<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 18, 1996
REGISTRATION NO. 333-11243
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
AT&T CAPITAL CORPORATION CAPITA PREFERRED FUNDING L.P. CAPITA PREFERRED TRUST
(EXACT NAME OF REGISTRANT AS (EXACT NAME OF REGISTRANT AS SPECIFIED (EXACT NAME OF REGISTRANT AS
SPECIFIED IN CHARTER) IN SPECIFIED IN CERTIFICATE OF TRUST)
CERTIFICATE OF LIMITED PARTNERSHIP)
DELAWARE DELAWARE DELAWARE
(STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF (STATE OR OTHER JURISDICTION OF
INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION) INCORPORATION OR ORGANIZATION)
22-3211453 22-3467161 22-3467159
(I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
44 WHIPPANY ROAD
MORRISTOWN, NEW JERSEY 07962
(201) 397-3000
</TABLE>
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
------------------------
ROBERT J. INGATO
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
AT&T CAPITAL CORPORATION
44 WHIPPANY ROAD
MORRISTOWN, NEW JERSEY 07962
(201) 397-3000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
ANDREW R. KELLER RICHARD T. PRINS
SIMPSON THACHER & BARTLETT GREGORY A. FERNICOLA
425 LEXINGTON AVENUE SKADDEN, ARPS, SLATE, MEAGHER & FLOM
NEW YORK, NEW YORK 10017 919 THIRD AVENUE
(212) 455-2000 NEW YORK, NEW YORK 10022
(212) 735-3000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as
practicable after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED AMOUNT TO BE REGISTERED PER UNIT OFFERING PRICE(1) FEE(2)
<S> <C> <C> <C> <C>
Capita Preferred Trust Trust Originated
Preferred Securities...................... 8,000,000 $25 $ 200,000,000 $ 60,607
Capita Preferred Funding L.P. Partnership
Preferred Securities(3)................... 8,000,000 $25 $ 200,000,000 --
Guarantee of AT&T Capital Corporation with
respect to Trust Preferred
Securities(4)............................. -- -- -- --
Guarantee of AT&T Capital Corporation with
respect to Partnership Preferred
Securities(4)............................. -- -- -- --
Guarantees of AT&T Capital Corporation with
respect to certain debentures of its
wholly owned subsidiaries (the 'Affiliate
Debentures')(4)........................... -- -- -- --
Subordinated Debenture of AT&T Capital
Corporation(4) ........................... $ 200,000,000 -- $ 200,000,000 --
Totals................................. $ 60,607
</TABLE>
(cover continued on next page)
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
________________________________________________________________________________
<PAGE>
<PAGE>
(footnotes from cover page)
(1) Estimated solely for the pupose of determining the registration fee pursuant
to Rule 457.
(2) Previously paid.
(3) The Partnership Preferred Securities will be purchased by Capita Preferred
Trust with the proceeds of the sale of the Trust Preferred Securities,
together with the proceeds received from AT&T Capital Corporation in respect
of the common securities to be issued by Capita Preferred Trust. No separate
consideration will be received for the Partnership Preferred Securities.
(4) No separate consideration will be received for (i) guarantees of AT&T
Capital Corporation with respect to the Trust Preferred Securities, the
Partnership Preferred Securities or the Affiliate Debentures or (ii) the
Subordinated Debenture. The Subordinated Debenture and the Affiliate
Debentures will be purchased by Capita Preferred Funding L.P. with proceeds
of the sale of the Partnership Preferred Securities, together with a capital
contribution from AT&T Capital Corporation.
<PAGE>
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED OCTOBER 21, 1996
PROSPECTUS
8,000,000 TRUST PREFERRED SECURITIES
CAPITA PREFERRED TRUST
% TRUST ORIGINATED PREFERRED SECURITIES'SM' ('TOPrS'SM'')
(LIQUIDATION AMOUNT $25 PER TRUST PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
[LOGO]
------------------------
The % Trust Originated Preferred Securities'SM' (the 'TOPrS'SM'' or 'Trust
Preferred Securities') offered hereby represent preferred undivided beneficial
ownership interests in the assets of Capita Preferred Trust, a statutory
business trust formed under the laws of the State of Delaware (the 'Trust').
AT&T Capital Corporation, a Delaware corporation (the 'Company' or 'AT&T
Capital'), will own all the common securities (the 'Trust Common Securities'
and, together with the Trust Preferred Securities, the 'Trust Securities')
representing undivided beneficial ownership interests in the assets of the
Trust. The Trust exists for the sole purpose of issuing the Trust Securities and
investing the proceeds as described below and engaging in activities incident
thereto. The proceeds from the sale of the Trust Securities will be used by the
Trust to purchase Partnership Preferred Securities ('Partnership Preferred
Securities'), representing the limited partnership interests of Capita Preferred
Funding L.P., a Delaware limited partnership (the 'Partnership'). The general
partnership interest, which constitutes all of the interest in the Partnership
other than the limited partnership interests represented by the Partnership
Preferred Securities, is owned by the Company, which is the sole general partner
of the Partnership (in such capacity, the 'General Partner'). Substantially all
of the proceeds from the sale of the Partnership Preferred Securities, together
with the capital contribution from the General Partner, will be used by the
Partnership to purchase the Debentures (as defined herein), which consist of
debt instruments of the Company
(continued on next page)
SEE 'RISK FACTORS' BEGINNING ON PAGE 17 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE TRUST PREFERRED
SECURITIES, INCLUDING CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.
The Trust Preferred Securities have been approved, subject to issuance, for
listing on the New York Stock Exchange, Inc. (the 'New York Stock Exchange').
Trading of the Trust Preferred Securities on the New York Stock Exchange is
expected to commence within a 30-day period after the initial delivery of the
Trust Preferred Securities. See 'Underwriting.'
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) COMMISSION(2) TRUST(3)(4)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Trust Preferred Security............ $ (3) $
- ---------------------------------------------------------------------------------------------------------------
Total................................... $ (3) $
- ---------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued distributions, if any, from October , 1996.
(2) The Trust, the Partnership and the Company have agreed to indemnify the
several Underwriters against certain liabilities, including liabilities
under the Securities Act of 1933, as amended. See 'Underwriting.'
(3) In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will be ultimately invested in investment instruments of the
Company and its eligible controlled affiliates, the Company has agreed to
pay to the Underwriters as compensation (the 'Underwriters' Compensation')
$ per Trust Preferred Security (or $ in the aggregate); provided
that such compensation for sales of or more Trust Preferred
Securities to a single purchaser will be $ per Trust Preferred
Security. Therefore, to the extent of such sales, the actual amount of
Underwriters' Compensation will be less than the aggregate amount specified
in the preceding sentence. See 'Underwriting.'
(4) Expenses of the offering which are payable by the Company are estimated to
be $1,138,907, of which $200,000 will be reimbursed by, and certain
additional expenses related to the offering will be paid for by, the
Underwriters.
------------------------
The Trust Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Trust Preferred Securities will be made only in book-entry
form through the facilities of The Depository Trust Company ('DTC') on or about
, 1996.
------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO. LEHMAN BROTHERS
PAINEWEBBER INCORPORATED PRUDENTIAL SECURITIES INCORPORATED
------------------------
The date of this Prospectus is , 1996
'SM'Trust Originated Preferred Securities' and 'TOPrS' are service marks of
Merrill Lynch & Co., Inc.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<PAGE>
(continued from cover page)
and certain of its domestic eligible controlled affiliates. In addition,
approximately one percent of the proceeds from the sale of the Partnership
Preferred Securities and the capital contribution from the General Partner will
be used to purchase certain U.S. government obligations and commercial paper of
entities not affiliated with the Company (the 'Eligible Debt Securities'). See
'Description of the Partnership Preferred Securities -- Partnership
Investments.'
Holders of the Trust Preferred Securities will be entitled to receive
cumulative cash distributions accruing from the date of original issuance and
payable quarterly in arrears on each March 31, June 30, September 30, and
December 31, commencing December 31, 1996 at an annual rate of % of the
liquidation amount of $25 per Trust Preferred Security (equivalent to $
per Trust Preferred Security) if, as and when the Trust has funds available for
payment. See 'Description of the Trust Preferred Securities -- Distributions.'
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly at a rate per annum equal to %. The distribution rate
and the distribution payment dates and other payment dates for the Trust
Preferred Securities will correspond to the distribution rate and distribution
payment dates and other payment dates for the Partnership Preferred Securities,
which constitute the sole assets of the Trust. As described above, the assets of
the Partnership will initially consist only of the Debentures and, to a limited
extent, Eligible Debt Securities.
The payment of distributions by the Trust and payments on liquidation of
the Trust or the redemption of Trust Preferred Securities, as described below,
are guaranteed by the Company (the 'Trust Guarantee') to the extent the Trust
has funds available therefor as described under 'Description of the Trust
Guarantee.' The payment of distributions by the Partnership (if, as and when
declared) and payments on liquidation of the Partnership or the redemption of
Partnership Preferred Securities, as described below, are also guaranteed by the
Company (the 'Partnership Guarantee') to the extent the Partnership has funds
available therefor as described under 'Description of the Partnership
Guarantee.' In addition, payments in respect of the Debentures (other than the
Company Debenture (as defined herein)) are fully and unconditionally guaranteed,
on a subordinated basis, by the Company (the 'Investment Guarantees') for the
benefit of the holders of the Partnership Preferred Securities. The Trust
Guarantee, the Partnership Guarantee and the Investment Guarantees
(collectively, the 'Guarantees'), when taken together with the Company Debenture
and the Company's obligations to pay all fees and expenses of the Trust and the
Partnership, constitute a guarantee to the extent set forth herein by the
Company of the distribution, redemption and liquidation payments payable to the
holders of the Trust Preferred Securities. Unlike other TOPrS transactions,
however, the Guarantees do not apply to current distributions by the Partnership
unless and until such distributions are declared by the Partnership out of funds
legally available for payment or to liquidating distributions unless there are
assets available for payment in the Partnership, each as more fully described in
the next succeeding paragraph and under 'Risk Factors -- Risk Factors Related to
TOPrS -- Insufficient Income or Assets Available to Partnership.' The Company's
obligations under the Guarantees are subordinate and junior in right of payment
to all other liabilities of the Company and rank pari passu with the most senior
preferred stock issued from time to time by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred stock
of any affiliate of the Company and its obligations under the Company Debenture
are subordinate and junior in right of payment to all senior indebtedness of the
Company. At September 30, 1996, the Company had outstanding consolidated senior
indebtedness aggregating approximately $7.9 billion, which would have ranked
senior to the Company's obligations under the Guarantees and the Company
Debenture. See 'Risk Factors -- Risk Factors Related to TOPrS -- Ranking of
Subordinate Obligations Under the Guarantees and the Company Debenture.'
Distributions on the Partnership Preferred Securities will be declared and
paid only as determined in the sole discretion of the Company in its capacity as
the General Partner of the Partnership. In addition, the General Partner is not
obligated to declare distributions on the Partnership Preferred Securities at
any time, including upon or following a Partnership Enforcement Event (as
defined herein). To the extent that the issuers (including, where applicable,
the Company, as guarantor) of the securities in which the Partnership invests
fail to make any payments in respect of such securities (or, if applicable,
guarantees), the Partnership will not have sufficient funds to pay and will not
declare or pay
2
<PAGE>
<PAGE>
distributions on the Partnership Preferred Securities. In addition, as described
under 'Risk Factors -- Risk Factors Related to TOPrS -- Insufficient Income or
Assets Available to Partnership,' the Partnership may not have sufficient funds
to pay current or liquidating distributions on the Partnership Preferred
Securities if (i) at any time that the Partnership is receiving current payments
in respect of the securities held by the Partnership (including the Debentures),
the General Partner, in its sole discretion, does not declare distributions on
the Partnership Preferred Securities and the Partnership receives insufficient
amounts to pay the additional compounded distributions that will accrue in
respect of the Partnership Preferred Securities, (ii) the Partnership reinvests
the proceeds received in respect of the Debentures upon their retirement or at
their maturities in Affiliate Investment Instruments and Eligible Debt
Securities that do not generate income in an amount that is sufficient to pay
full distributions in respect of the Partnership Preferred Securities or (iii)
the Partnership invests in equity or debt securities of Investment Affiliates
that are not guaranteed by the Company and that cannot be liquidated by the
Partnership for an amount sufficient to pay such distributions in full. If the
Partnership does not declare and pay distributions on the Partnership Preferred
Securities out of funds legally available for distribution, the Trust will not
have sufficient funds to make distributions on the Trust Preferred Securities,
in which event the Trust Guarantee will not apply to such distributions until
the Trust has sufficient funds available therefor. See 'Risk Factors -- Risk
Factors Related to TOPrS -- Distributions Payable Only if Declared by General
Partner; Restrictions on Certain Payments; Tax Consequences,' ' -- Risk Factors
Related to TOPrS -- Insufficient Income or Assets Available to Partnership,'
'Description of the Trust -- Preferred Securities -- Distributions' and
'Description of the Partnership Preferred Securities-Distributions.'
If (a) for any distribution period, full distributions on a cumulative
basis on any Trust Preferred Securities have not been paid, (b) an Investment
Event of Default by any Investment Affiliate in respect of any Affiliate
Investment Instrument (each as defined herein) has occurred and is continuing or
(c) the Company is in default of its obligations under any Guarantee, then
during such period the Company shall not, nor permit any majority owned
subsidiary to (i) declare or pay dividends on, make distributions with respect
to, or redeem, purchase or acquire, or make a liquidation payment with respect
to any of its capital stock or comparable equity interest (except for dividends
or distributions in shares of its capital stock, conversions or exchanges of
common stock of one class into common stock of another class and distributions
with respect to the Partnership or the Trust or dividends and distributions on
the common stock of wholly owned subsidiaries of the Company), (ii) make, or
permit the making of, any Affiliated Restricted Payments except for Permissible
Affiliated Payments (each as defined herein), and (iii) make any guarantee
payments with respect to the foregoing.
The Partnership Preferred Securities are redeemable by the Partnership, in
whole or in part, from time to time, on or after September 30, 2006 at an amount
per Partnership Preferred Security equal to $25 plus accrued and unpaid
distributions thereon. The Partnership Preferred Securities may also be
redeemed, in whole but not in part, at any time upon the occurrence of a
Partnership Special Event (as defined herein). If the Partnership redeems the
Partnership Preferred Securities, the Trust must redeem Trust Securities on a
pro rata basis having an aggregate liquidation amount equal to the aggregate
principal amount of the Partnership Preferred Securities so redeemed at a
redemption price corresponding to the redemption price of the Partnership
Preferred Securities (which includes all accrued and unpaid distributions
thereon to the date fixed for redemption) (the 'Redemption Price'). See
'Description of the Trust Preferred Securities -- Mandatory Redemption.' Neither
the Partnership Preferred Securities nor the Trust Preferred Securities have any
scheduled maturity or are redeemable at any time at the option of the holders
thereof.
The Trust will be dissolved upon the occurrence of a Trust Special Event
(as defined herein). Upon dissolution of the Trust, the Partnership Preferred
Securities will be distributed to the holders of the Trust Securities, on a pro
rata basis, in lieu of any cash distribution, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described herein. If the
Partnership Preferred Securities are distributed to the holders of the Trust
Securities, the Company will use its best efforts to cause the Partnership
Preferred Securities to be listed on the New York Stock Exchange or such other
national securities exchange or similar organization as the Trust Preferred
Securities are then listed or quoted. See 'Description of the Trust Preferred
Securities -- Trust Special Event Redemption or Distribution' and 'Description
of the Partnership Preferred Securities.'
3
<PAGE>
<PAGE>
In the event of any liquidation, dissolution, winding up or termination of
the Trust, the holders of the Trust Preferred Securities will be entitled to
receive for each Trust Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon, except to the extent, in connection
with such dissolution, Partnership Preferred Securities are distributed to the
holders of the Trust Preferred Securities. Upon (i) the occurrence of an
Investment Event of Default by an Investment Affiliate (including the Company)
in respect of any Affiliate Investment Instrument or (ii) default by the Company
on any of its obligations under any Guarantee, the holders of the Trust
Preferred Securities will have a preference over the holders of the Trust Common
Securities with respect to payments upon liquidation of the Trust. Under no
circumstances will the investment instruments held by the Partnership be
distributed in kind to the holders of the Trust Preferred Securities or
Partnership Preferred Securities. See 'Description of the Trust Preferred
Securities -- Liquidation Distribution Upon Dissolution.'
IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
AVAILABLE INFORMATION
The Company, the Trust and the Partnership have filed with the Securities
and Exchange Commission (the 'Commission') a Registration Statement on Form S-3
(the 'Registration Statement,' which term shall include all amendments, exhibits
and schedules thereto), pursuant to the Securities Act of 1933, as amended (the
'Securities Act'), and the rules and regulations promulgated thereunder, with
respect to the Trust Preferred Securities offered hereby (as well as the
Partnership Preferred Securities, the Trust Guarantee and the Partnership
Guarantee). This Prospectus, which constitutes a part of the Registration
Statement, does not contain all the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission, and to which reference is hereby made.
The Company is subject to the information and reporting requirements of the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and in
accordance therewith files periodic reports and other information with the
Commission. Except for the listing of Trust Preferred Securities that is
expected to be made on the New York Stock Exchange, none of the Trust, the
Partnership or the Company has any securities that are listed on any national
securities exchange. The Registration Statement, as well as such reports and
other information filed by the Company with the Commission, may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. In addition, copies of
such material can be obtained from the Commission's Web Site
(http://www.sec.gov). Such reports and other information concerning the Company
are also available for inspection at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005.
The Company beneficially owns all of the Partnership's partnership
interests (other than the Partnership Preferred Securities, which are held by
the Property Trustee (as defined herein) for the benefit of the holders of Trust
Preferred Securities) and beneficially owns all of the undivided beneficial
interests in the assets of the Trust (other than the beneficial interests
represented by the Trust Preferred Securities). See 'Capita Preferred Trust,'
'Capita Preferred Funding L.P.,' 'Description of the Trust Preferred Securities'
and 'Description of the Partnership Preferred Securities.' In future filings
under the Exchange Act, a footnote to the Company's annual financial statements
will state that the Trust and the Partnership are consolidated with the Company,
that the sole assets of the Trust are the Partnership
4
<PAGE>
<PAGE>
Preferred Securities, that the sole assets of the Partnership are the Affiliate
Investment Instruments and the Eligible Debt Securities and that the Guarantees,
when taken together with the Company Debenture and the Company's obligations to
pay all fees and expenses of the Trust and the Partnership, constitute a
guarantee to the extent set forth herein by the Company of the distribution,
redemption and liquidation payments payable to the holders of the Trust
Preferred Securities. The Guarantees do not apply, however, to current
distributions by the Partnership unless and until such distributions are
declared by the Partnership out of funds legally available for payment or to
liquidating distributions unless there are assets available for payment in the
Partnership, each as more fully described under 'Risk Factors -- Risk Factors
Related to TOPrS -- Insufficient Income or Assets Available to Partnership.'
Statements made in this Prospectus concerning the provisions of any
contract, agreement or other document referred to herein are not necessarily
complete. With respect to each such statement concerning a contract, agreement
or other document filed as an exhibit to the Registration Statement or otherwise
filed with the Commission, reference is made to such exhibit or other filing for
a more complete description of the matter involved, and each such statement is
qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
and are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995 (the '1995 Form 10-K');
(2) The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended March 31, 1996 and June 30, 1996; and
(3) The Company's Current Reports on Form 8-K dated April 12, 1996,
April 30, 1996, June 6, 1996, August 20, 1996 and October 1, 1996.
The Company will provide without charge to each person, including any
beneficial owner of such person, to whom this Prospectus is delivered, upon
written or oral request, a copy of any and all information incorporated by
reference in this Prospectus (not including exhibits to the information that has
been incorporated by reference, unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Such requests should be directed to AT&T Capital Corporation, 44
Whippany Road, Morristown, NJ 07962-1983 (Telephone Number 201-397-4444),
Attention of the Investor Relations Department.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Trust Preferred Securities shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
5
<PAGE>
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements and notes thereto appearing elsewhere or
incorporated by reference in this Prospectus. The Company operates through its
business units, which consist of its various subsidiaries and divisions within
such subsidiaries. Unless the context requires otherwise, as used herein, the
term the 'Company' or 'AT&T Capital' includes such business units. Certain terms
used in this Summary are defined elsewhere in this Prospectus. See 'Index of
Defined Terms' for a cross reference to the location in this Prospectus where
such terms are defined.
THE COMPANY
AT&T Capital Corporation ('AT&T Capital' or the 'Company') is a
full-service, diversified equipment leasing and finance company that operates
principally in the United States and also has operations in Europe, Canada, the
Asia/Pacific Region and Latin America. The Company is one of the largest
equipment leasing and finance companies in the United States and is the largest
lessor of telecommunications equipment in the United States, in each case, based
on the aggregate value of equipment leased or financed.
AT&T Capital, through its various subsidiaries, leases and finances a wide
variety of equipment, including general office, manufacturing and medical
equipment, telecommunications equipment (such as private branch exchanges,
telephone systems and voice processing units), information technology equipment
(such as personal computers, retail point of sale systems and automatic teller
machines) and transportation equipment (primarily vehicles). In addition, AT&T
Capital provides inventory financing for equipment dealers, franchise financing
for franchisees and financing collateralized by real estate. At December 31,
1995, the percentage of the Company's total assets in each of its various asset
categories was as follows: 28% were comprised of general office, manufacturing
and medical equipment; 23% were comprised of telecommunications equipment; 23%
were comprised of information technology equipment; 19% were comprised of
transportation equipment; and 7% were comprised of Small Business Administration
loans and other financings collateralized by real estate and other assets. The
Company's leasing and financing services are marketed (i) to customers of
equipment manufacturers, distributors and dealers with which the Company has a
marketing relationship for financing services and (ii) directly to end-users of
equipment. The Company's approximately 500,000 customers include large global
companies, small and mid-sized businesses and federal, state and local
governments and their agencies.
During its eleven year history, the Company has achieved significant growth
in assets, finance volume (total principal amount of loans and total cost of
equipment associated with finance and lease transactions recorded by the Company
and the increase, if any, in outstanding inventory financing and asset-based
lending transactions), revenues and net income. At December 31, 1995, the
Company's total assets were $9.5 billion, an increase of 18.9% over the prior
year-end; finance volume for 1995 was $4.6 billion, an increase of 7.4% over
1994; total revenues for 1995 were $1.6 billion, an increase of 13.9% over 1994;
and net income of $127.6 million for 1995 was 27.1% greater than the Company's
net income for 1994. Total assets at the end of the third quarter of 1996 were
$10.3 billion, representing a 7.4% increase over total assets at the end of
1995, and net income of $115.3 million for the first nine months of 1996
represented an increase of 34.9% over the net income for the corresponding
period in 1995.
AT&T Capital has two broad business strategies: (i) to enhance its position
as a leader in providing leasing and financing services that are marketed to
customers of equipment manufacturers, distributors and dealers ('vendors') with
whom the Company has a marketing relationship for financing services (the
Company's 'Global Vendor Finance' strategy); and (ii) to establish itself as a
leader in providing leasing, financing and related services that are marketed
directly to end-users of equipment, including customers of the Company's Global
Vendor Finance marketing activities (e.g., end-users acquiring general equipment
for which the Company previously financed telecommunications equipment), as well
as customers of vendors with whom the Company does not have a marketing
relationship for financing services (the Company's 'Direct Customer Finance'
strategy). For the year ended December 31, 1995,
6
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the percentage of the Company's aggregate finance volume derived from the
Company's Global Vendor Finance and Direct Customer Finance programs was 58% and
42%, respectively.
AT&T Capital seeks to implement its strategies by taking advantage of what
it believes are its competitive strengths: (i) high-volume processing
capabilities that enable it to serve a large number of customers in a timely and
efficient manner; (ii) significant experience in structuring and managing Global
Vendor Finance and Direct Customer Finance programs tailored to specific
customer needs; (iii) risk management skills (including initial credit review
and residual value assessment and continuing portfolio management capabilities);
(iv) asset management skills (including equipment remarketing skills that
enhance the ability of the Company to realize the residual values of its
equipment); and (v) financial structuring capabilities. See 'Business of the
Company -- Certain Business Skills.'
The Company was founded in 1985 by AT&T Corp. ('AT&T') as a captive finance
company to assist AT&T's equipment marketing and sales efforts by providing its
customers with sophisticated financing. AT&T Capital has operated independently
since its initial public offering (the 'IPO') in 1993. Consequently, the Company
believes that the disposition by AT&T of its remaining ownership of the
Company's Common Stock, par value $.01 per share (the 'Common Stock') as a
result of the Merger referred to below will not have a material impact on the
manner in which the Company conducts its business operations, except that
following the Merger, the Company anticipates that significant changes in the
Company's financing strategy will be implemented. In particular, the Company
anticipates that approximately 30% of its financing volume originated each year
may be securitized annually pursuant to off-balance sheet securitization
transactions. See 'Business of the Company -- Business Strategy.'
The Company has a management team with significant experience with the
Company and in the equipment leasing and finance industry. At September 30,
1996, the Company and its subsidiaries had approximately 2,900 employees. The
principal executive offices of the Company are located at 44 Whippany Road,
Morristown, New Jersey 07962.
THE MERGER
On October 1, 1996, the Company consummated a merger (the 'Merger') with
Antigua Acquisition Corporation, a recently formed Delaware corporation ('Merger
Sub'), pursuant to an Agreement and Plan of Merger (the 'Merger Agreement')
among AT&T, the former indirect owner of approximately 86% of the outstanding
Common Stock of the Company, Hercules Limited, a recently formed Cayman Islands
corporation ('Holdings'), and Merger Sub, a majority-owned subsidiary of
Holdings. Pursuant to the Merger Agreement, Merger Sub was merged with and into
the Company, with the Company continuing its corporate existence under Delaware
law as the surviving corporation.
All of the outstanding common equity capital of the Company is currently
directly or indirectly owned by members of a leasing consortium (the 'Leasing
Consortium') consisting of (i) certain members of the Company's management (the
'Management Investors'), including Thomas C. Wajnert, Chairman of the Board and
Chief Executive Officer of the Company, and approximately 23 other members of
the Company's senior management, and (ii) GRS Holding Company Limited, a private
United Kingdom holding corporation engaged in the U.K. rail leasing business
('GRSH'). Following the consummation of the Merger and the related transactions,
the Management Investors own 3.3% of the Common Stock (or approximately 5.5% on
a fully diluted basis) and GRSH indirectly owns 96.7% of the Common Stock (or
approximately 94.5% on a fully diluted basis). GRSH, in turn, is 85%
beneficially owned by Nomura International plc, a wholly owned subsidiary of The
Nomura Securities Co., Ltd. ('Nomura'), and 9.5% beneficially owned by Babcock &
Brown Holdings Inc., a San Francisco based leasing, asset and project financing
advisory company ('Babcock & Brown'), in each case, through instruments
convertible into GRSH's capital stock. The principal activities of Nomura, which
was founded in 1925 in Osaka, Japan and is currently Japan's largest securities
brokerage house, include securities brokerage, trading, investment banking and
commercial banking in global financial markets.
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Following the Merger, on October 15, 1996, a newly established trust
sponsored by the Company issued and sold equipment receivable-backed securities
in an off-balance sheet securitization which generated net proceeds to the
Company of approximately $2.6 billion which proceeds, together with the equity
contributions relating to the Merger (approximately $0.9 billion), were used to
repay short-term notes, including approximately $1.3 billion of short-term
obligations incurred by the Company to finance a portion of the aggregate
consideration paid in respect of the Merger. See 'The Merger' for a description
of certain pro forma financial data after giving effect to the Merger and the
related transactions, including such securitization by the Company.
RELATIONSHIP WITH AT&T ENTITIES
In September 1995, AT&T announced plans to separate itself into three
publicly traded companies (AT&T, Lucent Technologies Inc. ('Lucent') and NCR
Corporation ('NCR') (collectively, the 'AT&T Entities')) and to dispose of its
approximately 86% equity interest in the Company to the general public or
another company (the 'AT&T Restructuring'). Pursuant to the AT&T Restructuring,
the Company consummated the Merger which resulted in, among other things, the
disposition by AT&T of its remaining equity interest in the Company. See 'The
Merger.'
On September 30, 1996, AT&T spun off its entire remaining interest in
Lucent to AT&T's shareholders. Lucent's businesses involve the manufacture and
distribution of public telecommunications systems, business communications
systems, micro-electronic components, and consumer telecommunications products.
In addition, AT&T has announced that it intends to distribute to its
shareholders all of its interest in NCR by the end of 1996. NCR's businesses
involve the manufacture and distribution of information technology equipment,
including automatic teller machines and point-of-sale terminal equipment.
In connection with the Company's IPO in 1993, the Company entered into a
series of agreements with AT&T to formalize the relationship between the two
companies, including the following three significant agreements, each dated as
of June 25, 1993: (i) an Operating Agreement (the 'AT&T Operating Agreement'),
(ii) an Intercompany Agreement (the 'Intercompany Agreement') and (iii) a
License Agreement (the 'License Agreement'). The Company has executed agreements
comparable to the AT&T Operating Agreement with each of Lucent and NCR (the
'Additional Operating Agreements' and, together with the AT&T Operating
Agreement, the 'Operating Agreements'). In addition, the Company has entered
into letter agreements (the 'Agreement Supplements') with Lucent and NCR
pursuant to which Lucent and NCR have agreed that various provisions of the
Intercompany Agreement and the License Agreement shall apply equally to them.
The initial term of each of the Operating Agreements, the Intercompany
Agreement, the License Agreement and the Agreement Supplements is scheduled to
end on August 4, 2000. In addition, AT&T has the right under the License
Agreement, after two years' prior notice, to require the Company to discontinue
use of the 'AT&T' trade name as part of the Company's corporate or 'doing
business' name. For additional details with respect to the terms of each of the
Operating Agreements, the Intercompany Agreement, the License Agreement and the
Agreement Supplements, see 'Relationship with AT&T Entities.'
In 1995, approximately 41% and 76% of the Company's total revenues and net
income, respectively, were attributable, directly or indirectly, to AT&T
Entities. See 'Risk Factors -- Changes in Relationship with AT&T
Entities -- Revenues and Net Income Attributable to AT&T Entities' for a
description of the Company's dependence on the revenue and net income
attributable to the Company's relationship with the AT&T Entities and their
customers and employees.
8
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THE OFFERING
<TABLE>
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The Trust.................................... Capita Preferred Trust, a Delaware statutory business trust. The
sole assets of the Trust will be the Partnership Preferred
Securities.
The Partnership.............................. Capita Preferred Funding L.P., a Delaware limited partnership. The
assets of the Partnership will initially consist of the
Debentures and, to a limited extent, certain Eligible Debt
Securities.
Securities Offered........................... 8,000,000 of % Trust Preferred Securities.
Distributions................................ Distributions on the Trust Preferred Securities will accrue from
the date of original issuance of the Trust Preferred Securities
and will be payable at the annual rate of % of the liquidation
amount of $25 per Trust Preferred Security if, as, and when the
Trust has funds available for payment. Distributions will be
payable quarterly in arrears on each March 31, June 30,
September 30, and December 31, commencing December 31, 1996.
Distributions not made on the scheduled payment date will
accumulate and compound quarterly at a rate per annum equal to
%.
The ability of the Trust to pay distributions on the Trust
Preferred Securities is entirely dependent on its receipt of
corresponding distributions with respect to the Partnership
Preferred Securities. The ability of the Partnership to pay
distributions on the Partnership Preferred Securities is, in
turn, dependent on its receipt of payments with respect to the
Debentures and the Eligible Debt Securities held by the
Partnership. Distributions on the Partnership Preferred
Securities will be declared and paid only as determined in the
sole discretion of the Company in its capacity as the General
Partner of the Partnership. See 'Risk Factors -- Risk Factors
Related to TOPrS -- Distributions Payable Only if Declared by
General Partner; Restrictions on Certain Payments; Tax
Consequences,' 'Description of the Trust Preferred
Securities -- Distributions' and 'Description of the Partnership
Preferred Securities -- Distributions' and ' -- Partnership
Investments.'
