be deemed to constitute a payment
or distribution on account of the principal of or premium or interest on
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Convertible Debenture shall be deemed to
constitute payment on account of the principal of such Convertible Debenture.
For the purposes of this Section, the term junior securities means (i) shares of
any stock of any class of the Company and (ii) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Convertible
Debentures are so subordinated as provided in this Article. Nothing contained in
this Article or elsewhere in the Indenture or this Supplemental Indenture or in
the Convertible Debentures is intended to or shall impair, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Convertible Debentures, the right, which is absolute and unconditional, of the
Holder of any Convertible Debenture to convert such Convertible Debenture in
accordance with Article VI.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1. Conflict of Any Provision of Indenture with
Trust Indenture Act of 1939
If and to the extent that any provision of this Supplemental Indenture
limits, qualifies or conflicts with another provision included in this
Supplemental Indenture or in the Indenture which is required to be included
herein or therein by any of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939, as amended, such required provision shall control.
SECTION 9.2. New York Law to Govern
THIS SUPPLEMENTAL INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE
DEEMED TO BE CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID
STATE.
SECTION 9.3. Counterparts
This Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
SECTION 9.4. Effect of Headings
The Article and Section headings herein are for convenience only and
shall not affect the construction hereof.
SECTION 9.5. Severability of Provisions
In case any provision in this Supplemental Indenture or in the
Convertible Debentures shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 9.6. Successors and Assigns
All covenants and agreements in this Supplemental Indenture by the
parties hereto shall bind their respective successors and assigns and inure to
the benefit of their respective successors and assigns, whether so expressed or
not.
SECTION 9.7. Benefit of Supplemental Indenture
Nothing in this Supplemental Indenture, express or implied, shall give
to any Person, other than the parties hereto, any Security Registrar, any Paying
Agent and their successors hereunder, and the Holders of the Convertible
Debentures, any benefit or any legal or equitable right, remedy or claim under
this Supplemental Indenture.
SECTION 9.8. Acceptance by Trustee
The Trustee accepts the amendments to the Indenture effected by this
Supplemental Indenture and agrees to execute the trusts created by the Indenture
as hereby amended, but only upon the terms and conditions set forth in the
Indenture. Without limiting the generality of the foregoing, the Trustee assumes
no responsibility for the correctness of the recitals contained herein, which
shall be taken as the statements of the Company and except as provided in the
Indenture the Trustee shall not be responsible or accountable in any way
whatsoever for or with respect to the validity or execution or sufficiency of
this Supplemental Indenture and the Trustee makes no representation with respect
thereto.
SECTION 9.9. Ratification of Indenture; Supplemental
Indenture Controls; Scope of Supplemental Indenture
i. The Indenture, as supplemented by this Supplemental Indenture, is
in all respects ratified and confirmed, and this Supplemental Indenture shall be
deemed part of the Indenture in the manner and to the extent herein and therein
provided. The provisions of this Supplemental Indenture shall, subject to
Section 9.1 hereof, supersede the provisions of the Indenture to the extent the
Indenture is inconsistent herewith.
ii. The changes, modifications and supplements to the Indenture
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the Convertible Debentures, and shall not apply to
any other Securities which may be issued under the Indenture unless a
supplemental indenture with respect to such other Securities specifically
incorporates such changes, modifications and supplements.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.
TOSCO CORPORATION
By: /S/ JEFFERSON F. ALLEN
Name: Jefferson F. Allen
Title: Executive Vice
President and
Chief Financial
Officer
STATE STREET BANK
AND TRUST COMPANY,
as Trustee
By: /S/ WILKES MCCLAVE, III
Name: Wilkes McClave, III
Title: Senior Vice
President and
Secretary
EXHIBIT 4.6
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
[IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT
- - THIS CONVERTIBLE PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
CONVERTIBLE PREFERRED SECURITY IS EXCHANGEABLE FOR CONVERTIBLE PREFERRED
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO
TRANSFER OF THIS CONVERTIBLE PREFERRED SECURITY (OTHER THAN A TRANSFER OF THIS
CONVERTIBLE PREFERRED SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CONVERTIBLE PREFERRED SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CONVERTIBLE PREFERRED SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
CERTIFICATE NUMBER: NUMBER OF CONVERTIBLE PREFERRED SECURITIES:
CUSIP NO.
Certificate Evidencing Convertible Preferred Securities
of
TOSCO FINANCING TRUST
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE BY ITS
ACQUISITION HEREOF, THE HOLDER ( 1 ) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B.)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501 (A)( 1),
(2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR")
OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN
AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 1 44(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY,
ISSUABLE UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO TOSCO
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES
OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON STOCK), A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITY
EVIDENCED HEREBY PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES
OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR
ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE
CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE EVIDENCES
COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
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). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR
THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE
MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS TOSCO MAY
REASONABLY REQUIRE 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. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO THE SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
53/4% Trust Convertible Preferred Securities (liquidation amount $50 per
Trust Convertible Preferred Security)
Tosco Financing Trust, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that ____________ (the
"Holder") is the registered owner of convertible preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the 5 3/4% Trust Convertible Preferred Securities (liquidation amount
$50 per Trust Convertible Preferred Security) (the "Convertible Preferred
Securities"). The Convertible Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Convertible Preferred Securities represented hereby
are issued and shall in all respects be subject to the provisions of the Amended
and Restated Declaration of Trust of the Trust dated as of December 13, 1996, as
the same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Convertible Preferred Securities as set forth in
Annex I 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
Convertible Preferred Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Convertible Preferred
Securities Guarantee and the Indenture to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Convertible Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Institutional Trustee's Certificate of Authentication hereon has
been properly executed, these Convertible Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this 1 3th day
of December, 1996.
