<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
December 11, 1996
---------------------------------
(Date of earliest event reported)
THE FINOVA GROUP INC.
FINOVA FINANCE TRUST
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(Exact name of Registrant as specified in its charter)
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Delaware 001-11011 86-0695381
Delaware 001-11011-01 Applied For
- -------------- --------------------- ------------------
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
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1850 North Central Avenue, P.O. Box 2209, Phoenix, AZ 85002-2209
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(Address of principal executive offices, including zip code)
(602) 207-4900
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(Registrant's telephone number, including area code)
None
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(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
On November 4, 1996, The FINOVA Group Inc. (the "Company") and FINOVA
Finance Trust (the "Trust") filed a Registration Statement on Form S-3 (No.
333-15445 and -01). Such Registration Statement was declared effective by the
Securities and Exchange Commission on December 5, 1996.
On December 11, 1996, the Trust issued 2,300,000 5 1/2% Convertible Trust
Originated Preferred Securities, guaranteed by the Company to the extent
provided in the Registration Statement. The sole assets of the Trust are
$118,556,750 aggregate principal amount of 5 1/2% Convertible Subordinated
Debentures due 2016 of the Company.
This Form 8-K includes as exhibits conformed copies of the definitive
Indenture, Amended and Restated Declaration of Trust, Preferred Securities
Guarantee, form of the Company's 5 1/2% Convertible Subordinated Debenture and
form of the Trust's Preferred Security. These exhibits are being filed herewith
for purposes of incorporation by reference, pursuant to Rule 12b-32(a) under the
Securities Exchange Act of 1934, in the Registration Statement.
(c) Exhibits.
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Exhibit Number by Refer- Description
ence to Item 601 of Regu-
lation S-K
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4.1 Indenture, dated as of December 11, 1996,
between the Company and Fleet National
Bank, as trustee.
4.2 Amended and Restated Declaration of Trust,
dated as of December 11, 1996, among Bruno
A. Marszowski and Robert J. Fitzsimmons, as
Regular Trustees, First Union Bank of
Delaware, as Delaware Trustee, Fleet
National Bank, as Property Trustee, and the
Company.
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4.3 Preferred Security Guarantee, dated as of
December 11, 1996, between the Company and
Fleet National Bank, as trustee.
4.4 Form of 5 1/2% Convertible
Subordinated Debenture
(included as an exhibit in
Exhibit 4.1 above).
4.5 Form of Preferred Security
(included as an exhibit in
Exhibit 4.2 above).
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3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, The FINOVA
Group Inc. and FINOVA Finance Trust have duly caused this report to be signed on
their behalf by the undersigned hereunto duly authorized.
THE FINOVA GROUP INC.
By: /s/ROBERT J. FITZSIMMONS
--------------------------------
Name: Robert J. Fitzsimmons
Title: Senior Vice President-
Treasurer
FINOVA FINANCE TRUST
By: /s/ROBERT J. FITZSIMMONS
--------------------------------
Name: Robert J. Fitzsimmons,
as Regular Trustee
Date: December 19, 1996
4
<PAGE> 5
EXHIBIT INDEX
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Exhibit Number by Refer- Description
ence to Item 601 of Regu-
lation S-K
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4.1 Indenture, dated as of December 11, 1996,
between the Company and Fleet National
Bank, as trustee.
4.2 Amended and Restated Declaration of Trust,
dated as of December 11, 1996, among Bruno
A. Marszowski and Robert J. Fitzsimmons, as
Regular Trustees, First Union Bank of
Delaware, as Delaware Trustee, Fleet
National Bank, as Property Trustee, and the
Company.
4.3 Preferred Security Guarantee, dated as of
December 11, 1996, between the Company and
Fleet National Bank, as trustee.
4.4 Form of 5 1/2% Convertible
Subordinated Debenture
(included as an exhibit in
Exhibit 4.1 above).
4.5 Form of Preferred Security
(included as an exhibit in
Exhibit 4.2 above).
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5
<PAGE> 1
EXHIBIT 4.1
THE FINOVA GROUP INC., as Issuer
and
FLEET NATIONAL BANK, as Trustee
----------------
Indenture
Dated as of December 11, 1996
$103,092,800*
5 1/2% Convertible Subordinated Debentures due 2016
----------------
- --------
* Subject to increase to up to $118,556,750 in the event
an over-allotment option is exercised.
<PAGE> 2
The FINOVA Group Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
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Trust Indenture Indenture
Act Section Section
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Section 310(a)(1) ........................................... 609
(a)(2) ........................................... 609
(a)(3) ........................................... Not Applicable
(a)(4) ........................................... Not Applicable
(b) ........................................... 608, 610
Section 311(a) ........................................... 613
(b) ........................................... 613
Section 312(a) ........................................... 701
........................................... 702(a)
(b) ........................................... 702(b)
(c) ........................................... 702(c)
Section 313(a) ........................................... 703(a)
(a)(4) ........................................... 101, 1004
(b) ........................................... 703(a)
(c) ........................................... 703(a)
(d) ........................................... 703(b)
Section 314(a) ........................................... 704
(b) ........................................... Not Applicable
(c)(1) ........................................... 102
(c)(2) ........................................... 102
(c)(3) ........................................... Not Applicable
(d) ........................................... Not Applicable
(e) ........................................... 102
Section 315(a) ........................................... 601
(b) ........................................... 602
(c) ........................................... 601
(d) ........................................... 601
(e) ........................................... 514
Section 316(a) ........................................... 101
(a)(1)(A) ........................................... 502
........................................... 512
(a)(1)(B) ........................................... 513
(a)(2) ........................................... Not Applicable
(b) ........................................... 508
(c) ........................................... 104(c)
Section 317(a)(1) ........................................... 503
(a)(2) ........................................... 504
(b) ........................................... 1003
Section 318(a) ........................................... 107
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Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
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<PAGE> 3
TABLE OF CONTENTS
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Recitals of the Company............................................................. 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
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Section 101. Definitions....................................................... 3
Section 102. Compliance Certificates and Opinions.............................. 13
Section 103. Form of Documents Delivered to Trustee............................ 14
Section 104. Acts of Holders; Record Dates..................................... 14
Section 105. Notices, Etc., to Trustee and the Company......................... 16
Section 106. Notice to Holders; Waiver......................................... 16
Section 107. Conflict with Trust Indenture Act................................. 17
Section 108. Effect of Headings and Table of Contents.......................... 17
Section 109. Successors and Assigns............................................ 18
Section 110. Separability Clause............................................... 18
Section 111. Benefits of Indenture............................................. 18
Section 112. Governing Law..................................................... 18
Section 113. Legal Holidays.................................................... 18
ARTICLE II
SECURITY FORMS
Section 201. Forms Generally.................................... ............. 19
Section 202. Initial Issuance to Property Trustee.............................. 19
ARTICLE III
THE SECURITIES
Section 301. Title and Terms.................................................. 20
Section 302. Denominations..................................................... 22
Section 303. Execution, Authentication, Delivery and
Dating......................................................... 22
Section 304. Temporary Securities.............................................. 23
Section 305. Registration, Registration of Transfer
and Exchange................................................... 23
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities..................................................... 25
Section 307. Payment of Interest; Interest Rights
Preserved...................................................... 26
Section 308. Persons Deemed Owners............................................. 28
Section 309. Cancellation...................................................... 28
Section 310. Right of Set Off.................................................. 29
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Section 311. CUSIP Numbers..................................................... 29
Section 312. Option to Extend Interest Payment Period.......................... 29
Section 313. Paying Agent, Security Registrar and
Conversion Agent............................................... 32
Section 314. Global Security................................................... 32
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture........................... 35
Section 402. Application of Trust Money........................................ 37
ARTICLE V
REMEDIES
Section 501. Events of Default................................................. 37
Section 502. Acceleration of Maturity; Rescission and
Annulment...................................................... 39
Section 503. Collection of Indebtedness and Suits for
Enforcement by Trustee......................................... 40
Section 504. Trustee May File Proofs of Claim.................................. 41
Section 505. Trustee May Enforce Claims Without Pos-
session of Securities.......................................... 41
Section 506. Application of Money Collected.................................... 42
Section 507. Limitation on Suits............................................... 42
Section 508. Unconditional Right of Holders to Receive
Principal and Interest and Convert............................. 43
Section 509. Restoration of Rights and Remedies................................ 43
Section 510. Rights and Remedies Cumulative.................................... 44
Section 511. Delay or Omission Not Waiver...................................... 44
Section 512. Control by Holders................................................ 44
Section 513. Waiver of Past Defaults........................................... 44
Section 514. Undertaking for Costs............................................. 45
Section 515. Waiver of Stay or Extension Laws.................................. 46
Section 516. Enforcement by Holders of Preferred
Securities..................................................... 46
ARTICLE VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities............................... 47
Section 602. Notice of Defaults................................................ 47
Section 603. Certain Rights of Trustee......................................... 48
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Section 604. Not Responsible for Recitals or Issuance
of Securities.................................................. 49
Section 605. May Hold Securities............................................... 49
Section 606. Money Held in Trust............................................... 50
Section 607. Compensation and Reimbursement.................................... 50
Section 608. Disqualification; Conflicting Interests........................... 51
Section 609. Corporate Trustee Required; Eligibility........................... 51
Section 610. Resignation and Removal; Appointment of
Successor...................................................... 51
Section 611. Acceptance of Appointment by Successor............................ 53
Section 612. Merger, Conversion, Consolidation or Suc-
cession to Business............................................ 53
Section 613. Preferential Collection of Claims Against
Company........................................................ 54
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and
Addresses of Holders........................................... 54
Section 702. Preservation of Information; Communica-
tions to Holders............................................... 55
Section 703. Reports by Trustee................................................ 55
Section 704. Reports by Company................................................ 55
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on
Certain Terms.................................................. 56
Section 802. Successor Substituted............................................. 57
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent
of Holders..................................................... 58
Section 902. Supplemental Indentures with Consent of
Holders........................................................ 59
Section 903. Execution of Supplemental Indentures.............................. 60
Section 904. Effect of Supplemental Indentures................................. 61
Section 905. Conformity with Trust Indenture Act............................... 61
Section 906. Reference in Securities to Supplemental
Indentures..................................................... 61
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ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
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Section 1001. Payment of Principal and Interest................................. 61
Section 1002. Maintenance of Office or Agency................................... 62
Section 1003. Money for Security Payments to Be Held
in Trust....................................................... 62
Section 1004. Statement by Officers as to Default............................... 64
Section 1005. Limitation on Dividends; Covenants as to
the Trust...................................................... 64
Section 1006. Payment of Expenses of the Trust.................................. 66
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Optional Redemption............................................... 66
Section 1102. Tax Event Optional Redemption..................................... 67
Section 1103. Applicability of Article.......................................... 68
Section 1104. Election to Redeem; Notice to Trustee............................. 68
Section 1105. Notice of Redemption.............................................. 68
Section 1106. Deposit and Payment of Redemption Price........................... 69
Section 1107. Securities Payable on Redemption Date............................. 69
Section 1108. No Sinking Fund................................................... 70
ARTICLE XII
SUBORDINATION OF SECURITIES
Section 1201. Agreement to Subordinate.......................................... 70
Section 1202. Default on Senior Indebtedness.................................... 71
Section 1203. Liquidation; Dissolution; Bankruptcy.............................. 71
Section 1204. Subrogation....................................................... 73
Section 1205. Trustee to Effectuate Subordination............................... 74
Section 1206. Notice by the Company............................................. 75
Section 1207. Rights of the Trustee; Holders of Senior
Indebtedness................................................... 76
Section 1208. Subordination May Not Be Impaired................................. 76
ARTICLE XIII
CONVERSION OF SECURITIES
Section 1301. Conversion Rights................................................. 77
Section 1302. Conversion Procedures............................................. 78
Section 1303. Conversion Price Adjustments...................................... 82
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Section 1304. Reclassification, Consolidation, Merger
or Sale of Assets.............................................. 88
Section 1305. Notice of Adjustments of Conversion
Price.......................................................... 89
Section 1306. Prior Notice of Certain Events.................................... 89
Section 1307. Certain Defined Terms............................................. 91
Section 1308. Dividend or Interest Reinvestment Plans........................... 91
Section 1309. Certain Additional Rights......................................... 92
Section 1310. Trustee Not Responsible for Determining
Conversion Price or Adjustments................................ 93
Section 1311. Expiration of Conversion Rights................................... 93
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 1401. No Recourse....................................................... 94
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<PAGE> 8
EXHIBIT AND ANNEX
EXHIBIT A Form of Security
ANNEX A Amended and Restated Declaration of Trust of
FINOVA Finance Trust, among the Company, as
trust sponsor, Fleet National Bank, as proper-
ty trustee, First Union Bank of Delaware, as
Delaware trustee, and Bruno A. Marszowski and
Robert J. Fitzsimmons, as regular trustees,
dated as of December 11, 1996.
- --------------
Note: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
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<PAGE> 9
INDENTURE, dated as of December 11, 1996, between The FINOVA
Group Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office at
1850 North Central Avenue, P.O. Box 2209, Phoenix, Arizona 85002-2209, and Fleet
National Bank, a national banking association, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
WHEREAS, FINOVA Finance Trust, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as trust sponsor, Fleet National Bank, as property trustee (the
"Property Trustee"), First Union Bank of Delaware, as Delaware trustee (the
"Delaware Trustee"), and Bruno A. Marszowski and Robert J. Fitzsimmons, as
regular trustees (the "Regular Trustees"), dated as of December 11, 1996 (as the
same may be supplemented or amended from time to time in accordance with its
terms, the "Declaration"), pursuant to the Purchase Agreement (the "Purchase
Agreement") dated December 5, 1996, among the Company and the underwriters named
therein, will issue and sell up to 2,000,000 (or 2,300,000 if the over-allotment
option is exercised) of its 5 1/2% Convertible Trust Originated Preferred
Securities (the "Preferred Securities") with a liquidation amount of $50 per
Preferred Security, having an aggregate liquidation amount with respect to the
assets of the Trust of $100,000,000 (or $115,000,000 if the over-allotment
option is exercised);
WHEREAS, the trustees of the Trust, on behalf of the Trust, will
execute and deliver to the Company 5 1/2% Convertible Common Securities (the
"Common Securities") of the Trust, registered in the name of the Company, in an
aggregate amount equal to approximately three percent of the capitalization of
the Trust, equivalent to 61,856 Common Securities (or up to 71,135 Common
Securities if the over-allotment option is exercised), with a liquidation amount
of $50 per Common Security, having an aggregate liquidation amount with respect
to the assets of the Trust of $3,092,800 (or $3,556,750 if the over-allotment
option is exercised) (the "Common Securities");
WHEREAS, the Trust will use the proceeds from the sale of the
Preferred Securities and the Common Securities to purchase from the Company 5
1/2% Convertible Subordinated Debentures due 2016 (the "Securities") of the
Company in an
<PAGE> 10
aggregate principal amount of $103,092,800 (or up to $118,556,750 if the
over-allotment option is exercised);
WHEREAS, the Company is guaranteeing the payment of distributions
on the Preferred Securities, and payment of the Redemption Price and payments on
liquidation with respect to the Preferred Securities, to the extent provided in
the Preferred Securities Guarantee Agreement (as the same may be supplemented or
amended from time to time in accordance with its terms, the "Guarantee") dated
as of December 11, 1996 between the Company and Fleet National Bank, as
guarantee trustee, for the benefit of the holders of the Preferred Securities
from time to time;
WHEREAS, the Company has duly authorized the creation of the
Securities of the tenor and amount herein set forth and to provide therefor the
Company has duly authorized the execution and delivery of this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities, and any
Preferred Securities are outstanding, the Declaration provides that the holders
of Preferred Securities may cause the Conversion Agent to (a) exchange such
Preferred Securities for Securities held by the Trust and (b) immediately
convert such Securities into Common Stock of the Company; and
WHEREAS, all things necessary to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
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<PAGE> 11
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with generally accepted
accounting principles; and
(d) the words "herein", "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" has the meaning specified in Section 301.
"Additional Payments" means Compounded Interest and Additional
Interest, if any.
"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 Registrar, Paying Agent, Conversion Agent or
co-registrar.
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<PAGE> 12
"Board of Directors" means either the board of directors of the
Company or any committee duly authorized by that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York or in
Wilmington, Delaware are authorized or required by law to close.
"Closing Price" has the meaning specified in Section 1307.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Securities" has the meaning specified in the recitals to
this Instrument.
"Common Securities Guarantee" means any guarantee that the
Company may enter into that operates directly or indirectly for the benefit of
holders of Common Securities of the 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. However,
subject to the provisions of Article XIII, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or
- 4 -
<PAGE> 13
winding up of the Company and which are not subject to redemption by the
Company. Until the Rights Distribution Date (as defined in the Rights Agreement)
or the earlier expiration, exchange or redemption of the Rights (as defined in
the Rights Agreement), subject to adjustment, one Right will be issued with each
share of Common Stock issued upon conversion of any of the Securities.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman or a Vice President, and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Compounded Interest" has the meaning specified in Section 312.
"Conversion Agent" means the Person appointed to act on behalf of
the holders of Preferred Securities in effecting the conversion of Preferred
Securities as and in the manner set forth in the Declaration and Section 1302
hereof.
"Conversion Date" has the meaning specified in Section 1302.
"Conversion Termination Date of the Securities" and "Conversion
Termination Date" have the respective meanings specified in Section 1311(d).
"Corporate Trust Office" means the principal office of the
Trustee, at which at any particular time its corporate trust business shall be
administered and which at the date of this Indenture is located at 777 Main
Street, Hartford, Connecticut 06115, Attention: Corporate Trust Administration.
"Declaration" has the meaning specified in the Recitals of this
instrument.
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<PAGE> 14
"Defaulted Interest" has the meaning specified in Section 307.
"Delaware Trustee" means the Person named as "Delaware Trustee"
in the Recitals of this instrument until a successor Delaware Trustee shall have
become such pursuant to the applicable provisions of the Declaration, and
thereafter, "Delaware Trustee" shall mean such successor Delaware Trustee.
"Depositary" means, with respect to any Securities issued in the
form of one or more Global Securities, a clearing agency registered under the
Exchange Act that is designated to act as Depositary for the Securities.
"Direct Action" means a proceeding directly instituted by a
holder of Preferred Securities for enforcement of payment to such holder of the
principal of or interest on the Securities having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder on
or after the respective due date specified in the Securities, if an "Event of
Default" under the Declaration has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Securities on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date.)
"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 Securities held by the Property Trustee are to be
distributed to the holders of Trust Securities issued by the Trust pro rata in
accordance with the Declaration.
"Dissolution Tax Opinion" has the meaning specified in Annex I
to the Declaration.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations promulgated thereunder,
or any successor legislation.
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<PAGE> 15
"Extension Period" has the meaning specified in Section 312.
"Global Security" has the meaning specified in Section 314.
"Guarantee" has the meaning specified in the Recitals to this
instrument.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" has the meaning specified in Section 301.
"Investment Company Event" has the meaning specified in Annex I
to the Declaration.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Ministerial Action" has the meaning specified in Section 1102.
"90-Day Period" has the meaning specified in Section 1102.
"No Recognition Opinion" has the meaning specified in Annex I to
the Declaration.
"Notice of Conversion" means the notice to be given by a holder
of Preferred Securities to the Conversion Agent directing the Conversion Agent
to exchange such Pre-
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<PAGE> 16
ferred Securities for Securities and to convert such Securities into Common
Stock on behalf of such holder.
"Officers' Certificate" means a certificate signed by the
Chairman or a Vice President, and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial or accounting officer
of the Company.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except: (i) Securities theretofore cancelled by
the Trustee or delivered to the Trustee for cancellation; (ii) Securities for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities that have been paid pursuant to Section 307,
converted into Common Stock pursuant to Section 1301, or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; provided, however, that in determining whether the
Holders of the requisite principal amount of the Outstanding Securities have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securi-
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<PAGE> 17
ties which the Trustee knows to be so owned shall be so disregarded. Securities
so owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company.
"Person" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in the Recitals
to this instrument.
"Property Trustee" means the Person named as the "Property
Trustee" in the Recitals to this instrument until a successor Property Trustee
shall have become such pursuant to the applicable provisions of the Declaration,
and thereafter, "Property Trustee" shall mean such successor Property Trustee.
"Purchase Agreement" has the meaning specified in the Recitals to
this instrument.
"Purchased Shares" has the meaning specified in Section 1303(e).
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<PAGE> 18
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Redemption Tax Opinion" has the meaning set forth in Annex I to
the Declaration.
"Reference Date" has the meaning specified in Section 1303(c).
"Regular Record Date" has the meaning specified in Section 301.
"Regular Trustees" mean the Persons named as "Regular Trustees"
in the Recitals of this instrument until, in the case of any such Regular
Trustee, a successor Regular Trustee shall have become such pursuant to the
applicable provisions of the Declaration, and thereafter "Regular Trustees"
shall include such successor Regular Trustee.
"Responsible Officer", when used with respect to the Trustee,
means any vice-president, any assistant vice-president, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer in the Corporate Trust Department of the 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.
"Rights Agreement" means the Amended and Restated Rights
Agreement, dated as of September 14, 1995, between the Company and Harris Trust
and Savings Bank, as successor rights agent, as amended or supplemented from
time to time in accordance with the applicable provisions thereof.
"Securities" has the meaning specified in the Recitals to this
instrument.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
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<PAGE> 19
"Senior Indebtedness" means in respect of the Company (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed 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 of any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other Persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise, and
(vi) all obligations of the type referred to in clauses (i) through (v) 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), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Securities 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 other trust, or a trustee of such trust,
partnership, limited liability company 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, or the Company's guarantee of which ranks, pari
passu with, or junior to, the Preferred Securities or the Guarantee,
respectively. Such Senior Indebtedness shall continue to be Senior Indebtedness
and entitled to the benefits of the subordination provisions irrespective of any
amendment, modification or waiver of any term of such Senior Indebtedness.
"Special Event" has the meaning specified in Annex I to the
Declaration.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
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<PAGE> 20
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal, together with any accrued and unpaid
interest (including Compounded Interest), of such Security or such installment
of interest is due and payable.
"Subsidiary" of any Person means a corporation more than 50% of
the outstanding Voting Stock of which is owned, directly or indirectly, by such
Person or by one or more other Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof.
"Tax Event" has the meaning specified in Annex I
to the Declaration.
"Trading Day" has the meaning specified in Section 1307.
"Trust" means the Person named as the "Trust" in the recitals of
this instrument until a successor Trust shall have become such pursuant to the
applicable provisions of the Declaration, and thereafter "Trust" shall mean such
successor Trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, and the rules and regulations promulgated thereunder,
or any successor legislation.
"Trust Securities" means Common Securities and Preferred
Securities.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" of any Person means capital stock of such Person
which ordinarily has voting power for the election of directors (or Persons
performing similar func-
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<PAGE> 21
tions) of such Person, whether at all times or only so long as no senior class
of securities has such voting power by reason of any contingency.
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee such certificates and opinions as may be required under the Trust
Indenture Act or reasonably requested by the Trustee in connection with such
application or request. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
applicable requirements of the Trust Indenture Act and any other applicable
requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
(a) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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<PAGE> 22
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly
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<PAGE> 23
required, to the Company. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee or the Company, as the case may be, deems
sufficient.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or take
any request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the
Security Register.
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<PAGE> 24
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.
Section 105. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Administration, or
(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company.
Section 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
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<PAGE> 25
affected by such event, at such Holder's address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Any notice
when mailed to a Holder in the aforesaid manner shall be conclusively deemed to
have been received by such Holder whether or not actually received by such
Holder. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
Section 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
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<PAGE> 26
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness, the holders of
Preferred Securities (to the extent provided herein) and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO ITS PRINCIPLES OF CONFLICTS OF LAWS.
Section 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security or the Conversion Termination Date of the
Securities shall not be a Business Day, then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or
principal or conversion of the Securities need not be made on such date, but may
be made on the next succeeding Business Day (except that, if such Business Day
is in the next succeeding calendar year, such Interest Payment Date, Redemption
Date or Stated Maturity, as the case may be, shall be the immediately preceding
Business Day) with the same force and effect as if made on the Interest Payment
Date or Redemption Date, the Stated Maturity or the Conversion Termination Date
of the Securities, provided, that no inter-
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<PAGE> 27
est shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
ARTICLE II
SECURITY FORMS
Section 201. Forms Generally.
The Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A, which is hereby incorporated in
and expressly made a part of this Indenture. The Securities may have 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 Company is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Company). The Company shall
furnish any such legend not contained in Exhibit A to the Trustee in writing.
Each Security shall be dated the date of its authentication. The terms and
provisions of the Securities set forth in Exhibit A are part of the terms of
this Indenture and to the extent applicable, the Company and the Trustee, by
their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
The definitive Securities shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution thereof.
Section 202. Initial Issuance to Property Trustee.
The Securities initially issued to the Property Trustee of the
Trust shall be in the form of one or more individual certificates in definitive,
fully registered form without coupons.
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<PAGE> 28
ARTICLE III
THE SECURITIES
Section 301. Title and Terms.
The aggregate principal amount of Securities that may be
authenticated and delivered under this Indenture is limited to $103,092,800 (or
up to $118,556,750 if the over-allotment option is exercised in accordance with
the terms and provisions of the Purchase Agreement), except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities pursuant to Section 304, 305, 306, 906 or
1302.
The Securities shall be known and designated as the "5 1/2%
Convertible Subordinated Debentures due 2016" of the Company. Their Stated
Maturity shall be December 31, 2016, and they shall bear interest at the rate of
5 1/2% per annum, from December 11, 1996 or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided
for, as the case may be, payable quarterly (subject to deferral as set forth
herein), in arrears, on March 31, June 30, September 30 and December 31 (each an
"Interest Payment Date") of each year, commencing March 31, 1997, until the
principal thereof is paid or made available for payment, and they shall be paid
to the Person in whose name the Security is registered at 5:00 p.m. (New York
City time) on the regular record date for such interest installment, which, so
long as the Securities remain solely in book-entry only form, the regular record
dates shall be one Business Day prior to the relevant Interest Payment Date;
provided, that if the Securities do not continue to be held solely in book-entry
only form, the regular record date for each Interest Payment Date shall be the
day 15 calendar days prior to such Interest Payment Date; provided, further,
that if such regular record date does not conform to the rules of any securities
exchange on which the Securities are then listed, if any, such regular record
date shall be changed to conform to the rules of such securities exchange (the
"Regular Record Date"). To the extent permitted by applicable law, interest will
compound quarterly and will accrue at the rate of 5 1/2% per annum on any
interest installment in arrears for more than one quarter or during an extension
of an interest payment period as set forth in Section 312 hereof.
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<PAGE> 29
The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day month. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
If at any time while the Property Trustee is the Holder of any
Securities, the Trust or the Property 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 Securities held by the Property Trustee, such amounts as shall
be required so that the net amounts received and retained by the Trust and the
Property Trustee after paying any such taxes, duties, assessments and
governmental charges will be not less than the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
governmental charges been imposed.
The principal of and interest on the Securities shall be payable
at the office or agency of the Company in the United States maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or by wire transfer to an account appropriately
designated by the Holder entitled thereto.
The Securities shall be redeemable as provided in Article XI
hereof.
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<PAGE> 30
The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article XII hereof.
The Securities shall be convertible as provided in Article XIII
hereof.
Section 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $50 and integral multiples thereof.
Section 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its assistant secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and
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<PAGE> 31
the only evidence, that such Security has been duly authenticated and delivered
hereunder.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are typewritten, printed, lithographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
1002, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
Section 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
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<PAGE> 32
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount. Neither the Company nor the Security Registrar shall be required to
register or cause to be registered the transfer of any Securities that have been
called for redemption.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 304, 906 or 1302 not involving any transfer.