Rights Upon Non-Payment of Distributions and
Certain Defaults; Covenants of the
Company.................................... If, at any time, (i) arrearages on distributions on the Trust
Preferred Securities shall exist for six consecutive quarterly
distribution periods, (ii) an Investment Event of Default occurs
and is continuing on any Affiliate Investment Instrument or
(iii) the Company is in default on any of its obligations under
the Trust Guarantee, then (a) the Property Trustee, as the
holder of the Partnership Preferred Securities, will have the
right to enforce the terms of the Partnership Preferred
Securities, including the right to direct the Special
Representative (as defined herein) to enforce (1) the
Partnership's creditors' rights and other rights with respect to
the Affiliate Investment
</TABLE>
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<S> <C>
Instruments and the Investment Guarantees and (2) the rights of
the holders of the Partnership Preferred Securities to receive
distributions (only if, as and when declared) on the Partnership
Preferred Securities, and (b) the Trust Guarantee Trustee or the
Special Representative, as the holders of the Trust Guarantee
and the Partnership Guarantee, respectively, shall have the
right to enforce such Guarantees, including the right to enforce
the covenant restricting certain payments by the Company and its
majority owned subsidiaries described below.
Under no circumstances, however, shall the Special Representative
have authority to cause the General Partner to declare
distributions on the Partnership Preferred Securities. If the
Partnership does not declare and pay distributions on the
Partnership Preferred Securities out of funds legally available
for distribution, the Trust will not have sufficient funds to
make distributions on the Trust Preferred Securities. See 'Risk
Factors -- Risk Factors Related to TOPrS -- Insufficient Income
or Assets Available to Partnership,' 'Description of the Trust
Preferred Securities -- Trust Enforcement Events' and
'Description of the Partnership Preferred Securities --
Partnership Enforcement Events.'
The Company has agreed that if (a) for any distribution period,
full distributions on a cumulative basis on any Trust Preferred
Securities have not been paid, (b) an Investment Event of
Default by any Investment Affiliate in respect of any Affiliate
Investment Instrument has occurred and is continuing or (c) the
Company is in default of its obligations under the Trust
Guarantee, the Partnership Guarantee or any Investment
Guarantee, then, during such period the Company shall not, nor
permit any majority owned subsidiary to (i) declare or pay
dividends on, make distributions with respect to, or redeem,
purchase or acquire, or make a liquidation payment with respect
to any of its capital stock or comparable equity interest
(except for dividends or distributions in shares of its capital
stock, conversions or exchanges of common stock of one class
into common stock of another class and dividends, distributions
with respect to the Partnership or the Trust or dividends and
distributions on the common stock of wholly owned subsidiaries
of the Company), (ii) make, or permit the making of, any
Affiliated Restricted Payments except for Permissible Affiliated
Payments and (iii) make any guarantee payments with respect to
the foregoing.
Liquidation Amount........................... In the event of any liquidation of the Trust, holders will be
entitled to receive $25 per Trust Preferred Security plus an
amount equal to any accrued and unpaid distributions thereon to
the date of payment (such amount being the 'Trust Liquidation
Distribution'), unless Partnership Preferred Securities are
distributed to such holders in
</TABLE>
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<S> <C>
connection with a Trust Special Event. If upon a liquidation of
the Trust (in which the Partnership Preferred Securities are not
distributed to holders of the Trust Securities), the Trust
Liquidation Distribution can be paid only in part because the
Trust has insufficient assets available to pay in full the
aggregate Trust Liquidation Distribution, then the amounts
payable directly by the Trust on the Trust Preferred Securities
shall be paid on a pro rata basis. The holders of the Trust
Common Securities will be entitled to receive distributions upon
any such liquidation pro rata with the holders of the Trust
Preferred Securities, except that upon (i) the occurrence of an
Investment Event of Default by an Investment Affiliate
(including the Company) in respect of any Affiliate Investment
Instrument or (ii) default by the Company on any of its
obligations under any Guarantee, the holders of the Trust
Preferred Securities will have a preference over the holders of
the Trust Common Securities with respect to payments upon
liquidation of the Trust. See 'Description of the Trust
Preferred Securities -- Liquidation Distribution Upon
Dissolution.'
Optional Redemption.......................... The Partnership Preferred Securities will be redeemable for cash,
at the option of the Partnership, in whole or in part, from time
to time, after September 30, 2006, at an amount per Partnership
Preferred Security equal to $25 plus accrued and unpaid
distributions thereon. Upon any redemption of the Partnership
Preferred Securities, the Trust Preferred Securities will be
redeemed at the Redemption Price. See 'Description of the
Partnership Preferred Securities -- Optional Redemption' and
'Description of the Trust Preferred Securities -- Mandatory
Redemption.' Neither the Partnership Preferred Securities nor
the Trust Preferred Securities have any scheduled maturity or
are redeemable at any time at the option of the holders thereof.
Guarantees................................... The Company will irrevocably guarantee, on a subordinated basis,
the payment in full of (i) any accrued and unpaid distributions
on the Trust Preferred Securities to the extent of funds of the
Trust available therefor, (ii) the amount payable upon
redemption of the Trust Preferred Securities to the extent of
funds of the Trust available therefor and (iii) generally, the
liquidation amount of the Trust Preferred Securities to the
extent of the assets of the Trust available for distribution to
holders of Trust Preferred Securities. See 'Description of the
Trust Guarantee.'
The Company will also irrevocably guarantee, on a subordinated
basis and to the extent set forth herein, the payment in full of
(i) any accrued and unpaid distributions on the Partnership
Preferred Securities if, as and when declared out of funds
legally available therefor, (ii) the amount payable upon
redemption of the
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Partnership Preferred Securities to the extent of funds of the
Partnership legally available therefor and (iii) generally, the
liquidation amount of the Partnership Preferred Securities to
the extent of the assets of the Partnership available for
distribution to holders of Partnership Preferred Securities. See
'Description of the Partnership Guarantee.'
The Company will fully and unconditionally guarantee, on a
subordinated basis, payments in respect of the Debentures (other
than the Company Debenture) for the benefit of the holders of
the Partnership Preferred Securities, to the extent described
under 'Description of the Partnership Preferred Securities --
Investment Guarantees.'
The Guarantees, when taken together with the Company Debenture and
the Company's obligations to pay all fees and expenses of the
Trust and the Partnership, constitute a guarantee to the extent
set forth herein by the Company of the distribution, redemption
and liquidation payments payable to the holders of the Trust
Preferred Securities. The Guarantees do not apply, however, to
current distributions by the Partnership unless and until such
distributions are declared by the Partnership out of funds
legally available for payment or to liquidating distributions
unless there are assets available for payment in the
Partnership, each as more fully described under 'Risk
Factors -- Risk Factors Related to TOPrS -- Insufficient Income
or Assets Available to Partnership.' The Company's obligations
under the Guarantees are subordinate and junior in right of
payment to all other liabilities of the Company and rank pari
passu with the most senior preferred stock issued from time to
time by the Company and with any guarantee now or hereafter
entered into by the Company in respect of any preferred stock of
any affiliate of the Company.
Voting Rights................................ Generally, holders of the Trust Preferred Securities will not have
any voting rights. The holders of a majority in liquidation
amount of the Trust Preferred Securities, however, have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or
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 Partnership
Preferred Securities, (i) to exercise its rights in the manner
described above under 'Rights Upon Non-Payment of Distributions
and Certain Defaults; Covenants of the Company' and (ii) to
consent to any amendment, modification or termination of the
Limited Partnership Agreement or the Partnership Preferred
Securities where such consent shall be required. See
'Description of the Trust Preferred Securities -- Voting
Rights.'
</TABLE>
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Special Event Redemptions or Distributions... Upon the occurrence of a Trust Tax Event (which event will
generally be triggered upon the occurrence of certain adverse
tax consequences or the denial of an interest deduction on the
Debentures held by the Partnership) or a Trust Investment
Company Event (which event will generally be triggered if the
Trust is considered an 'investment company' under the Investment
Company Act of 1940, as amended (the '1940 Act')), except in
certain limited circumstances, the Regular Trustees (as defined
herein) will have the right to liquidate the Trust and cause
Partnership Preferred Securities to be distributed to the
holders of the Trust Preferred Securities. In certain
circumstances involving a Partnership Tax Event (which event
will generally be triggered upon the occurrence of certain
adverse tax consequences or the denial of an interest deduction
on the Debentures held by the Partnership) or a Partnership
Investment Company Event (which event will generally be
triggered if the Partnership is considered an 'investment
company' under the 1940 Act), the Partnership will have the
right to redeem the Partnership Preferred Securities, in whole
(but not in part), at $25 per Partnership Preferred Security
plus accrued and unpaid distributions thereon, in lieu of a
distribution of the Partnership Preferred Securities, in which
event the Trust Securities will be redeemed at the Redemption
Price. See 'Description of the Trust Preferred Securities --
Trust Special Event Redemption or Distribution' and 'Description
of the Partnership Preferred Securities -- Partnership Special
Event Redemption.'
Form of Trust Preferred Securities........... The Trust Preferred Securities will be represented by a global
certificate or certificates registered in the name of Cede &
Co., as nominee for DTC. Beneficial interests in the Trust
Preferred Securities will be evidenced by, and transfers thereof
will be effected only through, records maintained by the
participants in DTC. Except as described herein, Trust Preferred
Securities in certificated form will not be issued in exchange
for the global certificate or certificates. See 'Description of
the Trust Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company.'
Use of Proceeds.............................. All of the proceeds from the sale of the Trust Securities will be
invested by the Trust in the Partnership Preferred Securities.
The Partnership will use the funds to make investments in the
Debentures and, to a limited extent, certain Eligible Debt
Securities. See 'Use of Proceeds.'
</TABLE>
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SUMMARY FINANCIAL DATA
The Results of Operations Data, the Balance Sheet Data and the Other Data
shown below at or for the years ended December 31, 1995, 1994 and 1993 are
derived from the Consolidated Financial Statements of the Company at such dates
or for such periods, which have been audited by Coopers & Lybrand L.L.P.,
independent accountants. Such data at or for the nine months ended September 30,
1996 and 1995 are derived from unaudited consolidated financial information. In
management's opinion, the Company's unaudited consolidated financial statements
at or for the nine months ended September 30, 1996 and 1995 include all
adjustments (consisting of normal recurring adjustments) necessary for a fair
presentation. The results of operations for the nine months ended September 30,
1996 are not necessarily indicative of the results for the entire year or any
other interim period.
The summary financial data as presented below should be read in conjunction
with 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' and the Consolidated Financial Statements and related notes thereto
incorporated by reference in this Prospectus. The Company's unaudited
consolidated financial information at or for the nine months ended September 30,
1996 does not include the effects of the Merger and related transactions. For a
description of the significant impact of the Merger and related transactions on
the Company's financial position and results of operations, see 'The Merger.'
For a description of certain increased annual costs that the Company expects to
incur as a result of the Merger, see 'Risk Factors -- Risks Related to the
Termination of AT&T's Ownership Interest in the Company.'
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- ------------------------------------
1996 1995 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
RESULTS OF OPERATIONS DATA:
Total revenues................ $1,370,494 $1,140,651 $1,577,035 $1,384,079 $1,359,589
Interest expense.............. 350,359 300,891 411,040 271,812 236,335
Operating and administrative
expenses.................... 375,172 351,443 473,663 427,187 381,515
Provision for credit losses... 71,454 60,359 86,214 80,888 123,678
Income before income taxes and
cumulative effect on prior
years of accounting
change...................... 182,496 143,276 208,239 173,614 138,040
Income before cumulative
effect on prior years of
accounting change and impact
of tax rate change.......... 115,290 85,466 127,555 100,336 83,911
Cumulative effect on prior
years of accounting
change(1)................... -- -- -- -- (2,914)
Impact of 1993 tax rate
change(1)................... -- -- -- -- (12,401)
Net income(1)................. 115,290 85,466 127,555 100,336 68,596
Earnings per share(1)......... 2.43 1.82 2.70 2.14 1.60
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
---------------- ------------------------------------
1996 1995 1994 1993
---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
BALANCE SHEET DATA:
Total assets.................. $ 10,251,600 $9,541,259 $8,021,923 $6,409,726
Total debt(2)................. 7,917,926 6,928,409 5,556,458 4,262,405
Total liabilities(2).......... 9,033,798 8,425,134 7,013,705 5,485,283
Total shareowners' equity..... 1,217,802 1,116,125 1,008,218 924,443
</TABLE>
(table continued on next page)
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<CAPTION>
AT OR FOR THE AT OR FOR THE
NINE MONTHS ENDED SEPTEMBER 30, YEAR ENDED DECEMBER 31,
---------------------------------- -----------------------------------
1996 1995 1995 1994 1993
---------------- ---------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
OTHER DATA:
Ratio of earnings to fixed
charges(3).................. 1.51x 1.47x 1.50x 1.62x 1.57x
Ratio of total debt to
shareowners' equity(4)...... 6.50x 6.07x 6.22x 5.51x 4.61x
Return on average
equity(5)(7)................ 13.2% 11.0% 12.1% 10.5% 8.5%
Return on average
assets(6)(7)................ 1.6% 1.3% 1.5% 1.4% 1.1%
Portfolio Assets of the
Company..................... $ 10,041,020 $ 8,892,895 $9,328,623 $7,661,226 $6,236,624
Allowance for credit losses... 235,205 214,711 223,220 176,428 159,819
Net Portfolio Assets of the
Company..................... 9,805,815 8,678,184 9,105,403 7,484,798 6,076,805
Assets of others managed by
the Company................. 2,159,316 2,428,924 2,214,502 2,659,526 2,795,663
Volume of equipment
financed(8)................. 3,780,000 3,088,790 4,567,000 4,251,000 3,467,000
Ratio of allowance for credit
losses to net
charge-offs(9).............. 3.08x 4.22x 4.77x 3.18x 2.71x
Ratio of net charge-offs to
Portfolio Assets(9)......... 0.76% 0.57 0.50% 0.73% 0.95%
Ratio of allowance for credit
losses to Portfolio
Assets...................... 2.34% 2.41% 2.39% 2.30% 2.56%
Ratio of operating and
administrative expenses to
period-end total
assets(10).................. 4.88% 5.19% 4.96% 5.33% 5.95%
</TABLE>
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(1) Net income and earnings per share for 1993 were adversely impacted by the
federal tax rate increase to 35% and a cumulative effect on prior years of
accounting change. See note 10 to the Consolidated Financial Statements
incorporated herein by reference to the 1995 Form 10-K. Earnings per share
without these charges for 1993 would have been $1.95 per share.
(2) Total debt does not include, and total liabilities includes, certain
interest-free loans from AT&T to the Company under certain tax agreements,
in aggregate outstanding principal amounts of $247.4 million, $248.9
million, $214.1 million and $188.6 million at September 30, 1995, December
31, 1995, 1994 and 1993, respectively. The Company no longer receives such
interest-free loans and repaid such loans in their entirety with a payment
of $247.4 million on September 30, 1996. See 'Risk Factors -- Risks Related
to the Termination of AT&T's Ownership Interest in the Company -- Tax
Deconsolidation' and note 4 below.
(3) Earnings before income taxes and cumulative effect on prior years of
accounting change plus fixed charges (the sum of interest on indebtedness
and the portion of rentals representative of the interest factor) divided
by fixed charges. Prior to the Merger, a portion of the Company's
indebtedness to AT&T did not bear interest. See note 2 above. On a pro
forma basis giving effect to the issuance of the Trust Preferred Securities
on January 1, 1995, the ratio of earnings to fixed charges for the nine
months ended September 30, 1996 and the year ended December 31, 1995 would
have been 1.49x and 1.47x, respectively. Had the Merger and related
transactions, including the issuance of the Trust Preferred Securities,
taken place on January 1, 1995, the pro forma ratio of earnings to fixed
charges for the nine months ended September 30, 1996 would have been 1.17x,
and for the year ended December 31, 1995, there would have been an earnings
deficiency of $30.0 million to cover fixed charges. See 'Ratio of Earnings
to Fixed Charges of the Company.'
(4) Total debt does not include certain interest-free loans previously made
from AT&T to the Company under certain tax agreements. The Company repaid
such loans in their entirety with a payment of $247.4 million on September
30, 1996. If such loans were so included, the ratio of total debt to
shareowners' equity would have been 6.28x, 6.45x, 5.72x and 4.81x at
September 30, 1995, December 31, 1995, 1994 and 1993, respectively. See
'Risk Factors -- Risks Related to the Termination of AT&T's Ownership
Interest in the Company -- Tax Deconsolidation' and note 2 above.
(5) Net income (annualized in the case of the nine months ended September 30,
1996 and 1995) divided by average total shareowners' equity.
(6) Net income (annualized in the case of the nine months ended September 30,
1996 and 1995) divided by average total assets.
(7) In 1993, the Company's adjusted return on average equity and return on
average assets, defined as income before cumulative effect on prior years
of accounting change and impact of tax rate change as a percentage of
average equity and average assets, respectively, was 10.3% and 1.4%,
respectively.