Tosco Financing Trust
By:
Name:
Title: Regular Trustee
[FORM OF CERTIFICATE OF AUTHENTICATION]
INSTITUTIONAL TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated: December 13,1996
The Bank of New York,
as Institutional Trustee or as Authentication Agent
By: By:
Authorized Signatory Authorized Signatory
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Convertible Preferred Security will be fixed
at a rate per annum of 53/4% (the "Coupon Rate") of 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 Institutional Trustee. Distributions
in arrears for more than one quarter will bear interest thereon compounded
quarterly at the Coupon Rate (to the extent permitted by applicable law). The
term "Distributions" as used herein includes such cash distributions and any
such interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Institutional Trustee and to the extent the Institutional Trustee has funds
available therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Convertible
Preferred Securities will be cumulative, will accrue from December 13, 1996 and
will be payable quarterly in arrears, on March 15, June 15, September 15 and
December 15 of each year, commencing on March 15, 1997, which payment dates
shall correspond to the interest payment dates on the Debentures, to Holders of
record at the close of business on the regular record date for such Distribution
which shall be the close of business 15 days prior to such Distribution payment
date unless otherwise provided in the Declaration. The Debenture Issuer has the
right under the Indenture to defer payments of interest by extending the
interest payment period from time to time on the Debentures for a period not
exceeding 20 consecutive quarters (each an "Extension Period"); provided that no
Extension Period shall last beyond the date of the maturity or any redemption
date of the Debentures 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 Coupon Rate compounded quarterly during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further extend such Extension Period; provided that such Extension Period
together with all such previous and further extensions thereof may not exceed 20
consecutive quarters or extend beyond the maturity or any redemption date of the
Debentures. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
The Convertible Preferred Securities shall be redeemable as provided in the
Declaration.
The Convertible Preferred Securities shall be convertible into shares of
Common Stock, through (i) the exchange of Convertible Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures
into Debenture Issuer Common Stock, in the manner and according to the terms set
forth in the Declaration.
CONVERSION REQUEST
To: The Bank of New York,
as Institutional Trustee of
Tosco Financing Trust
The undersigned owner of these Convertible Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Stock of Tosco
Corporation (the "Common Stock") in accordance with the terms of the Amended and
Restated Declaration of Trust (the "Declaration"), dated as of December 13,
1996, by Jefferson F. Allen, Wilkes McClave III and Craig R. Deasy, as Regular
Trustees, The Bank of New York (Delaware), as Delaware Trustee, The Bank of New
York, as Institutional Trustee, Tosco Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Convertible Preferred Securities, the undersigned
hereby directs the Conversion Agent (as that term is defined in the Declaration)
to (i) exchange such Convertible Preferred Securities for a portion of the
Debentures (as that term is defined in the Declaration) held by the Trust (at
the rate of exchange specified in the terms of the Convertible Preferred
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Common Stock (at the
conversion rate specified in the terms of the Convertible Preferred Securities
set forth as Annex I to the Declaration).
The undersigned 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.
<PAGE>
Date: ________________,___
in whole ________ in part
Number of Convertible 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 Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
[FORM OF ASSIGNMENT FOR DEFINITIVE CONVERTIBLE PREFERRED SECURITY]
For value received ___________ hereby sell(s), assign(s)
and transfer(s) unto ________________
Please insert social security or other taxpayer
identification number of assignee.)
the within security and hereby irrevocably constitutes and appoints __________
attorney to transfer the said security on the books of the Company, with full
power of substitution in the premises.
In connection with any transfer of the within security occurring prior to the
Transfer Restriction Termination Date, the undersigned confirms that such
security is being transferred:
[ ] To Tosco Corporation or a subsidiary thereof; or
[ ] Pursuant to and in compliance with Rule 1 44A under the Securities
Act of 1933, as amended; or
[ ] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the Securities
Act of 1933, as amended;
and unless the box belong is checked, the undersigned confirms that such
security is not being transferred to an "affiliate" of the Company as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
Dated:______________
____________________
____________________
Signature(s)
Signature(s) must be guaranteed by a commercial
bank or trust company or a member firm of a major
stock exchange.
______________________
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
<PAGE>
SCHEDULE I
Changes to Number of Convertible Preferred Securities in
Global Security
Number of Convertible
Preferred Securities by
which this Global
Security Is To Be Remaining Convertible
Reduced or Increased, Preferred Securities
and Reason for Represented by this
Date Reduction or Increase Global Security Notation Made By
EXHIBIT 4.7
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING - -
THIS DEBENTURE IS A BOOK-ENTRY DEBENTURE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR CONVERTIBLE
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. CUSIP NO.