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<PAGE> 33
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such Security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen Security, a new Security
of like tenor and principal amount and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
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Section 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at 5:00 p.m. (New York City time) on the Regular Record Date.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (a) or (b) below:
(a) The Company may elect to make payment of
any Defaulted Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at 5:00 p.m. (New York City
time) on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each Security
and the date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Clause (a)
provided. Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at his address as it appears
in the Security Register, not less than 10 days prior to such Special Record
Date. Notice of
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<PAGE> 35
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at 5:00 p.m. (New York City time) on such Special
Record Date and shall no longer be payable pursuant to the following Clause (b).
(b) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so listed,
upon such notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this Clause (b),
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue (including in each such case Additional
Payments, if any), which were carried by such other Security.
In the case of any Security which is converted after any Regular
Record Date and on or prior to the next succeeding Interest Payment Date,
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 Security (or one or more Predecessor Securities) is
registered at 5:00 p.m. (New York City time) on such Regular Record Date. Except
as otherwise expressly provided in the immediately preceding sentence and in
Section 1302, interest whose Stated Maturity is after the date of conversion of
such Security shall not be payable, and the Company shall not make nor be
required to make any other payment, adjustment or allowance with respect to
accrued but unpaid interest (including Additional Payments, if any) on the
Securities being converted, which shall be deemed to be paid in full. Subject to
any right of the Holder of such Security or any Predecessor Security to receive
interest as provided in this paragraph and Section 1302, the Company's delivery
upon conversion of the fixed number of shares of Common Stock into which the
Securities are convertible (together
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<PAGE> 36
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Securities so converted and any unpaid interest (including Additional
Payments, if any) accrued on such Securities at the time of such conversion. If
any Security called for redemption is converted and any interest (including
Additional Payments, if any) payable in respect of such converted Security
pursuant to this paragraph and Section 1302 shall have been paid in full, any
money deposited with the Trustee or with any Paying Agent or so segregated and
held in trust for the redemption of such Security shall (subject to any right of
the Holder of such Security or any Predecessor Security to receive interest as
provided in this paragraph and in Section 1302) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 307) interest (including Additional Payments, if any) on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment, redemption, registration
of transfer or exchange or conversion shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of as directed by
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<PAGE> 37
a Company Order; provided, however, that the Trustee shall not be required to
destroy the certificates representing such cancelled Securities.
Section 310. Right of Set Off.
Notwithstanding anything to the contrary in this Indenture, the
Company shall have the right to set off any payment it is otherwise required to
make hereunder to the extent the Company has theretofore made, or is
concurrently on the date of such payment making, a payment under the Guarantee.
Section 311. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
Section 312. Option to Extend Interest Payment Period.
(a) The Company shall have the right at any time during
the term of the Securities to defer interest payments (including Additional
Payments) from time to time by extending the interest payment period ("Extension
Period") for successive periods not exceeding 20 consecutive quarters for each
such period, during which Extension Period no interest shall be due and payable;
provided, no Extension Period may extend beyond the Stated Maturity of the
Securities. Each Extension Period, if any, will end on an Interest Payment Date.
At the end of each Extension Period, the Company shall pay all interest then
accrued and unpaid (including Additional Interest, if any), together with
interest thereon, compounded quarterly at the rate of interest borne by the
Securities to the extent permitted by applicable law ("Compounded Interest");
provided, that during any Extension Period, the Company (i) shall not declare or
pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liqui-
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<PAGE> 38
dation payment with respect to, any of its capital stock (other than (A)
purchases or acquisitions of shares of Common Stock (or Common Stock
equivalents) in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company to
purchase shares of Common Stock (or Common Stock equivalents) (provided that
such contract is in effect or such security is outstanding at least 60 days
prior to the commencement of such Extension Period), (B) purchases of shares of
Common Stock (or Common Stock equivalents) from officers or employees of the
Company or its subsidiaries upon termination of employment or retirement not
pursuant to any obligation under any contract or security requiring the Company
to purchase shares of Common Stock (or Common Stock equivalents) (provided that
such purchases by the Company upon termination of employment or retirement shall
be made at a price not to exceed the market value on the date of any such
purchase and shall not exceed $7.5 million in the aggregate for all officers and
employees), (C) as a result of a reclassification of the Company's capital stock
or the exchange or conversion of one class or series of the Company's capital
stock for another class or series of the Company's capital stock, (D) dividends
or distributions of shares of Common Stock on Common Stock or (E) the purchase
of fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged (or make any guarantee payments with respect to the
foregoing), (ii) 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 that rank pari passu with or junior to the
Securities and (iii) 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, the Company may further extend such Extension Period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may select
a new Extension Period, subject to the above requirements. If the payment of
interest on the Securities is deferred as aforesaid, except under the limited
circumstances described in Section 1302, such deferred interest (including
Additional Payments, if any)
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<PAGE> 39
shall be paid to the Holders registered as such in the Security Register at 5:00
p.m. (New York City time) on the Regular Record Date for the Interest Payment
Date upon which such Extension Period ends.
(b) If the Property Trustee is the sole Holder of the
Securities at the time the Company selects an Extension Period, the Company
shall give written notice to the Regular Trustees, the Property Trustee and the
Trustee of its selection of such Extension Period at least one Business Day
prior to the earlier of (i) the date the distributions on the Preferred
Securities are payable or (ii) if the Preferred Securities are listed on the New
York Stock Exchange, Inc. (the "NYSE") or other stock exchange or quotation
system, the date the Trust is required to give notice to the NYSE or other
applicable self-regulatory organization or to holders of the Preferred
Securities of the record date or the date such distributions are payable, but in
any event not less than 10 Business Days prior to such record date. The Company
shall cause the Trust to give notice of the Company's selection of such
Extension Period to the holders of the Preferred Securities.
(c) If the Property Trustee is not the sole holder of
the Securities at the time the Company selects an Extension Period, the Company
shall give the Holders of the Securities and the Property Trustee and the
Trustee written notice of its selection of such Extension Period at least 10
Business Days prior to the earlier of (i) the next succeeding Interest Payment
Date or (ii) if the Securities are listed on the NYSE or other stock exchange or
quotation system, the date the Company is required to give notice to the NYSE or
other applicable self-regulatory organization or to holders of the Securities of
the record or payment date of such related interest payment, but in any event
not less than two Business Days prior to such record date.
(d) The quarter in which any notice is given pursuant to
paragraphs (b) and (c) hereof shall be counted as one of the 20 quarters
permitted in the maximum Extension Period permitted under paragraph (a) hereof.
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<PAGE> 40
Section 313. Paying Agent, Security Registrar and Conversion
Agent.
The Trustee will initially act as Paying Agent, Security
Registrar and Conversion Agent. The Company may change any Paying Agent,
Security Registrar, co-registrar or Conversion Agent without prior notice. The
Company or any of its Affiliates may act in any such capacity. The Trustee is
entitled to the protections of Article VI in its capacity as Paying Agent,
Registrar and Conversion Agent.
Section 314. Global Security.
(a) If distributed to holders of the Preferred
Securities as the result of a Dissolution Event, the Securities will be issued
in the same form as the Preferred Securities which such Securities replace. Any
global book-entry Preferred Security (a "Global Preferred Security") will be
replaced by one or more Global Securities (as defined below) registered in the
name of the Depositary or its nominee. In connection with a Dissolution Event,
(i) to the extent that Preferred Securities are in global
book-entry form, Securities may be presented to the Trustee by the
Property Trustee in exchange for a Security or Securities in global
book-entry form (each, a "Global Security") in an aggregate principal
amount equal to the aggregate principal amount of all outstanding
Securities, to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to the Depositary for crediting to
the accounts of its participants pursuant to the instructions of the
Property Trustee. The Company upon any such presentation shall execute a
Global Security or Global Securities in such aggregate principal amount
and deliver the same to the Trustee for authentication and delivery in
accordance with this Indenture. Payments on the Securities issued as a
Global Security will be made to the Depositary; and
(ii) if any Preferred Securities are held in non
book-entry certificated form ("Certificated Preferred Securities"), then
Securities in non-book-entry certificated form having an aggregate
principal amount equal to the aggre-
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<PAGE> 41
gate stated liquidation amount of such Certificated Preferred Securities
shall be presented to the Trustee by the Property Trustee and any
outstanding Certificated Preferred Securities will be deemed to
represent beneficial interests in such Securities presented to the
Trustee by the Property Trustee having an aggregate principal amount
equal to the aggregate liquidation amount of, with an interest rate
identical to the distribution rate of, with accrued and unpaid interest
equal to accrued and unpaid distributions on, and having the same record
dates for payment as, such Certificated Preferred Securities until such
Certificated Preferred Securities are presented to the Security
Registrar for transfer or reissuance at which time each such
Certificated Preferred Security will be cancelled and a Security,
registered in the name of the holder of the Certificated Preferred
Security or the transferee of the holder of such Certificated Preferred
Security, as the case may be, with an aggregate principal amount equal
to the aggregate liquidation amount of, with an interest rate identical
to the distribution rate of, with accrued and unpaid interest equal to
accrued and unpaid distributions on, and having the same record dates
for payment as, such Certificated Preferred Security, will be executed
by the Company and delivered to the Trustee for authentication and
delivery in accordance with this Indenture. On issue of such Securities,
Securities with an equivalent aggregate principal amount that were
presented by the Property Trustee to the Trustee will be deemed to have
been cancelled.
(b) A Global Security may be transferred, in whole but not
in part, only to the Depositary or a nominee of the Depositary, or to a
successor Depositary or a nominee of such successor Depositary.
(c) If (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a depositary for the Global Securities or, if
at any time the Depositary ceases to be a clearing agency registered as such
under the Exchange Act, and no successor Depositary shall have been appointed
within 90 days of such notification or of the Company becoming aware of the
Depositary's ceasing to be so registered, as the case may be (ii) the Company in
its
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<PAGE> 42
sole discretion determines that the Global Securities shall be exchanged for
definitive certificated Securities or (iii) there shall have occurred and be
continuing an Event of Default, the Company will execute, and, subject to
Article III of this Indenture, the Trustee, upon written notice from the Company
and receipt of a Company Order (which the Company hereby agrees to promptly
deliver), will authenticate and deliver the Securities in definitive registered
form without coupons, in authorized denominations, and in an aggregate principal
amount equal to the principal amount of the Global Security in exchange for such
Global Security. Upon the exchange of the Global Securities for such Securities
in definitive registered form without coupons, in authorized denominations, the
Global Securities shall be cancelled by the Trustee. Such Securities in
definitive registered form issued in exchange for the Global Securities 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. The Trustee shall deliver such Securities to, or as
instructed by, the Depositary for delivery to the Persons in whose names such
Securities are so registered.
(d) Every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR
A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN
WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN
SUCH DEPOSITARY (OR A SUCCESSOR THERETO) OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
(e) If the Depositary is The Depository
Trust Company, each Global Security authenticated and delivered hereunder shall
also bear a legend in substantially the following form, in capital letters and
bold-face type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
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<PAGE> 43
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
(f) If the Securities are distributed to holders of
Preferred Securities upon the occurrence of a Dissolution Event or otherwise,
the Company will use its best efforts to have the Securities listed on the NYSE
or on such other national securities exchange on which the Preferred Securities
are then listed.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered
(other than (A) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and (B)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation; or
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<PAGE> 44
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation have become due and payable, or will become due
and payable at their Stated Maturity within one year, or are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company and, in any case described in
this clause (ii), the Company has deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancellation,
for principal and interest (including Additional Payments, if any) to
the date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be, along with a certificate from a firm of independent public
accountants of nationally recognized standing stating such funds are
sufficient to pay principal and interest on the Securities when and as
due;
(b) the Company has paid or caused to be paid all other
sums payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of Clause (a) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 and the obligations of the Company under Section 1002
shall survive.
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<PAGE> 45
Section 402. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities and
this Indenture, to the payment, either directly or through any Paying Agent
(other than the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee. All moneys
deposited with the Trustee pursuant to Section 401 (and held by it or any Paying
Agent) for the payment of Securities subsequently converted into Common Stock
shall be returned to the Company upon Company Request.
ARTICLE V
REMEDIES
Section 501. Events of Default.
"Event of Default," wherever used herein, means any one of the
following events that has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article XII or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) failure for 30 days to pay interest on any of the
Securities, including any Additional Payments 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 Additional Payments,
if any) for this purpose;
(b) failure to pay principal of any of the Securities when
due, whether at maturity, upon redemption, by declaration or otherwise;
(c) failure by the Company to deliver shares of its Common
Stock upon an election by a holder of Preferred Securities to convert such
Preferred Securities;
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<PAGE> 46
(d) failure to observe or perform any other covenant
contained in the Indenture for 90 days after notice to the Company by the
Trustee or by the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities;
(e) entry by a court having jurisdiction in the premises
of (i) a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (ii) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of all or substantially all of the property
of the Company, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such other decree
or order unstayed and in effect for a period of 60 consecutive days;
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by the Company or to the
entry of a decree or order for relief in respect of itself in an involuntary
case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against the Company, or the filing by the Company
of a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by the Company to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or of all or substantially all of the property of the Company, or
the making by the Company of an assignment for the benefit of creditors, or the
admission by the Company in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company in
furtherance of any such action; or
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<PAGE> 47
(g) the voluntary or involuntary dissolution, winding up
or termination of the Trust, except in connection with (i) the distribution of
Securities to holders of Preferred Securities in liquidation of the Trust upon
the occurrence of a Special Event, upon the redemption of all outstanding
Preferred Securities, upon the conversion of all outstanding Preferred
Securities or (ii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
Section 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in
every such case the Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities may declare the principal of all the
Securities and any other amounts payable hereunder to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal and all accrued
interest (including Additional Payments, if any) and all such other amounts
shall become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as provided in this Article, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a
sum sufficient to pay
(i) all overdue interest (including Additional Payments,
if any) on all Securities,
(ii) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and interest thereon
at the rate borne by the Securities, and
(iii) all sums paid or advanced by the Trustee hereunder
and the reasonable compensa-
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<PAGE> 48
tion, expenses, disbursements and advances of the Trustee, its agents
and counsel;
and
(b) all Events of Default, other than the non-payment of
the principal of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.
The Company covenants that if:
(a) default is made in the payment of any interest
(including Additional Payments, if any) on any Security when such interest
becomes due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including Additional Payments, if any)
and, to the extent that payment thereof shall be legally enforceable, interest
on any overdue principal and on any overdue interest (including Additional
Payments, if any), at the rate borne by the Securities, and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
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<PAGE> 49
Section 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
to have claims of the Holders and the Trustee allowed in any such proceeding. In
particular, the Trustee shall be authorized to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator
or other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 505. Trustee May Enforce Claims Without Possession of
Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
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Section 506. Application of Money Collected.
Subject to Article XII, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or interest (including Additional Payments, if any), upon
presentation of the Securities and the notation thereon of the payment if only
partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including Additional Payments, if any) on the
Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for
principal and interest (including Additional Payments, if any),
respectively.
Section 507. Limitation on Suits.
Subject to Section 516, no Holder of any Security shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(b) if the Trust is not the sole holder of the Securities,
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
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(d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request
has been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
Section 508. Unconditional Right of Holders to Receive Principal
and Interest and Convert.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest
(including Additional Payments, if any) on such Security on the respective
Stated Maturities expressed in such Security (or, in the case of redemption, on
the Redemption Date) and to convert such Security in accordance with Article
XIII and to institute suit for the enforcement of any such payment and right to
convert, and such rights shall not be impaired without the consent of such
Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
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Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, that
(a) such direction shall not be in conflict with any rule
of law or with this Indenture; and
(b) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
Subject to Section 902 hereof, the Holders of not less than a
majority in principal amount of the Outstanding Securities may on behalf of the
Holders of all the Securi-
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ties waive any past default hereunder and its consequences, except a default
(a) in the payment of the principal of or interest
(including Additional Payments, if any) on any Security (unless such default has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration has been deposited with the
Trustee); or
(b) in respect of a covenant or provision hereof that
under Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected;
provided, however, that if the Securities are held by the Trust or a trustee of
the Trust, such waiver shall not be effective until the holders of a majority in
liquidation amount of Trust Securities shall have consented to such waiver;
provided, further, that if the consent of the Holder of each outstanding
Security is required, such waiver shall not be effective until each holder of
the Trust Securities shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs against
any such party litigant, in the manner and to the extent provided in the Trust
Indenture Act; provided, that neither this Section nor the Trust Indenture Act
shall be deemed to authorize any court to require such an undertaking or to make
such an assessment against the Company or the Trustee in any suit instituted by
the Company or the Trustee or in any suit for the enforcement of the right to
receive the principal of and interest (including Additional Payments, if any) on
any Security or to convert any Security in accordance with Article XIII.
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Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
Section 516. Enforcement by Holders of Preferred Securities.
Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on the Securities on the date such interest
or principal is otherwise payable, the Company acknowledges that, in such event,
a holder of Preferred Securities may institute a Direct Action for payment on or
after the respective due date specified in the Securities. The Company may not
amend this Indenture to remove the foregoing right to bring a Direct Action (or
to change this Section 516) without the prior written consent of all the holders
of Preferred Securities. Notwithstanding any payment made to such holder of
Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Securities (including Additional Payments, if any) held by the Trust or the
Property Trustee and the Company shall be subrogated to the rights of the holder
of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Preferred Securities, as such, will not be
able to exercise directly any other remedy available to the Holders of the
Securities.
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ARTICLE VI
THE TRUSTEE
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of its
duties 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 Indenture or indemnity
reasonably satisfactory to the Trustee against such risk or liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section 601.
Section 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act; provided,
however, that except (i) in the case of a default of the character specified in
Section 501(a) or (b), the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities and (ii) in the case of any default of the character specified in
Section 501(d), no such notice to Holders shall be given until at least 30 days
after the occurrence thereof. For the purpose of this Section 602, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default.
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Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order and
any resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and
the advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts
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or matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to reasonable examination
of the books, records and premises of the Company, personally or by agent or
attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence or
willful misconduct, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture.
Section 604. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the use
or application by the Company of the Securities or the proceeds thereof.
Section 605. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any
other agent of the Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections 608 and 613, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, or such other agent.
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Section 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Company.
Section 607. Compensation and Reimbursement.
The Company agrees
(a) to pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder;
(b) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses, fees,
disbursements and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith;
and
(c) to indemnify the Trustee and any predecessor Trustee
for, and to hold it 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 this trust, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(e) or Section
501(f), the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of
this Indenture.
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Section 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article.
Section 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 611.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company. If an instrument of acceptance by a
successor
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Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 608
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section
609 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent or a receiver of the Trustee
or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (A) the Company by Board Resolution may remove the
Trustee, or (B) subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor Trustee shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities delivered to the Company and the retiring Trustee, the
successor Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee shall have been so appointed
by the Compa-
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ny or the Holders and accepted appointment in the manner hereinafter provided,
any Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; provided, that on request of
the Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder. Upon request of any such successor
Trustee, the Company shall execute any and all instruments required to more
fully and certainly vest in and confirm to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
Section 612. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any
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corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee 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. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than February 15 and August 15
in each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days prior to
the delivery thereof, and
(b) at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
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Section 702. Preservation of Information; Communications to
Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by reason
of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
Section 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year, commencing
May 15, 1997, the Trustee shall transmit by mail to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as
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may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant to such Act; provided, that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within
15 days after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the
Trustee is for informational purposes only and the Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
The Company shall also provide to the Trustee on a timely basis
such information as the Trustee requires to enable the Trustee to prepare and
file any form required to be submitted by the Company with the Internal Revenue
Service and the Holders of the Securities relating to interest or original issue
discount, if any, including, without limitation, Form 1099-INT or Form 1099-OID
or any successor form.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 801. Company May Consolidate, Etc., Only on Certain
Terms.
The Company will not consolidate with or merge with or into any
other Person or, directly or indirectly, convey, transfer or lease all or
substantially all of its properties and assets on a consolidated basis to any
Person, unless:
(a) either (i) the Company is the surviving corporation in
any such merger or (ii) the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance, transfer or
lease, all or substantially all of the properties and assets of the Company on a
consolidated basis (in any such case, the "Successor Person") shall be a
corporation organized and validly
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existing under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form reasonably
satisfactory to the Trustee, the due and punctual payment of the principal of
and interest (including Additional Payments, if any) on all the Securities and
the performance or observance of every covenant in this Indenture on the part of
the Company to be performed or observed and shall have provided for conversion
rights in accordance with Article XIII;
(b) immediately after giving effect to such transaction,
no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
Section 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease of all or
substantially all the properties and assets of the Company on a consolidated
basis in accordance with Section 801, the successor Person formed by such
consolidation or into which the Company is merged or to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person had been named as the Company herein,
and thereafter (except in the case of a lease) the predecessor Person shall be
relieved of all obligations and covenants under this Indenture and the
Securities.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(b) to add to the covenants of the Company for the benefit
of the Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to make provision with respect to the conversion
rights of Holders pursuant to the requirements of Article XIII; or
(d) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Indenture which shall not be inconsistent with the provisions of this
Indenture; provided, that such action pursuant to this Clause (d) shall not
adversely affect the interests of the Holders of the Securities or, so long as
any of the Preferred Securities shall remain outstanding, the holders of the
Preferred Securities;
(e) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under the Trust
Indenture Act or to comply with the requirements of any national securities
exchange or quotation system on which the Securities may be listed; or
(f) to make provision for all matters required pursuant
to Section 314 or otherwise necessary, desirable or appropriate in connection
with the issuance of Securities to holders of Preferred Securities in the event
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of a distribution of Securities by the Trust if a Dissolution Event occurs and
is continuing.
Section 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(a) extend the Stated Maturity of the principal of, or any
installment of interest (including Additional Payments, if any) on, any
Security, or reduce the principal amount thereof, or reduce the rate or extend
the time for payment of interest thereon, or extend the Extension Period, or
change the place of payment where, or the coin or currency in which, any
Security or interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or adversely
affect the right to convert any Security as provided in Article XIII (except as
permitted by Section 901(c)), or modify the provisions of this Indenture with
respect to the subordination of the Securities in any manner adverse to the
Holders,
(b) reduce the percentage in principal amount of the
Outstanding Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(c) modify any of the provisions of this Section or
Section 513, except to increase any such percentage or to provide that certain
other provisions of this
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Indenture cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby;
provided that if the Securities are held by the Trust or a trustee of the Trust,
such supplemental indenture shall not be effective until the holders of a
majority in liquidation amount of Trust Securities shall have consented to such
supplemental indenture; provided, further, that if the consent of the Holder of
each Outstanding Security is required, such supplemental indenture shall not be
effective until each holder of the Trust Securities of the Trust shall have
consented to such supplemental indenture.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate, each stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby. No such supplemental indenture shall directly
or indirectly modify the provisions of Article XII in any manner which might
terminate or impair the rights of the Senior Indebtedness pursuant to such
subordination provisions.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
Section 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
ARTICLE X
COVENANTS; REPRESENTATIONS AND WARRANTIES
Section 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Securities and Additional Payments, if any, in accordance with
the terms of the Securities and this Indenture.
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Section 1002. Maintenance of Office or Agency.
The Company will maintain in the United States an office or
agency where Securities may be presented or surrendered for payment, where
Securities may be surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion, and where notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served. In the event that a Dissolution Event shall occur and any Securities
shall be issued that are not in global book-entry form, the Company shall
maintain such an office or agency in the Borough of Manhattan, The City of New
York. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies (in the United States) where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the United States for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
Section 1003. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided and will promptly notify the Trustee of its action or failure so to
act.
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Whenever the Company shall have one or more Paying Agents, it
will, prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and (unless such Paying Agent is
the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
The Company will cause each Paying Agent other than the Trustee
to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
(including Additional Payments, if any) any Security and remaining unclaimed for
two years after such principal or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of any such Security shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof unless an abandoned property law designates another Person, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease.
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Section 1004. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the material terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder) and,
if the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
Section 1005. Limitation on Dividends; Covenants as to the Trust.
(a) The Company covenants that so long as any Securities
are outstanding, if (i) there shall have occurred and be continuing an Event of
Default or an event of default under the Guarantee, or any event that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default or an event of default under the Guarantee, or (ii) the Company has
exercised its option to select an Extension Period and such Extension Period, or
extension thereof, shall be continuing, then the Company (x) shall not declare
or pay dividends on, or make a distribution with respect to, or redeem or
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 (or Common Stock equivalents) in connection with the satisfaction by the
Company of its obligations under any employee benefit plans or the satisfaction
by the Company of its obligations pursuant to any contract or security requiring
the Company to purchase shares of Common Stock (or Common Stock equivalents)
(provided that such contract is in effect or such security is outstanding at
least 60 days prior to the occurrence of any event described in clause (i) above
or the commencement of the Extension Period referred to in clause (ii) above, as
the case may be, (II) purchases of shares of Common Stock (or Common Stock
equivalents) from officers or employees of the Company or its subsidiaries upon
termination of employment or retirement not pursuant to any obligation under any
contract or security requiring the Company to purchase shares of Common Stock
(or Common Stock equivalents) (pro-
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vided that such purchases by the Company upon termination of employment or
retirement shall be made at a price not to exceed the market value on the date
of any such purchase and shall not exceed $7.5 million in the aggregate for all
officers and employees), (III) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (IV) dividends or distributions of shares of Common Stock on Common Stock
or (V) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged (or make any guarantee payments with
respect to the foregoing)), (y) 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 that rank pari passu
with or junior to the Securities and (z) shall not make any guarantee payments
with respect to the foregoing (other than pursuant to the Guarantee).
(b) The Company also covenants and agrees (i) that it
shall directly or indirectly maintain 100% ownership of the Common Securities of
the Trust; provided, however, that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities, (ii)
that it shall use its reasonable efforts, consistent with the terms and
provisions of the Declaration, to cause the Trust (x) to remain a statutory
business trust, except in connection with the distribution of the Securities to
the holders of Trust Securities in liquidation of the Trust, the redemption of
all of the Trust Securities of the Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, (y) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes and (iii) that it will use its reasonable efforts to cause each holder
of Trust Securities to be treated as owning an undivided beneficial interest in
the Securities.
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Section 1006. Payment of Expenses of the Trust.
In connection with the offering, sale and issuance of the
Securities to the Property Trustee in connection with the sale of the Trust
Securities by the Trust, the Company shall:
(a) pay for all costs, fees and expenses relating to the
offering, sale and issuance of the Securities, including commissions, discounts
and expenses payable pursuant to the Purchase Agreement and compensation of the
Trustee under the Indenture in accordance with the provisions of Section 607 of
the Indenture;
(b) be responsible for and pay for all debts and
obligations (other than with respect to the Trust Securities) of the Trust, pay
for all costs and expenses of the Trust (including, but not limited to, costs
and expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions, discounts and expenses
in connection therewith), the fees and expenses of the Property Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving and
computing or accounting equipment, paying agent(s), registrar(s), transfer
agent(s), duplicating, travel and telephone and other telecommunications
expenses and costs and expenses incurred in connection with the acquisition,
financing, and disposition of Trust assets); and
(c) 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.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 1101. Optional Redemption.
In the event that at any time following the Conversion
Termination Date, if any, the number of Preferred Securities Outstanding is less
than 10% of the number of
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Preferred Securities originally issued (including any Preferred Securities
issued upon exercise of the over-allotment option granted in the Purchase
Agreement) (or, if the Securities are distributed to holders of Preferred
Securities following the occurrence of a Dissolution Event, the aggregate
principal amount of Outstanding Securities is less than 10% of the aggregate
principal amount of Securities purchased by the Trust with the proceeds from the
sale of the Preferred Securities, including any Preferred Securities issued upon
exercise of such over-allotment option), the Company shall have the right to
redeem the Securities, in whole but not in part, upon not less than 30 nor more
than 60 days' notice to the Holders of the Securities, in cash at a redemption
price equal to 100% of the principal amount of the Securities to be redeemed
plus any accrued and unpaid interest (including Additional Payments, if any) to
the Redemption Date.