(8) Total principal amount of loans and total cost of equipment associated with
finance and lease transactions recorded by the Company and the increase, if
any, in outstanding inventory financing and asset-based lending
transactions.
(9) Net charge-offs at September 30, 1996 and 1995 are calculated based on the
twelve months then ended.
(10) Operating and administrative expenses (annualized for the nine months ended
September 30, 1996 and 1995) divided by period-end total assets.
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RATINGS OF SECURITIES
Standard & Poor's Ratings Group, a division of McGraw-Hill ('S&P'), will
assign a rating to the Trust Preferred Securities of 'BBB - ', Moody's Investors
Service, Inc. ('Moody's') has assigned an initial rating to the Trust Preferred
Securities of 'ba2', Duff & Phelps Credit Rating Co. ('Duff & Phelps') has
indicated it will assign a rating to the Trust Preferred Securities of 'BBB - '
and Fitch Investors Service, Inc. ('Fitch') has indicated its expected rating of
the Trust Preferred Securities as 'BBB - .'
An explanation of the significance of ratings may be obtained from the
rating agencies. Generally, rating agencies base their ratings on such material
and information, and such of their own investigations, studies and assumptions,
as they deem appropriate. A credit rating of a security is not a recommendation
to buy, sell or hold securities. There is no assurance that any rating will
apply for any given period of time or that a rating may not be adjusted or
withdrawn.
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RISK FACTORS
Prospective purchasers of the Trust Preferred Securities should consider
carefully the risk factors set forth below, as well as all other information
contained or incorporated by reference in this Prospectus, in evaluating an
investment in the Trust Preferred Securities. To the extent any of the
information contained or incorporated by reference in this Prospectus
constitutes a 'forward-looking statement' as defined in Section 27A(i)(1) of the
Securities Act, the risk factors set forth below are meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those in the forward-looking statement.
RISKS RELATED TO EXPECTED PLANS INVOLVING THE COMPANY
SECURITIZATION PROGRAM. The Company's current business plan incorporates
future securitization transactions as a key part of the Company's financing to
manage the Company's leverage ratio and to transfer credit risk. The Company
will continue to manage the securitized assets following their sale. To the
extent that the actual level of securitization deviates significantly from the
Company's current target level of securitization (currently planned at
approximately 30% of the financing volume originated in each year), there could
be a material adverse effect on the Company's results of operations and any such
significant deviation may affect the credit ratings assigned to the short-term
or long-term debt of the Company.
LEVERAGE AND DEBT SERVICE. As a result of the Merger and related
transactions, there has been a significant increase in the Company's ratio of
consolidated indebtedness to shareowners' equity. As of September 30, 1996, on a
pro forma basis for the Merger and related transactions, the Company's ratio of
consolidated indebtedness to shareowners' equity plus Company-obligated
preferred securities issued in this offering would have been 7.19x. The
increased debt-to-equity ratio will be a factor in the analyses of the Company
applied by statistical rating organizations. Any future downgrades in the credit
ratings of the Company's short-term or long-term debt would increase the
Company's cost of borrowing, limit its access to the commercial paper market
(the Company's traditional funding source) and reduce its competitiveness,
particularly if any such rating is in a generic rating category that signifies
that the relevant debt of the Company is less than investment grade, and certain
ratings downgrades below 'BB+' by S&P or below 'Ba1' by Moody's could result in
the termination of one or more of the License Agreements with AT&T, Lucent and
NCR. See 'Relationship with AT&T Entities -- Operating and Certain Other
Agreements with AT&T Entities' below. Any such downgrading could have a material
adverse effect on the Company.
CHANGES IN RELATIONSHIP WITH AT&T ENTITIES
REVENUES AND NET INCOME ATTRIBUTABLE TO AT&T ENTITIES. A substantial
portion of the Company's revenues and a substantial majority of its net income
are attributable to the financing provided by the Company to customers of AT&T,
Lucent and NCR (the 'Customers of the AT&T Entities') with respect to products
manufactured or distributed by them (the 'AT&T Entities Products') and, to a
lesser extent, to transactions where the AT&T Entities or their employees are
customers of the Company (the 'AT&T Entities as End-User'), primarily with
respect to the lease of information technology and other equipment or vehicles
to them as end-users and to the administration and management of certain leased
assets on behalf of AT&T. The Company's commercial relationships with the AT&T
Entities are currently governed by certain important agreements described below
and in 'Relationship with AT&T Entities.'
For the nine months ended September 30, 1996, approximately 30.5% and 59.7%
(or $418.4 million and $68.8 million) of the Company's total revenues and net
income, respectively, were attributable to lease and other financing provided by
the Company to the Customers of the AT&T Entities with respect to the AT&T
Entities Products. An additional approximately 7.2% and 7.6% (or $99.2 million
and $8.8 million) of total revenues and net income, respectively, for the nine
months ended September 30, 1996 were attributable to transactions with the AT&T
Entities as End-Users. The Company's non-AT&T Entities related business
generated 62.3% and 32.7% (or $852.9 million and $37.7 million) of total
revenues and net income, respectively, for the nine months ended September 30,
1996
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(approximately 30.9% of net income for the period without giving effect to a
securitization of lease receivables effected by the Company in the first quarter
of 1996).
In 1995, approximately 32.7% and 67.9% (or $516.2 million and $86.6
million) of the Company's total revenues and net income, respectively, were
attributable to lease and other financing provided by the Company to the
Customers of the AT&T Entities with respect to the AT&T Entities Products. An
additional approximately 8.3% and 8.2% (or $130.6 million and $10.5 million) of
total revenues and net income, respectively, in 1995 were attributable to
transactions with the AT&T Entities as End-Users. In 1995, the Company's
non-AT&T Entities related business generated approximately 59.0% and 23.9% (or
$930.2 million and $30.5 million) of total revenues and net income,
respectively. The foregoing net income amounts were calculated based upon an
allocation of interest, income taxes and certain corporate overhead expenses
that the Company believes to be reasonable. See 'Business of the
Company -- General.'
Accordingly, while the proportion of the Company's total revenues and net
income from non-AT&T Entities related business has grown over the last several
years, a substantial portion of the Company's total revenues, and a substantial
majority of the Company's net income, have been generated by the Company's
relationship with the AT&T Entities. A substantial majority of such revenues and
substantially all such net income have been attributable to transactions with
customers of Lucent and its subsidiaries (and the business related to these
transactions have been generally among the most profitable for the Company). A
significant decrease in the portion of the sales of the AT&T Entities Products
(the 'AT&T Entities Product Sales') that are financed by the Company, or in the
absolute amount of the AT&T Entities Product Sales (in either case, particularly
with respect to Lucent), or in the amount of transactions effected by the
Company with the AT&T Entities as End-User (particularly with respect to AT&T)
would have a material adverse effect on the Company's results of operations and
financial condition.
OPERATING AND CERTAIN OTHER AGREEMENTS WITH AT&T ENTITIES. The initial
terms of each of the Operating Agreements (pursuant to which, among other
things, the Company serves as preferred provider of financing services and has
certain related and other rights and privileges in connection with the financing
of equipment to the Customers of the AT&T Entities) will expire on August 4,
2000, but will be automatically renewed for successive two-year periods unless
either party thereto gives the other a non-renewal notice at least one year
prior to the end of the initial or renewal term. None of the AT&T Entities is
required to renew the term of its Operating Agreement beyond the expiration of
the current term on August 4, 2000.
Although the Company will seek to maintain and improve its existing
relationships with Lucent, NCR and AT&T and seek to extend each of the Operating
Agreements beyond August 4, 2000, no assurance can be given that the Operating
Agreements, or any of them, will be extended beyond such date or, if extended,
that the terms and conditions thereof will not be modified in a manner adverse
to the Company. Failure to renew NCR's and Lucent's Operating Agreements on
terms not adverse to the Company could have a material adverse effect on the
Company. Moreover, in certain circumstances, the Operating Agreements may be
terminated prior to their expiration. See 'Relationship with AT&T Entities' for
a summary of certain important terms of the Operating Agreements, including a
description of the scope (and limitations) of the Company's 'preferred provider'
status under such agreements.
To provide additional incentive for Lucent to assist the Company in the
financing of products manufactured or distributed by Lucent, in recent years the
Company has paid Lucent a sales assistance fee equal to a designated percentage
of the aggregate sales prices and other charges ('volumes') of Lucent products
financed by the Company. In early 1996, following Lucent's request, the Company
agreed to pay a substantial increase in the Lucent sales assistance fee for
1995, both as an absolute amount and as a percentage of volumes attributable to
Lucent. After giving effect to the increase, the sales assistance fee paid by
the Company to Lucent for 1995 was approximately double the 1994 fee. The
Company and Lucent recently agreed to a modified formula for calculating the
sales assistance fee for the remaining years of the term of Lucent's Operating
Agreement (retroactive to January 1, 1996). The revised formula is expected to
result in aggregate annual sales assistance fees which are approximately double
the amounts that would have been paid if the pre-1995 formula had been
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maintained. No assurance can be given that Lucent will not seek higher sales
assistance fees in 1996 or future years (or otherwise attempt to share in the
revenues of the Company associated with the leasing of Lucent products) or seek
to use alternative providers of financing. Similarly, although neither AT&T nor
NCR has requested any sales assistance fees or other similar benefits from the
Company by reason of the financing by the Company of their respective products,
no assurance can be given that AT&T or NCR will not do so in the future. Any
such action by Lucent, alone or in combination with similar action by AT&T or
NCR, could have a material adverse effect on the Company.
The Operating Agreements do not require that the Company be the sole
provider of financing in connection with the AT&T Entities Product Sales. Also,
such Operating Agreements provide no assurance that the percentage of such sales
for which the Company provides financing will not decrease in the future.
Subject to certain restrictions, the Operating Agreements permit the AT&T
Entities to use or promote an alternative financing program offered by an
unaffiliated company that provides better terms than those offered by the
Company, without providing the Company an opportunity to match such better
terms. In addition, none of the Operating Agreements is generally required to be
assumed by the purchaser or other transferee of all or any portion of the
relevant AT&T Entity's product manufacturing business upon any sale or other
disposition thereof by such AT&T Entity, although such AT&T Entity is required
to use reasonable efforts to cause the related Operating Agreement to be so
assumed. Moreover, each Operating Agreement provides that the relevant AT&T
Entity may terminate the Company's 'preferred provider' status and organize
their own 'captive' finance subsidiaries if the Company's Financing Penetration
Rate (as defined in the respective Operating Agreements) decreases by certain
specified amounts or if the Company becomes a subsidiary of a person other than
Holdings or one of its affiliates. The Company does not expect its Financing
Penetration Rate under its Operating Agreements with Lucent and NCR to decrease
during the remainder of the initial term thereof by an amount that would permit
Lucent or NCR, as the case may be, to terminate the Company's 'preferred
provider' status, although no assurance can be given in that regard.
The Company's ability to capture a significant portion of the AT&T Entities
Product Sales is augmented by the provisions of the Agreement Supplements with
Lucent and NCR pursuant to which Lucent and NCR have licensed certain trade
names and service marks, including the 'Lucent Technologies' and 'NCR' trade
names, to the Company for use in the business of the Company and certain of its
subsidiaries. The Company's License Agreement with AT&T also has similar
provisions. The initial term of the License Agreement and Agreement Supplements
expires on August 4, 2000 but will be automatically renewed in the event of a
renewal of the relevant Operating Agreement, for a term equal to any renewal
term of that Operating Agreement. Each License Agreement may be terminated prior
to the end of its term upon the occurrence of certain events (including upon the
termination of the applicable Operating Agreement and the occurrence of certain
ratings downgrades below 'BB+' by S&P or below 'Ba1' by Moody's). In addition,
AT&T may require the Company to discontinue, following two years' prior notice,
use of (i) the 'AT&T' trade name as part of the Company's corporate name and
(ii) the other service marks licensed by AT&T to the Company. The Company's
subsidiaries may, in such event, continue to use the 'AT&T' trade name and
service marks in connection with the provision of financing services and
otherwise in accordance with the terms of the License Agreement, which include
extensive restrictions on the use thereof in connection with the issuance of
securities.
The Operating Agreements do not apply to the Company's relationship with
the AT&T Entities as end-users of information technology and other equipment or
vehicles financed by the Company. Although the Intercompany Agreement and
Agreement Supplements provides that each AT&T Entity will view the Company as
its preferred provider of financing, the Intercompany Agreement and Agreement
Supplements do not require any of the AT&T Entities to continue to use the
Company as its financing source for its own acquisitions of such equipment or
vehicles if competitors of the Company offer financing on more attractive terms.
See 'Relationship with AT&T Entities.'
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RISKS RELATED TO THE TERMINATION OF AT&T'S OWNERSHIP INTEREST IN THE COMPANY
BUSINESS RELATIONSHIP. Prior to the consummation of the Merger, AT&T had an
approximately 86% economic interest in the Company. The Company believes that it
has benefitted from that interest because approximately 86% of the profits
derived by the Company from its commercial relationship with the AT&T Entities
(the Company's most important commercial relationship -- see ' -- Changes in
Relationship with AT&T Entities -- Revenues and Net Income Attributable to AT&T
Entities' above) directly or indirectly benefitted AT&T. Following the AT&T
Restructuring and the consummation of the Merger, the Company's relationship
with AT&T, Lucent and NCR as its principal customers and sources of business
will be based entirely on commercial dealings and its contract rights, without
any ownership interest by AT&T, Lucent or NCR in the Company. To the extent that
this change causes the relations of AT&T, Lucent and NCR with the Company to be
less favorable than in the past, there will be an adverse effect on the Company.
CERTAIN INCREASED COSTS AND EXPENSES.
General. In connection with the consummation of the Merger and related
transactions pursuant to which AT&T sold its entire indirect equity interest in
the Company (see 'The Merger'), certain of the Company's annual expenses are
expected to increase. A summary of the significant increases follows.
Borrowing Costs. While it is difficult to predict the response of investors
to the Company's medium and long-term note and commercial paper programs and,
therefore, it is difficult to quantify such effect of the Merger and related
transactions and consequent downgrading of ratings on the Company's debt with
reasonable accuracy, the Company has estimated an increase in borrowing costs of
approximately 20 basis points relating to its commercial paper program and 25
basis points relating to its medium and long-term debt issuances. Assuming such
an increase in borrowing costs, had the Merger occurred on January 1, 1995, the
Company's 1995 interest expense would have increased by $7.4 million. The
increase in interest expense was calculated using the 1995 average commercial
paper balance outstanding and the 1995 issuances of medium and long-term debt
multiplied by the respective incremental borrowing costs. To illustrate the
Company's sensitivity to interest rates, had the increase in such borrowing
costs been 10 basis points lower or higher than the assumed respective increases
in borrowing costs referred to above the Company's interest expense increase
would have been $4.1 million or $10.7 million, respectively.
Tax Deconsolidation. The Company was formerly a member of AT&T's
consolidated group for federal income tax purposes, but immediately after the
Merger ceased to be a member of such tax group (the 'Tax Deconsolidation'). The
Tax Deconsolidation is expected to have certain adverse effects on the Company
as described below.
Most financings by the Company of products manufactured by the AT&T
Entities involve the purchase of such products by the Company and the
contemporaneous lease of such products by the Company to third parties. Because
the Company and the AT&T Entities are no longer affiliated, sales of such
products to the Company by the AT&T Entities will generate current taxable
income for AT&T or the affiliate of AT&T manufacturing such products, together
with a liability of AT&T or such affiliate to pay federal income tax on such
income. Notwithstanding such sales of products, while the Company was a part of
the AT&T consolidated federal income tax group at the time of such sale, the
payment of such taxes had been deferred (the amount of such previously deferred
taxes being herein called 'Gross Profit Tax Deferral') generally until the
Company claimed depreciation on the products, or sold the products outside the
group. Pursuant to one of the former tax agreements between AT&T and the
Company, AT&T had extended interest-free loans to the Company in an amount equal
to the then outstanding amount of Gross Profit Tax Deferral, as well as certain
other intercompany transactions.
As a result of the Tax Deconsolidation, the Company no longer receives such
loans, which had constituted a competitive advantage to the Company in financing
the AT&T Entities Products. In addition, the Company was required to repay all
such outstanding loans immediately prior to the Tax Deconsolidation. The
aggregate outstanding principal amount of the interest-free loans associated
with Gross Profit Tax Deferral which were repaid by the Company in connection
with the Tax Deconsolidation equaled approximately $247.4 million. Additionally,
as a result of Tax Deconsolidation,
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the Company made a payment to AT&T of $35 million in exchange for AT&T's
assumption of certain federal and combined state tax liabilities of the Company
relating to periods prior to the Merger.