TOSCO CORPORATION
5:% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT", AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR" OR (C)
IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE COMMON STOCK, IF ANY,
ISSUABLE UPON CONVERSION OR EXCHANGE OF SUCH SECURITY EXCEPT (A) TO TOSCO
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO STATE STREET BANK AND TRUST COMPANY, AS TRUSTEE (OR,
IF THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON
STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO STATE STREET BANK AND TRUST COMPANY, AS
TRUSTEE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER MUST
FURNISH TO THE TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE 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). IF THIS CERTIFICATE DOES NOT
EVIDENCE COMMON STOCK AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO STATE STREET BANK AND TRUST COMPANY, AS
TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS TOSCO MAY
REASONABLY REQUIRE 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. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Tosco Corporation, a Nevada corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, The Bank of New York, as
Institutional Trustee for Tosco Financing Trust or registered assigns, the
principal sum of _________________________ Dollars ($__________________)
on March 15, 1997, at the rate of 5:% per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded quarterly. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year of twelve
30-day months. Except as provided in the following sentence, the amount of
interest payable for any period shorter than a full quarterly period for which
interest is computed, 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 interest is
payable on this Convertible Debenture is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof) be paid to the person in whose name this Convertible Debenture
(or one or more Predecessor Securities, as defined in said Indenture) is
registered on the record date for such interest installment, which shall be the
close of business on the fifteenth day prior to such Interest Payment Date
unless otherwise provided in the Indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such record date and may be paid to the Person in whose
name this Convertible Debenture (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the registered Holders of the Convertible Debentures not less than 10
days prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Convertible Debentures may be listed, and upon such notice as may
be required by such exchange, all as more fully provided in the Indenture. The
principal of (and premium, if any) and the interest on this Convertible
Debenture shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the registered Holder at such address as shall appear
in the Security Register. Notwithstanding the foregoing, so long as the Holder
of this Convertible Debenture is the Institutional Trustee, the payment of the
principal of (and premium, if any) and interest on this Convertible Debenture
will be made at such place and to such account as may be designated by the
Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Convertible Debenture, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his or her behalf to take such action as may be necessary or
appropriate to acknowledge or effectuate the subordination so provided and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, hereby waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
This Convertible Debenture shall not be entitled to any benefit under
the Indenture hereinafter referred to, be valid or become obligatory for any
purpose until the Certificate of Authentication hereon shall have been signed by
or on behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
TOSCO CORPORATION
By:
Jefferson F. Allen
Executive Vice President and
Chief Financial Officer
Attest:
By:
Wilkes McClave, III
Senior Vice President and Secretary
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of Convertible
Debentures described in the within-mentioned Indenture.
Dated:
STATE STREET BANK AND
TRUST COMPANY
as Trustee
By:
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of
debentures, notes, bonds or other evidences of indebtedness of the Company
(herein sometimes referred to as the "Securities", specified in the Indenture,
all issued or to be issued in one or more series under and pursuant to an
Indenture dated as of May 1, 1996, duly executed and delivered between the
Company and State Street Bank and Trust Company, as Trustee (the "Trustee", as
supplemented by the Supplemental Indenture dated as of December 13, 1996,
between the Company and the Trustee (the Indenture as so supplemented, the
"Indenture", to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Convertible Debentures. By the terms of the Indenture, the
Securities are issuable thereunder in series that may vary as to amount, date of
maturity, rate of interest and in other respects as provided in the Indenture.
This series of Securities is limited in aggregate principal amount as specified
in said Supplemental Indenture and herein sometimes referred to as the
"Convertible Debentures."
Because of the occurrence and continuation of a Special Event, in
certain circumstances, this Convertible Debenture may become due and payable at
the principal amount specified on the face hereof together with any interest
accrued thereon (the "Redemption Price". The Redemption Price shall be paid
prior to 12:00 noon, New York City time, on the date of such redemption or at
such earlier time as the Company determines. The Company shall have the right to
redeem this Convertible Debenture at the option of the Company, upon not less
than 30 nor more than 60 days notice, without premium or penalty, in whole or in
part at any time on or after December 18, 1999 (an "Optional Redemption" at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price" together with accrued
and unpaid interest, including Additional Interest and Compound Interest to, but
excluding, the redemption date, if redeemed during the 12-month period beginning
December 18:
YEAR REDEMPTION PRICE
1999 104.025%
2000 103.450
2001 102.875
2002 102.300
2003 101.725
2004 101.150
2005 100.575
and 100% if redeemed on or after December 18, 2006.
If Convertible Debentures are redeemed on any March 15, June 15,
September 15, or December 15, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Convertible Preferred Securities.
If the Convertible Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Convertible Debentures will be
redeemed pro rata or by lot or by any other method utilized by the Trustee;
In the event of redemption of this Convertible Debenture in part only,
a new Convertible Debenture or Convertible Debentures of this series for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
and the interest accrued thereon may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of a majority of the Aggregate
principal amount of the Securities at the time Outstanding of all Series to be
affected (treated as one class), evidenced as provided in the Indenture, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of
the Securities of each such Series; provided, however that no such supplemental
indenture shall (i) extend the Stated Maturity of any Security, or reduce the
principal amount thereof or any premium thereon, or reduce the rate or extend
the time of payment of interest thereon, or reduce any amount payable upon
redemption thereof, or impair or affect the right of any Holder to institute
suit for the payment thereof or, if the Securities provide therefor, any right
of repayment at the option of the Securityholders, without the consent of the
Holder of each Security so affected, or (ii) reduce the aforesaid percentage of
Securities of any Series, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holder of each Security
affected. It is also provided in the Indenture that, with respect to certain
defaults or Events of Default regarding the Securities of any Series, prior to
any declaration accelerating the maturity of such Securities, the Holders of a
majority in aggregate principal amount Outstanding of the Securities of such
Series (or, in the case of certain defaults or Events of Default, all or certain
Series of the Securities, may on behalf of the Holders of all the Securities of
such Series (or all or certain Series of the Securities), as the case may be)
waive any such past default or Event of Default and its consequences. The
preceding sentence shall not , however, apply to a default in the payment of the
principal of or premium, if any, or interest on any of the Securities. Any such
consent or waiver by the Holder of this Convertible Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Convertible Debenture and any
Convertible Debenture which may be issued in exchange or substitution therefor,
irrespective of whether or not any notation thereof is made upon this
Convertible Debenture or such other Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the Indenture
shall not have occurred and be continuing, the Company shall have the right at
any time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extended Interest Payment Period", at the end of which
period the Company shall pay all interest then accrued and unpaid (together with
interest thereon at the rate specified for the Convertible Debentures to the
extent that payment of such interest is enforceable under applicable law).