Section 1102. Tax Event Optional Redemption.
If, after receiving a Dissolution Tax Opinion to the effect that
a Tax Event has occurred, the Regular Trustees shall either (i) have received a
Redemption Tax Opinion or (ii) have been informed by tax counsel rendering the
Dissolution Tax Opinion that a No Recognition Opinion cannot be delivered to the
Trust,
then the Company shall have the right upon not less than 30 days nor more than
60 days notice to the Holders of the Securities to redeem the Securities in
whole (but not in part) for cash at a redemption price equal to 100% of the
principal amount of the Securities plus accrued and unpaid interest (including
Additional Payments, if any), to the date of redemption, within 90 days
following the occurrence of such Tax Event (the "90-Day Period"); provided,
however, that if, at the time there is available to the Company or the Trust the
opportunity to eliminate within 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, in the sole
judgment of the Company, has or will cause no adverse effect on the Company, the
Trust or the holders of the Trust Securities and will involve no material cost,
the Company or the Trust shall pursue such Ministerial Action or other measure
in lieu of redemption, and provided, further, that the Company shall have no
right to redeem the Securities while the Trust is pursuing any Ministerial
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Action or other similar measure pursuant to its obligations under the
Declaration.
Section 1103. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by Sections 1101 and 1102, shall be made in accordance with such
provisions and this Article.
Section 1104. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Securities pursuant to
Section 1101 or 1102 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 45 days
and no more than 90 days prior to the Redemption Date fixed by the Company,
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed and provide a copy of the notice of
redemption given to Holders of Securities to be redeemed pursuant to Section
1105.
Section 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at such Holder's address
appearing in the Security Register.
All notices of redemption shall identify the Securities to be
redeemed (including, if relevant, CUSIP number) and shall state:
(a) the Redemption Date,
(b) the Redemption Price,
(c) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(d) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
Section 1106. Deposit and Payment of Redemption
Price.
Prior to 10:00 a.m. (New York City time) on the Redemption Date,
the Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 1003) an amount of money sufficient to pay the Redemption
Price of, plus (except if the Redemption Date shall be an Interest Payment Date)
accrued and unpaid interest (including Additional Payments, if any) on all of
the Securities which are to be redeemed on that date. Such redemption payment
shall be made to the Holders prior to 12:00 noon (New York City time) on the
Redemption Date or such earlier time as the Company determines.
If any Security called for redemption is converted prior to the
Conversion Termination Date for the Securities, any money deposited with the
Trustee or with any Paying Agent or so segregated and held in trust for the
redemption of such Security shall (subject to any right of the Holder of such
Security or any Predecessor Security to receive interest as provided in the last
paragraph of Section 307 and in Section 1302) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
Section 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price herein specified plus accrued and unpaid
interest (including Additional Payments, if any) thereon, and from and after
such date (unless the Company shall default in the payment of the Redemption
Price and accrued and unpaid interest, including Additional Payments, if any)
such Securities shall cease to bear interest. Upon surrender of any such
Security for redemption in accordance with said notice, such Security shall be
paid by the Company at the Redemption Price, together with accrued and unpaid
interest (including Addition-
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al Payments, if any) to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at 5:00 p.m. (New York City time) on
the relevant Record Dates according to the terms and the provisions of Section
307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security.
Section 1108. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking
fund.
ARTICLE XII
SUBORDINATION OF SECURITIES
Section 1201. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of Securities
by such Holder's acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article XII; and
each Holder of a Security, whether upon original issue or upon transfer or
assignment thereof, accepts and agrees to be bound by such provisions. The
payment by the Company of the principal of and interest (including Additional
Payments, if any) on all Securities issued hereunder shall, to the extent and in
the manner hereinafter set forth, be subordinated and junior in right of payment
to the prior payment in full of all existing and future Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred;
provided however, that no provision of this Article XII shall prevent the
occurrence of any default or Event of Default hereunder.
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Section 1202. Default on Senior Indebtedness.
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 continuing beyond the period of grace, if any,
specified in the instrument evidencing such Senior Indebtedness, unless and
until such default shall have been cured or waived or shall have ceased to
exist, or in the event that the maturity of any Senior Indebtedness has been
accelerated because of a default, then no payment shall be made by the Company
with respect to the principal of (including redemption payments, if any) or
interest on the Securities.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 1202, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing within 90 days of
such payment of the amounts then due and owing on the Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of Senior Indebtedness.
Section 1203. Liquidation; Dissolution; Bankruptcy.
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, winding up, liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due on, all Senior Indebtedness must be paid in full
before any payment is made on account of the principal or interest (including
Additional Payments, if any) on the Securities; and upon any such dissolution,
winding up, liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether
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in cash, property or securities, to which the Holders of the Securities or the
Trustee would be entitled, except for the provisions of this Article XII, shall
be paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders of the Securities or by the Trustee under this Indenture if received by
them or it, directly to the holders of Senior Indebtedness (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 money's 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
Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness 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 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, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness 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 holders of such Senior Indebtedness.
For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the
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extent provided in this Article XII with respect to the Securities to the
payment of all Senior Indebtedness which may at the time be outstanding;
provided, that (i) such Senior Indebtedness is assumed by the new corporation,
if any, resulting from any such reorganization or readjustment, and (ii) the
rights of the holders of such Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 1203 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 1202 or in this Section 1203 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607 hereof.
Section 1204. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the
rights of the Holders of the Securities shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, as the case may be, applicable to
such Senior Indebtedness until the principal of and interest (including
Additional Payments, if any) on the Securities shall be paid in full; and, for
the purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article XII, and no payment over pursuant to the provisions
of this Article XII, to or for the benefit of the holders of such Senior
Indebtedness by Holders of the Securities or the Trustee, shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Article XII are and are intended solely for the purposes of defining the
relative rights of the Holders of the Securities, on the one
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hand, and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of and
interest (including Additional Payments, if any) on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Securities
and creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the Holder of any Security from exercising all remedies otherwise permitted by
this Indenture or by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XII of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Company, as the
case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XII, the Trustee, subject to the provisions of
Section 603, and the Holders of the Securities, shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of the
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 XII.
Section 1205. Trustee to Effectuate Subordination.
Each Holder of Securities by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or
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appropriate to effectuate the subordination provided in this Article XII and
appoints the Trustee as such Holder's attorney-in-fact for any and all such
purposes.
Section 1206. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XII. Notwithstanding the
provisions of this Article XII or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Securities pursuant to the provision of this Article XII, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof at the Corporate Trust Office of the Trustee from the Company or
a holder or holders of Senior Indebtedness or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 603 hereof, shall be entitled in all respects to assume
that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section 1206 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 interest (including Additional Payments, if any) on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary which may be received by it within two Business Days prior to
such date.
The Trustee, subject to the provisions of Section 603, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a holder
of such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or
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distribution pursuant to this Article XII, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of 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 right of such Person under this Article XII, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Section 1207. Rights of the Trustee; Holders of Senior
Indebtedness.
The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Article XII in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are set forth in this Article XII, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 603, the Trustee shall not be liable to any
holder of such Senior Indebtedness if it shall pay over or deliver to Holders of
Securities, the Company or any other Person money or assets to which any holder
of such Senior Indebtedness shall be entitled by virtue of this Article XII or
otherwise.
Section 1208. Subordination May Not Be Impaired.
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 which any such holder may
have or otherwise be charged with.
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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
Securities, without incurring responsibility to the holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the holders
of Senior Indebtedness, do any one or more of the following: (i) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing such Senior Indebtedness; (iii) release any Person liable in any manner
for the collection of such Senior Indebtedness; and (iv) exercise or refrain
from exercising any rights against the Company and any other Person.
ARTICLE XIII
CONVERSION OF SECURITIES
Section 1301. Conversion Rights.
Subject to and upon compliance with the provisions of this
Article, the Securities are convertible, at the option of the Holder, at any
time on or before 5:00 p.m. (New York City time) on the earlier of (i) the
Business Day immediately preceding the date of repayment of such Securities,
whether at maturity or upon redemption, and (ii) the Conversion Termination Date
of the Securities, into fully paid and nonassessable shares of Common Stock of
the Company at a conversion rate of .6387 shares of Common Stock for each $50 in
aggregate principal amount of Securities (equivalent to a conversion price of
$78.28 per share of Common Stock), subject to adjustment as described in this
Article XIII. A Holder of Securities may convert any portion of the principal
amount of the Securities into that number of fully paid and nonassessable shares
of Common Stock (calculated as to each conversion to the nearest 1/100th of a
share) obtained by dividing the principal amount of the Securities to be
converted by such conversion price. In case the Securities are called for
redemption, such conversion right in re-
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spect of the Securities shall expire at 5:00 p.m. (New York City time) on the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
Section 1302. Conversion Procedures.
(a) To convert all or a portion of the Secu-
rities, the Holder thereof shall deliver to the Conversion Agent an irrevocable
Notice of Conversion setting forth the principal amount of Securities to be
converted, together with the name or names, if other than the Holder, in which
the shares of Common Stock should be issued upon conversion and, if such
Securities are definitive Securities, surrender to the Conversion Agent the
Securities to be converted, duly endorsed or assigned to the Company or in
blank. In addition, a Holder of Preferred Securities may exercise its right
under the Declaration to convert such Preferred Securities into Common Stock by
delivering to the Conversion Agent an irrevocable Notice of Conversion setting
forth the information called for by the preceding sentence and directing the
Conversion Agent (i) to exchange such Preferred Security for a portion of the
Securities held by the Trust (at an exchange rate of $50 liquidation amount of
Securities for each Preferred Security) and (ii) to immediately convert such
Securities, on behalf of such Holder, into Common Stock of the Company pursuant
to this Article XIII and, if such Preferred Securities are in definitive form,
surrendering such Preferred Securities, duly endorsed or assigned to the Company
or in blank. So long as any Preferred Securities are outstanding, the Trust
shall not convert any Securities except pursuant to a Notice of Conversion
delivered to the Conversion Agent by a holder of Preferred Securities.
If a Notice of Conversion is delivered on or after a Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder of
Securities to be converted, as reflected in the Security Register at 5:00 p.m.
(New York City time) on such Regular Record Date, will be entitled to receive
the interest payable on the subsequent Interest Payment Date on such Securities
to be converted notwithstanding the conversion thereof prior to such Interest
Payment Date. Except as provided in the immediately preceding sentence, the
Company shall not make, nor be required to make, any payment, allowance or
adjustment with respect to accrued but unpaid interest (including any Additional
Payments, if any), whether or not in arrears, on converted Securities; pro-
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vided, however, that if notice of redemption of the Securities is mailed or
otherwise given to Holders of Securities or the Trust (or, under certain
circumstances set forth in Section 1311(c), the Company) issues a press release
announcing a Conversion Termination Date, then, if any Holder of Securities
delivers a Notice of Conversion on any date on or after the date on which such
notice of redemption is mailed or otherwise given or the date of such press
release, as the case may be, and if the date upon which such Notice of
Conversion is delivered falls on any day from and including the first day of an
Extension Period and on or prior to the Interest Payment Date upon which such
Extension Period ends, such converting Holder shall be entitled to receive
either (i) if the date upon which such Notice of Conversion is delivered falls
after a Regular Record Date and on or prior to the next succeeding Interest
Payment Date, all accrued and unpaid interest on such Securities to such
Interest Payment Date or (ii) if the date upon which such Notice of Conversion
is delivered does not fall on a date described in clause (i) above, all accrued
and unpaid interest on such Securities to the most recent Interest Payment Date
prior to the date upon which such Notice of Conversion is delivered, which
interest shall, in either such case, be paid to such converting Holder unless
the date upon which such Notice of Conversion is delivered is on or prior to the
Interest Payment Date upon which such Extension Period ends and after the
Regular Record Date for such Interest Payment Date, in which case such interest
shall be paid to the Holder of such Securities (or one or more predecessor
Securities) at 5:00 p.m. (New York City time) on such Regular Record Date.
Accrued and unpaid interest payable pursuant to the proviso to the immediately
preceding sentence shall be paid (x) in the case of interest payable with
respect to Securities which are converted on or after notice of redemption, on
the related redemption date, and (y) in the case of Securities which are
converted on or after a Conversion Termination Date is announced, on the
Business Day immediately succeeding such Conversion Termination Date; provided,
however, that, if the date of conversion is on or prior to the Interest Payment
Date on which the relevant Extension Period ends and after the corresponding
Regular Record Date, such interest shall instead be paid on such Interest
Payment Date. The Company shall make no payment or allowance for accumulated and
unpaid dividends on the shares of Common Stock issued upon such conversion,
except to the extent that such shares of Common Stock are held of record on the
record date for any such dividends and except as provided in Section
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1309. If any Security called for redemption is converted, any money deposited
with the Trustee or with any Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security or any Predecessor Security to receive interest as provided in the
last paragraph of Section 307 or in this Section 1302) be paid to the Company
upon Company Request or, if then held by the Company, shall be discharged from
such trust.
Each conversion shall be deemed to have been effected immediately
prior to 5:00 p.m. (New York City time) on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Preferred Securities effecting a conversion
thereof pursuant to its conversion rights under the Declaration, as the case may
be. The Person or Persons entitled to receive the Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock as of the Conversion Date. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver
at the office of the Conversion Agent, unless otherwise directed by the Holder
in the Notice of Conversion, a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) Subject to any right of the Holder of such Security or
any Predecessor Security to receive interest as provided in the last paragraph
of Section 307 or in this Section 1302, the Company's delivery upon conversion
of the fixed number of shares of Common Stock into which the Securities are
convertible (together with the cash payment, if any, in lieu of fractional
shares) shall be deemed to satisfy the Company's obligation to pay the principal
amount at Maturity of the portion of Securities so converted and any unpaid
interest (including Additional Payments, if any) accrued on such Securities at
the time of such conversion.
(c) 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
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Closing Price of shares of Common Stock on the Conversion Date for such
Securities or Preferred Securities, as the case may be, or, if such day is not a
Trading Day, on the next Trading Day, and the Conversion Agent in turn will make
such payment, if any, to the Holder of the Securities or the holder of the
Preferred Securities so converted.
(d) In the event of the conversion of any Security in part
only, a new Security or Securities for the unconverted portion thereof will be
issued in the name of the Holder thereof upon the cancellation thereof in
accordance with Section 305.
(e) In effecting the conversion transactions described in
this Section , the Conversion Agent is acting as agent of the holders of
Preferred Securities (in the exchange of Preferred Securities for Securities)
and as agent of the Holders of Securities (in the conversion of Securities into
Common Stock), as the case may be, directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities held by the Trust from time to time for Preferred Securities in
connection with the conversion of such Preferred Securities in accordance with
this Article XIII and (ii) to convert all or a portion of the Securities into
Common Stock and thereupon to deliver such shares of Common Stock in accordance
with the provisions of this Article XIII and to deliver to the Trust a new
Security or Securities for any resulting unconverted principal amount.
(f) The Company shall at all times reserve and keep
available out of its authorized and unissued Common Stock, solely for issuance
upon the conversion of the Securities, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Securities then outstanding.
Notwithstanding the foregoing, the Company shall be entitled to deliver upon
conversion of Securities, shares of Common Stock reacquired and held in the
treasury of the Company (in lieu of the issuance of authorized and unissued
shares of Common Stock), so long as any such treasury shares are free and clear
of all liens, charges, security interests or encumbrances and are not subject to
any preemptive or other similar rights. Any shares of Common Stock issued upon
conversion of the Securities shall be duly authorized, validly issued, fully
paid and nonassessable. The Company shall deliver the shares of Common
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Stock to the converting Holder free and clear of all liens, charges, security
interests and encumbrances, except for United States withholding taxes, if any.
The Company shall prepare and shall use its best efforts to obtain and keep in
force such governmental or regulatory permits or other authorizations as may be
required by law, and shall comply with all applicable requirements as to
registration or qualification of the Common Stock issuable upon conversion of
Securities (and all requirements to list on any national securities exchange
such Common Stock that are at the time applicable), to enable the Company to
lawfully issue Common Stock to each Holder upon conversion of the Securities.
(g) The Company will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of Securities. The Company shall not, however, be required to pay any
tax that may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax or has established to the satisfaction of the Company
that such tax has been paid.
Section 1303. Conversion Price Adjustments.
The conversion price shall be subject to adjustment (without
duplication) from time to time as follows:
(a) In case the Company shall, while any of the Securities
are outstanding, (i) pay a dividend or make a distribution with respect to its
Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of
Common Stock, (iii) combine its 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 price in
effect immediately prior to such action shall be adjusted so that the Holder of
any Securities thereafter surrendered for conversion shall be entitled to
receive the number of shares of capital stock of the Company which he would have
owned immediately following such action had such Securities been converted
immediately prior thereto. An adjustment made pursuant to this Section 1303(a)
shall become effective immediately after the record date in the case of a
dividend or other distribution and shall become effective immediately
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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 Section 1303(a), the Holder of any Security 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 between or among shares of such classes or series of
capital stock.
(b) In case the Company shall, while any of the Securities
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 in this Section 1303(b)) 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 1303(f) below) on such record date, the
conversion price for the Securities 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. 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
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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.
(c) Subject to the last sentence of this Section 1303(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 (including securities, but excluding any rights
or warrants referred to in Section 1303(b), any dividend or distribution paid
exclusively in cash and any dividend or distribution referred to in Section
1303(a)), 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 Section
1303(c) by a fraction of which the numerator shall be the current market price
per share (determined as provided in Section 1303(f)) 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 applicable
to one share of Common Stock and the denominator shall be such current market
price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the Reference
Date. In the event that such dividend or distribution is not so paid or made,
the 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 Section 1303(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
Section 1303(f)). For purposes of this Section 1303(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
(1) 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
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warrants (making any conversion price reduction required by this Section
1303(c)) immediately followed by (2) a dividend or distribution of such shares
of Common Stock or such rights or warrants (making any further conversion price
reduction required by Section 1303(a) or 1303(b)), except (A) the Reference Date
of such dividend or distribution as defined in this 1303(c) shall be substituted
as (a) "the record date in the case of a dividend or other distribution," and
(b) "the record date for the determination of stockholders entitled to receive
such rights or warrants" and (c) "the date fixed for such determination" within
the meaning of Sections 1303(a) and 1303(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 Section 1303(a).
(d) In case the Company shall pay or make a dividend or
other distribution on its Common Stock exclusively in cash (excluding all
regular cash dividends, if the annualized amount thereof per share of Common
Stock does not exceed 15% of the current market price per share determined as
provided in Section 1303(f) of the Common Stock on the Trading Day immediately
preceding the date of declaration of such dividend), 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 Section 1303(d) by a fraction of
which the numerator shall be the current market price per share (determined as
provided in Section 1303(f)) 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 applicable to one share of Common Stock and the denominator
shall be such current market price per share of the Common Stock, such reduction
to become effective immediately prior to the opening of business on the day
following the date fixed for the payment of such distribution; provided,
however, that in the event the portion of the cash so distributed applicable to
one share of Common Stock is equal to or greater than the current market price
per share (as defined in Section 1303(f)) of the Common Stock on the record date
mentioned above, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder of Securities shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each share of the Securities immediately prior to the record date for
the distribu-
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tion of the cash. In the event that such dividend or distribution is not 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.
(e) In case a tender or exchange offer (other than an
odd-lot offer) made by the Company or any Subsidiary of the Company for all or
any portion of the Company's Common Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such Subsidiary of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
conclusive and described in a resolution of the Board of Directors) at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds 110% of
the current market price per share (determined as provided in Section 1303(f))
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 Section
1303(e) by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the current market price per share (determined as
provided in Section 1303(f)) of the Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) at the Expiration Time and the current market price per
share (determined as provided in Section 1303(f)) of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time.
(f) For the purpose of any computation under Section
1303(b), 1303(c), 1303(d) or 1303(e), the current
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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 five consecutive Trading
Days selected by the Company commencing not more than 20 Trading Days before,
and ending not later than, the earlier of the day in question or, if applicable,
the day before the "ex" date with respect to the issuance or distribution
requiring such computation; provided, however, that if another event occurs that
would require an adjustment pursuant to Section 1303(a) through (e), inclusive,
the Board of Directors may make such adjustments to the Closing Prices during
such five Trading Day period as it deems appropriate to effectuate the intent of
the adjustments in this Section 1303, 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, (i) when used
with respect to any issuance or distribution, means the first date on which the
Common Stock trades regular way on the NYSE 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 (ii) 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.
(g) The Company may make such reductions in the conversion
price, in addition to those required by Sections 1303 (a) through (e), as it
considers to be advisable to avoid or diminish any income tax to holders of
Common Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. 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
20 days, the reduction is irrevocable during the period, and the Board of
Directors of the Company 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 Securities 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.
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(h) 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 then in effect; provided, however, that any
adjustments which by reason of this Section 1303(h) are not required to be made
shall be carried forward and taken into account in determining whether any
subsequent adjustment shall be required.
(i) No adjustment in the conversion price shall be made
upon the issuance of Rights pursuant to the Rights Agreement or upon the
issuance of similar rights issued under any analogous successor shareholder
rights plan.
(j) 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 Securities.
Section 1304. Reclassification, Consolidation, Merger or Sale of
Assets.
In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Stock), (b) any consolidation of the Company with, or
merger of the Company into, any other Person, 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), (c) any sale, transfer or lease of all or substantially all of the
properties and assets of the Company on a consolidated basis or (d) any
compulsory share exchange) pursuant to which the Common Stock is converted into
the right to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby the
Holder of each Security then outstanding shall have the right thereafter to
convert such Security only into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock of the
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Company into which such Security could have been converted immediately prior to
such transaction.
The Company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document, and shall enter into a
supplemental indenture to establish such right. Such certificate or articles of
incorporation or other constituent document and such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XIII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
Section 1305. Notice of Adjustments of Conversion Price.
Whenever the conversion price is adjusted as herein provided:
(a) 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, the Conversion Agent
and the transfer agent for the Preferred Securities and the Securities; and
(b) 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 Preferred Securities and the
Securities at their last addresses as they appear upon the stock transfer books
of the Company and the Trust.
Section 1306. Prior Notice of Certain Events.
In case:
(a) the Company shall (i) declare any dividend (or any
other distribution) on its Common Stock, other
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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 1303(c) or
1303(d), or (ii) authorize a tender or exchange offer that would require an
adjustment pursuant to Section 1303(e);
(b) 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;
(c) 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 properties and assets of the Company
on a consolidated basis or of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then the Company shall (1) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the stock transfer books the Trust or (2)
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 (x) the date on which
a record (if any) is to be taken for the purpose of such dividend, distribution,
rights or warrants or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification,
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consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up (but no failure to mail such notice or any defect therein or in
the mailing thereof shall affect the validity of the corporate action required
to be specified in such notice).
Section 1307. Certain Defined Terms.
The following definitions shall apply to terms used in this
Article XIII:
(a) "Closing Price" of any security on any day shall mean
the last reported sale price, regular way on such day or, if no sale takes place
on such day, the average of the reported closing bid and asked prices on such
day, regular way, in either case as reported on the NYSE Composite Tape, or, if
such security is not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which such security is listed or admitted to
trading, or, if such security is not listed or admitted to trading on a national
securities exchange, on the National Market System of the National Association
of Securities Dealers, Inc., or, if such security is not quoted or admitted to
trading on such quotation system, on the principal quotation system on which
such security is listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or quotation
system, the average of the closing bid and asked prices of such security in the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or, if not so available in such manner, as furnished by any NYSE member
firm selected from time to time by the Board of Directors for that purpose or,
if not so available in such manner, as otherwise determined in good faith by the
Board of Directors.
(b) "Trading Day" shall mean a day on which securities are
traded on the national securities exchange or quotation system used to determine
the Closing Price.
Section 1308. Dividend or Interest Reinvestment Plans.
Notwithstanding the foregoing provisions, the issuance of any
shares of Common Stock pursuant to any present or future plan providing for the
reinvestment of
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dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan, and
the issuance of any shares of Common Stock or options or rights to purchase such
shares pursuant to any present or future employee benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable, exchangeable
or convertible security outstanding as of the date hereof, shall not be deemed
to constitute an issuance of Common Stock or exercisable, exchangeable or
convertible securities by the Company to which any of the adjustment provisions
described above applies. There shall also be no adjustment of the conversion
price in case of the issuance of any stock (or securities convertible into or
exchangeable for stock) of the Company except as specifically described in this
Article XIII.
Section 1309. Certain Additional Rights.
In case the Company shall, by dividend or otherwise, declare or
make a distribution on its Common Stock referred to in Section 1303(c) or
1303(d) (including, without limitation, dividends or distributions referred to
in the last sentence of Section 1303(c)), the Holders of the Securities, upon
the conversion thereof subsequent to 5:00 p.m. (New York City time) 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 Securities 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 Securities described in the
immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Stock which the Holder of Securities so
converted is enti-
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tled 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
(i) meets any applicable requirements of the principal national securities
exchange or other market on which the Common Stock is then traded and (ii)
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 1310. Trustee Not Responsible for Determining Conversion
Price or Adjustments.
Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Security to determine
whether any facts exist which may require any adjustment of the conversion
price, or with respect to the nature or extent of any such adjustment when made,
or with respect to the method employed, or herein or in any supplemental
indenture provided to be employed, in making the same. Neither the Trustee nor
any Conversion Agent shall be accountable with respect to the validity or value
(or the kind of account) of any shares of Common Stock or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Security; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion, or, except as expressly herein provided, to
comply with any of the covenants of the Company contained in Article X or this
Article XIII.
Section 1311. Expiration of Conversion Rights.
(a) Right of Company to Terminate Conversion Privilege. On
and after December 31, 1999, the Company may, at its option, cause the
conversion rights of Holders of Securities to terminate if (i) the Company is
then current
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in the payment of interest on the Securities (including Additional Payments, if
any) (except to the extent that the payment of interest may have been deferred
as a result of an Extension Period) and (ii) for at least 20 Trading Days within
any period of 30 consecutive Trading Days ending on or after December 31, 1999,
including the last Trading Day of such period, the Closing Price of the Common
Stock shall have exceeded 120% of the conversion price of the Securities in
effect at the close of business on such Trading Day.
(b) Exercise of Option Prior to a Dissolution Event
Distribution. To exercise its conversion termination option prior the
distribution of Securities from the Trust to the holders of Preferred Securities
upon the occurrence of a Dissolution Event (a "Dissolution Event Distribution"),
the Company must cause the Trust to issue a press release for publication on the
Dow Jones News Service or on a comparable news service prior to the opening of
business on the second Trading Day after any period in which the conditions in
Section 1311(a) have been met (provided that in no event may any such press
release be issued prior to December 31, 1999), which press release must contain
the information specified in paragraph 5(h) of Annex I of the Declaration;
provided that, if the Trust fails to issue the press release as directed, the
Company may, on behalf of the Trust, issue the press release in accordance with
the provisions of the Declaration. The Company shall also furnish a copy of the
press release to the Trustee (and the Conversion Agent if the Trustee is not
then serving as the Conversion Agent). In addition, the Company shall cause a
Notice of Conversion Termination (as defined below) to be given by first-class
mail to the Holders of Securities, the Trustee (and the Conversion Agent if the
Trustee is not then serving as the Conversion Agent) not more than four Business
Days after the foregoing press release is issued, which Notice of Conversion
Termination shall contain the information set forth in Section 1311(c). Upon
compliance with the foregoing procedures, and provided that the Trust shall have
complied with the corresponding procedures in the Declaration, the conversion
rights of the Holders of the Securities shall terminate simultaneously with the
termination of the conversion rights of the holders of the Preferred Securities
pursuant to the Declaration. Prior to a Dissolution Event Distribution, the
conversion rights of Holders may in no event terminate unless and until the
conversion rights of holders of Preferred Securities shall have terminated in
accordance with the Declaration.