Operating and Administrative Expenses. The Company's annual expenses for
operating and administrative expenses are expected to increase after the Merger
as a result of the Company no longer being entitled to the discounts accorded to
AT&T and its subsidiaries or received directly from AT&T. The incremental and
recurring costs in the Company's operating and administrative expenses for which
the Company received such discounts include services for telecommunication,
certain information processing, travel, human resources, real estate, express
mail and insurance services. In addition, annual management and advisory fees of
initially $3.0 million will be paid to Nomura. The Company estimates the total
increase in operating and administrative expenses to be $5.9 million annually
(including such management and advisory fees).
Compensation and Benefit Plans. Under the Company's Share Performance
Incentive Plan ('SPIP'), approximately 120 employees had the right to receive
cash awards at the end of five, 3-year performance periods. The first such
period ended on June 30, 1996, with each of the other performance periods ending
on the annual anniversary of such date through and including June 30, 2000. In
connection with the Merger, nearly all of these cash awards for the second
through the fifth performance periods were accelerated and paid at the closing
of the Merger, resulting in an aggregate payment of approximately $50.9 million.
In addition, approximately $9.9 million is expected to be paid to certain
officers and other key employees of the Company in connection with the waiver
and modification of the Company's Leadership Guarantee Plan and other
termination and compensation related payments effective upon closing of the
Merger.
Transaction Costs. The Company will incur an $11.3 million after-tax
expense relating to the Company's Merger-related and other transaction costs.
COMPETITION
The equipment leasing and finance industry in which the Company operates is
highly competitive and has been undergoing a process of consolidation. As a
result, certain of the Company's competitors' relative cost bases have been
reduced. Participants in the industry compete through price (including the
ability to control costs), risk management, innovation and customer services.
Principal cost factors include the cost of funds, the cost of selling to or
obtaining new end-user customers and vendors and the cost of managing
portfolios. The Company's competitors include captive or related leasing
companies (such as General Electric Capital Corporation and IBM Credit
Corporation), independent leasing companies (such as Comdisco, Inc.), certain
banks engaged in leasing, lease brokers and investment banking firms that
arrange for the financing of leased equipment, and manufacturers and vendors
which lease their own products to customers. Many of the competitors of the
Company are large companies that have substantial capital, technological and
marketing resources; some of these competitors are significantly larger than the
Company and have access to debt at a lower cost than the Company.
CERTAIN OTHER RISKS
The Company is subject to certain other risks including the risk that its
allowance for credit losses may not prove adequate to cover ultimate losses and
that its estimated residual values will not be realized at the end of the lease
terms. On an aggregate basis, the Company has historically realized proceeds
from the sale of equipment during the lease term and at lease termination in
excess of the Company's recorded residual values. There can be no assurance,
however, that credit allowances will prove adequate to cover losses in
connection with the Company's investment in finance receivables, capital leases
and operating leases ('Portfolio Assets', and net of allowance for credit
losses, 'Net Portfolio Assets') or that such residual values will be realized in
the future. See 'Business of the Company -- Certain Business Skills.'
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RISK FACTORS RELATED TO TOPRS
DISTRIBUTIONS PAYABLE ONLY IF DECLARED BY GENERAL PARTNER; RESTRICTIONS ON
CERTAIN PAYMENTS; TAX CONSEQUENCES
Distributions on the Partnership Preferred Securities will be payable only
if, as and when declared by the General Partner in its sole discretion. If
interest payments on the Debentures are deferred as permitted thereby, or if
such interest payments are not paid to the Partnership according to their terms
(and guarantee payments on the Investment Guarantees are not made by the
Company), the Partnership will generally lack funds to pay distributions on the
Partnership Preferred Securities. If the Partnership does not make current
distributions on the Partnership Preferred Securities, either because the
General Partner does not declare distributions to be made or because the
Partnership lacks sufficient funds, the Trust will not have funds available to
make current distributions on the Trust Preferred Securities.
As described under 'Description of the Trust Guarantee -- Certain Covenants
of the Company,' the Company will be restricted from, among other things, paying
any dividends on its Common Stock or (subject to certain exceptions) making
payments to Affiliates if full distributions on the Trust Preferred Securities
have not been paid. However, the Company has no current intention to pay
dividends on its Common Stock at any time in the foreseeable future. Therefore,
although the Company's intention as to its dividend policy can and may change at
any time in the future at the discretion of the Company's Board of Directors
(subject to applicable requirements of law), the restriction on dividend
payments that would be imposed on the Company if distributions are not made on
the Trust Preferred Securities would not materially affect the manner in which
the Company intends to operate its business. In addition, as a consequence of
the Merger, the Company's Common Stock is no longer listed on the New York Stock
Exchange and there is no longer a public market for the Common Stock; the
absence of such public market, together with the current policy of the Company
not to pay dividends, reduces the effectiveness of the dividend restriction
described above in deterring the Company, as General Partner, from failing to
declare distributions on the Partnership Preferred Securities.
Should the Partnership fail to pay current distributions on the Partnership
Preferred Securities, each holder of Trust Preferred Securities will generally
be required to accrue income, for United States federal income tax purposes, in
respect of the cumulative deferred distributions (including interest thereon)
allocable to its proportionate share of the Partnership Preferred Securities. As
a result, each holder of Trust Preferred Securities will recognize income for
United States federal income tax purposes in advance of the receipt of cash and
will not receive the cash from the Trust related to such income if such holder
disposes of its Trust Preferred Securities prior to the record date for the date
on which distributions of such amounts are made by the Trust. See 'Certain
Federal Income Tax Considerations.'
INSUFFICIENT INCOME OR ASSETS AVAILABLE TO PARTNERSHIP
The Trust Preferred Securities are subject to the risk of a current or
liquidating distribution rate mismatch between the rate paid on the Trust
Preferred Securities and the rate paid on the securities held by the
Partnership, including the Debentures and any additional securities acquired by
the Partnership in the future. Such mismatch could occur if (i) at any time that
the Partnership is receiving current payments in respect of the securities held
by the Partnership (including the Debentures), the General Partner, in its sole
discretion, does not declare distributions on the Partnership Preferred
Securities and the Partnership receives insufficient amounts to pay the
additional compounded distributions that will accrue in respect of the
Partnership Preferred Securities, (ii) the Partnership reinvests the proceeds
received in respect of the Debentures upon their retirement or at their
maturities in Affiliate Investment Instruments or Eligible Debt Securities that
do not generate income in an amount that is sufficient to pay full distributions
in respect of the Partnership Preferred Securities at a rate of % per annum
or (iii) the Partnership invests in equity or debt securities of Investment
Affiliates that are not guaranteed by the Company and that cannot be liquidated
by the Partnership for an amount sufficient to pay such distributions in full.
If the reinvestments in the Investment Affiliates contemplated by the General
Partner do not meet the eligibility criteria for Affiliate Investment
Instruments described under 'Description of the Partnership Preferred
Securities -- Partnership
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Investments,' the Partnership shall invest funds available for reinvestment in
Eligible Debt Securities. To the extent that the Partnership lacks sufficient
funds to make current or liquidating distributions on the Partnership Preferred
Securities in full, the Trust will not have sufficient funds available to pay
full current or liquidating distributions on the Trust Preferred Securities.
DEPENDENCE ON AFFILIATE INVESTMENT INSTRUMENTS
Approximately 99% of the proceeds from the issuance of the Partnership
Preferred Securities and the General Partner's capital contribution will be
invested in the Debentures, which consist of debt instruments of the Company and
two domestic eligible controlled affiliates.
PROPOSED TAX LEGISLATION
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the 'Proposed
Legislation') that would, among other things, deny the borrower an interest
deduction with respect to certain types of debt instruments that are payable in
stock of the issuer or a related party. The Proposed Legislation also would
treat as equity for United States federal income tax purposes instruments with a
maximum term of more than 20 years that are not shown as indebtedness on the
consolidated balance sheet of the issuer. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth and House Ways and Means Committee Chairman
Bill Archer issued a joint statement (the 'Joint Statement') indicating their
intent that certain legislative proposals initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress, would have an effective date
that is no earlier than the date of 'appropriate Congressional action'. In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in
the Joint Statement (the 'Democrat Letters'). If the principles contained in the
Joint Statement and the Democrat Letters were followed and the Proposed
Legislation were enacted, such legislation would not apply to the Debentures.
There can be no assurances, however, that legislation enacted after the date
hereof will not adversely affect the tax treatment of the Debentures, or whether
such tax treatment would cause a Partnership Tax Event or a Trust Tax Event that
may result in the redemption of the Partnership Preferred Securities and,
consequently, the Trust Preferred Securities.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Trust Special Event or a Partnership Special Event
(each of which will generally be triggered either upon (i) the occurrence of
certain adverse tax consequences to the Trust or the Partnership, as the case
may be, or the denial of an interest deduction by the related Investment
Affiliate on the Debentures held by the Partnership or (ii) the Trust or
Partnership being considered an 'investment company' under the 1940 Act) (each,
a 'Special Event'), the Trust will be dissolved with the result, except in the
limited circumstances described below, that the Partnership Preferred Securities
would be distributed to the holders of the Trust Preferred Securities in
connection with the liquidation of the Trust. In certain circumstances, the
Partnership shall have the right to redeem the Partnership Preferred Securities,
in whole (but not in part), in lieu of a distribution of the Partnership
Preferred Securities by the Trust, in which event the Trust will redeem the
Trust Preferred Securities for cash. See 'Description of the Trust Preferred
Securities -- Trust Special Event Redemption or Distribution' and 'Description
of the Partnership Preferred Securities -- Partnership Special Event
Redemption.'
Unless the liquidation of the Trust occurs as a result of the Trust being
subject to United States federal income tax with respect to income on the
Partnership Preferred Securities, a distribution of the Partnership Preferred
Securities upon the dissolution of the Trust would not be a taxable event to
holders of the Trust Preferred Securities. If, however, the liquidation of the
Trust were to occur because the Trust is subject to United States federal income
tax with respect to income accrued or received on the Partnership Preferred
Securities, the distribution of Partnership Preferred Securities to holders by
the Trust would be a taxable event to each such holder, and a holder would
recognize gain or loss as if the holder had exchanged its Trust Preferred
Securities for the Partnership Preferred Securities it received upon the
liquidation of the Trust. Similarly, the holders of the Trust Preferred
Securities would
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recognize gain or loss if the Trust dissolves upon an occurrence of a
Partnership Special Event and the holders of Trust Preferred Securities receive
cash in exchange for their Trust Preferred Securities. See 'Certain United
States Federal Income Tax Considerations -- Redemption of Trust Preferred
Securities for Cash.'
There can be no assurance as to the market prices for the Partnership
Preferred Securities that may be distributed in exchange for Trust Preferred
Securities if a dissolution or liquidation of the Trust were to occur.
Accordingly, the Trust Preferred Securities that an investor may purchase,
whether pursuant to the offer made hereby or in the secondary market, or the
Partnership Preferred Securities that a holder of Trust Preferred Securities may
receive upon dissolution and liquidation of the Trust, may trade at a discount
to the price that the investor paid to purchase the Trust Preferred Securities
offered hereby. Because holders of Trust Preferred Securities may receive
Partnership Preferred Securities upon the occurrence of a Special Event,
prospective purchasers of Trust Preferred Securities also are making an
investment decision with regard to the Partnership Preferred Securities and
should carefully review all the information regarding the Partnership Preferred
Securities contained herein. See 'Description of the Partnership Preferred
Securities -- Partnership Special Event Redemption' and 'Description of the
Partnership Preferred Securities -- General.'
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEES AND THE COMPANY
DEBENTURE
The Company's obligations under the Trust Guarantee, the Partnership
Guarantee and the Investment Guarantees are subordinate and junior in right of
payment to all liabilities of the Company and will rank pari passu with the most
senior preferred stock issued, if any, from time to time by the Company and with
any guarantee now or hereafter entered into by the Company in respect of any
preferred stock of any affiliate of the Company and its obligations under the
Company Debenture are subordinate and junior in right of payment to all senior
indebtedness of the Company. As of September 30, 1996, consolidated senior
indebtedness of AT&T Capital aggregated approximately $7.9 billion. Except under
certain limited circumstances described under 'Description of the Partnership
Preferred Securities -- Partnership Investments' with respect to the Company
Debenture, there are no terms in the Trust Preferred Securities, the Partnership
Preferred Securities, the Guarantees or the Debentures that limit the Company's
ability to incur additional indebtedness, including indebtedness that ranks
senior to the Guarantees. See 'Description of the Partnership Preferred
Securities -- Partnership Investments' and ' -- Investment Guarantees,'
'Description of the Trust Guarantee' and 'Description of the Partnership
Guarantee.'
ENFORCEMENT OF CERTAIN RIGHTS BY OR ON BEHALF OF HOLDERS OF TRUST PREFERRED
SECURITIES
If a Trust Enforcement Event occurs and is continuing, then (a) the holders
of Trust Preferred Securities would rely on the enforcement by the Property
Trustee of its rights, as a holder of the Partnership Preferred Securities,
against the Company, including the right to direct the Special Representative to
enforce (i) the Partnership's creditors' rights and other rights with respect to
the Affiliate Investment Instruments and the Investment Guarantees, (ii) the
rights of the holders of the Partnership Preferred Securities under the
Partnership Guarantee, and (iii) the rights of the holders of the Partnership
Preferred Securities to receive distributions (only if and to the extent
declared out of funds legally available therefor) on the Partnership Preferred
Securities, and (b) the Trust Guarantee Trustee shall have the right to enforce
the terms of the Trust Guarantee, including the right to enforce the covenant
restricting certain payments by the Company and its majority owned subsidiaries.
Under no circumstances, however, shall the Special Representative have authority
to cause the General Partner to declare distributions on the Partnership
Preferred Securities. As a result, although the Special Representative may be
able to enforce the Partnership's creditors' rights to accelerate and receive
payments in respect of the Affiliate Investment Instruments and the Investment
Guarantees, the Partnership would be entitled to reinvest such payments in
additional Affiliate Investment Instruments, subject to satisfying the
reinvestment criteria described under 'Description of the Partnership Preferred
Securities -- Partnership Investments,' and the Eligible Debt Securities, rather
than declaring and making distributions on the Partnership Preferred Securities.
See 'Description of the Trust Preferred Securities -- Trust Enforcement Events.'
24
<PAGE>
<PAGE>
LIMITED VOTING RIGHTS
Holders of the Trust Preferred Securities will have limited voting rights
and will not be entitled to vote to appoint, remove or replace, or to increase
or decrease the number of, Trustees, which voting rights are vested exclusively
in the holder of the Trust Common Securities. See 'Description of the Trust
Preferred Securities -- Voting Rights.'
TRADING CHARACTERISTICS OF TRUST PREFERRED SECURITIES
The price at which the Trust Preferred Securities may trade may not fully
reflect the value of the accrued but unpaid distributions on the Trust Preferred
Securities (which will equal the accrued but unpaid distributions on the
Partnership Preferred Securities). In addition, as a result of the right of the
General Partner to not declare current distributions on the Partnership
Preferred Securities, the market price of the Trust Preferred Securities (which
represent undivided beneficial ownership interests in the Partnership Preferred
Securities) may be more volatile than other similar securities where there is no
such right to defer current distributions. A holder who disposes of its Trust
Preferred Securities will be required to include for United States federal
income tax purposes accrued but unpaid distributions on the Partnership
Preferred Securities through the date of disposition in income as ordinary
income, and to add such amount to its adjusted tax basis in its pro rata share
of the Partnership Preferred Securities deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include
all accrued but unpaid distributions), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
'Certain Federal Income Tax Considerations.'
NO PRIOR MARKET FOR THE TRUST PREFERRED SECURITIES
The Trust Preferred Securities constitute a new issue of securities with no
established trading market. The Trust Preferred Securities have been approved,
subject to issuance, for listing on the New York Stock Exchange. There can be no
assurance that an active market for the Trust Preferred Securities will develop
or be sustained in the future on the New York Stock Exchange. Although the
Underwriters have indicated to the Company that they intend to make a market in
the Trust Preferred Securities, as permitted by applicable laws and regulations,
they are not obligated to do so and may discontinue any such market-making at
any time without notice. Accordingly, no assurance can be given as to the
liquidity of, or trading markets for, the Trust Preferred Securities.