Before the termination of any such Extended Interest Payment Period, the Company
may further extend such Extended Interest Payment Period, provided that such
Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters. At the termination of any such
Extended Interest Payment Period and upon the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein
set forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount and series
will be issued to the designated transferee or transferees. No service charge
will be made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Security Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Security Registrar) for the purpose of receiving payment
of or on account of the principal hereof and premium, if any, and interest due
hereon and for all other purposes, and neither the Company nor the Trustee nor
any paying agent nor any Security Registrar shall be affected by any notice to
the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Convertible Debenture has the right, exercisable at any
time beginning March 13, 1997 through the close of business (New York time) on
December 15, 2026 (or, in the case of a Convertible Debenture called for
redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $50) into shares of Common Stock
at the initial conversion rate of .50633 shares of Common Stock for each
Convertible Debenture (equivalent to a Conversion Price of $98.75 per share of
Common Stock), subject to adjustment under certain circumstances.
The Conversion Price will be reset if Companys agreement to consummate
the acquisition of Unocal Corporations West Cost petroleum refining, marketing
and related supply and transportation assets pursuant to a letter of intent
dated November 17, 1996 (the "Acquisition" is terminated or if the Acquisition
is not consummated on or prior to December 31, 1997 (the "Date of
Non-Completion". Within one Business Day after the Date of Non- Completion, the
Company and the Trust will provide notice thereof (the "Notice of Non-
Completion" to the Holders of the Convertible Preferred Securities. Upon the
occurrence of the Date of Non-Completion, the Conversion Price of the
Convertible Preferred Securities will be adjusted to the lower of (i) the
Conversion Price in effect immediately prior to the Date of Non- Completion and
(ii) the product of (A) the average of the reported last sale price of a share
of Common Stock on the New York Stock Exchange for the ten trading days
beginning two trading days after the Date of Non-Completion and (B) 125% (which
represents the Conversion Price divided by the reported last sale price of a
share of Common Stock on the New York Stock Exchange on December 10, 1996);
provided, however, that in no event shall the Conversion Price be reset to less
than $75.16.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Convertible Debenture for conversion on or after the 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 Convertible Debenture on such record date. In such event, such Convertible
Debenture, when surrendered for conversion, need not be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. However, if a Redemption Date falls between a record date
and the subsequent Interest Payment Date, the Holder will be entitled to
receive, on such Redemption Date, the interest accrued to, but excluding, the
Redemption Date. The number of shares issuable upon conversion of a Convertible
Debenture is determined by dividing the principal amount of the Convertible
Debenture converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Convertible Debenture shall be reduced by the portion of the principal amount
thereof converted into shares of Common Stock.
The Convertible Debentures of this series are issuable only in
registered form without Coupons in denominations of $50 and any integral
multiple thereof.1 This Global Debenture is exchangeable for Convertible
Debentures in definitive form only under certain limited circumstances set forth
in the Indenture. Convertible Debentures of this series so issued are issuable
only in registered form without Coupons in denominations of $50 and any integral
multiple thereof.2 As provided in the Indenture and subject to certain
limitations therein set forth, Convertible Debentures of this series are
exchangeable for a like aggregate principal amount of Convertible Debentures of
this series of a different authorized denomination, as requested by the Holder
surrendering the same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE
AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS
THEREOF.
- --------
1 This text will appear in the case of registered definitive
certificates issued to Institutional Accredited Investors.
2 This text will appear in the case of a Global
Debenture.
<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Tosco Corporation
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of TOSCO CORPORATION in accordance with the terms
of the Indenture referred to in this Convertible Debenture, and directs that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: ,
in whole Portions of Convertible Debenture 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:3
_________________________
3 Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership of partifipation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
<PAGE>
ASSIGNMENT
[FORM OF ASSIGNMENT FOR, CONVERTIBLE DEBENTURES
THAT ARE NOT GLOBAL DEBENTURES]
For value received ____________________ hereby sell(s), assign(s) and transfers)
unto ______________________________ (Please insert Social security or other
taxpayer identification number of assignee.)
the within Security and hereby irrevocably constitutes and appoints
____________________ attorney to transfer the said Convertible Debenture on the
books of the Company, with full power of substitution in the premises.
In connection with any transfer of the within Convertible Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned confirms
that such Security is being transferred:
_ To Tosco Corporation or a subsidiary
thereof; or
_ Pursuant to and in compliance with
Rule 144A under the Securities Act
of 1933, as amended; or
_ To an Institutional Accredited
Investor pursuant to and in
compliance with the Securities Act
of 1933, as amended; or
_ Pursuant to and in compliance with
Regulation S under the Securities
Act of 1933, as amended; or
_ Pursuant to and in compliance with
Rule 144 under the Securities Act
of 1933, as amended;
<PAGE>
and unless the box below is checked, the undersigned confirms that such
Security is not being transferred to an "affiliate of the Company" as defined in
Rule 144 under the Securities Act of 1933, as amended (an "Affiliate"):
The transferee is an Affiliate of the Company.
Dated:
Signature(s)
Signature(s) must be
guaranteed by a
commercial bank or
trust company or a
member firm of a
major stock exchange.