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(c) Exercise of Option After a Dissolution Event
Distribution. To exercise its conversion termination option after a Dissolution
Event Distribution, the Company shall issue a press release for publication on
the Dow Jones News Service or on a comparable news service announcing the
Conversion Termination Date of the Securities. Such press release must be issued
prior to the opening of business on the second Trading Day after a period in
which the conditions in Section 1311(a) have been met, but in no event prior to
December 31, 1999. Such press release shall state that the Company has elected
to exercise its right to terminate the conversion privilege, specify the
Conversion Termination Date of the Securities (as determined in the manner set
forth below) and provide the conversion price and the Closing Price of Common
Stock, in each case as of the close of business on the Trading Day next
preceding the date of the press release. Additionally, the Company shall cause a
notice of the termination of conversion rights (a "Notice of Conversion
Termination") to be given by first-class mail to the Holders of Securities, the
Trustee (and the Conversion Agent if the Trustee is not then serving as the
Conversion Agent) not more than four Business Days after the Company issues the
press release. The Notice of Conversion Termination shall state, as appropriate:
(i) the Conversion Termination Date of the Securities; (ii) the conversion price
of the Securities and the Closing Price of the Common Stock, in each case as of
the close of business on the Trading Day next preceding the date of the Notice
of Conversion Termination; (iii) that Securities will be convertible until 5:00
p.m. (New York City time) on the Conversion Termination Date of the Securities
and the place or places at which a conversion notice with respect to Securities
may be given to the Conversion Agent and where Securities (if not in global
book-entry form) may be surrendered for conversion into shares of Common Stock;
and (iv) such other information or instructions as the Company deems necessary
or advisable to enable a Holder to exercise its conversion right hereunder.
Notice of Conversion Termination shall be deemed to have been given on the day
such notice is first mailed by first-class mail, postage prepaid, to each Holder
of Securities at the address of the Holder appearing in the Security Register
(whether or not the Holder receives the Notice of Conversion Termination). No
defect in the Notice of Conversion Termination or in the mailing thereof with
respect to any Securities shall affect the validity of the Company's exercise of
its conversion termination option with respect to any other Security. As of 5:00
p.m. (New York city time) on the Con-
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<PAGE> 104
version Termination Date of the Securities, the Securities will be deemed to be
non-convertible securities.
(d) Certain Definitions. The term "Conversion Termination
Date" has the meaning assigned to such term in paragraph 5(h) of Annex I of the
Declaration. The "Conversion Termination Date of the Securities" shall be (i) in
the event that conversion rights are terminated pursuant to Section 1311(b), the
Conversion Termination Date or (ii) in the event that conversion rights are
terminated pursuant to Section 1311(c), the close of business on the Business
Day selected by the Company which is not less than 30 nor more than 60 calendar
days after the date on which the Company issues the press release pursuant to
Section 1311(c). If the Company does not exercise its conversion termination
rights under this Indenture, then the Securities shall be convertible at any
time prior to 5:00 p.m. (New York City time) on the Business Day immediately
preceding the earlier of (i) the Stated Maturity of the Securities and (ii) the
date, if any, on which the Securities are redeemed pursuant to this Indenture.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 1401. No Recourse.
No recourse under or upon any obligation, covenant or agreement
of this Indenture, or of any Security, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such 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; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
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reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Securities.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE> 106
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
THE FINOVA GROUP INC.
By: /s/BRUNO A. MARSZOWSKI
-------------------------------
Name: Bruno A. Marszowski
Title: Senior Vice President-
Controller and Chief
Financial Officer
FLEET NATIONAL BANK,
as Trustee
By: /s/FRANK MCDONALD
-------------------------------
Name: Frank McDonald
Title: Vice President
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<PAGE> 107
EXHIBIT A
FORM OF SECURITY
[FACE OF SECURITY]
[Include if Security is in global form: THIS SECURITY IS A GLOBAL
CERTIFICATE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS
SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY
REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY (OR A
SUCCESSOR THERETO) OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[Include if Security is in global form and The Depository Trust Company
is the Depositary: UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
SIGNATORY OF THE DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
<PAGE> 108
Certificate No.: $___________
THE FINOVA GROUP INC.
5 1/2% Convertible Subordinated Debenture due 2016
THE FINOVA GROUP INC., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ___________, or registered assigns,
the principal sum of __________________ Dollars ($___________) on December 31,
2016 and to pay interest thereon (including Additional Payments, if any) from
December 11, 1996 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, as the case may be, payable
quarterly (subject to deferral as set forth in the Indenture), in arrears, on
March 31, June 30, September 30 and December 31 (each an "Interest Payment
Date") of each year, commencing March 31, 1997 until the principal thereof is
paid or made available for payment; provided that, if any such Interest Payment
Date is not a Business Day, the interest payable on such date will be paid as
provided on the reverse hereof. The interest which is so payable, and punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at 5:00 p.m. (New York City time) on the regular record date for such
interest installment, which shall be the Business Day next preceding such
Interest Payment Date (each, a "Regular Record Date").
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
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<PAGE> 109
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
THE FINOVA GROUP INC.
By:________________________
Name:
Title:
Attest:
__________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated:
FLEET NATIONAL BANK,
as Trustee
By:________________________
Authorized Signatory
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<PAGE> 110
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of
the Company designated as its 5 1/2% Convertible Subordinated Debenture Due 2016
(herein called the "Securities"), in aggregate principal amount of $103,092,800
(or up to $118,556,750 if the over-allotment option is exercised by the Trust in
accordance with the terms and provisions of the Purchase Agreement), issued and
to be issued under an Indenture, dated as of December 11, 1996 (as the same may
be amended or supplemented from time to time, the "Indenture"), between the
Company and Fleet National Bank, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Trustee, the Company and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) ("TIA") as in effect on the date of the Indenture.
The Securities are subject to, and qualified by, all such terms, certain of
which are summarized hereon, and holders are referred to the Indenture and the
TIA for a statement of such terms. No reference herein to the Indenture and no
provision of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest (which term, as used herein, includes all Additional
Interest and, to the extent permitted by applicable law, Compounded Interest, if
any) on this Security at the times, place and rate, and in the coin or currency,
herein and in the Indenture prescribed or to convert this Security as provided
in the Indenture. All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture. The Company
will furnish to any Holder upon written request and without charge a copy of the
Indenture.
(a) Interest. Interest on this Security will accrue at the
rate and will be payable as provided on the face of this Security and in the
Indenture. To the extent permitted by applicable law, interest will
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<PAGE> 111
compound quarterly and will accrue at the rate of 5 1/2% per annum on any
interest installment in arrears for more than one quarter or during an Extension
Period as described below.
The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day month. In the event
that any Interest Payment Date is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which is a Business
Day (and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such Interest Payment Date.
If at any time while the Property Trustee is the Holder of any
Securities, the Trust or the Property 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 shall pay as additional interest
("Additional Interest") on the Securities held by the Property Trustee, such
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying any such taxes, duties,
assessments and governmental charges will be not less than the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or governmental charges been imposed.
The principal of and interest on the Securities shall be payable,
and the Securities may be surrendered for conversion, at the office or agency of
the Company in the United States maintained for such purpose and at any other
office or agency maintained by the Company for such purpose in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may
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<PAGE> 112
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer to an account
appropriately designated by the Holder entitled thereto.
(b) Option to Extend Interest Payment Period. On the terms
and subject to the conditions set forth in the Indenture, the Company shall have
the right at any time during the term of the Securities to defer interest
payments (including Additional Payments) from time to time by extending the
interest payment period for successive periods (each, an "Extension Period") not
exceeding 20 consecutive quarters for each such Extension Period; provided, no
Extension Period may extend beyond the Stated Maturity of the Securities. Each
Extension Period, if any, will end on an Interest Payment Date. At the end of
each Extension Period, the Company shall pay all interest then accrued and
unpaid (including Additional Interest, if any) together with interest thereon
compounded quarterly at the rate of interest borne by the Securities to the
extent permitted by applicable law ("Compounded Interest"); provided, that
during any Extension Period, the Company shall be required to comply with
certain covenants set forth in the Indenture. Prior to the termination of any
such Extension Period, the Company may further extend such Extension Period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may select
a new Extension Period, subject to the above requirements. No interest during an
Extension Period shall be due and payable. If the payment of interest on the
Securities is deferred as aforesaid, except under the limited circumstances
described in the Indenture, such deferred interest (including Additional
Payments, if any) shall be paid to the Holders registered as such in the
Security Register at 5:00 p.m. (New York City time) on the Regular Record Date
immediately preceding the Interest Payment Date upon which such Extension Period
ends.
(c) Paying Agent and Security Registrar. The Trustee will
act as initial Paying Agent, Security Registrar and Conversion Agent. The
Company may change any Paying Agent, Security Registrar, co-registrar or
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<PAGE> 113
Conversion Agent without prior notice. The Company or any of its Affiliates may
act in any such capacity.
(d) Redemption. The Securities are redeemable at the
option of the Company, in whole but not in part, at the times and subject to the
terms and conditions set forth in the Indenture, at a redemption price of 100%
of the principal amount thereof, together with accrued unpaid interest thereon
(including Additional Payments, if any, to the extent permitted by applicable
law) to the date of redemption; provided, however, that installments of interest
whose Stated Maturity is on or prior to the date fixed for redemption shall be
payable (together with Additional Payments, if any, to the extent permitted by
applicable law) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at 5:00 p.m. (New York City time) on the relevant
regular Record Dates according to the terms and provisions of the Securities and
the Indenture.
(e) Sinking Fund. The Securities are not entitled to the
benefit of any sinking fund.
(f) Subordination. The Securities are unsecured general
obligations of the Company. The payment of the principal of and interest
(including Additional Payments, if any) on all Securities is subordinated and
junior in right of payment to the prior payment in full of all existing and
future Senior Indebtedness, whether outstanding at the date of the Indenture or
thereafter incurred. Each holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
(g) Conversion. On the terms and subject to the conditions
set forth in the Indenture, the Holder of any Security has the right,
exercisable at any time on or before 5:00 p.m. (New York City time) on the
earlier of (i) the Business Day immediately preceding the date of repayment of
such Security, whether at maturity or upon redemption, and (ii) the Conversion
Termination Date of the Securities, if any, to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $50) into fully
paid and nonassessable shares
A- 7
<PAGE> 114
of Common Stock of the Company at a conversion rate of .6387 shares of Common
Stock for each $50 in aggregate principal amount of Securities (equivalent to a
conversion price of $78.28 per share of Common Stock), subject to adjustment
under certain circumstances. The number of shares issuable upon conversion of a
Security is determined by dividing the principal amount of the Security
converted by the conversion price in effect on the date of conversion. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Common Stock. The conversion privilege and the
conversion price are subject to adjustment as provided in the Indenture, to
which reference is hereby made. Under certain circumstances specified in the
Indenture, Holders converting Securities may be entitled to accrued and unpaid
interest (including Additional Payments, if any, to the extent permitted by
applicable law) on such Securities.
(h) The conversion rights of the Holders of Securities are
subject to termination at the option of the Company on and after December 31,
1999, subject to and upon the satisfaction of certain conditions set forth in
the Indenture.
(i) Registration, Transfer, Exchange and Denominations. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $50 and integral multiples thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover
A- 8
<PAGE> 115
any tax or other governmental charge payable in connection therewith. Prior to
due presentment of this Security for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof for all purposes,
whether or not this Security be overdue, and neither the Company, the Trustee
nor any such agent shall be affected by notice to the contrary. In the event of
conversion of this Security in part only, a new Security or Securities for the
unconverted portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
(j) Persons Deemed Owners. Except as provided in the
Indenture, the registered Holder of a Security may be treated as its owner for
all purposes.
(k) Unclaimed Money. If money for the payment of principal
or interest remains unclaimed for two years after it has become due, the Trustee
and the Paying Agent shall pay the money back to the Company at its written
request. After that, holders of Securities entitled to the money must look to
the Company for payment unless an abandoned property law designates another
Person and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
(l) Defaults and Remedies. The Securities shall have the
Events of Default as set forth in Section 501 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in aggregate principal amount of the then Outstanding Securities by notice to
the Company and the Trustee may declare all the Securities to be due and payable
immediately.
The Holders of a majority in principal amount of the Securities
then Outstanding by written notice to the Company and the Trustee may rescind an
acceleration and its consequences upon the terms and subject to the conditions
set forth in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then Outstanding Securities may direct the
Trustee in its exercise of any trust or power. The Company must furnish annually
compliance certificates to the Trustee.
A- 9
<PAGE> 116
(m) Amendments, Supplements and Waivers. The Indenture
permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of
the Holders of the Securities under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
(n) Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate of the
Company with the same rights it would have, if it were not Trustee, subject to
certain limitations provided for in the Indenture and in the TIA. Any Agent may
do the same with like rights.
(o) No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(p) Governing Law. THE INTERNAL LAWS OF THE STATE OF NEW
YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
A- 10
<PAGE> 117
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- --------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Date:
----------------------------
- -----------------------------------------
(Sign exactly as your name appears on the
other side of this Security)
Signature Guarantee:*---------------------
- -----------------
* (Signature must be guaranteed by an "eligible guarantor institu-
tion", that is a bank, stockbroker, savings and loan association
or credit union meeting the requirements of the Security Regis-
trar, 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
Security Registrar in addition to, or in substitution for, STAMP,
(continued...)
A- 11
<PAGE> 118
NOTICE OF CONVERSION
To: The FINOVA Group Inc.
The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion below designated,
into Common Stock (the "Common Stock") of The FINOVA Group Inc. (the "Company")
in accordance with the terms of the Indenture referred to in the Security,
between the Company and Fleet National Bank, as Trustee, 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:
-------------------------------------
Principal Amount of Securities to be converted ($50 or integral multiples
thereof):
---------------------------------
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of Common Stock are to be issued,
along with the address or addresses of such person or persons.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- ------------------------------------------
(Sign exactly as your name appears on the
other side of the Security) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
- ------------------------------------------
- -----------------
(...continued)
all in accordance with the Securities Exchange Act of 1934, as
amended.)
A- 12
<PAGE> 119
Signature Guarantee:* _______________________
- --------
* (Signature must be guaranteed by an "eligible guarantor institu-
tion", that is a bank, stockbroker, savings and loan association
or credit union meeting the requirements of the Security Regis-
trar, 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
Security Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as
amended.)
A- 13
<PAGE> 1
EXHIBIT 4.2
=====================================
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
FINOVA FINANCE TRUST
Dated as of December 11, 1996
=====================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions....................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................. 10
SECTION 2.2 Lists of Holders of Securities.................... 10
SECTION 2.3 Reports by the Property Trustee................... 11
SECTION 2.4 Periodic Reports to Property Trustee.............. 11
SECTION 2.5 Evidence of Compliance with Conditions
Precedent........................................ 12
SECTION 2.6 Events of Default; Waiver......................... 12
SECTION 2.7 Event of Default; Notice.......................... 14
ARTICLE III
ORGANIZATION OF TRUST
SECTION 3.1 Name.............................................. 15
SECTION 3.2 Office............................................ 15
SECTION 3.3 Purpose........................................... 15
SECTION 3.4 Prohibition of Actions by the Trust
and the Trustees................................. 16
SECTION 3.5 General Authority of the Trustees................. 17
SECTION 3.6 Title to Property of the Trust.................... 17
SECTION 3.7 Not Responsible for Recitals or Issuance
of Securities.................................... 17
SECTION 3.8 Duration of Trust................................. 17
SECTION 3.9 Mergers........................................... 17
SECTION 3.10 Dissolution and Termination of Trust.............. 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; Eligibility..................... 23
SECTION 5.3 Property Trustee; Eligibility..................... 23
<PAGE> 3
Page
SECTION 5.4 Qualifications of Regular Trustees and
Delaware Trustee Generally........................... 24
SECTION 5.5 Initial Trustees...................................... 24
SECTION 5.6 Appointment, Removal and Resignation
of Trustees.......................................... 25
SECTION 5.7 Vacancies among Trustees.............................. 27
SECTION 5.8 Merger, Conversion, Consolidation
or Succession to Business of a Trustee................ 27
SECTION 5.9 Authority, Powers and Duties of the
Regular Trustees..................................... 28
SECTION 5.10 Delegation of Powers and Duties of
the Regular Trustees................................. 32
SECTION 5.11 Powers and Duties of the Property
Trustee.............................................. 33
SECTION 5.12 Certain Duties and Responsibilities
of the Property Trustee.............................. 34
SECTION 5.13 Certain Rights of Property Trustee.................... 36
SECTION 5.14 Delaware Trustee...................................... 39
SECTION 5.15 Meetings.............................................. 40
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions......................................... 40
ARTICLE VII
THE SECURITIES
SECTION 7.1 Title and Terms....................................... 41
SECTION 7.2 General Provisions Regarding the
Securities........................................... 41
SECTION 7.3 General Form of Certificates.......................... 42
SECTION 7.4 Form of Preferred Securities
Certificates; Global Certificates.................... 42
SECTION 7.5 Execution and Dating of Certificates.................. 44
SECTION 7.6 Authentication of Preferred Security
Certificates......................................... 44
SECTION 7.7 Definitive Preferred Security
Certificates......................................... 45
SECTION 7.8 Temporary Certificates................................ 45
SECTION 7.9 Registrar, Paying Agent and Conversion
Agent................................................ 45
SECTION 7.10 Paying Agent to Hold Money in Trust................... 46
SECTION 7.11 Outstanding Preferred Securities...................... 47
SECTION 7.12 Preferred Securities in Treasury...................... 47
SECTION 7.13 Notices to Clearing Agency............................ 47
SECTION 7.14 Appointment of Successor Clearing
Agency............................................... 48
SECTION 7.15 Deemed Security Holders............................... 48
ii
<PAGE> 4
Page
ARTICLE VIII
TRANSFERS, EXCHANGES AND
CANCELLATIONS OF SECURITIES
SECTION 8.1 General............................................. 48
SECTION 8.2 Transfer Procedures and Restrictions
for Global Certificates............................ 49
SECTION 8.3 Mutilated, Destroyed, Lost or Stolen
Certificates; Replacement Securities............... 51
SECTION 8.4 Cancellation of Preferred Security
Certificates....................................... 51
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES AND OTHERS
SECTION 9.1 Liability........................................... 52
SECTION 9.2 Exculpation......................................... 52
SECTION 9.3 Fiduciary Duty...................................... 53
SECTION 9.4 Indemnification..................................... 54
SECTION 9.5 Outside Businesses.................................. 58
ARTICLE X
ACCOUNTING
SECTION 10.1 Fiscal Year......................................... 59
SECTION 10.2 Certain Accounting Matters.......................... 59
SECTION 10.3 Banking............................................. 60
SECTION 10.4 Withholding......................................... 60
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.......................................... 61
SECTION 11.2 Meetings of the Holders of Securities;
Action by Written Consent.......................... 63
ARTICLE XII
REPRESENTATIONS OF PROPERTY
TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of
Property Trustee................................... 65
SECTION 12.2 Representations and Warranties of
Delaware Trustee................................... 66
iii
<PAGE> 5
Page
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.............................. 67
SECTION 13.2 Governing Law........................ 69
SECTION 13.3 Intention of the Parties............. 69
SECTION 13.4 Headings............................. 69
SECTION 13.5 Successors and Assigns............... 69
SECTION 13.6 Partial Enforceability............... 69
SECTION 13.7 Counterparts......................... 70
ANNEX AND EXHIBITS
ANNEX I Terms of Securities
Exhibit A-1 Form of Preferred Security
Exhibit A-2 Form of Common Security
Exhibit B Specimen of Debenture
iv
<PAGE> 6
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)...................................... 5.12(b)-(e)
315(c)...................................... 5.12(a)
315(d)...................................... 5.12(a)
316(a)...................................... Annex I
316(c)...................................... 5.9(d)(v)
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
FINOVA FINANCE TRUST
DECEMBER 11, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of December 11, 1996, by the Trustees (as defined
herein), The FINOVA Group Inc., a Delaware corporation, as trust sponsor (the
"Sponsor"), and by the holders, from time to time, of undivided beneficial
interests in the Trust issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established FINOVA
Finance Trust (the "Trust"), a trust under the Business Trust Act (as defined
herein) pursuant to a Declaration of Trust dated as of November 1, 1996 (the
"Original Declaration"), and a Certificate of Trust filed with the Secretary of
State of the State of Delaware on November 1, 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 (as defined herein) of the Debenture Issuer (as defined
herein);
WHEREAS, as of the date hereof, no interests in the Trust have
been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 8
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 and Annexes and
Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice
versa; and
(g) a reference to the masculine includes the feminine and
vice versa.
"Additional Interest" means if the Trust 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, such amounts as shall be required so that the net amounts received
and retained by the Trust after paying such taxes, duties, assessments and
governmental charges will not be less than the amounts the Trust would have
received had no such taxes, duties, assessments or governmental charges been
imposed.
2
<PAGE> 9
"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 Registrar, Paying Agent, Conversion Agent or
co-registrar.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"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 8.2.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in The City of New York or in
Wilmington, Delaware are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"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 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 Preferred
Securities.
"Closing Date" means the "Closing Time" and each "Date of
Delivery" under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section 7.1.
3
<PAGE> 10
"Common Securities Guarantee" means the guarantee agreement
dated as of December 11, 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.
"Company" means The FINOVA Group Inc., a Delaware corporation,
until a successor Person shall have become such pursuant to the applicable
provisions of the Indenture and thereafter "Company" shall mean such successor
Person.
"Company Indemnified Person" means (i) any Regular Trustee;
(ii) any Affiliate of any Regular Trustee; (iii) any officer, director,
shareholder, member, partner, employee, representative or agent of any Regular
Trustee; or (iv) any officer, employee or agent of the Trust or its Affiliates.
"Compounded Interest" means interest compounded quarterly at
the rate specified for the Debentures to the extent permitted by applicable law
upon interest accrued and unpaid (including Additional Interest, if any) during
each Extension Period.
"Conversion Agent" has the meaning set forth in Section 7.9.
"Covered Person" means (a) any officer, director, stockholder,
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 the Company, in its capacity as
issuer of the Debentures.
"Debenture Trustee" means Fleet National Bank, a national
banking association, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the 5 1/2% Convertible Subordinated
Debentures due 2016, to be issued by the Debenture Issuer under the Indenture
and to be held by the Property Trustee, a specimen certificate for such
Debentures being Exhibit B hereto.
4
<PAGE> 11
"Definitive Preferred Security Certificates" has the meaning
set forth in Section 7.7.
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Depositary" means The Depository Trust Company, the initial
Clearing Agency, until a successor shall be appointed pursuant to Section 7.14,
and thereafter means such successor Depositary.
"Distribution" has the meaning set forth in Section 6.1.
"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, and the rules and regulations promulgated thereunder,
or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 9.4(b).
"FINOVA Common Stock" has the meaning set forth in the
Indenture.
"Global Certificate" has the meaning set forth in Section
7.4(a).
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of December 11, 1996,
between the Debenture Issuer and the Debenture Trustee, as it may be
supplemented or amended from time to time.
"Investment Company" means an investment company as defined in
the Investment Company Act.
5
<PAGE> 12
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, and the rules and regulations promulgated
thereunder, or any successor legislation.
"Legal Action" has the meaning set forth in Section
5.9(d)(vii).
"Majority in liquidation amount of the Securities" means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holders of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, 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 hereto.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(i) a statement that each officer signing the
Certificate has read the covenant or condition
and the definitions relating thereto;
(ii) a brief statement of the nature and scope
of the examination or investigation undertaken by
each officer in rendering the Certificate;
(iii) a statement that each such officer has made such
examination or investigation as, in such
officer's opinion, is necessary to enable such
officer to express an informed opinion as to
whether or not such covenant or condition has
been complied with; and
6
<PAGE> 13
(iv) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been
complied with.
"Paying Agent" has the meaning specified in Section 7.9.
"Person" means any legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section
7.1.
"Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Preferred Securities Guarantee" means the Guarantee Agreement
dated as of December 11, 1996 of the Sponsor in respect of the Preferred
Securities.
"Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"Property Trustee Account" has the meaning set forth in
Section 5.11(c).
"Purchase Agreement" means the Purchase Agreement dated as of
December 5, 1996, among the Sponsor, the Trust and the underwriters named
therein, relating to the offering and sale of the Preferred Securities.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
7
<PAGE> 14
"Registrar" has the meaning set forth in Section 7.9.
"Registration Statement" means the Registration Statement on
Form S-3 (Reg. No. 333-15445 and -01), including any amendments thereto,
relating to, among other securities, the Preferred Securities.
"Regular Trustee" has the meaning set forth in Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any vice-president, any assistant vice-president, the treasurer, any
assistant treasurer, any trust officer or assistant trust officer or any other
officer in the Corporate Trust Department of the Property Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, and the rules and regulations promulgated thereunder, or any
successor legislation.
"Securities Guarantee" means the Common Securities Guarantee
and the Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means the Company, in its capacity as sponsor of the
Trust, and its successors in such capacity.
8
<PAGE> 15
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"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 Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Preferred Securities or Holders of
outstanding Common Securities, voting separately as a class, who are the record
owners of 10% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"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, and the rules and regulations promulgated
thereunder, or any successor legislation.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration, which are
incorporated by reference in and made part of this Declaration, and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee that is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall furnish or cause to be furnished to the Property Trustee (i)
within 14 days after each record date for payment of Distributions, a list, in
such form as the Property Trustee may reasonably require, of the names and
addresses of the Holders ("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 Property
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 Property Trustee. The Property Trustee shall preserve,
in as current a form as is reasonably practicable, all information contained in
any List of Holders given to it or which it receives in the capacity as Paying
Agent (if acting in such capacity),
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provided that the Property Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
(a) Within 60 days after May 15 of each year, commencing May
15, 1997, the Property Trustee shall transmit by mail to Holders such reports
concerning the Property Trustee and its actions under this Declaration as may be
required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Property Trustee with each stock
exchange upon which the Securities are listed, with the Commission and with the
Company. The Trust will notify the Property Trustee when the Securities are
listed on any stock exchange.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall file or cause to be filed with the Property Trustee and the
Commission, and transmit or cause to be transmitted to Holders, such
information, documents and other reports, and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act; provided, that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Property Trustee within 15 days
after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the
Property Trustee is for informational purposes only and the Property Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Trust's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
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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 Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a majority in liquidation amount of
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waiveable under the Indenture, the Event of
Default under the Declaration shall also not be waiveable; 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 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 Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
any such waiver, any such default shall cease to exist, and any Event of Default
with respect to the Preferred Securities arising therefrom shall be deemed to
have been cured, for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Preferred Securities or impair any right consequent thereon. Any waiver by
the Holders of
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the Preferred Securities of an Event of Default with respect to the Preferred
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waiveable 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 waiveable; 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 their consequences until all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default with respect to the Preferred
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee will be deemed to be acting solely on behalf of the Holders of the
Preferred Securities and only the Holders of the Preferred Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture
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Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
are hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of
this Section 2.6(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
Property Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property 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; 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 Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers in good faith determines that the withholding of such notice is in the
interests of the Holders of the Securities. Such notice shall state that an
event of default under the Indenture constitutes an Event of Default.