25
<PAGE>
<PAGE>
USE OF PROCEEDS
The proceeds to be received by the Trust from the sale of the Trust
Preferred Securities and the Trust Common Securities will be used by the Trust
to purchase Partnership Preferred Securities, and will be applied by the
Partnership to invest in the Debentures and Eligible Debt Securities. See
'Description of the Partnership Preferred Securities -- Partnership
Investments.' After payment of the Underwriters' Compensation (as defined under
'Underwriting') and other expenses of this offering, the Company will, and will
cause the subsidiaries of the Company which are the issuers of the Debentures
to, use the proceeds from the sale of such Debentures to the Partnership of $200
million to repay certain outstanding indebtedness.
CAPITALIZATION
The following table sets forth the short-term notes and capitalization of
the Company as of September 30, 1996, pro forma for the Merger and related
transactions (excluding the effects of this offering) as described below under
'The Merger', and as adjusted to give effect to the sale of the Trust Preferred
Securities offered hereby and the application of the proceeds therefrom. This
table should be read in conjunction with the Consolidated Financial Statements
and the related notes thereto incorporated by reference in this Prospectus.
<TABLE>
<CAPTION>
PRO FORMA AS ADJUSTED FOR
ACTUAL FOR MERGER(1) THE OFFERING
---------- ------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Short-term notes, less unamortized discounts....................... $3,021,459 $ 1,714,859 $ 1,514,859
Medium and long-term debt.......................................... 4,896,467 4,896,467 4,896,467
Company-obligated preferred securities of subsidiary(2)............ -- -- 200,000
Shareowners' equity:
Preferred Stock, $.01 par value, authorized 10,000,000 shares;
no shares issued and outstanding............................ -- -- --
Common Stock, $.01 par value, authorized 100,000,000 shares;
issued and outstanding 47,097,447 shares (150,000,000 shares
authorized and 90,000,000 shares issued and outstanding on a
pro forma basis)............................................ 471 900 900
Additional paid-in capital......................................... 786,163 624,206 624,206
Foreign currency translation adjustment............................ (2,804) (2,804) (2,804)
Retained earnings.................................................. 454,895 84,900 84,900
Recourse loans to senior executives(3)............................. (20,923) (15,423) (15,423)
---------- ------------- ---------------
Total shareowners' equity..................................... 1,217,802 691,779 691,779
---------- ------------- ---------------
Total capitalization.......................................... $9,135,728 $ 7,303,105 $ 7,303,105
---------- ------------- ---------------
---------- ------------- ---------------
</TABLE>
- ------------
(1) Gives effect to the Merger and related transactions (excluding the effects
of this offering), which are described below under 'The Merger.'
(2) As described herein, the assets of the Trust will be comprised of the
Partnership Preferred Securities issued by the Partnership, and the assets
of the Partnership will initially be comprised of the Debentures and the
Eligible Debt Securities. Except to the extent described under 'Risk
Factors -- Risk Factors Related to TOPrS -- Insufficient Income or Assets
Available to Partnership,' the Guarantees, when taken together with the
Company Debenture and the Company's obligations to pay all fees and expenses
of the Trust and the Partnership, constitute a guarantee by the Company of
the distribution, redemption and liquidation payments payable to the holders
of the Trust Preferred Securities.
(3) These recourse loans to senior executives were made pursuant to the
Company's 1993 Leveraged Stock Purchase Plan and the 1993 Long Term
Incentive Plan. Most of these loans remain outstanding following the Merger.
26
<PAGE>
<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES OF THE COMPANY
<TABLE>
<CAPTION>
PRO FORMA FOR OFFERING(1)
-----------------------------
NINE MONTHS NINE MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED DECEMBER 31,
SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30, -----------------------------------------
1996 1995 1996 1995 1994 1993 1992 1991
------------- ------------ ------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges......... 1.49x 1.47x 1.51x 1.50x 1.62x 1.57x 1.44x 1.29x
</TABLE>
- ------------
(1) The pro forma data represents the Company's results as if the issuance of
the Trust Preferred Securities had taken place on January 1, 1995. Had the
Merger and related transactions, including the issuance of the Trust
Preferred Securities, taken place on January 1, 1995, the pro forma ratio of
earnings to fixed charges for the nine months ended September 30, 1996 would
have been 1.17x, and for the year ended December 31, 1995 there would have
been an earnings deficiency of $30.0 million to cover fixed charges. See
'The Merger' for a description of the Merger and the transactions related to
the Merger reflected in this pro forma presentation.
Earnings consist of income before income taxes and cumulative effect on
prior years of accounting change plus fixed charges. Fixed charges consist of
interest on indebtedness and the portion of rentals representative of the
interest factor.
27
<PAGE>
<PAGE>
SELECTED FINANCIAL DATA
The Results of Operations Data, the Balance Sheet Data and the Other Data
shown below at or for the years ended December 31, 1995, 1994, 1993, 1992 and
1991 are derived from the Consolidated Financial Statements of the Company at
such dates or for such periods, which have been audited by Coopers & Lybrand
L.L.P., independent accountants. Such data at or for the nine months ended
September 30, 1996 and 1995 are derived from unaudited consolidated financial
information. In management's opinion, the Company's unaudited consolidated
financial statements at or for the nine months ended September 30, 1996 and 1995
include all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation. The results of operations for the nine months ended
September 30, 1996 are not necessarily indicative of the results for the entire
year or any other interim period.
The selected financial data as presented below should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and the Consolidated Financial Statements and related
notes thereto incorporated by reference in this Prospectus. The Company's
unaudited consolidated financial information at or for the nine months ended
September 30, 1996 does not include the effects of the Merger and related
transactions. For a description of the significant impact of the Merger and
related transactions on the Company's financial position and results of
operations, see 'The Merger.' For a description of certain increased annual
costs that the Company expects to incur as a result of the Merger, see 'Risk
Factors -- Risks Related to the Termination of AT&T's Ownership Interest in the
Company.'
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1996 1995
----------- ----------
(DOLLARS IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
RESULTS OF OPERATIONS DATA:
Total revenues..................... $ 1,370,494 $1,140,651
Interest expense................... 350,359 300,891
Operating and administrative
expenses......................... 375,172 351,443
Provision for credit losses........ 71,454 60,359
Income before income taxes and
cumulative effect on prior years
of accounting change............. 182,496 143,276
Income before cumulative effect on
prior years of accounting change
and impact of tax rate change.... 115,290 85,466
Cumulative effect on prior years of
accounting change(1)............. -- --
Impact of 1993 tax rate
change(1)........................ -- --
Net income(1)...................... 115,290 85,466
Earnings per share(1).............. 2.43 1.82
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
RESULTS OF OPERATIONS DATA:
Total revenues..................... $1,577,035 $1,384,079 $1,359,589 $1,265,526 $1,160,150
Interest expense................... 411,040 271,812 236,335 252,545 275,650
Operating and administrative
expenses......................... 473,663 427,187 381,515 359,689 298,833
Provision for credit losses........ 86,214 80,888 123,678 111,715 108,635
Income before income taxes and
cumulative effect on prior years
of accounting change............. 208,239 173,614 138,040 114,875 82,559
Income before cumulative effect on
prior years of accounting change
and impact of tax rate change.... 127,555 100,336 83,911 73,572 54,199
Cumulative effect on prior years of
accounting change(1)............. -- -- (2,914) -- --
Impact of 1993 tax rate
change(1)........................ -- -- (12,401) -- --
Net income(1)...................... 127,555 100,336 68,596 73,572 54,199
Earnings per share(1).............. 2.70 2.14 1.60 1.83 1.35
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30, AT DECEMBER 31,
---------------- ------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets......... $ 10,251,600 $9,541,259 $8,021,923 $6,409,726 $5,895,429 $5,197,245
Total debt(2)........ 7,917,926 6,928,409 5,556,458 4,262,405 4,089,483 3,594,247
Total
liabilities(2)..... 9,033,798 8,425,134 7,013,705 5,485,283 5,158,808 4,647,979
Total shareowners'
equity............. 1,217,802 1,116,125 1,008,218 924,443 736,621 549,266
(table continued on next page)
</TABLE>
28
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS
ENDED SEPTEMBER 30, AT OR FOR THE YEAR ENDED DECEMBER 31,
------------------------------ ------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------------- ---------- ---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
OTHER DATA:
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges(3)... 1.51x 1.47x 1.50x 1.62x 1.57x 1.44x 1.29x
Ratio of total debt
to shareowners'
equity(4).......... 6.50x 6.07x 6.22x 5.51x 4.61x 5.55x 6.54x
Return on average
equity(5)(7)....... 13.2% 11.0% 12.1% 10.5% 8.5% 11.4% 10.7%
Return on average
assets(6)(7)....... 1.6% 1.3% 1.5% 1.4% 1.1% 1.3% 1.1%
Portfolio Assets of
the Company........ $ 10,041,020 $8,892,895 $9,328,623 $7,661,226 $6,236,624 $5,724,702 $5,050,797
Allowance for credit
losses............. 235,205 214,711 223,220 176,428 159,819 123,961 93,967
Net Portfolio Assets
of the Company..... 9,805,815 8,678,184 9,105,403 7,484,798 6,076,805 5,600,741 4,956,830
Assets of others
managed by the
Company............ 2,159,316 2,428,924 2,214,502 2,659,526 2,795,663 1,374,354 649,014
Volume of equipment
financed(8)........ 3,780,000 3,088,790 4,567,000 4,251,000 3,467,000 3,253,000 2,453,000
Ratio of allowance
for credit losses
to net
charge-offs(9)..... 3.08x 4.22x 4.77x 3.18x 2.71x 1.58x 1.15x
Ratio of net
charge-offs to
Portfolio
Assets(9).......... 0.76% 0.57% 0.50% 0.73% 0.95% 1.37% 1.62%
Ratio of allowance
for credit losses
to Portfolio
Assets............. 2.34% 2.41% 2.39% 2.30% 2.56% 2.17% 1.86%
Ratio of operating
and administrative
expenses to
period-end total
assets(10)......... 4.88% 5.19% 4.96% 5.33% 5.95% 6.10% 5.75%
</TABLE>
- ------------
(1) Net income and earnings per share for 1993 were adversely impacted by the
federal tax rate increase to 35% and a cumulative effect on prior years of
accounting change. See note 10 to the Consolidated Financial Statements
incorporated herein by reference to the 1995 Form 10-K. Earnings per share
without these charges for 1993 would have been $1.95 per share. See 'Risk
Factors -- Risks Related to the Termination of AT&T's Ownership Interest in
the Company' for a description of certain increased annual costs that the
Company might incur as a result of the Merger.
(2) Total debt does not include, and total liabilities includes, certain
interest-free loans from AT&T to the Company under certain tax agreements,
in aggregate outstanding principal amounts of $247.4 million, $248.9
million, $214.1 million, $188.6 million, $193.1 million and $206.6 million
at September 30, 1995, December 31, 1995, 1994, 1993, 1992 and 1991,
respectively. The Company no longer receives such interest-free loans and
repaid such loans in their entirety with a payment of $247.4 million on
September 30, 1996. See 'Risk Factors -- Risks Related to the Termination
of AT&T's Ownership Interest in the Company -- Tax Deconsolidation' and
note 4 below.
(3) Earnings before income taxes and cumulative effect on prior years of
accounting change plus fixed charges (the sum of interest on indebtedness
and the portion of rentals representative of the interest factor) divided
by fixed charges. Prior to the Merger, a portion of the Company's
indebtedness to AT&T did not bear interest. See note 2 above. On a pro
forma basis giving effect to the issuance of the Trust Preferred Securities
on January 1, 1995, the ratio of earnings to fixed charges for the nine
months ended September 30, 1996 and the year ended December 31, 1995 would
have been 1.49x and 1.47x, respectively. Had the Merger and related
transactions, including the issuance of the Trust Preferred Securities,
taken place on January 1, 1995, the pro forma ratio of earnings to fixed
charges for the nine months ended September 30, 1996 would have been 1.17x
and for the year ended December 31, 1995, there would have been an earnings
deficiency of $30.0 million to cover fixed charges. See 'Ratio of Earnings
to Fixed Charges of the Company.'
(4) Total debt did not include certain interest-free loans previously made from
AT&T to the Company under certain tax agreements. The Company repaid such
loans in their entirety with a payment of $247.4 million on September 30,
1996. If such loans were so included, the ratio of total debt to
shareowners' equity would have been 6.28x, 6.45x, 5.72x, 4.81x, 5.81x and
6.92x at September 30, 1995, December 31, 1995, 1994, 1993, 1992 and 1991,
respectively. See 'Risk Factors -- Risks Related to the Termination of
AT&T's Ownership Interest in the Company -- Tax Deconsolidation' and note 2
above.
(5) Net income (annualized in the case of the nine months ended September 30,
1996 and 1995) divided by average total shareowners' equity.
(6) Net income (annualized in the case of the nine months ended September 30,
1996 and 1995) divided by average total assets.
(7) In 1993, the Company's adjusted return on average equity and return on
average assets, defined as income before cumulative effect on prior years
of accounting change and impact of tax rate change as a percentage of
average equity and average assets, respectively, was 10.3% and 1.4%,
respectively.
(8) Total principal amount of loans and total cost of equipment associated with
finance and lease transactions recorded by the Company and the increase, if
any, in outstanding inventory financing and asset-based lending
transactions.
(9) Net charge-offs at September 30, 1996 and 1995 are calculated based on the
twelve months then ended.
(10) Operating and administrative expenses (annualized for the nine months ended
September 30, 1996 and September 30, 1995) divided by period-end total
assets.
29
<PAGE>
<PAGE>
BUSINESS OF THE COMPANY
The following information should be read in conjunction with the
description of the Company's business in the 1995 Form 10-K of the Company
incorporated herein by reference.
GENERAL
AT&T Capital is a full-service, diversified equipment leasing and finance
company with a presence in more than 20 countries in North America, Europe,
Canada, the Asia/Pacific Region and Latin America. The Company is one of the
largest equipment leasing and finance companies in the United States and is the
largest lessor of telecommunications equipment in the United States, in each
case, based on the aggregate value of equipment leased or financed.
AT&T Capital leases and finances equipment manufactured and distributed by
numerous vendors, including Lucent and NCR. In addition, the Company provides
equipment leasing and financing and related services directly to end-user
customers. The Company's approximately 500,000 customers include large global
companies, small and mid-size businesses and federal, state and local
governments and their agencies.
A significant portion of the Company's total assets and revenues and a
substantial majority of its net income are attributable to financing provided by
the Company to Customers of the AT&T Entities with respect to AT&T Entities
Products and, to a lesser extent, transactions with the AT&T Entities as
End-Users, primarily with respect to the lease of information technology and
other equipment or vehicles to them as end-users and the administration and
management of certain leased assets on behalf of AT&T.
The following table shows the respective percentages of the Company's total
assets, revenues and net income (loss) related to its United States and foreign
operations that are attributable to (i) leasing and financing services provided
by the Company to Customers of the AT&T Entities, (ii) transactions involving
the AT&T Entities as End-User and (iii) the Company's non-AT&T Entities related
business, in each case at or for the nine months ended September 30, 1996 and at
or for the years ended December 31, 1995, 1994 and 1993. A substantial majority
of the assets and revenues, and substantially all the Company's net income, that
were attributable to Customers of the AT&T Entities were attributable to leasing
and financing services provided by the Company to customers of Lucent and its
subsidiaries. The net income (loss) shown below were calculated based upon what
the Company believes to be a reasonable allocation of interest, income taxes and
certain corporate overhead expenses.