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
<PAGE>
[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Debentures
=============================================================================
Principal Amount of
Securities by which
this Global Security
Is To Be Reduced or Remaining Principal Notation
Date Increased, and Reason Amount of this Made by
for Reduction or Global Security
Increase
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
===============================================================================
EXHIBIT 4.8
-----------------------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
TOSCO FINANCING TRUST
Dated as of December 13, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.............................1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application...........................4
SECTION 2.2 Lists of Holders...........................................4
SECTION 2.3 Reports by the Preferred Guarantee Trustee.................5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee............5
SECTION 2.5 Evidence of Compliance with Conditions Precedent...........5
SECTION 2.6 Events of Default; Waiver..................................5
SECTION 2.7 Event of Default; Notice...................................5
SECTION 2.8 Conflicting Interests......................................6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee....................................................6
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee..............8
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee............................10
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee Eligibility...................10
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Guarantee Trustee...............................11
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.................................................12
SECTION 5.2 Waiver of Notice and Demand...............................12
SECTION 5.3 Obligations Not Affected..................................12
SECTION 5.4 Rights of Holders.........................................13
SECTION 5.5 Guarantee of Payment......................................13
SECTION 5.6 Subrogation...............................................13
SECTION 5.7 Independent Obligations...................................14
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions................................14
SECTION 6.2 Subordination.............................................14
ARTICLE VII
TERMINATION
SECTION 7.1 Termination...............................................15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation...............................................15
SECTION 8.2 Indemnification...........................................16
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns....................................16
SECTION 9.2 Amendments................................................16
SECTION 9.3 Notices...................................................16
SECTION 9.4 Benefit...................................................17
SECTION 9.5 Governing Law.............................................17
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE ASECURITIES ACT@), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT
OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A AQUALIFIED
INSTITUTIONAL BUYER@ (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) RESELL OR OTHERWISE
TRANSFER THE SECURITY EVIDENCED HEREBY EXCEPT (A) TO TOSCO CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (D) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE
CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
AFTER THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO THE SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of December 13, 1996, is executed and delivered by Tosco Corporation, a Nevada
corporation (the "Guarantor"), and The Bank of New York, as trustee (the
"Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of
Tosco Financing Trust, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of December 13, 1996, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof up to 6,000,000 preferred securities, having an
aggregate liquidation amount of up to $50 designated the 5 3/4% Trust
Convertible Preferred Securities (the "Preferred Securities").
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of
execution of this Preferred Securities Guarantee have the same meaning when used
in this Preferred Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same
when used in this Preferred Securities Guarantee, unless otherwise defined in
this Preferred Securities Guarantee or unless the context otherwise requires;
and
(g) a reference to the singular includes the plural and vice
versa.
"Authorized Officer" of a Person means any Person that is authorized
to legally bind such Person provided, however, that the Authorized Officer
signing an Officers' Certificate given pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, Floor 21
West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) or Liquidated Damages that are required to be paid on such
Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price (the "Redemption Price"), and all accrued
and unpaid Distributions to the date of redemption to the extent the Issuer has
funds available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
conversion of all of the Trust Securities into the Guarantor's common stock or
the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an Event of Default (as defined in the
Indenture) has occurred and is continuing, the rights of holders of the Common
Securities to receive payments under the Common Securities Guarantee Agreement
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and records
of the Issuer, of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"Indenture" means the Indenture dated as of May 1, 1996, among the
Guarantor (the "Debenture Issuer") and State Street Bank and Trust Company, as
trustee, as supplemented by the Supplemental Indenture dated as of December 13,
1996, among the Debenture Issuer and State Street Bank and Trust Company, as
trustee.
"Majority in liquidation amount of the Preferred Securities" means,
except as provided in the terms of the Convertible Preferred Securities, or
except as provided by the Trust Indenture Act, a vote by Holder(s), voting
separately as a class, of more than 50% of the liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Preferred Securities.
"Preferred Guarantee Trustee" means The Bank of New York, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4. 1.
"Trust Securities" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) Upon its public offering pursuant to the registration
requirements of the Securities Act, this Preferred Securities Guarantee will be
subject to the provisions of the Trust Indenture Act that will be required to be
part of this Preferred Securities Guarantee and shall, to the extent applicable,
be governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such date, (i) within 1 Business Day after January 1 and June 30
of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee,
provided that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders such reports as are required by Section 313
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as are required by Section 314 and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 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 actually known
to a Responsible Officer of the Preferred Guarantee Trustee, unless such
defaults have been cured before the giving of such notice, provided that the
Preferred Guarantee Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Preferred Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders.
(b) The Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice thereof, or a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the Declaration
shall have obtained actual knowledge thereof.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee
Trustee
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders and the Preferred
Guarantee Trustee shall not transfer this Preferred Securities Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee,
and such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders.
(c) The Preferred 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 Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and shall 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 Preferred Securities Guarantee shall
be construed to relieve the Preferred Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of
Default and after the curing or waiving of all such Events
of Default that may have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the
Preferred Guarantee Trustee, the Preferred Guarantee Trustee
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Preferred Guarantee
Trustee and conforming to the requirements of this Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Preferred Guarantee Trustee,
the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Preferred Guarantee Trustee, unless it shall be proved
that the Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less
than a Majority in liquidation amount of the Preferred Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Preferred Guarantee Trustee, or exercising
any trust or power conferred upon the Preferred Guarantee Trustee under
this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities
Guarantee shall require the Preferred Guarantee Trustee to expend or
risk its own funds or otherwise incur personal financial liability in
the performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory to
the Preferred Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee shall be
sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Guarantee Trustee shall
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Preferred Guarantee
Trustee (unless other evidence is herein specifically prescribed) may,
in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration of any instrument
(or any rerecording, refiling or re- registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion. Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Preferred
Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Preferred Securities Guarantee
from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by
this Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be requested by
the Preferred Guarantee Trustee; provided that nothing contained in
this Section 3.2(a)(vi) shall be taken to relieve the Preferred
Guarantee Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute
any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians or
attorneys, and the Preferred Guarantee Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders and the
signature of the Preferred Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party
shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the
terms and provisions of this Preferred Securities Guarantee, both of
which shall be conclusively evidenced by the Preferred Guarantee
Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority
in liquidation amount of the Preferred Securities, (ii) may refrain
from enforcing such remedy or right or taking such other action until
such instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such instructions.
(xi) The Preferred Guarantee Trustee may execute any
of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder.