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(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 501(a) and 501(b) of the
Indenture; or
(ii) any default as to which a Responsible Officer
shall have received written notice or of which a Responsible Officer
charged with the administration of the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION OF TRUST
SECTION 3.1 Name.
The Trust is named "FINOVA Finance Trust," as such name may be
modified from time to time by the Regular Trustees following 10 Business Days
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o The
FINOVA Group Inc., 1850 North Central Avenue, P.O. Box 2209, Phoenix, Arizona
85002-2209, Attention: Treasurer. On 10 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.
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SECTION 3.4 Prohibition of Actions by the Trust and the Trustees.
The Trust shall not, and the Trustees (including the Property
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 Property Trustee) shall not cause the Trust to:
(a) invest any proceeds received by the Trust from holding the
Debentures, but the Property Trustee shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of the
Securities;
(b) acquire any assets other than as expressly provided
herein;
(c) possess Trust property for other than a Trust purpose;
(d) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(e) 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;
(f) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities; or
(g) 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 waiveable 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 a nationally
recognized independent counsel experienced in such matters to the effect that
such amendment or modification will not cause more than an insubstantial risk
that (i) the Trust will be deemed an Investment Company required to be
registered under the Investment Company Act or (ii) for
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United States federal income tax purposes the Trust will not be classified as a
grantor trust.
SECTION 3.5 General Authority of the Trustees.
In dealing with the Trustees acting on behalf of the Trust, no
person shall be required to inquire into the authority of the Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Trustees as set forth in this Declaration.
SECTION 3.6 Title to Property of the Trust.
Except as provided in Section 5.11 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.7 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 3.8 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Section 3.10 hereof, shall exist until November 1, 2021.
SECTION 3.9 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
as an entirety or substantially as an entirety, to any Person, except as
described in Sections 3.9(b) and 3.9(c).
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(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
Property Trustee, consolidate, amalgamate, merge with or into, or be replaced by
a trust organized as such under the laws of any state of the United States;
provided that:
(i) if the Trust is not the survivor, such successor
entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations
of the Trust under the Securities; or
(B) substitutes for the Preferred Securities
other securities having substantially the same terms
as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank
the same as the Preferred Securities with respect to
Distributions, assets 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 Property Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
another organization on which the Preferred Securities are then listed
or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Preferred Securities (including any
Successor Securities)
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in any material respect (other than with respect to any dilution of the
Holders' interest in the new entity);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee;
(viii) prior to such merger, consolidation,
amalgamation or replacement, the Sponsor has received an opinion of a
nationally recognized independent counsel to the Trust reasonably
acceptable to the Property Trustee and experienced in such matters to
the effect that:
(A) such merger, consolidation, amalgamation
or replacement will not adversely affect the rights,
preferences and privileges of the Holders of the Securities
(including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders'
interest in the new entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will be treated as a grantor trust for United States
federal income tax purposes; and
(ix) the Regular Trustees shall have furnished the
Delaware Trustee at least five Business Days prior written notice of
the proposed consummation of such merger, consolidation, amalgamation
or replacement; provided that failure to provide such notice shall not
affect the validity of any such transaction.
(c) Notwithstanding Section 3.9(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgam-
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ate, 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.
SECTION 3.10 Dissolution and Termination of Trust.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor or the Holder
of the Common Securities;
(ii) upon the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor or the Holder of the
Common Securities, upon receipt by the Trust of the consent of at least
a Majority in liquidation amount of the Securities, voting together as
a single class, to dissolve the Trust and file a certificate of
cancellation with respect thereto, or upon the revocation of the
certificate of incorporation of the Sponsor or the Holder of the Common
Securities 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 or the Holder
of the Common Securities;
(iv) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption thereof,
including any Additional Interest and Compounded Interest, 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
shall have been distributed to the Holders of Securities in exchange
for all of the Securities;
(vi) after the distribution of shares of FINOVA Common
Stock (or such other securities or property as may be distributable
upon conversion of the
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Debentures pursuant to the Indenture) to all Holders upon conversion of
all outstanding Preferred Securities;
(vii) the expiration of the term of the Trust on
November 1, 2021; or
(viii) before the issuance of any Securities, with the
consent of all the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 3.10(a), the Regular Trustees shall pay (or make
provision for the payment of) all claims against the Trust and, upon completion
of the winding up of the Trust, shall execute and file a certificate of
cancellation with the Secretary of State of the State of Delaware and thereupon
the Trust shall terminate.
(c) The provisions of Article IX shall survive the termination
of the Trust.
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 aggregate amount at least equal to
3% of the capital of the Trust, at the same time as the Preferred Securities are
sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issuance and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing with the Commission the Registration
Statement, including any amendments thereto;
(b) to determine the states in which to take appropriate
action to qualify or register for sale all or part of the Preferred Securities
and to do any and all such
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acts, other than actions that 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
to comply with the applicable laws of any such states;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange, Inc. (the "NYSE") or any other national stock exchange
or the Nasdaq National Market for listing or quotation of the Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the Preferred
Securities under Section 12(b) of the Exchange Act, including any amendments
thereto; and
(e) to negotiate the terms of the Purchase Agreement and other
agreements, documents and instruments providing for the sale of the Preferred
Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
The number of Trustees shall initially be four, and
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that the number of Trustees shall in no event be less than
two; provided further that (i) there shall be at least one Trustee who is an
employee or officer of, or is affiliated with the Sponsor (each, a "Regular
Trustee") and (ii) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an
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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; Eligibility.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be
(a) a natural person who is resident of the State of Delaware;
or
(b) if not a natural person, an entity that has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee may also be the Delaware Trustee and Section 5.14
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee and shall
(i) not be an Affiliate of the Sponsor;
(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 Person permitted
by the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000,
and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such 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; and
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(iii) if the Trust is excluded from the definition of
an Investment Company solely by means of Rule 3a-5 and to the extent
the Investment Company Act or Trust Indenture Act requires a trustee
having certain qualifications to hold title to the "eligible assets" of
the Trust, the Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.6(d).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
SECTION 5.5 Initial Trustees.
(a) The initial Regular Trustees are:
Bruno A. Marszowski
c/o The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
and
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Robert J. Fitzsimmons
c/o The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
The initial Delaware Trustee is:
First Union Bank of Delaware
One Rodney Square
1st Floor
920 King Street
Wilmington, Delaware 19801
Attention: Corporate Trust Department
The initial Property Trustee is:
Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
(a) Subject to Sections 5.6(b) and 5.6(c), 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.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until a successor possessing the
qualifications to act as a Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee and delivered to the
Trust, the Sponsor and the removed Property Trustee.
(c) The Trustee that acts as Delaware Trustee shall not be
removed in accordance with Section 5.6(a) until a successor possessing the
qualifications to act as Delaware
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Trustee under Sections 5.2 and 5.4 (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
removed Delaware Trustee.
(d) A Trustee appointed to office shall hold office until his,
her or its successor shall have been appointed or until his, her or its death,
removal, resignation, dissolution or liquidation. Any Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing signed by the Trustee and delivered to the 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 Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee and delivered to the Trust, the Sponsor and
the resigning Property Trustee; or
(B) until the assets of the Trust have
been completely liquidated and the proceeds
thereof distributed to the holders of the
Securities; 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.
(e) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with Section 5.6(d).
(f) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted
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appointment as provided in this Section 5.6 within 60 days after delivery
pursuant to this Section 5.6 of an instrument of resignation or removal, the
Property Trustee or Delaware Trustee resigning or being removed, as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.
(g) No Property Trustee or Delaware Trustee shall be liable
for the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
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.
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 this Section 5.6, the Regular Trustees
in office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 5.8 Merger, Conversion, Consolidation or Succession to Business of a
Trustee.
Any corporation or national banking association into which the
Property Trustee or the Delaware Trustee, as the case may be, may be merged or
converted or with which either may be consolidated, or any corporation or
national banking association resulting from any merger, conversion or
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consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation or national banking association
succeeding to all or substantially all the corporate trust business of the
Property Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the case may be,
hereunder, provided such corporation or national banking association shall be
otherwise qualified and eligible under this Article V, without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
SECTION 5.9 Authority, Powers and Duties of the Regular Trustees.
(a) Subject to the limitations provided in this Declaration
and to the specific duties of the Property Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
Any action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and any action taken by the
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust.
(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 this Section 5.9.
(d) The Regular Trustees shall have the exclusive power, duty
and authority to cause the Trust to engage in the following activities:
(i) to issue and sell the Preferred Securities and
the Common Securities in accordance with this Declaration; provided,
however, that the Trust may issue no more than one series of Preferred
Securities
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and no more than one series of Common Securities, and, provided,
further, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to
simultaneous issuance of both Preferred Securities and Common
Securities on the Closing Date;
(ii) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(A) execute the Registration Statement
prepared by the Sponsor, including any amendments
thereto relating to, among other securities, the
Preferred Securities;
(B) execute and file any documents prepared
by the Sponsor, or take any acts as determined by the
Sponsor to be necessary to qualify or register all or
part of the Preferred Securities in any state or
foreign jurisdiction in which the Sponsor has
determined to qualify or register such Preferred
Securities for sale;
(C) execute and file an application,
prepared by the Sponsor, to the NYSE or any other
national stock exchange or the Nasdaq National Market
for listing or quotation of the Preferred Securities,
from time to time;
(D) execute and deliver letters, documents,
or instruments to the Depositary relating to the
Preferred Securities;
(E) execute and file with the Commission a
registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating
to the registration of the Preferred Securities under
Section 12(b) of the Exchange Act; and
(F) execute and perform the Purchase
Agreement and other agreements, documents and
instruments providing for the sale of the Preferred
Securities;
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(iii) to acquire the Debentures with the proceeds of
the sale of the 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 Property Trustee
for the benefit of the Holders of the Preferred Securities and the
Holders of Common Securities;
(iv) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(v) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of Section
316(c) of the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders
of Preferred Securities and Holders of Common Securities as to such
actions and applicable record dates;
(vi) to take all actions and perform such duties as
may be required of the Regular Trustees pursuant to the terms of the
Securities;
(vii) 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 5.11(e), the Property Trustee has the exclusive power to bring
such Legal Action;
(viii) to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and managers,
advisors, and consultants and pay reasonable compensation for such
services;
(ix) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(x) to give the certificate required by Section
314(a)(4) of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
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(xi) to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;
(xii) to act as, or appoint another Person to act as,
registrar, transfer agent and conversion agent for the Securities;
(xiii) 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;
(xiv) 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;
(xv) to take all action that may be necessary or
appropriate for the preservation and the continuation of the Trust's
valid existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of each
other jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Preferred Securities or to
enable the Trust to effect the purposes for which the Trust was
created;
(xvi) 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 5.9, including, but
not limited to:
(A) causing the Trust not to be deemed to be
an Investment Company required to be registered under
the Investment Company Act;
(B) causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(C) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as
indebtedness of the Debenture
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Issuer for United States federal income tax purposes;
provided that such action does not adversely affect the interests of
Holders; and
(xvii) 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.
(e) The Regular Trustees must exercise the powers set forth in
this Section 5.9 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.
(f) Subject to this Section 5.9, the Regular Trustees shall
have none of the powers or the authority of the Property Trustee set forth in
Section 5.11.
(g) Any expenses incurred by the Regular Trustees pursuant to
this Section 5.9 shall be reimbursed by the Debenture Issuer.
SECTION 5.10 Delegation of Powers and Duties of the Regular Trustees.
The Regular Trustees shall have power to delegate from time to
time to such of their number or to officers, employees or agents 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. 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
5.9, including the Registration Statement or any amendment thereto or other
document filed with the Commission, or making any other governmental filing.
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SECTION 5.11 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.6. Such
vesting and cessation of title shall be effective whether or not conveyancing
documents with regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee Account") in the name of
and under the exclusive control of the Property Trustee on behalf of
the Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the Property Trustee,
deposit such funds into the Property Trustee Account and make payments
to the Holders of the Preferred Securities and Holders of the Common
Securities from the Property Trustee Account in accordance with Section
6.1. Funds in the Property Trustee Account shall be held uninvested
until disbursed in accordance with this Declaration. The Property
Trustee Account shall be an account that is maintained with a banking
institution (including, without limitation, the Property Trustee in its
individual capacity) the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned to the Preferred
Securities by a "nationally recognized statistical rating
organization," as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities as so
directed and as shall be necessary or appropriate to effect the
redemption of the Preferred Securities and the Common Securities to the
extent the Debentures are redeemed or mature or the conversion of the
Preferred
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Securities to the extent the Preferred Securities are converted into
FINOVA Common Stock; 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 so directed as shall be
necessary or appropriate to effect the distribution of the Debentures
to Holders of Securities upon the occurrence of a Special Event arising
from a change in law or a change in legal interpretation or other
specified circumstances pursuant to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) The Property Trustee shall 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 occurs and is continuing, the Property Trustee shall, for the benefit of
Holders of the Securities, but subject to the rights of the Holders pursuant to
the terms of such Securities, enforce its rights as holder of the Debentures,
including the right to take any Legal Action which arises out of or in
connection with such an Event of Default.
(f) Subject to this Section 5.11, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 5.9.
(g) The Property Trustee must exercise the powers set forth in
this Section 5.11 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.3.
SECTION 5.12 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event
of Default and after the curing or waiving of all Events of Default that may
have occurred, shall under-
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take to perform only such duties and obligations as are specifically set forth
in this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) of which a Responsible Officer
has actual knowledge, the Property Trustee shall exercise such rights and powers
vested in it by this Declaration, and use the same degree of care and skill in
its exercise, as a prudent individual would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that 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, in the absence of bad faith on
the part of the Property Trustee, the Property Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically required
to be furnished to the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Declaration.
(c) The Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be proved
that the Property Trustee was negligent in ascertaining the pertinent facts.
(d) The Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation amount
of the Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Declaration.
(e) The Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration,
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nor shall the Property Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
(f) No provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, 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 Property Trustee against such risk or liability is not
reasonably assured to it.
(g) The Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a similar manner
as the Property Trustee deals with similar property for its own account, subject
to the protections and limitations on liability afforded to the Property Trustee
under this Declaration and the Trust Indenture Act.
(h) The Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee Account maintained
by the Property Trustee pursuant to Section 5.11(c)(i) and except to the extent
otherwise required by law.
(i) The Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith.
SECTION 5.13 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 5.12:
(i) the Property Trustee may 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
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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 Property Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting any
action hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and rely upon an Officers' Certificate which, upon receipt of
such request, shall be promptly delivered by the Sponsor or the Regular
Trustees;
(iv) the Property Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of
its choice or other experts and the advice or opinion of such counsel
and experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion; such counsel may be counsel to the Sponsor or any of
its Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Property Trustee adequate security
and indemnity, reasonably satisfactory to the Property
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Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Property 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 Property Trustee; provided that, nothing
contained in this Section 5.13(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its
agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such action and
no third party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Declaration
the Property Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any other
action hereunder the Property Trustee (A) may request instructions
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from the Holders of the Securities, which instructions may only be
given by the Holders of the same proportion in liquidation amount of
the Securities as would be entitled to direct the Property Trustee
under the terms of the Securities in respect of such remedy, right or
action, (B) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (C) shall
be protected in acting in accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 5.14 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 Property 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
Section 3807 of the Business Trust Act.
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SECTION 5.15 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 inperson
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 Trustees 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.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
If and to the extent that the Debenture Issuer makes a payment
of interest or principal on the Debentures held by the Property Trustee (the
amount of any such payment being a "Payment Amount"), the Property Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders of Preferred
Securities and Common Securities in accordance with the preferences set forth in
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the respective terms of such Securities, as described in Annex I hereto.
ARTICLE VII
THE SECURITIES
SECTION 7.1 Title and Terms.
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 (the "Preferred Securities"), and one class
of convertible common securities, representing undivided beneficial interests in
the assets of the Trust (the "Common Securities"), each having such terms (the
"Terms") as are set forth in Annex I. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Preferred Securities
and the Common Securities. The aggregate number of Preferred Securities
outstanding at any time shall not exceed the number set forth in the Terms in
Annex I hereto.
The Terms of the Securities set forth in Annex I and the forms
of Certificates set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee and the Sponsor,
by their execution and delivery of this Declaration, expressly agree to such
Terms and to be bound thereby.
SECTION 7.2 General Provisions Regarding the Securities.
(a) 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.
(b) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be validly issued, fully paid and
nonassessable.
(c) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to
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have expressly assented and agreed to the terms of, and shall be bound by, this
Declaration.
(d) The Securities shall have no preemptive rights.
SECTION 7.3 General Form of Certificates.
The Preferred Security Certificates and the Property
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 and the Common Security Certificates 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.
The Certificates may have letters, numbers, notations or other
marks of identification or designation and such legends or endorsements required
by law, stock exchange rule, the Depositary, 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
Property Trustee in writing.
The definitive Certificates shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the Regular Trustees, as evidenced by their execution thereof. The Trust shall
issue no Securities in bearer form.
SECTION 7.4 Form of Preferred Securities Certificates; Global Certificates.
(a) Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will be
issued in the form of one or more, fully registered, global Preferred Security
Certificates (each a "Global Certificate"), to be delivered to The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Trust. No
Preferred Security Beneficial Owner will receive a definitive Preferred Security
Certificate representing such Preferred Security Benefi-
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cial Owner's interests in such Global Certificates, except as provided in
Section 7.7.
(b) Unless required by the Depositary, any securities exchange
on which the Preferred Securities may be listed or any rule, regulation or law,
Preferred Securities issued in the form of Global Certificates need not be
printed, lithographed or engraved on steel engraved borders, but shall be in
such form as is acceptable to the Depositary.
(c) Every Global Certificate authenticated and delivered
hereunder shall bear a legend in substantially the following form, in capital
letters and bold-face type:
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A PREFERRED SECURITY REGISTERED, AND NO TRANSFER
OF THIS PREFERRED SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN
THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION (AS
DEFINED BELOW).
(d) If the Depositary is the Depository Trust Company, the
Global Certificate authenticated and delivered hereunder shall also bear a
legend in substantially the following form, in capital letters and bold-face
type:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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SECTION 7.5 Execution and Dating of Certificates.
The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee who shall have signed any of the
Certificates 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 Certificates may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Certificate, shall
be the Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Regular Trustee. Each
Preferred Security shall be dated the date of its authentication.
One Regular Trustee shall sign the Preferred Security
Certificates for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Security
Certificates, be a manual signature.
SECTION 7.6 Authentication of Preferred Security Certificates.
Each Global Certificate shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Depositary, and delivered to such Depositary or a nominee thereof or custodian
therefor, and each such Global Certificate shall constitute a single Preferred
Security for all purposes of this Declaration.
A Preferred Security Certificate shall not be valid until authenticated
by the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security Certificate
has been authenticated under this Declaration. Upon a written order of the Trust
signed by one Regular Trustee, the Property Trustee shall authenticate the
Preferred Security Certificates for original issue.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Preferred Security Certificates. An
authenticating agent may authenticate Preferred Security Certificates whenever
the Property Trustee may do so. Each reference in this Declaration to
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authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee to deal with
the Sponsor or an Affiliate.
SECTION 7.7 Definitive Preferred Security Certificates.
(a) Upon the occurrence of an event specified in Section
8.2(a), definitive, fully registered Preferred Security Certificates
("Definitive Preferred Security Certificates") shall be prepared by the Regular
Trustees on behalf of the Trust with respect to such Preferred Securi-
ties.
(b) Upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Preferred Security Certificates to be delivered to Preferred
Security Beneficial Owners in accordance with the instructions of the Clearing
Agency. Neither the Trustees nor the Trust shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on and
shall be protected in relying on, said instructions of the Clearing Agency.
SECTION 7.8 Temporary Certificates.
Until definitive Certificates are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Certificates. Temporary Certificates shall
be substantially in the form of definitive Certificates but may have variations
that the Trust considers appropriate for temporary Certificates. Without
unreasonable delay, the Trust shall prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate definitive Certificates in
exchange for temporary Certificates.
SECTION 7.9 Registrar, Paying Agent and Conversion Agent.
In the event that the Preferred Securities are not in book
entry only form, the Trust shall maintain in the Borough of Manhattan, City of
New York, State of New York, an office or agency where Preferred Securities may
be presented for registration of transfer or for exchange ("Registrar") and (ii)
an office or agency where Preferred Securities may be presented for payment
("Paying Agent"). The Trust shall maintain an office or agency where Securities
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may be presented for conversion ("Conversion Agent"). The Registrar shall keep a
register of the Preferred Securities and of their transfer and exchange. The
Trust may appoint the Registrar, the Paying Agent and the Conversion Agent and
may appoint one or more co-registrars, one or more additional paying agents and
one or more additional conversion agents in such other locations as it shall
determine. The term "Paying Agent" includes any additional paying agent and the
term "Conversion Agent" includes any additional conversion agent. The Trust may
change any Paying Agent, Registrar, co-registrar or Conversion Agent without
prior notice to any Holder. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Regular Trustees. The Trust
shall notify the Property Trustee 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 Registrar, Paying Agent or Conversion Agent, the Property Trustee
shall act as such. The Trust or any of its Affiliates may act as Paying Agent,
Registrar, or Conversion Agent. The Trust shall act as Paying Agent, Registrar,
co-registrar, and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent and Conversion Agent for the Preferred Securities. The
Property Trustee shall be entitled to the protections of Sections 5.12 and 5.13
and Article IX in its capacity as Registrar, Paying Agent and Conversion Agent.
SECTION 7.10 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of distributions on the Securities, and will notify the
Property Trustee if there are insufficient funds. While any such insufficiency
continues, the Property Trustee may require a Paying Agent to pay all money held
by it to the Property Trustee. The Trust at any time may require a Paying Agent
to pay all money held by it to the Property Trustee and to account for any money
disbursed by it. Upon payment over to the Property Trustee, the Paying Agent (if
other than the Trust or an Affiliate of the Trust) shall have no further
liability for the money. If the Trust or the Sponsor or an Affiliate of the
Trust or the Sponsor acts
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as Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent.
SECTION 7.11 Outstanding Preferred Securities.
The Preferred Securities outstanding at any time are all the
Preferred Securities authenticated by the Property Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section 7.11 as not outstanding.
If a Preferred Security is replaced or paid pursuant to
Section 8.3, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Preferred Security
is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Preferred
Security.
SECTION 7.12 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Preferred
Securities which the Property Trustee knows are so owned shall be so
disregarded.
SECTION 7.13 Notices to Clearing Agency.
Whenever a notice or other communication to the Holders of
Preferred Securities is required under this Declaration, the Regular Trustees
shall, in the case of any Global Preferred Security, give all such notices and
communications specified herein to be given to the Holders of Preferred
Securities to the Depositary, and shall have no
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notice obligations to the Preferred Security Beneficial Owners.
SECTION 7.14 Appointment of Successor Clearing Agency.
If the Depositary elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Preferred Securities.
SECTION 7.15 Deemed Security Holders.
The Trustees and any Agent 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.
ARTICLE VIII
TRANSFERS, EXCHANGES AND CANCELLATIONS
OF SECURITIES
SECTION 8.1 General.
(a) Where Preferred Security Certificates are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal number of Preferred Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfers and exchanges, the Trust shall issue and the Property Trustee shall
authenticate Preferred Security Certificates at the Registrar's request.
(b) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms set forth in
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Annex I to this Declaration. Any transfer or purported transfer of any Security
not made in accordance with this Declaration and the terms set forth in Annex I
to this Declaration shall be null and void.
(c) Subject to this Article VIII, the Sponsor and any Related
Party may only transfer Common Securities to the Sponsor or a Related Party;
provided that any such transfer is subject to the condition precedent that the
transferor obtain the written opinion of nationally recognized independent
counsel experienced in such matters that such transfer would not cause more than
an insubstantial risk that:
(i) the Trust would not be classified for United
States federal income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the
transferee would become an Investment Company.
(d) The Regular Trustees shall provide for the registration of
Securities and of transfers of Securities, which will be effected without charge
but only upon payment (with such indemnity as the Regular Trustees may require)
in respect of any tax or other governmental charges that may be imposed in
relation to it. Upon surrender for registration of transfer of any Certificates,
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 8.2 Transfer Procedures and Restrictions for Global Certificates.
(a) Notwithstanding any other provision in this Declaration,
no Global Certificate may be exchanged in whole or in part for Preferred
Securities registered, and no
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transfer of a Global Certificate in whole or in part may be registered, in the
name of any Person other than the Depositary for such Global Certificate or a
nominee thereof or a successor Depositary or a nominee of such successor
Depositary, unless (i) such Depositary notifies the Trust that it is unwilling
or unable to continue as Depositary for such Global Certificate or the
Depositary ceases to be a clearing agency registered as such under the Exchange
Act, and no successor depositary shall have been appointed within 90 days of
such notification or of the Trust becoming aware of the Depositary's ceasing to
be so registered, as the case may be, (ii) the Trust (with the consent of the
Sponsor) in its sole discretion determines that such Global Certificate shall be
exchanged for definitive Preferred Securities or (iii) there shall have occurred
and be continuing an Event of Default.
(b) The transfer and exchange of Global Certificates or
beneficial interests therein shall be effected through the Clearing Agency, in
accordance with this Declaration and the procedures of the Clearing Agency
therefor.
(c) Unless and until Definitive Preferred Security
Certificates have been issued to the Preferred Security Beneficial Owners
pursuant to Section 7.7:
(i) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Declaration
(including the payment of Distributions on the Global Certificates and
receiving approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates and
shall have no obligation to the Preferred Security Beneficial Owners;
and
(ii) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. The Depositary will make book entry transfers among the
Clearing Agency Participants.
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SECTION 8.3 Mutilated, Destroyed, Lost or Stolen Certificates; Replacement
Securities.
If the Holder of a Security claims that the Certificate
representing such Security has been lost, destroyed or wrongfully taken or if
such Certificate is mutilated and is surrendered to the Trust or, in the case of
the Preferred Securities, to the Property Trustee, the Trust shall issue and the
Property Trustee shall authenticate a replacement Certificate if the Property
Trustee's and the Trust's requirements, as the case may be, are met. If required
by the Property Trustee or the Trust, an indemnity bond must be sufficient in
the judgment of both to protect the Trustees, the Property Trustee, the Sponsor
or any authenticating agent from any loss which any of them may suffer if a
Certificate is replaced. The Company may charge for its expenses in replacing a
Certificate.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Sponsor in its discretion
may, instead of issuing a new Certificate, cause such Security to be redeemed.
Every replacement Certificate is an additional obligation of
the Trust.
SECTION 8.4 Cancellation of Preferred Security Certificates.
The Trust at any time may deliver Preferred Security
Certificates to the Property Trustee for cancellation. The Registrar, Paying
Agent and Conversion Agent shall forward to the Property Trustee any Preferred
Securities surrendered to them for registration of transfer, redemption,
conversion, exchange or payment. The Property Trustee shall promptly cancel all
Preferred Securities surrendered for registration of transfer, redemption,
conversion, exchange, payment, replacement or cancellation and shall dispose of
cancelled Preferred Securities as the Trust directs. The Trust may not issue new
Preferred Securities to replace Preferred Securities that it has paid or that
have been delivered to the Property Trustee for cancellation or that any holder
has converted.
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ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES AND OTHERS
SECTION 9.1 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) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for
all of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability as is extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
SECTION 9.2 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, in
the case of the Property Trustee, negligence) or willful misconduct with respect
to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 9.3 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 Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between an Indemnified Person and any Covered Person or
(ii) whenever this Declaration or any other agreement
contemplated herein 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
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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 9.4 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
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act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to
any criminal action or proceeding, had reasonable cause to believe that
his conduct was unlawful.