<TABLE>
<CAPTION>
AT OR FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
----------------------------------------------------------------------------------
% OF ASSETS % OF TOTAL REVENUES % OF NET INCOME (LOSS)
------------------------ ------------------------ --------------------------
U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL
---- ------- ----- ---- ------- ----- ----- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Customers of the AT&T
Entities.................... 27.7 0.6 28.3 30.0 0.5 30.5 59.6 0.1 59.7
AT&T Entities as End-User..... 4.0 -- 4.0 7.2 -- 7.2 7.6 -- 7.6
Non-AT&T Entities Related
Business.................... 49.0 18.7 67.7 49.3 13.0 62.3 36.8 (4.1) 32.7
---- ------- ----- ---- ------- ----- ----- ------- ------
Total............... 80.7 19.3 100.0 86.5 13.5 100.0 104.0 (4.0) 100.0
---- ------- ----- ---- ------- ----- ----- ------- ------
---- ------- ----- ---- ------- ----- ----- ------- ------
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, 1995
---------------------------------------------------------------------------------
% OF ASSETS % OF TOTAL REVENUES % OF NET INCOME (LOSS)
------------------------ ------------------------ -------------------------
U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL
---- ------- ----- ---- ------- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Customers of the AT&T
Entities.................... 29.4 0.1 29.5 32.3 0.4 32.7 67.2 0.7 67.9
AT&T Entities as End-User..... 5.3 -- 5.3 8.3 -- 8.3 8.2 -- 8.2
Non-AT&T Entities Related
Business.................... 47.8 17.4 65.2 46.3 12.7 59.0 27.0 (3.1) 23.9
---- ------- ----- ---- ------- ----- ----- ------- -----
Total............... 82.5 17.5 100.0 86.9 13.1 100.0 102.4 (2.4) 100.0
---- ------- ----- ---- ------- ----- ----- ------- -----
---- ------- ----- ---- ------- ----- ----- ------- -----
</TABLE>
30
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, 1994
---------------------------------------------------------------------------------
% OF ASSETS % OF TOTAL REVENUES % OF NET INCOME (LOSS)
------------------------ ------------------------ -------------------------
U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL
---- ------- ----- ---- ------- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Customers of the AT&T
Entities.................... 34.3 0.3 34.6 33.1 0.3 33.4 83.9 (1.4) 82.5
AT&T Entities as End-User..... 6.8 -- 6.8 9.5 -- 9.5 8.5 -- 8.5
Non-AT&T Entities Related
Business.................... 48.0 10.6 58.6 47.8 9.3 57.1 11.8 (2.8) 9.0
---- ------- ----- ---- ------- ----- ----- ------- -----
Total............... 89.1 10.9 100.0 90.4 9.6 100.0 104.2 (4.2) 100.0
---- ------- ----- ---- ------- ----- ----- ------- -----
---- ------- ----- ---- ------- ----- ----- ------- -----
</TABLE>
<TABLE>
<CAPTION>
AT OR FOR THE YEAR ENDED DECEMBER 31, 1993
---------------------------------------------------------------------------------
% OF ASSETS % OF TOTAL REVENUES % OF NET INCOME (LOSS)
------------------------ ------------------------ -------------------------
U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL U.S. FOREIGN TOTAL
---- ------- ----- ---- ------- ----- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Customers of the AT&T
Entities.................... 38.1 0.3 38.4 31.1 0.2 31.3 99.8 (1.7) 98.1(1)
AT&T Entities as End-User..... 9.5 -- 9.5 14.9 -- 14.9 20.8 -- 20.8(1)
Non-AT&T Entities Related
Business.................... 46.1 6.0 52.1 47.8 6.0 53.8 (6.9) (12.0) (18.9)(1)
---- ------- ----- ---- ------- ----- ----- ------- -----
Total............... 93.7 6.3 100.0 93.8 6.2 100.0 113.7 (13.7) 100.0
---- ------- ----- ---- ------- ----- ----- ------- -----
---- ------- ----- ---- ------- ----- ----- ------- -----
</TABLE>
- ------------
(1) In 1993, the Customers of the AT&T Entities, AT&T Entities as End-User and
non-AT&T Entities related business net income (loss) accounted for 89.0%,
20.2% and (9.2%), respectively, of the Company's net income before
cumulative effect of the 1993 accounting change and impact of the tax rate
change. For a description of the 1993 accounting change and impact of the
tax rate change, see Note 10 to the Consolidated Financial Statements which
are included in the 1995 Form 10-K incorporated herein by reference.
The increases in 1995 in the non-AT&T Entities related business assets and
revenues (as a percentage of total assets and revenues) were generated almost
equally from United States and foreign operations. The significant increase in
1995 in the Company's United States non-AT&T Entities related business net
income was primarily generated from large-ticket specialty and structured
finance activities, Small Business Administration loan sales and growth in the
vehicle portfolio. Net losses from foreign non-AT&T Entities related business
somewhat offset the strong United States results.
The securitization of certain non-AT&T Entities related Portfolio Assets
positively affected net income of the non-AT&T Entities related business in all
years presented as well as in the nine months ended September 30, 1996. However,
the Company decreased significantly the amount of securitization each year from
1993 through 1995. Partly as a result of the reduction in securitized assets,
the portion of the Company's non-AT&T Entities related business net income
attributable to securitization has decreased by 88.7% from 1993 to 1995. See
Note 6 to the Consolidated Financial Statements in the 1995 Form 10-K
incorporated herein by reference. The Company's non-AT&T Entities related
business contributed 30.9% of the Company's net income for the nine months ended
September 30, 1996 without giving effect to a securitization of non-AT&T
Entities related business Portfolio Assets effected by the Company during such
period. No similar securitization was effected during the nine months ended
September 30, 1995. See ' -- Business Strategy' below for a discussion of the
Company's current securitization plans.
BUSINESS STRATEGY
AT&T Capital has two broad business strategies: (i) to enhance its position
as a leader in providing leasing and financing services that are marketed to
customers of equipment manufacturers, distributors and dealers with whom the
Company has a marketing relationship for financing services (the Company's
'Global Vendor Finance' strategy); and (ii) to establish itself as a leader in
providing leasing, financing and related services that are marketed directly to
end-users of equipment, including customers of the Company's Global Vendor
Finance marketing activities (e.g., end-users acquiring general equipment for
which the Company previously financed telecommunications equipment), as well as
customers of
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vendors with whom the Company does not have a marketing relationship for
financing services (the Company's 'Direct Customer Finance' strategy).
In 1995, Global Vendor Finance constituted 58% of the Company's total
financing volume (24% attributable to the AT&T Entities and 34% attributable to
other vendors) and represented 56% of the Company's year-end total assets (29%
attributable to the AT&T Entities and 27% attributable to other vendors). In
1995, Direct Customer Finance constituted 42% of the Company's total financing
volume (4% attributable to AT&T Entities and their employees as end-users and
38% to other end-users) and 44% of the Company's year-end total assets (5%
attributable to the AT&T Entities and their employees as end-users and 39% to
other end-users).
The Company anticipates that significant changes in the Company's financing
strategy will be implemented. In particular, the Company anticipates that
approximately 30% of its financing volume originated each year may be
securitized annually pursuant to off-balance sheet securitization transactions.
To the extent that the actual level of securitization deviates significantly
from the planned level, there could be a material adverse effect on the Company.
See 'Risk Factors -- Risks Related to Expected Plans Involving the
Company-Securitization Program.' The Company anticipates that the cost of the
Company's on-balance sheet financing will increase by virtue of its
disaffiliation from AT&T and its lower debt ratings. See 'Risk Factors -- Risks
Related to the Termination of AT&T's Ownership Interest in the Company.'
However, such increase in borrowing costs is expected to be offset in
significant part by the lower financing rates associated with the Company's
planned off-balance sheet securitization program.
CERTAIN BUSINESS SKILLS
The Company has developed a number of business skills and competencies that
management believes make the Company an effective competitor in the leasing and
finance industry. For example, in connection with its Global Vendor Finance
relationship with the AT&T Entities, the Company has developed the capabilities
necessary to service large numbers of customers on an efficient and timely
basis. In general, the Company has linked its telecommunications and data
systems with those of the sales and marketing offices of the AT&T Entities and
has placed its own personnel and equipment at these offices. These linkages and
on-site presence, in conjunction with the Company's credit review and scoring
capabilities (see ' -- Vendor Relationship Management Skills -- Credit
Management Skills' below), enable the Company to receive and process a large
volume of applications, provide related credit review and approval and otherwise
efficiently service a high volume of transactions at what the Company believes
is a relatively low cost per transaction. This process allows the Company to
respond on a timely basis to credit inquiries (generally within 10 minutes for
routine financings under $50,000).
VENDOR RELATIONSHIP MANAGEMENT SKILLS
As a result of its Global Vendor Finance and Direct Customer Finance
relationships, the Company has, in addition to its credit management skills and
asset management skills described below, gained significant experience in
structuring and managing vendor finance and direct customer finance programs
tailored to specific customer needs. The Company has tailored programs to
specific customer needs by providing a number of specialized products and
programs, including (i) customer financing products; (ii) specialized sales aid
services, including training of vendor personnel and point-of-sale support;
(iii) tailored private label programs, in which financing is provided to the
vendor's customers under the vendor's name; (iv) specialized customer operations
support and interfaces; (v) alternate channel programs; (vi) inventory
financing; and (vii) support for value-added retailers or distributions.
CREDIT MANAGEMENT SKILLS. The Company has adopted policies and procedures
that management believes allow the Company to review carefully the
creditworthiness of its customers under procedures that management believes are
efficient and timely. Management of key risks is initially the responsibility of
business unit operating personnel and is further coordinated throughout the
Company by the Risk Management Department, which has established policies and
procedures for tracking credit performance results on a monthly basis.
Consistent with its strategy, the Company has diversified its credit risk
associated with its Portfolio Assets by customer, industry segment, equipment
type, geographic location
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and transaction maturity. Small transactions are generally credit scored by
operating personnel utilizing innovative expert systems credit scoring
technology developed in conjunction with the Bell Laboratories Operations
Research Department. This credit scoring technology supports decisions and
associated strategies for credit risk management throughout the customers'
financing lifecycle. Larger transactions are individually reviewed by
experienced credit officers. This system, when combined with the Company's
ongoing risk management review process, provides overall risk management
techniques that management believes position the Company favorably in the
marketplace.
ASSET MANAGEMENT SKILLS. The Company's asset management skills include its
equipment remarketing capabilities, its in-house equipment refurbishing
facilities and its knowledge of developing technologies and products and
obsolescence trends, particularly with respect to information technology
equipment. These skills assist the Company in its efforts to establish residual
values, to maximize the value of equipment that is returned to the Company at
the end of a lease and to help reduce the Company's risks in connection with its
residual values. Estimates of residual values are determined by the Company
from, among other things, studies prepared by the Company, professional
appraisals, historical experience, industry data, market information on sales of
used equipment, end-of-lease customer behavior and estimated obsolescence
trends. The Company actively manages its residuals by working with lessees and
vendors during the lease term to encourage lessees to extend their leases or
upgrade and enhance their leased equipment, as appropriate, and by monitoring
the various equipment industries, particularly the information technology
industries, for obsolescence trends. The Company strategically manages its
portfolio to ensure a broad diversification of residual value risk by equipment
type and lease expiration.
FINANCIAL STRUCTURING CAPABILITIES. The Company manages approximately $1.4
billion in lease finance assets (consisting principally of equity interests in
leveraged leases of commercial aircraft and project finance transactions) for
AT&T. The personnel that structured and negotiated the transactions under which
the lease finance assets were acquired, in addition to providing services
relating to the management of the lease finance assets, assist other segments of
the Company's business in structuring transactions that require use of complex
financial expertise, including transactions in specialty product areas that the
Company believes are not currently being served adequately by the industry.
THE MERGER
On October 1, 1996, the Company consummated the Merger with Merger Sub,
pursuant to the Merger Agreement among AT&T, the former indirect owner of
approximately 86% of the outstanding Common Stock of the Company, Holdings and
Merger Sub. Pursuant to the Merger Agreement, Merger Sub was merged with and
into the Company, with the Company continuing its corporate existence under
Delaware law as the surviving corporation.
All of the outstanding common equity capital of the Company is currently
directly or indirectly owned by the members of the Leasing Consortium consisting
of (i) the Management Investors, including Thomas C. Wajnert, Chairman of the
Board and Chief Executive Officer of the Company, and approximately 23 other
members of the Company's senior management, and (ii) GRSH. Following the
consummation of the Merger and the related transactions, the Management
Investors own 3.3% of the Common Stock (or approximately 5.5% on a fully diluted
basis) and GRSH indirectly owns 96.7% of the Common Stock (or approximately
94.5% on a fully diluted basis).
The Merger and related transactions had a significant impact on the
Company's financial position and results of operations. Had the Merger and
related transactions occurred on September 30, 1996, on a pro forma basis, the
Company's total assets, debt, total liabilities and shareowners' equity would
have been $8.1 billion, $6.4 billion, $7.2 billion and $0.7 billion,
respectively. Had the Merger and related transactions occurred on January 1,
1995, the Company's revenues for the nine months ended September 30, 1996 and
the year ended December 31, 1995 would have been $1.2 billion and $1.3 billion,
respectively, and the Company's net income (loss) for the nine months ended
September 30, 1996 and the year ended December 31, 1995 would have been $38.4
million and $(16.4) million, respectively. The transactions related to the
Merger include: (i) the securitization of approximately $3.1 billion of lease
and loan receivables which occurred on October 15, 1996, and the application of
the net proceeds therefrom principally to repay short-term borrowings of
approximately $1.3 billion incurred as
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part of the financing of the Merger; (ii) the conversion of the Company's then
outstanding common stock to the right to receive $45 per share in cash pursuant
to the Merger Agreement; (iii) the issuance and sale of the Trust Preferred
Securities by the Trust and the application of the net proceeds therefrom; (iv)
the Tax Deconsolidation from AT&T (see 'Risk Factors -- Risks Related to the
Termination of AT&T's Ownership Interest in the Company -- Tax
Deconsolidation'), including the repayment of approximately $247.4 million of
non-interest bearing notes held by AT&T and the payment by the Company to AT&T
of $35.0 million in exchange for AT&T's assumption of all federal and combined
state tax liabilities of the Company relating to periods prior to the Merger;
(v) effects of an Internal Revenue Code of 1986, as amended (the 'Code') Section
338(h)(10) election, including the deferred tax effects relating to the Merger
and the Section 338(h)(10) election; (vi) the issuance of short-term notes and
the incurrence of liabilities for payments under certain benefit plans, other
payments to certain employees and for Merger related transaction costs; (vii)
the expected increase in the Company's borrowing cost resulting from the Merger;
(viii) the expected increase in the Company's annual expenses for operating and
administrative expenses resulting from the Company no longer being entitled to
the discounts accorded to AT&T and its subsidiaries or received directly from
AT&T; (ix) the payment of certain annual transaction management and advisory
fees; and (x) payments associated with acceleration of amounts payable under
compensation and benefit plans.
The Company's pro forma revenues and net income results for the periods
described above do not reflect the Company's proposed future strategy of
increasing its use of periodic securitizations of lease and loan receivables as
a funding source. In addition, such pro forma results do not reflect the
significant gain associated with the Company's October 15, 1996 asset
securitization. Had the securitization taken place on January 1, 1995 and had
such gain been included in the Company's pro forma results, the Company's
revenues for the year ended December 31, 1995 would have been $1.4 billion, and
the Company's net income for the year ended December 31, 1995 would have been
$68.5 million (excluding other non-recurring expenses of $39.4 million).
In addition to asset sales in connection with the Company's anticipated
securitization transactions described in this Prospectus, the Company may review
opportunities from time to time to dispose of certain assets depending upon
market conditions and other circumstances at such time, although the Company
does not currently have any agreements for such dispositions. The Company's
Board of Directors and management will continue to evaluate the Company's
corporate structure, business, management composition, operations, organization
and other matters and make such changes as the Board deems appropriate.
The Company's Current Report on Form 8-K dated October 1, 1996, which is
incorporated by reference into this Prospectus, contains unaudited pro forma
consolidated financial information with respect to the Company. Such unaudited
pro forma consolidated financial information gives effect to the Merger and
related transactions described above.
RELATIONSHIP WITH AT&T ENTITIES
In September 1995, AT&T announced plans to effect the AT&T Restructuring,
which was comprised of separating itself into three publicly traded companies
(AT&T, Lucent and NCR) and disposing of its approximately 86% equity interest in
the Company to the general public or another company. Pursuant to the AT&T
Restructuring, the Company consummated the Merger which resulted in, among other
things, the disposition by AT&T of its remaining equity interest in the Company.
See 'The Merger.'
On September 30, 1996, AT&T spun off its entire remaining interest in
Lucent to AT&T's shareholders. Lucent's businesses involve the manufacture and
distribution of public telecommunications systems, business communications
systems, micro-electronic components, and consumer telecommunications products.
In addition, AT&T has announced that it intends to distribute to its
shareholders all of its interest in NCR by the end of 1996. NCR's businesses
involve the manufacture and distribution of information technology equipment,
including automatic teller machines and point-of-sale terminal equipment.