(xii) The Preferred Securities Trustee shall not be
liable for any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Preferred
Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall
be deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee: Eligibility
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or
Person permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars ($50,000,000), and
subject to supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for
the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire
any "conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustee
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution,
Liquidated Damages or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution, Liquidated Damages or other sum payable that results
from the extension of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce the Preferred Guarantee
Trustee's rights under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration,
then (a) the Guarantor shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock or (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) or make any guarantee
payments with respect to the foregoing, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities (including guarantees) issued by the Guarantor which
rank pari passu with or junior to the Debentures and (c) the Guarantor shall not
make any guarantee payments with respect to the foregoing (other than pursuant
to this Preferred Securities Guarantee).
SECTION 6.2 Subordination
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) 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 and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Guarantor's common stock to all of the Holders in respect of
the conversion of the Preferred Securities into the Guarantor's common stock or
upon the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder must restore payment
of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance with
this Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 5.1(f) or
Section 5.1(g) of the Indenture, the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of
Section 12.2 of the Declaration with respect to meetings of Holders apply to the
giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders of
the Preferred Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Preferred Securities):
Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Attn: Wilkes McClave III, General Counsel
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TOSCO CORPORATION, as Guarantor
By: /s/ JEFFERSON F. ALLEN
----------------------------
Jefferson F. Allen
Executive Vice President and
Chief Financial Officer
THE BANK OF NEW YORK, as
Preferred Guarantee Trustee
By: /s/
----------------------------
Name: Vivian Georges
Title: Assistant Vice President
EXHIBIT 5.1
EXHIBITS 5.1 and 8.1
March 13, 1997
Tosco Corporation
72 Cummings Point Road
Stamford, Connecticut 06902
Ladies and Gentlemen:
Tosco Corporation (the "Corporation") has requested our opinion in connection
with the filing of a shelf registration statement on Form S-3 by the Corporation
(the "Registration Statement") registering (i) 6,000,000 shares of Convertible
Preferred Securities (the "Preferred Stock") of Tosco Financing Trust (the
"Trust"), (ii) 5-3/4% Convertible Junior Subordinated Debentures of the
Corporation (the "Debt Securities"), (iii) the Preferred Securities Guarantee
(the "Guarantee") of the Corporation and (iv) shares of common stock, $.75 par
value per share, of the Corporation (the "Common Stock") (collectively, the
"Securities") to be issued to the public from time to time.
In furnishing this opinion, we have examined copies of the Registration
Statement, the Articles of Incorporation, organizational documents and By-Laws
of the Corporation and the Trust, as amended to date, and the minutes of the
meeting of the Board of Directors of the Corporation authorizing the issuance of
the Securities. We have also examined such other documents, papers, statutes and
authorities as we deemed necessary to form a basis for the opinion hereinafter
expressed. In our examinations of such material, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as original
documents and the conformity to original documents of all documents supplied to
us as copies. As to various questions of fact material to such opinion, we have
relied upon statements and certificates of officers and representatives of the
Corporation and others.
Based upon and subject to the foregoing, it is our opinion that:
1. The Common Stock, when issued upon conversion of the Debt Securities or
Preferred Stock, will be legally issued, fully paid, and nonassesable.
2. The Preferred Stock has been legally issued and is fully paid and
nonassessable.
3. The Debt Securities and Guarantee are legally issued and
binding obligations of the Corporation.
4. The information in the Prospectus under the heading "United States Federal
Income Taxation", to the extent that it constitutes matters of law,
summaries of legal matters or legal conclusions, has been reviewed by us
and is accurate in all material respects.
To the extent that the obligations of the Corporation as obligor under an
indenture may be dependent upon such matters, we have assumed for purposes of
this opinion (i) that the applicable trustee is duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and is
duly qualified to engage in the activities contemplated by the indenture, (ii)
that such indenture has been duly authorized, executed and delivered by and
constitutes the legal, valid and binding obligation of such trustee, enforceable
in accordance with its terms, (iii) that such trustee is in compliance,
generally and with respect to acting as a trustee under the indenture, with all
applicable laws and regulations and (iv) that such trustee has the requisite
organizational and legal power and authority to perform its obligations under
the indenture.
Attorneys involved in the preparation of this opinion are admitted to practice
law in the State of New York and we do not purport to be experts on, or to
express any opinion herein concerning, any law other than the laws of the State
of New York, the Nevada General Corporation Law and the federal laws of the
United States of America.
We hereby consent to be named in the Registration Statement to be filed by
the Corporation with the Securities and Exchange Commission under the Securities
Act as attorneys who have passed upon the legality and tax aspects of the
Securities to be registered by the Registration Statement. We further consent to
your filing a copy of this opinion as Exhibits 5.1 and 8.1 to the Registration
Statement. In giving such permission, we do not admit hereby that we come within
the category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Securities and Exchange
Commission thereunder.
Very truly yours,
STROOCK & STROOCK & LAVAN LLP
<PAGE>
EXHIBIT 12.1
<TABLE>
<CAPTION>
TOSCO CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995, 1994, 1993, AND 1992
(THOUSANDS OF DOLLARS, EXCEPT RATIO DATA)
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Income before income taxes per $ 247,849 $ 127,439 $ 133,849 $ 131,754 $ 51,013
income statement
Fixed charges to be added to income before income taxes:
Interest expense, including 91,061 59,815 58,315 48,868 23,941
amortization of debt expenses
Dividends on Trust Convertible 767
Preferred Securities
Interest factor of rental expense 29,869 17,808 13,575 8,869 5,882
Income as adjusted $ 369,546 $ 205,062 $ 205,739 $ 189,491 $ 80,836
Interest expense, including $ 91,061 $ 59,815 $ 58,315 $ 48,868 $ 23,941
amortization of debt expense
Interest capitalized 1,426 4,730 682
Dividends on Trust Convertible 767
Preferred Securities
Interest factor of rental expense 29,869 17,808 13,575 8,869 5,882
Total fixed charges $ 123,123 $ 82,353 $ 72,572 $ 57,737 $ 29,823
---------- ---------
Ratio of earnings to fixed charges 3.00 2.49 2.83 3.28 2.71
========== ========== ========== ========= ===========
</TABLE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statement of
TOSCO Corporation on Form S-3 (File No. 333-________) of our report dated
February 28, 1997, on our audits of the consolidated financial statements and
financial statement schedule of Tosco Corporation as of December 31, 1996 and
1995, and for the years ended December 31, 1996, 1995, and 1994, which report
is included in this Annual Report on Form 10-K. We also consenst to the
reference to our firm under the caption "Expert".