(ii) The 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 9.4(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 9.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that
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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
Holders of the Common Securities 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 9.4(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 9.4(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) the Holders
of the Common Securities of the Trust, that, based upon the facts known
to the Regular Trustees, counsel or the Holders of the Common
Securities 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 the
Holders of the Common Securities reasonably determine that such person
deliberately breached his duty to the Trust or the Holders of the
Common or Preferred Securities.
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(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 9.4(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 Holders of the Preferred Securities 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 9.4(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 9.4(a) is in effect. Any repeal or modification of this Section
9.4(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 9.4(a).
(viii) For purposes of this Section 9.4(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 9.4(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 9.4(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
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inure to the benefit of the heirs, executors and administrators of such
a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the
Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware
Trustee, and (iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Property
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 and all loss, liability or expense
including taxes (other than taxes based on the income of such Fiduciary
Indemnified Person) 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 9.4(b) shall survive the satisfaction and discharge of this Declaration.
SECTION 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property 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 Property Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Property Trustee 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 Property Trustee
may engage or be interested in any financial or other trans-
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action 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 X
ACCOUNTING
SECTION 10.1 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 10.2 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 of account, records
and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The Trust shall use the accrual method of
accounting for United States federal income tax purposes. The books of account
and the records of the Trust shall be examined by and reported upon as of the
end of each Fiscal Year by a firm of independent certified public accountants
selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and mailed
or 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 statements of 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
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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 the Code, 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 10.3 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 Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 10.4 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 the
required forms with the applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to the applicable jurisdictions. To the extent that
the Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed overwithholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions
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made, the Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than
two Regular Trustees, a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee, the
Property 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 Property 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 Property Trustee, the Property 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
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(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 Property Trustee; or
(C) cause the Trust to be deemed to be an
Investment Company that is required to be registered under the
Investment Company Act.
(c) So long as any Securities remain outstanding, any
amendment that would adversely affect the powers, preferences or special rights
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 8.1(c) and this Section 11.1 and paragraph 8(a) of
Annex I hereto shall not be amended without the consent of all of the Holders of
the Securities.
(e) Article IV and 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.
(f) Notwithstanding Section 11.1(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;
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(iii) add to the covenants, restrictions or
obligations of the Sponsor; and
(iv) 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 rights, preferences or
privileges of the Holders.
SECTION 11.2 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 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
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities represented by the Certificates so specified
shall be counted for purposes of determining whether the required percentage set
forth in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of
the Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least seven
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of Securities is
permitted or required under this Declaration or the rules of any stock
exchange or over-the-counter market on which the Preferred Securities
are listed or admit-
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ted for trading, such vote, consent or approval may be given at a
meeting of the Holders of Securities. Any action that may be taken at a
meeting of the Holders of Securities may be taken without a meeting if
a consent in writing setting forth the action so taken is signed by the
Holders of Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the Holders
of Securities entitled to vote who have not consented in writing. The
Regular Trustees may specify that any written ballot submitted to the
Security Holders for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any
Person to act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. No proxy shall be
valid after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be 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 Preferred Securities are then
listed or trading provide otherwise, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of
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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 XII
REPRESENTATIONS OF PROPERTY
TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration and
as of the Closing Date, and each successor Property Trustee represents and
warrants to the Trust and the Sponsor at the time of the successor Property
Trustee's acceptance of its appointment as Property Trustee that:
(a) The Property Trustee is a national banking association or
a banking corporation organized under state law, as applicable, with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States of America (in the case of a national banking association) or
the laws of the state of its organization (in the case of a banking
corporation), with power and authority to execute and deliver, and to carry out
and perform its obligations under the terms of, this Declaration.
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee; and the Declaration has been duly
executed and delivered by the Property Trustee, and constitutes the legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement
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of such remedies is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Property Trustee does not conflict with or constitute a breach of, or
constitute any default under, the charter or by-laws of the Property Trustee or
the provisions of any indenture, mortgage, contract or other agreement to which
it is a party or by which it or any of its properties may be bound or affected.
(d) The Property Trustee has not created any liens or
encumbrances on the Debentures.
(e) No consent, approval or authorization of, or registration
with or notice to any banking authority of the state in which its principal
corporate trust office is located (in the case of a national banking
association) or the state of its organization (in the case of a banking
corporation) or any federal banking authority is required for the execution,
delivery or performance by the Property Trustee, of the Declaration.
SECTION 12.2 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
as of the Closing Date, 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 satisfies the requirements set forth
in Section 5.2 (and, in the case of a banking corporation, is a banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware), with 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 Delaware
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee; and the Declaration has been duly
executed and delivered by the Delaware Trustee, and constitutes a
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legal, valid and binding obligation of the Delaware Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such remedies
is considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of the Declaration
by the Delaware Trustee does not conflict with or constitute a breach of, or
constitute any default under, the charter or by-laws of the Delaware Trustee or
the provisions of any indenture, mortgage, contract or other agreement to which
it is a party or by which it or any of its properties may be bound or affected.
(d) No consent, approval or authorization of, or registration
with or notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the Declaration.
(e) The Delaware Trustee is an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
sent by facsimile 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):
c/o The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
Tel: (602) 207-4900
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Telecopy: (602) 207-5543
Attention: Treasurer
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Tel: (860) 986-4236
Telecopy: (860) 986-7920
Attention: Corporate Trust Administration
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
First Union Bank of Delaware
One Rodney Square
1st Floor
920 King Street
Wilmington, Delaware 19801
Tel: (302) 888-7537
Telecopy: (302) 888-7544
Attention: Corporate Trust Department
(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):
c/o The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
Tel: (602) 207-4900
Telecopy: (602) 207-5543
Attention: Treasurer
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
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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 13.2 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 13.3 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 13.4 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 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
SECTION 13.6 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 circumstanc-
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es other than those to which it is held invalid, shall not be affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the date first above written.
/s/BRUNO A. MARSZOWSKI
-------------------------------------
Bruno A. Marszowski, as Trustee
/s/ROBERT J. FITZSIMMONS
-------------------------------------
Robert J. Fitzsimmons, as Trustee
FIRST UNION BANK OF DELAWARE,
Delaware Trustee
By: /s/STEVEN J. KABA
----------------------------------
Name: Steven J. Kaba
Title: Vice President
FLEET NATIONAL BANK,
Property Trustee
By: /s/FRANK MCDONALD
----------------------------------
Name: Frank McDonald
Title: Vice President
THE FINOVA GROUP INC., Sponsor
By: /s/BRUNO A. MARSZOWSKI
----------------------------------
Name: Bruno A. Marszowski
Title: Senior Vice President-
Controller and Chief
Financial Officer
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ANNEX I
TERMS OF
5 1/2% CONVERTIBLE TRUST ORIGINATED PREFERRED SECURITIES
5 1/2% CONVERTIBLE TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of December 11, 1996 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Registration Statement referred to below):
1. Designation and Number.
(a) "Preferred Securities." 2,000,000 Preferred Securities of the
Trust with an aggregate liquidation amount with respect to the
assets of the Trust of One Hundred Million Dollars
($100,000,000), plus up to an additional 300,000 Preferred
Securities of the Trust with an aggregate liquidation amount
with respect to the assets of the Trust of Fifteen Million
Dollars ($15,000,000) solely to cover over-allotments, as
provided for in the Purchase Agreement (the "Additional
Preferred Securities"), and a liquidation amount with respect
to the assets of the Trust of $50 per Preferred Security,
are hereby designated for the purposes of identification
only as "5 1/2% Convertible Trust Originated Preferred
Securities (liquidation amount $50 per Preferred Security)"
(the "Preferred Securities"). The Preferred Security
Certificates evidencing the Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration,
with such changes and additions thereto or deletions there-
from as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange or other
organization on which the Preferred Securities are listed.
(b) "Common Securities." 61,856 Common Securities of the Trust
with an aggregate liquidation amount with respect to the
assets of the Trust of Three
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Million Ninety-Two Thousand Eight Hundred Dollars ($3,092,800)
plus up to an additional 9,279 Common Securities of the Trust
with an aggregate liquidation amount with respect to the
assets of the Trust of Four Hundred Sixty-Three Thousand Nine
Hundred Fifty Dollars ($463,950) to meet the capital
requirements of the Trust in the event of an issuance of
Additional Preferred Securities, and a liquidation amount with
respect to the assets of the Trust of $50 per Common Security,
are hereby designated for the purposes of identification only
as "5 1/2% Convertible Trust Originated Common Securities
(liquidation amount $50 per Common Security)" (the "Common
Securities"). The Common Security Certificates evidencing the
Common Securities shall be substantially in the form of
Exhibit A-2 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of 5 1/2% (the "Coupon Rate") of the stated
liquidation amount of $50 per Security, such rate being the
rate of interest payable on the Debentures to be held by the
Property 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 any such interest
including any Additional Interest and Compounded 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 Property Trustee and to the extent the
Trust has funds available therefor. The amount of
Distributions payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months, and (except
as provided in paragraph 2(c) below) 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.
(b) Except as otherwise described below, Distributions on the
Securities will be cumulative, will accrue from December 11,
1996 (the "Original Issue Date") and will be payable quarterly
in arrears, on the following dates (each, a "Distribution
payment
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date"), which dates correspond to the interest payment dates
on the Debentures: March 31, June 30, September 30 and
December 31 of each year, except as otherwise described below,
commencing on March 31, 1997, when, as and if available for
payment by the Property Trustee. The Debenture Issuer has the
right at any time during the term of the Debentures to defer
interest payments from time to time by extending the interest
payment period for successive periods not exceeding 20
consecutive quarters (each an "Extension Period") for each
such period; provided, that no Extension Period may extend
beyond the maturity date of the Debentures. As a consequence
of such extension, quarterly Distributions on the Securities
would be deferred (although such Distributions would continue
to accrue with interest thereon, compounded quarterly at the
Coupon Rate, to the extent permitted by applicable law) during
any such extended interest payment period. In the event that
the Debenture Issuer exercises this right, then, during such
Extension Period the Debenture Issuer has agreed (a) not to
declare or pay dividends on, or make a distribution with
respect to, or redeem or 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 FINOVA
Common Stock (or FINOVA Common Stock equivalents) in
connection with the satisfaction by the Debenture Issuer of
its obligations under any employee benefit plans or the
satisfaction by the Debenture Issuer of its obligations
pursuant to any contract or security requiring the Debenture
Issuer to purchase shares of FINOVA Common Stock (or FINOVA
Common Stock equivalents) (provided that such contract is in
effect or such security is outstanding at least 60 days prior
to the commencement of such Extension Period), (ii) purchases
of shares of FINOVA Common Stock (or FINOVA Common Stock
equivalents) from officers or employees of the Debenture
Issuer or its subsidiaries upon termination of employment or
retirement not pursuant to any obligation under any contract
or security requiring the Debenture Issuer to purchase shares
of Common Stock (or Common Stock equivalents) (provided that
such purchases by the Debenture Issuer upon termination of
employment or retirement shall be made at a price not to
exceed the market value on the date of any such purchase and
shall not exceed $7.5 million in the aggregate for all
officers and employees), (iii) as a result of a
reclassification of the Debenture Issuer's
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capital stock or the exchange or conversion of one class or
series of the Debenture Issuer's capital stock for another
class or series of the Debenture Issuer's capital stock, (iv)
dividends or distributions of shares of FINOVA Common Stock on
FINOVA Common Stock or (v) the purchase of fractional
interests in shares of the Debenture Issuer's capital stock
pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged (or
make any guarantee payments with respect to the foregoing)),
(b) not to make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Debenture Issuer that
rank pari passu with or junior to the Debentures and (c) not
to make any guarantee payments with respect to the foregoing
(other than pursuant to the Securities Guarantee). Each
Extension Period, if any, shall end on an interest payment
date for the Debentures; such date shall also be a
Distribution payment date for the Securities. 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 date of the Debentures. Upon the
termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may select a new
Extension Period, subject to the above requirements. If
Distributions on the Securities are deferred as the result of
an Extension Period, except under the limited circumstances
described in paragraph 5(b), such deferred Distributions shall
be paid to the Holders thereof as they appear on the books and
records of the Trust at 5:00 p.m. (New York City time) on the
record date for the Distribution payment date upon which such
Extension Period terminates.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust
at 5:00 p.m. (New York City time) on the relevant record
dates. So long as the Preferred Securities remain solely in
book-entry form, the relevant record dates shall be one
Business Day prior to the relevant Distribution payment dates.
Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of
the Preferred
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Securities being held in book-entry form through the
Depositary will be made as described under the heading
"Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus
dated December 5, 1996 (the "Prospectus"), included in the
Registration Statement. The relevant record dates for the
Common Securities shall be the same record dates as for the
Preferred Securities. In the event that the Preferred
Securities do not continue to remain solely in book-entry
form, the record date for each Distribution shall be the day
15 calendar days prior to the relevant Distribution payment
date; provided that, if such record date does not conform to
the rules of any securities exchange on which the Preferred
Securities are then listed, such record date shall be changed
by the Regular Trustees to conform to the rules of such
securities exchange. Distributions payable on any Securities
that are not punctually paid on any Distribution payment date
as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the
Person in whose name such Securities are registered on the
relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities
are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date
on which Distributions are payable on the Securities is not a
Business Day, then payment of the Distribution payable on such
date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day
is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into FINOVA Common
Stock pursuant to the terms of the Securities as set forth in
this Annex I to the Declaration, accrued Distributions will
not be paid on Securities that are converted, nor will any
payment, allowance or adjustment be made for accumulated and
unpaid Distributions on such Securities, whether or not in
arrears, on converted Preferred Securities except under the
limited circumstances described in paragraph 5(b) and
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except that if any Preferred Security is converted on or after
a record date for payment of Distributions thereon and on or
prior to the corresponding Distribution payment date, the
Holder of such Security (or one or more predecessor
Securities) at 5:00 p.m. (New York City time) on such record
date will be entitled to receive the Distribution payable on
such Securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities into FINOVA
Common Stock following such record date but prior to such
Distribution payment date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined in
paragraph 9) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Liquidation") the
then Holders of the Securities on the date of the Liquidation will be entitled
to receive out of the assets of the Trust available for distribution to Holders
of Securities after satisfaction of liabilities to creditors, Distributions in
an amount equal to the aggregate of the stated liquidation amount of $50 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such Liquidation, Debentures in an aggregate principal amount equal to the
aggregate stated liquidation amount of such Securities, with an interest rate
identical to the Coupon Rate of, and bearing accrued and unpaid interest in an
amount equal to the accrued and unpaid Distributions on, and having the same
record dates for payment as, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities.
If, upon any such Liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis in
accordance with paragraph 9 below.
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4. Redemption and Distribution.
(a) The Debentures are not redeemable prior to their
stated maturity, except that:
(i) In the event that at any time following the
Conversion Termination Date (as defined in paragraph
5(h)), if any, the number of outstanding Preferred
Securities is less than 10% of the number of
Preferred Securities originally issued, including any
Additional Preferred Securities (or, if the
Debentures have been distributed to Holders of the
Securities following the occurrence of a Special
Event, the aggregate principal amount of the
outstanding Debentures is less than 10% of the
aggregate principal amount of Debentures originally
purchased by the Trust with the proceeds from the
sale of the Preferred Securities, including
Debentures purchased with the proceeds of any
Additional Preferred Securities), the Debenture
Issuer has the right, at its option, to redeem the
Debentures, in whole but not in part; and
(ii) The Debenture Issuer has the right, at its option, to
redeem the Debentures, in whole but not in part, in
certain circumstances upon the occurrence of a Tax
Event (as described below).
(b) Upon the repayment of the Debentures, whether at maturity or
upon redemption, the Trust shall apply the proceeds from such
repayment or payment to redeem the Securities at a redemption
price equal to the redemption price of such repaid or redeemed
Debentures, together with accrued and unpaid Distributions
thereon to the date fixed for redemption, payable in cash (the
"Redemption Price"); provided that the Holders of Securities
shall be given not less than 30 nor more than 60 days notice
of such redemption.
(c) If, at any time, a Tax Event or an Investment Company Event
(each as defined below and each a "Special Event") shall occur
and be continuing, the Regular Trustees shall, unless the
Debentures are redeemed in the limited circumstances in
relation to a Tax Event described in the following paragraph
of this paragraph 4(c), dissolve the Trust and, after
satisfaction of creditors of the Trust, if any, cause
Debentures held by the Prop-
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erty Trustee having an aggregate principal amount equal to the
aggregate stated liquidation amount of, an interest rate
identical to the Coupon Rate of, accrued and unpaid interest
on, and the same record dates for payment as, the Securities,
to be distributed to the Holders of the Securities in
liquidation of such Holders' interest in the Trust on a Pro
Rata basis, within 90 days following the occurrence of such
Special Event (the "90 Day Period"); provided, however, that
in the case of the occurrence of a Tax Event, such dissolution
and distribution shall be conditioned on the Regular Trustees'
receipt of an opinion of a nationally recognized independent
tax counsel experienced in such matters (a "No Recognition
Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the
Holders of the Preferred Securities will not recognize any
income, gain or loss for United States federal income tax
purposes as a result of such dissolution and distribution of
Debentures, and provided, further, that if at the time there
is available to the Trust the opportunity to eliminate, within
the 90 Day Period, the Special Event by taking some
ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure
that in the sole judgment of the Debenture Issuer has, or will
cause, no adverse effect on the Trust, the Debenture Issuer or
the Holders of the Securities and will involve no material
cost ("Ministerial Action"), the Trust will pursue such
Ministerial Action in lieu of dissolution.
If in the case of an occurrence of a Tax
Event, (i) the Regular Trustees have received an opinion (a
"Redemption Tax Opinion") of nationally recognized independent
tax counsel experienced in such matters that, as a result of a
Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the
interest on the Debentures for United States federal income
tax purposes even if the Debentures were distributed to the
Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this paragraph 4(c), or
(ii) the Regular Trustees shall have been informed by such tax
counsel that a No Recognition Opinion cannot be delivered to
the Trust, the Debenture Issuer shall have the right, upon not
less than 30 nor more than 60 days' notice, to redeem the
Debentures in whole (but not in part) for cash with-
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in 90 days following the occurrence of such Tax Event, and
promptly following such redemption, the Securities shall be
redeemed by the Trust at the Redemption Price; provided,
however, that if at the time there is available to the
Debenture Issuer or the Trust the opportunity to eliminate,
within such 90 Day Period, the Tax Event by taking some
Ministerial Action that in the sole judgment of the Debenture
Issuer has or will cause no adverse effect on the Trust, the
Holders of Securities or the Debenture Issuer, the Trust or
the Debenture Issuer will pursue such Ministerial Action in
lieu of redemption.
"Tax Event" means that the Regular Trustees
shall have received an opinion of nationally recognized
independent tax counsel experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of
(a) any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder
of the United States or any political subdivision or taxing
authority thereof or therein, (b) any amendment to, or change
in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental
agency or regulatory authority (including the enactment of any
legislation and the publication of any judicial decision or
regulatory determination), (c) any interpretation or
pronouncement that provides for a position with respect to
such laws or regulations that differs from the theretofore
generally accepted position or (d) any action taken by any
governmental agency or regulatory authority, which amendment
or change is enacted, promulgated, issued or announced or
which interpretation or pronouncement is issued or announced
or which action is taken, in each case on or after the date of
the Prospectus (collectively, a "Change in Tax Law"), there is
more than an insubstantial risk that (i) the Trust is, or will
be within 90 days of the date thereof, subject to United
States federal income tax with respect to interest accrued or
received on the Debentures, (ii) the Trust is, or will be
within 90 days of the date thereof, subject to more than a de
minimis amount of other taxes, duties or other governmental
charges, or (iii) interest payable by the Debenture Issuer to
the Trust on the Debentures is not, or within 90 days of the
date thereof will not be, deductible by the Debenture Issuer
for United States federal income tax purposes.
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"Investment Company Event" means that the
Regular Trustees shall have received an opinion of nationally
recognized independent counsel experienced in practice under
the Investment Company Act (an "Investment Company Event
Opinion") that, as a result of a change in law or regulation
or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency
or regulatory authority (a "Change in 1940 Act Law"), there is
more than an insubstantial risk that the Trust is or will be
considered an Investment Company that is required to be
registered under the Investment Company Act, which Change in
1940 Act Law becomes effective on or after the date of the
Prospectus.
On the date fixed for any distribution of
Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) the
Depositary or its nominee, as the record Holder of the Global
Certificates, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon
such distribution and (iii) any certificates representing
Securities, except for Global Certificates held by the
Depositary or its nominee, will be deemed to represent
beneficial interests in Debentures having an aggregate
principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate
of, with accrued and unpaid interest equal to accrued and
unpaid Distributions on, and having the same record dates for
payment as, such Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or
reissuance.
(d) If the Debentures are distributed to the Holders of the
Securities, pursuant to the terms of the Indenture, the
Debenture Issuer will use its best efforts to have the
Debentures listed on the NYSE or on any such other national
securities exchange or similar organization as the Preferred
Securities were listed or quoted immediately prior to the
distribution of the Debentures.
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(e) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of distribution
of Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the
Trust by mail to each Holder of Securities to be
redeemed or exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or
exchange thereof, which, in the case of a redemption,
will be the date fixed for redemption of the
Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which
notices are given pursuant to this paragraph 4(f)(i),
a Redemption/Distribution Notice shall be deemed to be
given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of
Securities. Each Redemption/Distribution Notice shall
be addressed to the Holders of Securities at the
address of each such Holder appearing in the books and
records of the Trust. No defect in the Redemption/
Distribution Notice or in the mailing of either
thereof with respect to any Holder shall affect the
validity of the redemption or exchange proceedings
with respect to any other Holder.
(ii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice is
irrevocable), then, provided that the Debenture Issuer
has paid the Property Trustee a sufficient amount of
cash in connection with the related redemption or
maturity of the Debentures, (A) with respect to
Preferred Securities held in book-entry form, by 12:00
noon, New York City time, on the redemption date, the
Trust will deposit irrevocably with the Depositary or
its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable
Redemption Price with respect to such Preferred
Securities and will give the Depositary irrevocable
instructions and authority to pay the applicable
Redemption Price to the Holders of such Preferred
Securities represented by the Global Certificates, and
(B) with respect to Preferred Securities issued in
definitive form and Common Securities, the
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Trust will irrevocably deposit with the Paying Agent
funds sufficient to pay the Redemption Price to the
Holders of such Securities, and will give the Paying
Agent irrevocable instructions and authority to pay
the Redemption Price to the Holders of such
Securities, upon surrender of their certificates. If a
Redemption/Distribution Notice shall have been given
and funds deposited as required, then on the date of
such deposit, all rights of Holders of such Securities
so called for redemption will cease, except the right
of the Holders of such Securities to receive the
Redemption Price, but without interest on such
Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of any Securities that have
been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a
Business Day (without any interest or other payment in
respect of any such delay) except that, if such
Business Day falls in the next calendar year, such
payment will be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date fixed for redemption.
If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not
paid either by the Trust or by the Debenture Issuer as
guarantor pursuant to the relevant Securities
Guarantee, Distributions on such Securities will
continue to accrue at the then applicable rate, from
the original redemption date to the date of payment,
in which case the actual payment date will be
considered the date fixed for redemption for purposes
of calculating the Redemption Price.
(iii) Redemption/Distribution Notices shall be sent by the
Regular Trustees on behalf of the Trust to (A) in the
case of Preferred Securities held in book-entry form,
the Depositary and, in the case of Securities held in
definitive form, the Holders of such certificates and
(B) in respect of the Common Securities, the Holder
thereof.
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(iv) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Debenture Issuer or any of its
subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time prior to
5:00 p.m. (New York City time) on the earlier of (i) the Business Day
immediately preceding the date of repayment of such Securities, whether
at maturity or upon redemption, and (ii) the Conversion Termination
Date, if any, to cause the Conversion Agent to convert Securities, on
behalf of the converting Holders, into shares of FINOVA Common Stock in
the manner described herein on and subject to the following terms and
conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of
FINOVA Common Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Securities for a portion of
the Debentures theretofore held by the Trust on the basis of
one Security per $50 principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid
and nonassessable shares of FINOVA Common Stock at a
conversion rate of .6387 shares of FINOVA Common Stock per $50
principal amount of Debentures (which is equivalent to a
conversion price of $78.28 per share of FINOVA Common Stock,
subject to certain adjustments set forth in the terms of the
Debentures (as such rate and price may be adjusted from time
to time, the "Conversion Rate" and "Conversion Price",
respectively)).
(b) To convert Securities into FINOVA Common Stock, the Holder
shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Securities on behalf
of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates.
The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other
than the Holder, in which the shares of FINOVA Common Stock
should be issued and (ii) direct the Conversion Agent (A) to
exchange such Securities for a portion of the
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Debentures held by the Trust (at the rate of exchange
specified in the preceding paragraph) and (B) to immediately
convert such Debentures on behalf of such Holder, into FINOVA
Common Stock (at the Conversion Rate then in effect). The
Conversion Agent shall notify the Trust of the Holder's
election to exchange Securities for a portion of the
Debentures held by the Trust and the Trust shall, upon receipt
of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debentures for exchange in
accordance with this paragraph 5. The Conversion Agent shall
thereupon notify the Debenture Issuer of the Holder's election
to convert such Debentures into shares of FINOVA Common Stock.
Holders of Securities at 5:00 p.m. (New York City time) on a
record date will be entitled to receive the Distribution
payable on such Securities on the corresponding Distribution
payment date notwithstanding the conversion of such Securities
following such record date but on or prior to such
Distribution payment date. Except as provided in the
immediately preceding sentence, neither the Trust nor the
Debenture Issuer will make, or be required to make, any
payment, allowance or adjustment for accumulated and unpaid
Distributions (including any Additional Interest or Compounded
Interest), whether or not in arrears, on converted Securities;
provided, however, that if notice of redemption of the
Securities is mailed or otherwise given to Holders of
Securities or the Trust (or, under certain circumstances set
forth in paragraph 5(h) below, the Debenture Issuer) issues a
press release announcing a Conversion Termination Date, then,
if any Holder of Securities converts any Securities into
FINOVA Common Stock on any date on or after the date on which
such notice of redemption is mailed or otherwise given or the
date of such press release, as the case may be, and if such
date of conversion falls on any day from and including the
first day of an Extension Period and on or prior to the
Distribution payment date upon which such Extension Period
ends, such converting Holder shall be entitled to receive
either (i) if the date of such conversion falls after a record
date and on or prior to the next succeeding Distribution
payment date, all accrued and unpaid Distributions on such
Securities to such Distribution payment date or (ii) if the
date of such conversion does not fall on a date described in
clause (i) of this sentence, all accrued and unpaid
Distributions on such Securities to the most
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recent Distribution payment date prior to the date of such
conversion, which Distributions shall, in either such case, be
paid to such converting Holder unless the date of conversion
of such Securities is on or prior to the Distribution payment
date upon which such Extension Period ends and after the
record date for such Distribution payment date, in which case
such Distributions shall be paid to the Person who was the
Holder of such Securities (or one or more predecessor
Securities) at 5:00 p.m. (New York City time) on such record
date. Distributions payable pursuant to the proviso to the
immediately preceding sentence shall be paid (x) in the case
of Distributions payable with respect to Securities which are
converted on or after notice of redemption, on the related
redemption date, and (y) in the case of Securities which are
converted on or after a Conversion Termination Date is
announced, on the Business Day immediately succeeding such
Conversion Termination Date; provided, however, that, if the
date of conversion is on or prior to the Distribution payment
date on which the relevant Extension Period ends and after the
corresponding record date, such Distributions shall instead be
paid on such Distribution payment date. The Debenture Issuer
shall make no payment or allowance for accumulated and unpaid
dividends on the shares of FINOVA Common Stock issued upon
such conversion, except to the extent that such shares of
FINOVA Common Stock are held of record on the record date for
any such dividends and except as provided in Section 1309 of
the Indenture. Securities shall be deemed to have been
converted immediately prior to 5:00 p.m. (New York City time)
on the day on which a Conversion Request relating to such
Securities is received by the Trust in accordance with the
foregoing provision (the "Conversion Date"). The Person or
Persons entitled to receive FINOVA Common Stock issuable upon
conversion of the Debentures shall be treated for all purposes
as the record holder or holders of such FINOVA Common Stock at
such time. As promptly as practicable on or after the
Conversion Date, the Debenture Issuer shall issue and deliver
at the office of the Conversion Agent a certificate or
certificates for the number of full shares of FINOVA Common
Stock issuable upon such conversion, together with the cash
payment, if any, in lieu of any fraction of any share to the
Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the notice of conversion
and the Conversion Agent
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shall distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Security by his acceptance there-of appoints
Fleet National Bank (the "Conversion Agent") for the purpose
of effecting the conversion of Securities in accordance with
this paragraph 5. In effecting the conversion and transactions
described in this paragraph 5, the Conversion Agent shall be
acting as agent of the Holders of Securities directing it to
effect such conversion transactions. The Trust shall not
convert Debentures held by it except pursuant to a Conversion
Request delivered to the Conversion Agent by a Holder of
Securities. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by
the Trust in connection with the conversion of such Securities
in accordance with this paragraph 5 and (ii) to convert all or
a portion of the Debentures into FINOVA Common Stock and
thereupon to deliver such shares of FINOVA Common Stock in
accordance with the provisions of this paragraph 5 and to
deliver to the Trust a new Debenture or Debentures for any
resulting unconverted principal amount.