Coopers & Lybrand L.L.P.
San Francisco, California
March 12, 1997
EXHIBIT 25.1
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) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of (I.R.S. Employer
incorporation or Identification No.)
organization if not a U.S.
national bank)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive
offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate
Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617)654-3253
(Name, address and telephone number of agent for service)
---------------------
TOSCO CORPORATION
TOSCO FINANCING TRUST
(Exact name of obligor as specified in its charter)
NEVADA 95-1865716
DELAWARE
(State or other jurisdiction (I.R.S. Employer
of Identification No.)
incorporation or organization)
72 CUMMINGS POINT ROAD
STAMFORD, CONNECTICUT 06902
(Address of principal executive offices) (Zip Code)
CONVERTIBLE PREFERRED SECURITIES
OF TOSCO FINANCING TRUST
(Title of indenture securities)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington, D.C.,
Federal Deposit Insurance Corporation, Washington, D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent, State
Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as Exhibit 1 to
Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of Massachusetts
that no certificate of authority for the trustee to commence business was
necessary or issued is on file with the Securities and Exchange Commission as
Exhibit 2 to Amendment No. 1 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS CONTAINED IN THE DOCUMENTS SPECIFIED IN
PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate trust
powers is on file with the Securities and Exchange Commission as Exhibit 3 to
Amendment No. 1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe, Inc. (File No.
22-17940) and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on file
with the Securities and Exchange Commission as Exhibit 4 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with the Registration
Statement of Eastern Edison Company (File No. 33- 37823) and is incorporated
herein by reference thereto.
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS
IN DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act is
annexed hereto as Exhibit 6 and made a part hereof.
7. A COPY OF THE LATEST REPORT OF CONDITION OF THE TRUSTEE PUBLISHED
PURSUANT TO LAW OR THE REQUIREMENTS OF ITS SUPERVISING OR EXAMINING AUTHORITY.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining authority is
annexed hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates
to matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the {DATE}.
STATE STREET BANK AND TRUST COMPANY
By: /s/
---------------------------------
NAME: DONALD E. SMITH
TITLE: VICE PRESIDENT
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture
Act of 1939, as amended, in connection with the proposed issuance by Tosco
Corporation of its CONVERTIBLE PREFERRED SECURITIES OF TOSCO FINANCING TRUST, we
hereby consent that reports of examination by Federal, State, Territorial or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/
--------------------------------
NAME: DONALD E. SMITH
TITLE: VICE PRESIDENT
DATED: MARCH 5, 1997
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business DECEMBER
31, 1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin........... 1,561,409
Interest-bearing balances.............................. 7,562,240
Securities...................................................... 9,388,513
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary.......................... 5,622,962
Loans and lease financing receivables:
Loans and leases, net of unearned income..................... 4,858,187
Allowance for loan and lease losses.......................... 72,614
Loans and leases, net of unearned income and allowances...... 4,785,573
Assets held in trading accounts................................. 874,700
Premises and fixed assets....................................... 383,955
Other real estate owned......................................... 870
Investments in unconsolidated subsidiaries...................... 93,621
Customers' liability to this bank on acceptances outstanding.... 35,022
Intangible assets............................................... 148,190
Other assets.................................................... 932,673
----------
Total assets.................................................... 31,389,728
===========
LIABILITIES
Deposits:
In domestic offices........................................... 8,508,096
Noninterest-bearing......................................... 6,435,131
Interest-bearing............................................ 2,072,965
In foreign offices and Edge subsidiary........................ 11,395,724
Noninterest-bearing......................................... 27,508
Interest-bearing............................................ 11,368,216
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary........................... 7,518,222
Demand notes issued to the U.S. Treasury and Trading
Liabilities................................................... 733,935
Other borrowed money............................................ 650,578
Bank's liability on acceptances executed and outstanding........ 35,022
Other liabilities............................................... 770,029
-----------
Total liabilities............................................... 29,611,606
-----------
EQUITY CAPITAL
Common stock.................................................... 29,931
Surplus......................................................... 358,146
Undivided profits............................................... 1,389,720
Cumulative foreign currency translation adjustments............. 325
-----------
Total equity capital............................................ 1,778,122
Total liabilities and equity capital............................ 31,389,728
==========
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
DATED: MARCH 5, 1997
EXHIBIT 25.2
==============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of (I.R.S. employer
incorporation identification no.)
if not a U.S. national bank)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive (Zip code)
offices)
TOSCO FINANCING TRUST
(Exact name of obligor as specified in its charter)
Delaware To be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization identification no.)
72 Cummings Point Road
Stamford, Connecticut 06902
(Address of principal executive (Zip code)
offices)
----------------------
Convertible Preferred Securities
(Title of the indenture securities)
==============================================================================
<PAGE>
CONFORMED COPY
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.
- -----------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------------
Superintendent of Banks of 2 Rector Street, New York,
the State of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN
EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST
INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 6th day of March, 1997.
THE BANK OF NEW YORK
By: /S/ WALTER N. GITLIN
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin ....................................... $ 4,404,522
Interest-bearing balances................................ 732,833
Securities:
Held-to-maturity securities.............................. 789,964
Available-for-sale securities............................ 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold......................................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................................................ 28,728,602
LESS: Allowance for loan and
lease losses .......................................... 584,525
LESS: Allocated transfer risk
reserve................................................ 429
Loans and leases, net of unearned
income, allowance, and reserve......................... 28,143,648
Assets held in trading accounts ........................... 1,004,242
Premises and fixed assets (including
capitalized leases) ..................................... 605,668
Other real estate owned ................................... 41,238
Investments in unconsolidated
subsidiaries and associated
companies................................................ 205,031
Customers' liability to this bank on
acceptances outstanding ................................. 949,154
Intangible assets ......................................... 490,524
Other assets .............................................. 1,305,839
-----------
Total assets .............................................. $44,043,010
===========
LIABILITIES
Deposits:
In domestic offices ..................................... $20,441,318
Noninterest-bearing .................................... 8,158,472
Interest-bearing ....................................... 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs........................ 11,710,903
Noninterest-bearing .................................... 46,182
Interest-bearing ...................................... 11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased ................................ 1,565,288
Demand notes issued to the U.S.
Treasury ............................................... 293,186
Trading liabilities ...................................... 826,856
Other borrowed money:
With original maturity of one year
or less .............................................. 2,103,443
With original maturity of more than
one year .............................................. 20,766
Bank's liability on acceptances executed
and outstanding ......................................... 951,116
Subordinated notes and debentures ......................... 1,020,400
Other liabilities ......................................... 1,522,884
-----------
Total liabilities ......................................... 40,456,160
-----------
EQUITY CAPITAL
Common stock .............................................. 942,284
Surplus ................................................... 525,666
Undivided profits and capital
reserves................................................. 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities .............................................. ( 2,073)
Cumulative foreign currency translation
adjustments ............................................. ( 8,403)
-----------
Total equity capital ...................................... 3,586,850
-----------
Total liabilities and equity
capital ................................................ $44,043,010
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
,
J. Carter Bacot *
Thomas A. Renyi * Directors
Alan R. Griffith *
-
Exhibit 25.3
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(state of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive (Zip code)
offices)
TOSCO CORPORATION
(Exact name of obligor as specified in its charter)
Nevada 95-1865716
(State or other (I.R.S. employer
jurisdiction of incorporation or identification no.)
organization)
72 Cummings Point Road 06902
Stamford, Connecticut (Zip code)
(Address of principal
executive offices)
---------------
Guarantee of Convertible Preferred
Securities of Tosco Financing Trust
(Title of the indenture securities)
<PAGE>
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.
Superintendent of Banks of 2 Rector Street, New York,
the State of New York N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York
Association 10005
WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS INDETIFIED IN PARENTHESES BELOW, ON FILE WITH THE
COMMISSION, ARE INCORPORATED HEREIN BY REFERENCE AS AN
EXHIBIT HERETO, PURSUANT TO RULE 7A-29 UNDER THE TRUST
INDENTURE ACT OF 1939 (THE "ACT") AND RULE 24 OF THE
COMMISSION'S RULES OF PRACTICE.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 33-6215,
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the
requirements of its supervising or examining authority.
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 6th day of March, 1997.
THE BANK OF NEW YORK
By: /s/ WALTER N. GITLIN
Name: WALTER N. GITLIN
Title: VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
ASSETS Dollar Amounts
in Thousands
Cash and balance due from depository
institutions:
Noninterest-bearing balances and
currency and coin.................................$ 4,404,522
Interest-bearing balances......................... 732,833
Securities:
Held-to-maturity securities...................... 789,964
Available-for-sale securities.................... 2,005,509
Federal funds sold in domestic offices of the bank:
Federal funds sold.................................... 3,364,838
Loans and lease financing
receivables:
Loans and leases, net of unearned
income..................................... 28,728,602
LESS: Allowance for loan and
lease losses............................... 584,525
LESS: Allocated transfer risk
reserve.................................... 429
Loans and leases, net of unearned
income, allowance, and reserve............. 28,143,648
Assets held in trading accounts...................... 1,004,242
Premises and fixed assets (including
capitalized leases)............................. 605,668
Other real estate owned.............................. 41,238
Investments in unconsolidated
subsidiaries and associated
companies....................................... 205,031
Customers' liability to this bank on
acceptances outstanding......................... 949,154
Intangible assets.................................... 490,524
Other assets......................................... 1,305,839
-----------
Total assets....................................... $ 44,043,010
============
LIABILITIES
Deposits;
In domestic offices........................... $ 20,441,318
Noninterest-bearing........................... 8,158,472
Interest-bearing.............................. 12,282,846
In foreign offices, Edge and
Agreement subsidiaries, and IBFs............. 11,710,903
Noninterest-bearing........................... 46,182
Interest-bearing......................... 11,664,721
Federal funds purchased in
domestic offices of the
bank:
Federal funds purchased....................... 1,565,288
Demand notes issued to the U.S.
Treasury...................................... 293,186
Trading liabilities................................ 826,856
Other borrowed money:
With original maturity of one year
or less.................................. 2,103,443
With original maturity of more than
one year...................................... 20,766
Bank's liability on acceptances executed
and outstanding.............................. 951,116
Subordinated notes and debentures.................. 1,020,400
Other liabilities.................................. 1,522,884
----------
Total liabilities.................................. 40,456,160
----------
EQUITY CAPITAL
Common stock...................................... 942,284
Surplus........................................... 525,666
Undivided profits and capital
reserves..................................... 2,129,376
Net unrealized holding gains
(losses) on available-for-sale
securities................................... ( 2,073)
Cumulative foreign currency translation
adjustments................................. ( 8,403)
----------
Total equity capital............................. 3,586,850
-----------
Total liabilities and equity
capital..................................... $ 44,043,010
===============
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true
and correct.
,
J. Carter Bacot *
Thomas A. Renyi * Directors
Alan R. Griffith *
-