(d) No fractional shares of FINOVA Common Stock will be issued as
a result of conversion, but in lieu thereof, such fractional
interest will be paid in cash (based on the Closing Price of
shares of FINOVA Common Stock on the Conversion Date) by the
Debenture Issuer to the Trust, which in turn will make such
payment to the Holder or Holders of Securities so converted.
(e) The Debenture Issuer shall at all times reserve and keep
available out of its authorized and unissued FINOVA Common
Stock, solely for issuance upon the conversion of the
Debentures, free from any preemptive or other similar rights,
such number of shares of FINOVA Common Stock as shall from
time to time be issuable upon the conversion of all the
Debentures then outstanding. Notwithstanding the foregoing,
the Debenture Issuer shall be entitled to deliver upon
conversion of Debentures, shares of FINOVA Common Stock
reacquired and held in the treasury of the Debenture Issuer
(in lieu of the issuance of authorized and unissued shares of
FINOVA Common Stock), so long as any such treasury shares are
free and clear of all liens, charges, security interests or
encumbrances and are not subject to any preemptive or other
similar rights.
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Any shares of FINOVA Common Stock issued upon conversion of
the Debentures shall be duly authorized, validly issued, fully
paid and nonassessable. The Trust shall deliver the shares of
FINOVA Common Stock received upon conversion of the Debentures
to the converting Holder free and clear of all liens, charges,
security interests and encumbrances, except for United States
withholding taxes. Each of the Debenture Issuer and the Trust
shall prepare and shall use its best efforts to obtain and
keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply
with all applicable requirements as to registration or
qualification of the FINOVA Common Stock issuable upon
conversion of Debentures (and all requirements to list on any
national securities exchange or quotation system such FINOVA
Common Stock that are at the time applicable), to enable the
Debenture Issuer to lawfully issue FINOVA Common Stock to the
Trust upon conversion of the Debentures and the Trust to
lawfully deliver FINOVA Common Stock to each Holder upon
conversion of the Securities.
(f) The Debenture Issuer will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of
FINOVA Common Stock on conversion of Debentures and the
delivery of shares of FINOVA Common Stock by the Trust upon
conversion of the Securities. The Debenture Issuer shall not,
however, be required to pay any tax that may be payable in
respect of any transfer involved in the issue and delivery of
shares of FINOVA Common Stock in a name other than that in
which the Securities so converted were registered, and no such
issue or delivery shall be made unless and until the Person
requesting such issue has paid to the Trust the amount of any
such tax or has established to the satisfaction of the Trust
that such tax has been paid.
(g) Nothing in the preceding paragraph 5(f) shall limit the
requirement of the Trust to withhold taxes pursuant to the
terms of the Securities or as set forth in this Annex I to the
Declaration or the Declaration itself or otherwise require the
Property Trustee or the Trust to pay any amounts on account of
such withholdings.
(h) (i) On and after December 31, 1999, the Debenture
Issuer shall have the right, at its
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option, to cause the conversion rights of holders
of the Debentures to convert the Debentures into
FINOVA Common Stock to terminate, in which case the
rights of Holders of the Securities to convert the
Securities into FINOVA Common Stock pursuant to this
paragraph 5 will likewise terminate, if (x) the Trust
is current in the payment of Distributions on the
Securities (except to the extent that the payment of
Distributions may have been deferred as the result of
an Extension Period) and (y) for at least 20 Trading
Days (as defined in paragraph 5(h)(iv) below) within
any period of 30 consecutive Trading Days ending on or
after December 31, 1999, including the last Trading
Day of such period, the Closing Price (as defined in
paragraph 5(h)(iv) below) of the Common Stock shall
have exceeded 120% of the Conversion Price in effect
at the close of business on such Trading Day.
(ii) To exercise its option to cause the conversion rights
of Holders of the Securities to terminate, the
Debenture Issuer must cause the Trust to issue a press
release (provided that, if the Trust fails to issue
such press release as directed by the Debenture
Issuer, the Debenture Issuer may, on behalf of the
Trust, issue such press release) for publication on
the Dow Jones News Service or on a comparable news
service (the "Press Release") prior to the opening of
business on the second Trading Day after any period in
which the conditions in paragraph 5(h)(i) have been
met (provided that in no event may any such Press
Release be issued prior to December 31, 1999), which
Press Release shall state that the Debenture Issuer
has elected to exercise its right to terminate the
conversion rights of holders of Debentures and Holders
of Securities, specify the Conversion Termination Date
and provide the Conversion Price of the Securities and
the Closing Price of the Preferred Securities and the
FINOVA Common Stock, in each case as of the close of
business on the Trading Day next preceding the date of
the Press Release. If the Debenture Issuer exercises
the option described in this paragraph 5(h), the
"Conversion Termination Date" shall be the Business
Day selected by
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the Debenture Issuer which shall not be less than 30
or more than 60 calendar days after the date on which
the Trust issues the Press Release. If the Debenture
Issuer does not exercise the option described in this
paragraph 5(h), and the Securities are otherwise
called for redemption, the Securities will be
convertible until 5:00 p.m. (New York City time) on
the Business Day immediately preceding the date of
such redemption.
(iii) In addition to the Press Release, notice of the
termination of conversion rights of Holders of the
Securities (a "Notice of Conversion Termination") must
be given by the Trust by first-class mail to each
Holder of Securities not more than four Business Days
after the Trust issues the Press Release. Each such
mailed Notice of Conversion Termination shall state:
(1) the Conversion Termination Date; (2) the
Conversion Price of the Securities and the Closing
Price of the FINOVA Common Stock, in each case as of
the close of business on the Trading Day next
preceding the date of the Notice of Conversion
Termination; (3) that Securities will be convertible
until 5:00 p.m. (New York City time) on the Conversion
Termination Date and the place or places at which a
conversion notice may be given and Securities (if not
in book-entry form) may be surrendered for conversion
into shares of FINOVA Common Stock; and (4) such other
information or instructions as the Trust deems
necessary or advisable to enable a Holder to exercise
its conversion rights hereunder. For purposes of the
calculation of the Conversion Termination Date and the
dates on which notices are given pursuant to this
paragraph 5(h)(iii), a Notice of Conversion
Termination shall be deemed to have been given on the
day such notice is first mailed by first-class mail,
postage prepaid, to each Holder of Securities at the
address of such Holder appearing in the books and
records of the Trust. No defect in the Notice of
Conversion Termination or in the mailing thereof with
respect to any Security shall affect the validity of
such notice with respect to any other Security. As of
5:00
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p.m. (New York City time) on the Conversion
Termination Date, the Securities shall be deemed to be
non-convertible securities.
(iv) The term "Closing Price" with respect to any security
on any day means the last reported sale price, regular
way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as
reported on the NYSE Composite Tape, or, if such
security is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on
which such security is listed or admitted to trading,
or, if such security is not listed or admitted to
trading on a national securities exchange, on the
National Market System of the National Association of
Securities Dealers, Inc., or, if such security is not
quoted or admitted to trading on such quotation
system, on the principal quotation system on which
such security is listed or admitted to trading or
quoted, or, if not listed or admitted to trading or
quoted on any national securities exchange or
quotation system, the average of the closing bid and
asked prices of such security in the over-the-counter
market on the day in question as reported by the
National Quotation Bureau Incorporated, or a similar
generally accepted reporting service, or, if not so
available in such manner, as furnished by any NYSE
member firm selected from time to time by the Board of
Directors (or any committee duly authorized by the
Board of Directors) of the Debenture Issuer for that
purpose or, if not so available in such manner, as
otherwise determined in good faith by the Board of
Directors (or any committee duly authorized by the
Board of Directors) of the Debenture Issuer.
(v) The term "Trading Day" shall mean a day on which
securities are traded on the national securities
exchange or quotation system used to determine the
Closing Price.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraph 6(b) and paragraph 8, in
the Business Trust Act, the Trust
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<PAGE> 98
Indenture Act and as otherwise required by law and the
Declaration, the Holders of the Preferred Securities will have
no voting rights. No vote or consent of the Holders of the
Preferred Securities will be required for the Trust to redeem
and cancel Preferred Securities or to distribute the
Debentures in accordance with the Declaration and the terms of
the Securities.
(b) Subject to the requirements set forth in this paragraph 6(b),
the Holders of a majority in liquidation amount of the
Preferred Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee and direct the
exercise of any trust or power conferred upon the Property
Trustee under the Declaration, including the right to direct
the Property Trustee, as holder of the Debentures, to (i)
exercise the remedies available to it under the Indenture as a
holder of the Debentures, (ii) waive any past default and its
consequences that are waiveable under the Indenture and (iii)
exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable;
provided, however, that where a consent or action under the
Indenture would require the consent or act of the Holders of a
Super Majority of Debentures affected thereby, the Property
Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the
relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding. The Property Trustee
shall not revoke any action previously authorized or approved
by a vote of the Holders of the Preferred Securities. Other
than with respect to directing the time, method and place of
conducting a proceeding for any remedy available to the
Property Trustee or the Debenture Trustee as set forth above,
the Property Trustee shall be under no obligation to take any
of the actions described in clause (i), (ii) or (iii) above
unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such
action and each Holder will be treated as owning an undivided
beneficial interest in the Debentures. If the Property Trustee
fails to enforce
I-21
<PAGE> 99
its rights under the Debentures after a Holder of Preferred
Securities has made a written request, such Holder of
Preferred Securities may institute a legal proceeding directly
against the Debenture Issuer to enforce the Property Trustee's
rights under the Debentures without first instituting any
legal proceeding against the Property Trustee or any other
Person. Notwithstanding the foregoing, if an Event of Default
has occurred and is continuing and such event is attributable
to the failure of the 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 date fixed for redemption), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement
of payment to such Holder (a "Direct Action") of the principal
of or interest on Debentures having a principal amount equal
to the aggregate liquidation amount of the Preferred
Securities of such Holder on or after the respective due date
specified in the Debentures. Except as provided in the
preceding sentence, the Holders of Preferred Securities will
not be able to exercise directly any other remedy available to
the holders of the Debentures. In connection with such Direct
Action, the Debenture Issuer will be subrogated to the rights
of such Holder of Preferred Securities under the Declaration
to the extent of any payment made by the Debenture Issuer to
such Holder of Preferred Securities in such Direct Action.
(c) Any required approval or direction of Holders of Preferred
Securities may be given at a separate meeting of Holders of
Preferred Securities convened for such purpose, at a meeting
of all of the Holders of Securities or pursuant to written
consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Preferred Securities are entitled
to vote, or of any matter upon which action by written consent
of such Holders is to be taken, to be mailed to each Holder of
record of Preferred Securities. Each such notice will include
a statement setting forth the following information: (i) the
date of such meeting or the date by which such action is to be
taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to
vote or of such matter upon which written consent is sought
and (iii) instructions for the delivery of proxies or
consents.
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<PAGE> 100
(d) Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are
owned at such time by the Debenture Issuer or any Affiliate of
the Debenture Issuer shall not be entitled to vote or consent
and shall, for purposes of such vote or consent, be treated as
if such Preferred Securities were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b) and (c) and paragraph
8, in the Business Trust Act and as otherwise required by law
and the Declaration, the Holders of the Common Securities will
have no voting rights. No vote or consent of the Holders of
the Common Securities will be required for the Trust to redeem
and cancel Common Securities or to distribute the Debentures
in accordance with the Declaration and the terms of the
Securities.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee or to increase or
decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the
requirements of the penultimate sentence of this paragraph
7(c), the Holders of a majority in liquidation amount of the
Common Securities, voting separately as a class, may direct
the time, method, and place of conducting any proceeding for
any remedy available to the Property Trustee, or exercising
any trust or power conferred upon the Property Trustee under
the Declaration, including (i) directing the time, method,
place of conducting any proceeding for any remedy available to
the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the
Debentures, (ii) waive any past default and its consequences
that are waiveable under the Indenture, (iii) exercise any
right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable; provided that,
where a consent or action under the Indenture would require
the consent or act of the Holders of a Super Majority in
principal amount of Debentures affected thereby, the Property
Trustee
I-23
<PAGE> 101
may only give such consent or take such action at the written
direction of the Holders of at least the proportion in
liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of
the Debentures outstanding. Pursuant to this paragraph 7(c),
the Property Trustee shall not revoke any action previously
authorized or approved by a vote of the Holders of the
Preferred Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to
the Property Trustee or the Debenture Trustee as set forth
above, the Property Trustee shall be under no obligation to
take any action in accordance with the directions of the
Holders of the Common Securities under this paragraph 7(c)
unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that for the purposes of
United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such
action and each Holder will be treated as owning an undivided
beneficial interest in the Debentures. If the Property Trustee
fails to enforce its rights under the Debentures after a
Holder of Common Securities has made a written request, such
Holder of Common Securities may institute a legal proceeding
directly against the Debenture Issuer or any other Person to
enforce the Property Trustee's rights under the Debentures,
without first instituting any legal proceeding against the
Property Trustee or any other Person.
(d) Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders
of Securities or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders
of Common Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of Common
Securities. Each such notice will include a statement setting
forth (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.
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<PAGE> 102
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 11.1 of the
Declaration, if any proposed amendment to the Declaration
provides for, or the Regular Trustees otherwise propose to
effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Securities, whether by
way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other
than as described in Section 3.10 of the Declaration, then the
Holders of Securities, voting together as a single class, will
be entitled to vote on such amendment or proposal (but not on
any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of
the Holders of a Majority in liquidation amount of the
Securities affected thereby, voting together as a single
class; provided, however, if any amendment or proposal
referred to in clause (i) above would adversely affect only
the Preferred Securities or only the Common Securities, then
only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in
liquidation amount of such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect
to any amendment, modification or termination of the Indenture
or the Debentures, the Property Trustee shall request the
written direction of the Holders of the Securities with
respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of
the Securities voting together as a single class; provided,
however, that where a consent under the Indenture would
require a Super Majority in aggregate principal amount of the
Debentures, the Property Trustee may only give such consent at
the written direction of the Holders of at least the same
proportion in aggregate stated liquidation preference of the
Securities; provided, further, that the Property Trustee shall
not be obligated to take any action in accordance with the
directions of the Holders of the Securities under this
paragraph 8(b) unless the Property Trustee has obtained an
opinion of tax counsel to the effect
I-25
<PAGE> 103
that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on
account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding. Payments of Distributions on, and amounts payable
upon redemption of, and all other payments in respect of, the Securities shall
be made Pro Rata upon the Securities; provided, however, that if on any
Distribution payment date, Redemption Date or date for any other payment, an
Event of Default under the Declaration has occurred and is continuing, any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing, the rights of Holders of the Common Securities
to payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Preferred Securities and, in such case and without limitation to the foregoing,
no payment of any Distribution on, or amount payable upon redemption of, or
other amount payable with respect to, any Common Security and no other payment
on account of the redemption, liquidation or other acquisition of any Common
Security shall be made, unless payment in full in cash of all accumulated and
unpaid Distributions on all outstanding Preferred Securities for all
distribution periods terminating on or prior thereto shall have been paid in
full in cash, and in the case of amounts due upon redemption of the Preferred
Securities, the full Redemption Price in respect of all outstanding Preferred
Securities shall have
I-26
<PAGE> 104
been paid or provided for in cash, and in the case of any other payment due in
respect of the Preferred Securities, the full amount of such payment shall have
been paid in full in cash.
11. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
The Holders of the Securities shall have no pre-emptive rights
to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Debenture Issuer will provide a copy of the Declaration,
the Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request to
the Debenture Issuer at its principal place of business.
I-27
<PAGE> 105
EXHIBIT A-1
FORM OF PREFERRED SECURITY
I-28
<PAGE> 106
EXHIBIT A-1
FORM OF PREFERRED SECURITY
[FACE OF SECURITY]
[Include if Preferred Security is in global form: THIS SECURITY IS A
GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
PREFERRED SECURITY REGISTERED, AND NO TRANSFER OF THIS PREFERRED
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION.]
[Include if Preferred Security is in global form and The Depository
Trust Company is the Depositary: UNLESS THIS CERTIFICATE IS PRESENTED
BY AN AUTHORIZED SIGNATORY OF THE DEPOSITORY TRUST COMPANY ("DTC") TO
THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.]
<PAGE> 107
Certificate No.: No. of Preferred Securities:
CUSIP NO. 31808E207
FINOVA Finance Trust
5 1/2% Convertible Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)
FINOVA Finance Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
____________________________ is the registered owner of preferred securities of
the Trust representing undivided beneficial interests in the assets of the Trust
designated the "5 1/2% Convertible Trust Originated Preferred Securities
(liquidation amount $50 per Preferred Security)" (the "Preferred Securities").
The Preferred Securities are transferable on the books and records of the Trust,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of December 11, 1996, as the same may be amended from time to
time, including the designation of the terms of the Preferred Securities as set
forth in Annex I to the Declaration (the "Declaration"). Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder of this Security is entitled to the benefits of the Preferred Securities
Guarantee to the extent provided therein. The Debenture Issuer will provide a
copy of the Declaration, the Preferred Securities Guarantee and the Indenture to
a Holder without charge upon written request to the Trust at its principal place
of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder of this Security
is bound by the Declaration and is entitled to the benefits thereunder.
A-1-2
<PAGE> 108
By acceptance, the Holder of this Security agrees to treat,
for United States federal income tax purposes, the Debentures as indebtedness
and the Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
A-1-3
<PAGE> 109
IN WITNESS WHEREOF, the Trust has caused this instrument to be
duly executed.
Dated:
FINOVA FINANCE TRUST
By:________________________
Name:
Title:
Attest:
_______________________
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated:
Fleet National Bank, as Property
Trustee
By: _______________________
A-1-4
<PAGE> 110
[REVERSE OF SECURITY]
Distributions are payable on each Preferred Security at a
fixed rate per annum of 5 1/2% (the "Coupon Rate") of the stated liquidation
amount of $50 per Preferred Security. 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, including Additional
Interest, if any, payable unless otherwise stated. A Distribution is payable
only to the extent that payments are made in respect of the Debentures held by
the Property Trustee and to the extent the Trust has funds available therefor.
The amount of Distributions payable for any period will be computed, except as
otherwise provided in the Declaration, 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, on the basis of the actual number
of days elapsed per such 30-day month.
Except as otherwise described below, Distributions on the
Preferred Securities will be cumulative, will accrue from December 11, 1996 and
will be payable quarterly in arrears, on: March 31, June 30, September 30 and
December 31 of each year, commencing on March 31, 1997, when, as and if
available for payment by the Property Trustee. The Debenture Issuer has the
right, on the terms and subject to the conditions set forth in the Declaration,
at any time during the term of the Debentures to defer interest payments from
time to time by extending the interest payment period for successive periods not
exceeding 20 consecutive quarters (each an "Extension Period") for each such
period; provided, that no Extension Period may extend beyond the maturity date
of the Debentures. As a consequence of such extension, quarterly Distributions
on the Preferred Securities would be deferred (though such Distributions would
continue to accrue with interest thereon, compounded quarterly at the Coupon
Rate, to the extent permitted by applicable law) during any such Extension
Period. In the event that the Debenture Issuer exercises this right, then,
during such Extension Period, the Debenture Issuer has agreed not to declare or
pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liquidation payment with respect to, any of its capital
stock (subject to certain exceptions set forth in the Declaration) and the
Deben-
A-1-5
<PAGE> 111
ture Issuer must comply with certain other agreements set forth in the
Declaration. Each Extension Period, if any, shall end on an interest payment
date for the Debentures; such date shall also be a Distribution payment date for
the Preferred Securities. 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 stated
maturity date of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may select a new
Extension Period, subject to the requirements set forth in the Declaration.
Distributions on the Preferred Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust at 5:00
p.m. (New York City time) on the relevant record dates. So long as the Preferred
Securities remain solely in book-entry form, the relevant record dates shall be
one Business Day prior to the relevant Distribution payment dates. In the event
that the Preferred Securities do not continue to remain solely in book-entry
form, the record date for each Distribution shall be the date 15 calendar days
prior to the relevant Distribution payment date, except as may otherwise be
provided pursuant to the Declaration.
The Preferred Securities shall be redeemable at the option of
the Trust as provided in the Declaration.
The Preferred Securities shall be convertible into shares of
FINOVA Common Stock, through (i) the exchange of Preferred Securities for a
portion of the Debentures and (ii) the immediate conversion of such Debentures,
in the manner and according to the terms set forth in the Declaration and the
Indenture.
A-1-6
<PAGE> 112
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Preferred Security certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _______________________
__________________________________________
(Sign exactly as your name appears on the
other side of this Preferred Security
certificate)
Signature Guarantee:* _______________________________
____________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-1-7
<PAGE> 113
CONVERSION REQUEST
To: Fleet National Bank, as Property Trustee of FINOVA Finance Trust
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into FINOVA Common Stock in accordance with the terms
of the Amended and Restated Declaration of Trust (the "Declaration"), dated as
of December 11, 1996, by Bruno A. Marszowski and Robert J. Fitzsimmons, as
Regular Trustees (as such terms and other capitalized terms used herein and not
defined are defined in the Declaration), First Union Bank of Delaware, as
Delaware Trustee, Fleet National Bank, as Property Trustee, The FINOVA Group
Inc., as Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Preferred Securities, the
undersigned hereby directs the Conversion Agent to (i) exchange such Preferred
Securities for a portion of the Debentures held by the Trust (at the rate of
exchange specified in the terms of the Preferred Securities set forth as Annex I
to the Declaration and in the Indenture) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Common Stock (at the conversion
rate specified in the terms of the Preferred Securities set forth as Annex I to
the Declaration and in the Indenture).
The undersigned also hereby directs 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.
Date: ________________
Number of Preferred Securities to be converted: ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of FINOVA Common Stock are to be
issued, along with the address or addresses of such person or persons.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Sign exactly as your name appears on the
face of this Preferred Security
certificate) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
_________________________________________
_________________________________________
_________________________________________
Signature Guarantee:* _______________________________
_________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-1-8
<PAGE> 114
EXHIBIT A-2
FORM OF COMMON SECURITY
<PAGE> 115
EXHIBIT A-2
FORM OF COMMON SECURITY
[FACE OF SECURITY]
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN EFFECTIVE REGISTRATION
STATEMENT. OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF THE FINOVA GROUP INC.
Certificate No.: Number of Common Securities:
FINOVA Finance Trust
5 1/2% Convertible Trust Originated Common Securities
(liquidation amount $50 per Common Security)
FINOVA Finance Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
__________________________ is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the "5 1/2% Convertible Trust Originated Common Securities
(liquidation amount $50 per Common Security)" (the "Common Securities"). The
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of December 11, 1996, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used herein but
not defined shall have the meaning given them in the Declaration.
<PAGE> 116
The Holder of this Security is entitled to the benefits of the Common Securities
Guarantee to the extent provided therein. The Debenture Issuer will provide a
copy of the Declaration, the Common Securities Guarantee and the Indenture to a
Holder without charge upon written request to the Sponsor at its principal place
of business.
Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder of this Security
is bound by the Declaration and is entitled to the benefits thereunder.
The payment of Distributions and other amounts payable in
respect of the Common Securities are, to the extent and under the circumstances
set forth in the Declaration and in the Common Securities Guarantee, expressly
subordinated to the Preferred Securities and the Holder hereof, by accepting
this certificate, agrees to and shall be bound by such subordination provision.
By acceptance, the Holder of this Security agrees to treat for
United States federal income tax purposes the Debentures as indebtedness and the
Common Securities as evidence of indirect beneficial ownership in the
Debentures.
A-2-2
<PAGE> 117
IN WITNESS WHEREOF, the Trust has caused this instrument to be
duly executed.
Dated:
FINOVA FINANCE TRUST
By:________________________
Name:
Title:
A-2-3
<PAGE> 118
[REVERSE OF SECURITY]
Distributions are payable on each Common Security at a fixed
rate per annum of 5 1/2% (the "Coupon Rate") of the stated liquidation amount of
$50 per Common Security. 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, including Additional Interest, if
any, payable unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held by the Property
Trustee and to the extent the Trust has funds available therefor. The amount of
Distributions payable for any period will be computed, except as otherwise
provided in the Declaration, 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, on the basis of the actual number of days
elapsed per such 30-day month.
Except as otherwise described below, Distributions on the
Common Security Securities will be cumulative, will accrue from December 11,
1996 and will be payable quarterly in arrears, on: March 31, June 30, September
30 and December 31 of each year, commencing on March 31, 1997, when, as and if
available for payment by the Property Trustee. The Debenture Issuer has the
right, on the terms and subject to the conditions set forth in the Declaration,
at any time during the term of the Debentures to defer interest payments from
time to time by extending the interest payment period for successive periods not
exceeding 20 consecutive quarters (each an "Extension Period") for each such
period; provided, that no Extension Period may extend beyond the maturity date
of the Debentures. As a consequence of such extension, quarterly Distributions
on the Common Securities would be deferred (though such Distributions would
continue to accrue with interest thereon, compounded quarterly at the Coupon
Rate, to the extent permitted by applicable law) during any such Extension
Period. In the event that the Debenture Issuer exercises this right, then,
during such Extension Period the Debenture Issuer has agreed not to declare or
pay dividends on, or make a distribution with respect to, or redeem or purchase
or acquire, or make a liquidation payment with respect to, any of its capital
stock (subject to certain exceptions set forth in the Declaration) and the
Debenture Issuer must comply with certain other agreements set
A-2-4
<PAGE> 119
forth in the Declaration. Each Extension Period, if any, shall end on an
interest payment date for the Debentures; such date shall also be a Distribution
payment date for the Preferred Securities. 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 stated maturity date of the Debentures. Upon the termination of any
Extension Period and the payment of all amounts then due, the Debenture Issuer
may select a new Extension Period, subject to the requirements set forth in the
Declaration.
The Common Securities shall be convertible into shares of
FINOVA Common Stock, through (i) the exchange of Common Securities for a portion
of the Debentures and (ii) the immediate conversion of such Debentures, in the
manner and according to the terms set forth in the Declaration and the
Indenture.
A-2-5
<PAGE> 120
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Common Security certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _______________________
__________________________________________
(Sign exactly as your name appears on the
other side of this Common Security
certificate)
Signature Guarantee:* _______________________________
_______________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-2-6
<PAGE> 121
CONVERSION REQUEST
To: Fleet National Bank, as Property Trustee of FINOVA Finance Trust
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into FINOVA Common Stock in accordance with the terms
of the Amended and Restated Declaration of Trust (the "Declaration"), dated as
of December 11, 1996, by Bruno A. Marszowski and Robert J. Fitzsimmons, as
Regular Trustees (as such term or other capitalized terms used herein and not
defined are defined in the Declaration), First Union Bank of Delaware, as
Delaware Trustee, Fleet National Bank, as Property Trustee, The FINOVA Group
Inc., as Sponsor, and by the Holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to the Declaration. Pursuant to the
aforementioned exercise of the option to convert these Common Securities, the
undersigned hereby directs the Conversion Agent to (i) exchange such Common
Securities for a portion of the Debentures held by the Trust (at the rate of
exchange specified in the terms of the Common Securities set forth as Annex I to
the Declaration and in the Indenture) and (ii) immediately convert such
Debentures on behalf of the undersigned, into Common Stock (at the conversion
rate specified in the terms of the Common Securities set forth as Annex I to the
Declaration and in the Indenture).
The undersigned also hereby directs 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.
Date: ________________
Number of Common Securities to be converted: ___________________
If a name or names other than the undersigned, please indicate in the spaces
below the name or names in which the shares of FINOVA Common Stock are to be
issued, along with the address or addresses of such person or persons.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Sign exactly as your name appears on the
face of this Common Security
certificate) (for conversion only)
Please Print or Typewrite Name and Address,
Including Zip Code, and Social Security or
Other Identifying Number.
_________________________________________
_________________________________________
_________________________________________
Signature Guarantee:* _______________________________
________
* (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
A-2-7
<PAGE> 122
EXHIBIT B
SPECIMEN OF DEBENTURE
[FACE OF SECURITY]
[Include if Security is in global form:
THIS SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY (OR A SUCCESSOR
THERETO) OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.]
[Include if Security is in global form and The Depository Trust Company is the
Depositary:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED SIGNATORY OF THE
DEPOSITORY TRUST COMPANY ("DTC") TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
<PAGE> 123
Certificate No.:$___________
THE FINOVA GROUP INC.
5 1/2% Convertible Subordinated Debenture due 2016
THE FINOVA GROUP INC., a corporation duly organized and
existing under the laws of the State of Delaware (herein called the "Company",
which term includes any successor Person under the Indenture hereinafter
referred to), for value received, hereby promises to pay to ___________, or
registered assigns, the principal sum of __________________ Dollars
($___________) on December 31, 2016 and to pay interest thereon (including
Additional Payments, if any) from December 11, 1996 or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, as
the case may be, payable quarterly (subject to deferral as set forth in the
Indenture), in arrears, on March 31, June 30, September 30 and December 31 (each
an "Interest Payment Date") of each year, commencing March 31, 1997 until the
principal thereof is paid or made available for payment; provided that, if any
such Interest Payment Date is not a Business Day, the interest payable on such
date will be paid as provided on the reverse hereof. The interest which is so
payable, and punctually paid or duly provided for, on any Interest Payment Date
shall be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at 5:00 p.m. (New York City time) on the
regular record date for such interest installment, which shall be the Business
Day next preceding such Interest Payment Date (each, a "Regular Record Date").
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
B-2
<PAGE> 124
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
Dated:
THE FINOVA GROUP INC.
By:________________________
Name:
Title:
Attest:
______________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated:
FLEET NATIONAL BANK,
as Trustee
By:_______________________
Authorized Signatory
B-3
<PAGE> 125
[FORM OF REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities
of the Company designated as its 5 1/2% Convertible Subordinated Debenture Due
2016 (herein called the "Securities"), in aggregate principal amount of
$103,092,800 (or up to $118,556,750 if the over-allotment option is exercised by
the Trust in accordance with the terms and provisions of the Purchase
Agreement), issued and to be issued under an Indenture, dated as of December 11,
1996 (as the same may be amended or supplemented from time to time, the
"Indenture"), between the Company and Fleet National Bank, as Trustee (herein
called the "Trustee", which term includes any successor trustee under the
Indenture), to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Trustee, the Company and the Holders of
the Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by the Trust Indenture Act of
1939 (15 U.S.C. Sections 77aaa-77bbbb) ("TIA") as in effect on the date of the
Indenture. The Securities are subject to, and qualified by, all such terms,
certain of which are summarized hereon, and holders are referred to the
Indenture and the TIA for a statement of such terms. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest (which term, as used herein, includes all
Additional Interest and, to the extent permitted by applicable law, Compounded
Interest, if any) on this Security at the times, place and rate, and in the coin
or currency, herein and in the Indenture prescribed or to convert this Security
as provided in the Indenture. All terms used in this Security which are defined
in the Indenture shall have the meanings assigned to them in the Indenture. The
Company will furnish to any Holder upon written request and without charge a
copy of the Indenture.
(a) Interest. Interest on this Security
will accrue at the rate and will be payable as provided on the face of this
Security and in the Indenture. To the extent permitted by applicable law,
interest will compound quarterly and will accrue at the rate of 5 1/2% per annum
on
B-4
<PAGE> 126
any interest installment in arrears for more than one quarter or during an
Extension Period as described below.
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. Except as provided in
the following sentence, the amount of interest payable for any period shorter
than a full quarterly period for which interest is computed, will be computed on
the basis of the actual number of days elapsed in such a 30-day month. In the
event that any Interest Payment Date is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such Interest Payment
Date.
If at any time while the Property Trustee is the Holder of any
Securities, the Trust or the Property 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 shall pay as additional interest
("Additional Interest") on the Securities held by the Property Trustee, such
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying any such taxes, duties,
assessments and governmental charges will be not less than the amounts the Trust
and the Property Trustee would have received had no such taxes, duties,
assessments or governmental charges been imposed.
The principal of and interest on the Securities shall be
payable, and the Securities may be surrendered for conversion, at the office or
agency of the Company in the United States maintained for such purpose and at
any other office or agency maintained by the Company for such purpose in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or by wire transfer to an account appropriately designated by
the Holder entitled thereto.
B-5
<PAGE> 127
(b) Option to Extend Interest Payment Period. On the
terms and subject to the conditions set forth in the Indenture, the Company
shall have the right at any time during the term of the Securities to defer
interest payments (including Additional Payments) from time to time by extending
the interest payment period for successive periods (each, an "Extension Period")
not exceeding 20 consecutive quarters for each such Extension Period; provided,
no Extension Period may extend beyond the Stated Maturity of the Securities.
Each Extension Period, if any, will end on an Interest Payment Date. At the end
of each Extension Period, the Company shall pay all interest then accrued and
unpaid (including Additional Interest, if any) together with interest thereon
compounded quarterly at the rate of interest borne by the Securities to the
extent permitted by applicable law ("Compounded Interest"); provided, that
during any Extension Period, the Company shall be required to comply with
certain covenants set forth in the Indenture. Prior to the termination of any
such Extension Period, the Company may further extend such Extension Period;
provided, that such Extension Period, together with all such previous and
further extensions thereof, may not exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Securities. Upon the termination of any
Extension Period and the payment of all amounts then due, the Company may select
a new Extension Period, subject to the above requirements. No interest during an
Extension Period shall be due and payable. If the payment of interest on the
Securities is deferred as aforesaid, except under the limited circumstances
described in the Indenture, such deferred interest (including Additional
Payments, if any) shall be paid to the Holders registered as such in the
Security Register at 5:00 p.m. (New York City time) on the Regular Record Date
immediately preceding the Interest Payment Date upon which such Extension Period
ends.
(c) Paying Agent and Security Registrar. The Trustee
will act as initial Paying Agent, Security Registrar and Conversion Agent. The
Company may change any Paying Agent, Security Registrar, co-registrar or
Conversion Agent without prior notice. The Company or any of its Affiliates may
act in any such capacity.
(d) Redemption. The Securities are redeemable at the
option of the Company, in whole but not in part, at the times and subject to the
terms and conditions set forth in the Indenture, at a redemption price of 100%
of the
B-6
<PAGE> 128
principal amount thereof, together with accrued unpaid interest thereon
(including Additional Payments, if any, to the extent permitted by applicable
law) to the date of redemption; provided, however, that installments of interest
whose Stated Maturity is on or prior to the date fixed for redemption shall be
payable (together with Additional Payments, if any, to the extent permitted by
applicable law) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at 5:00 p.m. (New York City time) on the relevant
regular Record Dates according to the terms and provisions of the Securities and
the Indenture.
(e) Sinking Fund. The Securities are not entitled to
the benefit of any sinking fund.
(f) Subordination. The Securities are unsecured
general obligations of the Company. The payment of the principal of and interest
(including Additional Payments, if any) on all Securities is subordinated and
junior in right of payment to the prior payment in full of all existing and
future Senior Indebtedness, whether outstanding at the date of the Indenture or
thereafter incurred. Each holder, by accepting a Security, agrees to such
subordination and authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and appoints the Trustee as its attorney-in-fact for such purpose.
(g) Conversion. On the terms and subject to the
conditions set forth in the Indenture, the Holder of any Security has the right,
exercisable at any time on or before 5:00 p.m. (New York City time) on the
earlier of (i) the Business Day immediately preceding the date of repayment of
such Security, whether at maturity or upon redemption, and (ii) the Conversion
Termination Date of the Securities, if any, to convert the principal amount
thereof (or any portion thereof that is an integral multiple of $50) into fully
paid and nonassessable shares of Common Stock of the Company at a conversion
rate of .6387 shares of Common Stock for each $50 in aggregate principal amount
of Securities (equivalent to a conversion price of $78.28 per share of Common
Stock), subject to adjustment under certain circumstances. The number of shares
issuable upon conversion of a Security is determined by dividing the principal
amount of the Security converted by the conversion price in effect on the date
of conversion. No fractional shares will be issued upon conversion but a cash
adjustment will be made for any fraction-
B-7
<PAGE> 129
al interest. The outstanding principal amount of any Security shall be reduced
by the portion of the principal amount thereof converted into shares of Common
Stock. The conversion privilege and the conversion price are subject to
adjustment as provided in the Indenture, to which reference is hereby made.
Under certain circumstances specified in the Indenture, Holders converting
Securities may be entitled to accrued and unpaid interest (including Additional
Payments, if any, to the extent permitted by applicable law) on such Securities.
(h) The conversion rights of the Holders of
Securities are subject to termination at the option of the Company on and after
December 31, 1999, subject to and upon the satisfaction of certain conditions
set forth in the Indenture.
(i) Registration, Transfer, Exchange and
Denominations. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained for such purpose, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $50 and integral multiples thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Prior to due presentment of
this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary. In the event of conversion of this
Security in part only, a new Security or Securities for the unconverted portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
B-8
<PAGE> 130
(j) Persons Deemed Owners. Except as provided in the
Indenture, the registered Holder of a Security may be treated as its owner for
all purposes.
(k) Unclaimed Money. If money for the payment of
principal or interest remains unclaimed for two years after it has become due,
the Trustee and the Paying Agent shall pay the money back to the Company at its
written request. After that, holders of Securities entitled to the money must
look to the Company for payment unless an abandoned property law designates
another Person and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
(l) Defaults and Remedies. The Securities shall have
the Events of Default as set forth in Section 501 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the Holders of at least 25%
in aggregate principal amount of the then Outstanding Securities by notice to
the Company and the Trustee may declare all the Securities to be due and payable
immediately.
The Holders of a majority in principal amount of the
Securities then Outstanding by written notice to the Company and the Trustee may
rescind an acceleration and its consequences upon the terms and subject to the
conditions set forth in the Indenture. Subject to certain limitations, Holders
of a majority in principal amount of the then Outstanding Securities may direct
the Trustee in its exercise of any trust or power. The Company must furnish
annually compliance certificates to the Trustee.
(m) Amendments, Supplements and Waivers. The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Company and
the rights of the Holders of the Securities under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Inden-
B-9
<PAGE> 131
ture and their consequences. Any such consent or waiver by the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
(n) Trustee Dealings with the Company. The Trustee,
in its individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate of the
Company with the same rights it would have, if it were not Trustee, subject to
certain limitations provided for in the Indenture and in the TIA. Any Agent may
do the same with like rights.
(o) No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or the Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
(p) Governing Law. THE INTERNAL LAWS OF THE STATE OF
NEW YORK SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
B-10
<PAGE> 132
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him or her.
Date: ____________________
_______________________________
(Sign exactly as your name appears on the
other side of this Security)
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 Security Registrar, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
B-11
<PAGE> 133
NOTICE OF CONVERSION
To: The FINOVA Group Inc.
The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion below designated,
into Common Stock (the "Common Stock") of The FINOVA Group Inc. (the "Company")
in accordance with the terms of the Indenture referred to in the Security,
between the Company and Fleet National Bank, as Trustee, 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: _______________
Principal Amount of Securities to be converted ($50 or integral multiples
thereof): _________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are
to be issued, along with the address or addresses of such person or
persons.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
___________________________________________
(Sign exactly as your name appears on the
other side of the Security) (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 Security Registrar, which
requirements include membership or participation in the Securities
Transfer Agents Medallion Program ("STAMP") or such other "signature
guarantee program" as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
B-12
<PAGE> 1
EXHIBIT 4.3
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
The FINOVA Group Inc.
Dated as of December 11, 1996
====================================
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1. Definitions and Interpretation.................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.................. 6
SECTION 2.2. List of Holders of Securities..................... 7
SECTION 2.3. Reports by the Preferred Guarantee
Trustee......................................... 7
SECTION 2.4. Periodic Reports to the Preferred
Guarantee Trustee............................... 8
SECTION 2.5. Evidence of Compliance with
Conditions Precedent............................ 8
SECTION 2.6. Event of Default; Waiver.......................... 8
SECTION 2.7. Event of Default; Notice.......................... 8
SECTION 2.8. Conflicting Interests............................. 9
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
THE PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Preferred
Guarantee Trustee............................... 9
SECTION 3.2. Certain Rights of the Preferred
Guarantee Trustee............................... 12
SECTION 3.3. Not Responsible for Recitals or
Issuance of Guarantee........................... 15
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee;
Eligibility..................................... 15
SECTION 4.2. Appointment, Removal and Resignation
of Preferred Guarantee Trustees................. 16
i
<PAGE> 3
Page
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee........................................... 17
SECTION 5.2. Subordination....................................... 17
SECTION 5.3. Waiver of Notice and Demand......................... 18
SECTION 5.4. Obligations Not Affected............................ 18
SECTION 5.5. Rights of Holders................................... 19
SECTION 5.6. Guarantee of Payment................................ 20
SECTION 5.7. Subrogation......................................... 20
SECTION 5.8. Independent Obligations............................. 20
SECTION 5.9. Conversion.......................................... 21
ARTICLE VI
LIMITATION OF TRANSACTIONS; RANKING
SECTION 6.1. Limitation of Transactions.......................... 21
SECTION 6.2. Ranking............................................. 22
ARTICLE VII
TERMINATION
SECTION 7.1. Termination......................................... 23
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1. Exculpation......................................... 23
SECTION 8.2. Indemnification..................................... 24
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. Successors and Assigns.............................. 24
SECTION 9.2. Amendments.......................................... 25
SECTION 9.3. Notices............................................. 25
SECTION 9.4. Benefit............................................. 26
SECTION 9.5. Governing Law....................................... 26
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred
Securities Guarantee"), dated as of December 11, 1996, is executed and delivered
by The FINOVA Group Inc., a Delaware corporation (the "Guarantor"), and Fleet
National Bank, a national banking association, 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 FINOVA Finance
Trust, a Delaware statutory business trust (the "Trust");
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (as the same may be supplemented or amended from time to time in
accordance with its terms, the "Declaration"), dated as of December 11, 1996,
among the trustees of the Trust named therein, the Guarantor, as sponsor, and
the holders from time to time of undivided beneficial interests in the assets of
the Trust, the Trust is issuing on the Closing Date (as defined in the
Declaration) 2,000,000 preferred securities, having an aggregate liquidation
amount of $100,000,000 (plus up to an additional 300,000 preferred securities,
having an aggregate liquidation amount of $15,000,000 to cover over-allotments),
designated the 5 1/2% Convertible Trust Originated 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
guarantee the obligations of the Trust to the Holders on the terms and
conditions set forth herein;
WHEREAS, 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
Indenture Event of Default (as defined herein), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments (as
defined in the Common Securities Guarantee) under the Common Securities
Guarantee shall be subordinated to the rights of Holders of Preferred Securities
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receive Guarantee Payments (as defined herein) under this Preferred Securities
Guarantee; and
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 of the date
hereof shall have the same meaning when used in this Preferred Securities
Guarantee unless otherwise defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
(d) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to this Preferred
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and Sections of this
Preferred Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities Guarantee, unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires;
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(g) a reference to the singular includes the plural
and vice versa;
(h) a reference to any Person shall include its
successors and assigns;
(i) a reference to any agreement or instrument shall
mean such agreement or instrument, as supplemented, modified, amended, or
amended and restated, and in effect from time to time; and
(j) a reference to any statute, law, rule or
regulation, shall include any amendments thereto applicable to the relevant
Person, and any successor statute, law, rule or regulation.
"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.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in The City of New York or in
Wilmington, Delaware are authorized or required by law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Trust.
"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 777 Main
Street, Hartford, Connecticut 06115, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the 5 1/2% Convertible Subordinated
Debentures due 2016, to be issued by the Guarantor under the Indenture and to be
held by the Property Trustee (as defined in the Declaration).
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"Declaration" has the meaning specified in the Recitals of
this instrument.
"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 Trust: (i) any accrued and unpaid
distributions that are required to be paid on the Preferred Securities to the
extent the Trust has funds available therefor, (ii) the Redemption Price (as
defined in the Declaration), with respect to any 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 (except in connection with the distribution of Debentures to the
Holders in liquidation of the Trust following the occurrence of a Special Event
(as defined in the Declaration), upon the redemption of all outstanding
Preferred Securities, upon the conversion of all outstanding Preferred
Securities or in connection with certain mergers, consolidations or
amalgamations permitted by 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 Trust has funds available
therefor and (b) the amount of assets of the Trust remaining available for
distribution to Holders upon the liquidation of the Trust (in either case, the
"Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Trust of any Preferred Securities; provided, however, that in
determining whether the holders of the requisite 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.
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"Indenture" means the Indenture, dated as of December 11,
1996, between the Guarantor and the Indenture Trustee, as trustee, and any
indenture supplemental thereto, pursuant to which the Debentures are to be
issued to the Property Trustee of the Trust.
"Indenture Event of Default" shall have the meaning specified
in Section 5.5.
"Indenture Trustee" means the Person acting as trustee under
the Indenture, initially Fleet National Bank, a national banking association.
"Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities, 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.
"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 Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and the definition
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each 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.
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"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means Fleet National Bank, a
national banking association, 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 Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions.
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(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. List of Holders of Securities.
(a) The Guarantor shall provide the Preferred
Guarantee Trustee with a list, in such form as the Preferred Guarantee Trustee
may reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such date, (i) within one Business Day after February 15 and
August 15 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 15 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 (x) the List of Holders does not differ from the most
recent List of Holders given to the Preferred Guarantee Trustee by the Guarantor
or (y) the Preferred Securities are represented by one or more Global Securities
(as defined in the Indenture). 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 Section 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.
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SECTION 2.4. Periodic Reports to the Preferred Guarantee
Trustee.
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314, if any, and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5. 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. Event of Default; Waiver.
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of all of the Holders, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this 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, 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 in good faith
determines that the withholding of such notice is in the interests of the
Holders.
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(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, or of which a Responsible Officer
charged with the administration of the Declaration shall have obtained actual
knowledge.
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
THE 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 5.5(b) or to a Successor Preferred Guarantee Trustee on acceptance by
such Successor Preferred Guarantee Trustee of its appointment to act as
Successor Preferred Guarantee Trustee. The right, title and interest of the
Preferred Guarantee Trustee shall automatically vest in any Successor Preferred
Guarantee Trustee, and such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered pursuant
to the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer 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 oc-
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curred, 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,
the Preferred Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Preferred Securities Guarantee, and use the same degree of
care and skill in its 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
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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, 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.
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SECTION 3.2. Certain Rights of the 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 registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel of its selection, and the written 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
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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 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, nomi-
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nees, 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 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
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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
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
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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 Trustees.
(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 Pre-
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ferred 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 to the Guarantor of an instrument of removal or
resignation, the resigning or removed Preferred Guarantee Trustee 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 (except to the extent paid by the Trust), as and when due,
regardless of any defense, right of set-off or counterclaim that the Trust may
have or assert, the Guarantee Payments, without duplication. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Trust to pay
such amounts to the Holders.
SECTION 5.2. Subordination.
If an Indenture Event of Default has occurred and is
continuing, the rights of holders of Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinate to the rights of
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Holders to receive Guarantee Payments under this Preferred Securities Guarantee.
SECTION 5.3. 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 Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.4. 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 Trust of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Trust;
(b) the extension of time for the payment by the Trust
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price (as
defined in the Declaration), Liquidation Distribution or other sums payable that
results from the extension of any interest payment period on the Debentures or
any extension of the maturity date of the Debentures permitted by the
Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Holders pursuant to the terms of the
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Preferred Securities, or any action on the part of the Trust granting indulgence
or extension of any kind;
(d) any 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 or other similar proceedings affecting the
Trust or any of the assets of the Trust;
(e) any invalidity of, or defect or deficiency in, the
Preferred Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a guarantor,
it being the intent of this Section 5.4 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.5. 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 to direct the
exercise of any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) Any Holder may directly institute a legal
proceeding against the Guarantor to enforce the obligations of the Guarantor
under this Preferred Securities Guarantee without first instituting a legal
proceeding against the Trust, the Preferred Guarantee Trustee or any other
Person.
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(c) If an Event of Default with respect to the
Debentures (an "Indenture Event of Default"), constituting the failure to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable has occurred and is continuing, then a Holder may directly,
at any time, 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 Preferred Securities of such Holder
on or after the respective due date specified in the Debentures. The Holders
will not be able to exercise directly any other remedy available to the holders
of the Debentures unless the Property Trustee fails to do so.
SECTION 5.6. Guarantee of Payment.
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.7. Subrogation.
The Guarantor shall be subrogated to all, if any, rights of
the Holders against the Trust 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 5.8. Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwith-
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standing the occurrence of any event referred to in subsections (a) through (g)
inclusive, of Section 5.4 hereof.
SECTION 5.9. Conversion.
The Guarantor agrees that it will honor its obligation to
issue and deliver common stock of the Guarantor upon the conversion of the
Preferred Securities.
ARTICLE VI
LIMITATION OF TRANSACTIONS; RANKING
SECTION 6.1. Limitation of Transactions.
So long as any Preferred Securities remain outstanding, if (x)
there shall have occurred and be continuing any event that constitutes an Event
of Default or an Indenture Event of Default, or any event that, with the giving
of notice or the lapse of time or both, would constitute an Event of Default or
an Indenture Event of Default, or (y) the Guarantor has exercised its option to
defer interest payments on the Debentures by selecting an Extension Period (as
defined in the Declaration) and such Extension Period, or any extension thereof,
shall be continuing, then the Guarantor (a) shall not declare or pay dividends
on, or make a distribution with respect to, or redeem or 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 (or Common Stock
equivalents) in connection with the satisfaction by the Guarantor of its
obligations under any employee benefit plans or the satisfaction by the
Guarantor of its obligations pursuant to any contract or security requiring the
Guarantor to purchase shares of Common Stock (or Common Stock equivalents)
(provided that such contract is in effect or such security is outstanding at
least 60 days prior to the occurrence of any event described in clause (x) above
or the commencement of an Extension Period referred to in clause (y) above, as
the case may be), (ii) purchases of shares of Common Stock (or Common Stock
equivalents) from officers or employees of the Guarantor or its subsidiaries
upon termination of employment or retirement not pursuant to any obligation
under any contract or security requiring the Guarantor to purchase shares of
Common Stock (or Common Stock equiva-
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lents) (provided that such purchases by the Guarantor upon termination of
employment or retirement shall be made at a price not to exceed the market value
on the date of any such purchase and shall not exceed $7.5 million in the
aggregate for all officers and employees), (iii) 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, (iv) dividends or distributions of
shares of Common Stock on Common Stock or (v) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged (or make any guarantee payments with respect to the foregoing)), (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
the Guarantor that rank pari passu with or junior to the Debentures and (c)
shall not make any guarantee payments with respect to the foregoing (other than
pursuant to this Preferred Securities Guarantee).
SECTION 6.2. Ranking.
(a) This Preferred Securities Guarantee will
constitute an unsecured obligation of the Guarantor and will rank (i)
subordinate and junior in right of payment to all other liabilities of the
Guarantor except any liabilities that may be pari passu expressly by their
terms, (ii) pari passu with the most senior preferred or preference stock issued
from time to time by the Guarantor and with any guarantee now or hereafter
entered into by the Guarantor in respect of any preferred or preference stock or
preferred securities of any Affiliate of the Guarantor, and (iii) senior to the
Guarantor's common stock.
(b) The holders of any obligations of the Guarantor
that are senior in priority to the obligations under this Preferred Securities
Guarantee will be entitled to all of the rights inuring to the holders of
"Senior Indebtedness" under Article 12 of the Indenture, and the Holders will be
subject to all of the terms and conditions of such Article 12 with respect to
any claims or rights hereunder with the same effect as though fully set forth
herein.
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ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Preferred Securities Guarantee will terminate as to each
Holder upon (i) full payment of the Redemption Price of all Preferred Securities
held by such Holder; or (ii) distribution of all of the Debentures held by the
Trust to the Holders; or (iii) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Trust, or (iv) upon the
distribution of the Guarantor's common stock to such Holder in respect of
conversion of such Holder's Preferred Securities into common stock of the
Guarantor. The Guarantee also will terminate completely upon full payment of the
amounts payable in accordance with the Declaration. 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 such 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 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, re-
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ports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 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 such 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.
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. Except in connection with any
permitted merger or consolidation of the Guarantor with or into another entity
or any permitted sale, transfer or lease of the Guarantor's assets to another
entity as described in the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Preferred Securities Guarantee without the
prior approval of the Holders of at least a Majority in liquidation amount of
the Preferred Securities then outstanding.
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SECTION 9.2. Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no vote will be required),
this Preferred Securities Guarantee may be amended only with the prior approval
of the Holders of at least a Majority in liquidation amount of the Preferred
Securities outstanding. The provisions of Section 11.2 of the Declaration with
respect to meetings of Holders of the Preferred Securities 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, sent by facsimile or mailed by registered or certified 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):
Fleet National Bank
777 Main Street
Hartford, Connecticut 06115
Tel: (860) 986-7920
Telecopy: (860) 986-4236
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the Guarantor may give
notice of to the Holders of the Preferred Securities):
The FINOVA Group Inc.
1850 North Central Avenue
P.O. Box 2209
Phoenix, Arizona 85002-2209
Tel: (602) 207-4900
Telecopy: (602) 207-5543
Attention: Treasurer
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(c) If given to any 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 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
AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICTS OF LAWS.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
THE FINOVA GROUP INC.,
as Guarantor
By: /s/BRUNO A. MARSZOWSKI
-----------------------------------
Name: Bruno A. Marszowski
Title: Senior Vice President-
Controller and Chief
Financial Officer
FLEET NATIONAL BANK,
as Preferred Securities
Guarantee Trustee
By: /s/FRANK MCDONALD
-----------------------------------
Name: Frank McDonald
Title: Vice President
27