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In connection with the Company's IPO in 1993, the Company entered into a
series of agreements with AT&T to formalize the relationship between the two
companies, including the following three significant agreements, each dated as
of June 25, 1993: (i) the Operating Agreement, (ii) the Intercompany Agreement
and (iii) the License Agreement. Each of these agreements, together with the
Agreement Supplements entered into with Lucent and NCR, are described below. The
descriptions of such agreements set forth herein do not purport to be complete
and are subject in their entirety to the actual terms of such agreements, copies
of which have been filed with the Commission. See 'Available Information.'
The AT&T Operating Agreement provides, among other things, that (i) the
Company serves as AT&T's 'preferred provider' of financing services and has
certain related and other rights and privileges in connection with the financing
of AT&T equipment to AT&T's customers and (ii) subject to various exceptions,
the AT&T Entities shall not compete or maintain an ownership interest in any
business that competes with the Company and its subsidiaries. The Company has
executed agreements comparable to the AT&T Operating Agreement with each of
Lucent and NCR.
As the 'preferred provider' of financing services for customers of Lucent,
NCR and AT&T, the Company receives a number of significant benefits, including
the receipt by the Company of information from Lucent and NCR relating to their
product development and marketing plans, the promotion and support by Lucent and
NCR of the efforts of the Company to market its leasing and financing services
to their customers and dealers, the provision of space at the Lucent and NCR
sales sites for personnel and equipment of the Company and the right of the
Company to maintain computer and telecommunication linkages with Lucent and NCR
in connection with the offering, documenting and monitoring of the Company's
leasing and financing services. The Company endeavors to take advantage of these
benefits, and has, over the past eleven years, invested significant resources in
creating a financing organization dedicated to and integrated (through such
computer and telecommunication linkages) with the sales forces of Lucent and, to
a lesser extent, NCR. In addition, the Company has developed relationships with
the organizations of the AT&T Entities (particularly Lucent), has developed and
maintained comprehensive, proprietary customer databases and has gained a
significant position with respect to the aftermarket for Lucent and NCR
equipment. The Company believes that Lucent and NCR are likewise the recipients
of significant benefits as a result of AT&T Capital's preferred provider status,
although there can be no assurance that any of such agreements will be extended
beyond the expiration of their initial term on August 4, 2000, or, if extended,
that the terms and conditions thereof will not be modified in a manner adverse
to the Company. See 'Risk Factors -- Changes in Relationship with AT&T
Entities -- Operating and Certain Other Agreements with AT&T Entities.'
In connection with its financing business for Lucent, the Company provides
an additional incentive, in the form of a sales assistance fee, for Lucent to
assist the Company in the financing of products manufactured or distributed by
Lucent. The sales assistance fee is based on designated percentages of the
aggregate sales prices and other charges ('volumes') of Lucent products financed
by the Company. In early 1996, the Company agreed to increase the designated
percentage for the sales assistance fee from the percentage paid by the Company
in prior years. After giving effect to the changes in the fee for 1995, the
sales assistance fee paid by the Company to Lucent for 1995 was approximately
double the 1994 fee. The Company and Lucent recently agreed to a modified
formula for calculating the sales assistance fee for the remaining years of the
term of Lucent's Operating Agreement (retroactive to 1996). The revised formula
is expected to result in aggregate annual sales assistance fees which are
approximately double the amounts that would have been paid if the pre-1995
formula had been maintained.
The Intercompany Agreement provides, among other things, that the Company
will administer for a fee various portfolios of financing and leasing assets,
including certain portfolios which prior to the Company's IPO had been owned by
the Company. In addition, the Company has entered into the Agreement Supplements
with Lucent and NCR pursuant to which Lucent and NCR have agreed that various
provisions of the Intercompany Agreement shall equally apply to them.
Pursuant to the License Agreement, AT&T has licensed certain trade names
and service marks, including the 'AT&T' trade name, to the Company for use in
the leasing and financing business of the
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Company and certain of its subsidiaries and, in the case of the 'AT&T' trade
name, to use as part of the corporate names of the Company and certain
subsidiaries. Pursuant to the Agreement Supplements, Lucent and NCR have
similarly licensed to the Company certain trade names and service marks,
including the 'Lucent Technologies' and 'NCR' trade names.
The initial term of each of the Operating Agreements, the Intercompany
Agreement, the License Agreement and the Agreement Supplements is scheduled to
end on August 4, 2000, subject to early termination rights. In addition, AT&T
has the right under the License Agreement, after two years' prior notice, to
require the Company to discontinue use of the 'AT&T' trade name as part of the
Company's corporate or assumed or 'doing business' name.
See 'Risk Factors -- Changes in Relationship with AT&T Entities -- Revenues
and Net Income Attributable to AT&T Entities' for a description of the Company's
dependence on the revenue and net income attributable to the Company's
relationship with the AT&T Entities and their customers and employees.
CAPITA PREFERRED TRUST
Capita Preferred Trust (the 'Trust') is a statutory business trust formed
under the Delaware Business Trust Act, as amended (the 'Trust Act'), pursuant to
a declaration of trust and the filing of a certificate of trust with the
Secretary of State of the State of Delaware; such declaration will be amended
and restated in its entirety (as so amended and restated, the 'Declaration')
substantially in the form filed as an exhibit to the Registration Statement of
which this Prospectus forms a part. The Declaration will be qualified as an
indenture under the Trust Indenture Act of 1939, as amended (the 'Trust
Indenture Act'). Upon issuance of the Trust Preferred Securities, the purchasers
thereof will own all the Trust Preferred Securities. See 'Description of the
Trust Preferred Securities.' The Company will acquire Trust Common Securities in
an aggregate liquidation amount equal to at least 3% of the total capital of the
Trust. The Trust will use all the proceeds derived from the issuance of the
Trust Securities to purchase the Partnership Preferred Securities from the
Partnership and, accordingly the assets of the Trust will consist solely of the
Partnership Preferred Securities. The Trust exists for the exclusive purpose of
(i) issuing the Trust Securities representing undivided beneficial ownership
interests in the assets of the Trust, (ii) investing the gross proceeds of the
Trust Securities in the Partnership Preferred Securities, and (iii) engaging in
only those other activities necessary or incidental thereto.
Pursuant to the Declaration, there will initially be five trustees (the
'Trustees') for the Trust. Three of the Trustees (the 'Regular Trustees') will
be individuals who are employees or officers of or who are affiliated with the
Company. The fourth trustee will be a financial institution that is unaffiliated
with the Company and is indenture trustee for purposes of compliance with the
provisions of the Trust Indenture Act (the 'Property Trustee'). The fifth
trustee will be an entity that maintains its principal place of business in the
State of Delaware (the 'Delaware Trustee'). Initially, The First National Bank
of Chicago, N.A., a national banking association, will act as Property Trustee,
and its affiliate, First Chicago Delaware Inc., a Delaware corporation, will act
as Delaware Trustee until, in each case, removed or replaced by the holder of
the Trust Common Securities. For purposes of compliance with the Trust Indenture
Act, The First National Bank of Chicago, N.A. will also act as trustee under the
Trust Guarantee (the 'Trust Guarantee Trustee').
The Property Trustee will hold title to the Partnership Preferred
Securities for the benefit of the holders of the Trust Securities, and the
Property Trustee will have the power to exercise all rights, powers and
privileges with respect to the Partnership Preferred Securities under the
Amended and Restated Agreement of Limited Partnership to be entered into by the
Company and the Trust (the 'Limited Partnership Agreement') as the holder of the
Partnership Preferred Securities. In addition, the Property Trustee will
maintain exclusive control of a segregated non-interest bearing bank account
(the 'Property Account') to hold all payments made in respect of the Partnership
Preferred Securities for the benefit of the holders of the Trust Securities. The
Trust Guarantee Trustee will hold the Trust Guarantee for the benefit of the
holders of the Trust Preferred Securities. The Company, as the holder of all the
Trust Common Securities, will have the right to appoint, remove or replace any
of the Trustees and to increase or decrease the number of trustees, provided
that the number of trustees shall be at
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least three; provided further that at least one trustee shall be a Delaware
Trustee, at least one trustee shall be the Property Trustee and at least one
Trustee shall be a Regular Trustee. The Company will pay all fees and expenses
related to the organization and operations of the Trust (including any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States or any other domestic taxing
authority upon the Trust) and the offering of the Trust Preferred Securities and
be responsible for all debts and obligations of the Trust (other than with
respect to the Trust Securities).
For so long as the Trust Preferred Securities remain outstanding, the
Company will covenant (i) to maintain directly 100% ownership of the Trust
Common Securities, (ii) to cause the Trust to remain a statutory business trust
and not to voluntarily dissolve, wind-up, liquidate or be terminated, except as
permitted by the Declaration of the Trust, (iii) to use its commercially
reasonable efforts to ensure that the Trust will not be an 'investment company'
for purposes of the 1940 Act and (iv) to take no action which would be
reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
The rights of the holders of the Trust Preferred Securities, including
economic rights, rights to information and voting rights, are as set forth in
the Declaration and the Trust Act. See 'Description of the Trust Preferred
Securities.' The Declaration and the Trust Guarantee also incorporate by
reference the terms of the Trust Indenture Act.
The location of the principal executive office of the Trust is c/o AT&T
Capital Corporation, 44 Whippany Road, Morristown, NJ 07962, and its telephone
number is (201) 397-3000.
CAPITA PREFERRED FUNDING L.P.
Capita Preferred Funding L.P. (the 'Partnership') is a limited partnership
that was formed under the Delaware Revised Uniform Limited Partnership Act, as
amended (the 'Partnership Act'), on August 29, 1996. Pursuant to the certificate
of limited partnership, as amended, and the Limited Partnership Agreement, the
Company is the sole general partner of the Partnership (in such capacity the
'General Partner'). Upon the issuance of the Partnership Preferred Securities,
which securities represent limited partner interests in the Partnership, the
Trust will be the sole limited partner of the Partnership. Contemporaneous with
the issuance of the Partnership Preferred Securities, the General Partner will
contribute capital to the Partnership in an amount sufficient to establish its
initial capital account at an amount equal to at least 15% of the total capital
of the Partnership.
The Partnership is managed by the General Partner and exists for the sole
purpose of (i) issuing its partnership interests, (ii) investing the proceeds
thereof in Affiliate Investment Instruments and Eligible Debt Securities and
(iii) engaging in only those other activities necessary or incidental thereto.
To the extent that aggregate payments to the Partnership on the Affiliate
Investment Instruments and on Eligible Debt Securities exceeds distributions
payable with respect to the Partnership Preferred Securities, the Partnership
may at times have excess funds which shall be allocated to and may, in the
General Partner's sole discretion, be distributed to the General Partner.
For so long as the Partnership Preferred Securities remain outstanding, the
Company will covenant in the Limited Partnership Agreement (i) to remain the
sole general partner of the Partnership and to maintain directly 100% ownership
of the General Partner's interest in the Partnership, which interest will at all
times represent at least 1% of the total capital of the Partnership; (ii) to
cause the Partnership to remain a limited partnership and not to voluntarily
dissolve, liquidate, wind-up or be terminated, except as permitted by the
Limited Partnership Agreement, (iii) to use its commercially reasonable efforts
to ensure that the Partnership will not be an 'investment company' for purposes
of the 1940 Act and (iv) to take no action which would be reasonably likely to
cause the Partnership to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
The rights of the holders of the Partnership Preferred Securities,
including economic rights, rights to information and voting rights, are set
forth in the Limited Partnership Agreement and the Partnership Act. See
'Description of the Partnership Preferred Securities.'
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The Limited Partnership Agreement provides that the General Partner will
have liability for the fees and expenses of the Partnership (including any
taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed by the United States or any other domestic
taxing authority upon the Partnership and be responsible for all debts and
obligations of the Partnership (other than with respect to the Partnership
Preferred Securities). Under Delaware law, assuming a limited partner in a
Delaware limited partnership such as the Partnership (i.e., a holder of the
Partnership Preferred Securities) does not participate in the control of the
business of the limited partnership, such limited partner will not be personally
liable for the debts, obligations and liabilities of such limited partnership,
whether arising in contract, tort or otherwise, solely by reason of being a
limited partner of such limited partnership (subject to any obligation such
limited partner may have to repay any funds that may have been wrongfully
distributed to it). The Partnership's business and affairs will be conducted by
the General Partner.
The location of the principal executive offices of the Partnership is c/o
AT&T Capital Corporation, 44 Whippany Road, Morristown, NJ 07962 and its
telephone number is (201) 397-3000.
DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The Trust Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Property Trustee, The First National Bank of Chicago, N.A.,
will act as trustee for the Trust Preferred Securities under the Declaration for
purposes of compliance with the provisions of the Trust Indenture Act. The terms
of the Trust Preferred Securities will include those stated in the Declaration
and those made part of the Declaration by the Trust Indenture Act. The following
summary of the material terms and provisions of the Trust Preferred Securities
does not purport to be complete and is subject to, and qualified in its entirety
by reference to, the Declaration, a copy of which is filed as an exhibit to the
Registration Statement of which this Prospectus is a part, the Trust Act and the
Trust Indenture Act.
GENERAL
The Trust Preferred Securities will be issued in fully registered form
without coupons. Trust Preferred Securities will not be issued in bearer form.
See ' -- Book-Entry Only Issuance -- The Depository Trust Company.'
The Declaration authorizes the Regular Trustees of the Trust to issue the
Trust Securities, which represent undivided beneficial ownership interests in
the assets of the Trust. Title to the Partnership Preferred Securities will be
held by the Property Trustee for the benefit of the holders of the Trust
Securities. The Declaration does not permit the Trust to acquire any assets
other than the Partnership Preferred Securities or the issuance by the Trust of
any securities other than the Trust Securities or the incurrence of any
indebtedness by the Trust. The payment of distributions out of money held by the
Trust, and payments out of money held by the Trust upon redemption of the Trust
Preferred Securities or liquidation of the Trust, are guaranteed by the Company
to the extent described under 'Description of the Trust Guarantee.' The Trust
Guarantee will be held by The First National Bank of Chicago, N.A., the Trust
Guarantee Trustee, for the benefit of the holders of the Trust Preferred
Securities. The Trust Guarantee does not cover payment of distributions when the
Trust does not have sufficient available funds to pay such distributions. In
such event, holders of Trust Preferred Securities will have the remedies
described below under ' -- Trust Enforcement Events.'
DISTRIBUTIONS
The distribution rate on Trust Preferred Securities will be fixed at a rate
per annum of % of the stated liquidation amount of $25 per Trust Preferred
Security if, as and when the Trust has funds available for payment.
Distributions not paid on the scheduled payment date will accumulate and
compound quarterly at a rate per annum equal to %. The term 'distribution'
as used herein includes any such compounded amounts unless otherwise stated or
the context otherwise requires. The amount of distributions payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months.
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Distributions on the Trust Preferred Securities will be cumulative, will
accrue from the date of initial issuance and will be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
December 31, 1996, if, as and when available for payment, by the Property
Trustee, except as otherwise described below. If distributions are not paid when
scheduled, the accrued distributions shall be paid to the holders of record of
Trust Preferred Securities as they appear on the books and records of the Trust
on the record date with respect to the payment date for the Trust Preferred
Securities which corresponds to the payment date fixed by the Partnership with
respect to the payment of cumulative distributions on the Partnership Preferred
Securities.
Distributions on the Trust Preferred Securities will be made to the extent
that the Trust has funds available for the payment of such distributions in the
Property Account. Amounts available to the Trust for distribution to the holders
of the Trust Preferred Securities will be limited to payments received by the
Trust from the Partnership with respect to the Partnership Preferred Securities
or from the Company on the Partnership Guarantee or the Trust Guarantee.
Distributions on the Partnership Preferred Securities will be paid only if, as
and when declared in the sole discretion of the Company, as the General Partner
of the Partnership. Pursuant to the Limited Partnership Agreement, the General
Partner is not obligated to declare distributions on the Partnership Preferred
Securities at any time, including upon or following a Partnership Enforcement
Event. See 'Description of Partnership Preferred Securities -- Partnership
Enforcement Events.'
The assets of the Partnership consist only of Affiliate Investment
Instruments (which initially will be the Debentures) and Eligible Debt
Securities. To the extent that the issuers (including, where applicable, the
Company, as guarantor) of the securities in which the Partnership invests fail
to make any payment in respect of such securities (or, if applicable, such
guarantees), the Partnership will not have sufficient funds to pay and will not
declare or pay distributions on the Partnership Preferred Securities. If the
Partnership does not declare and pay distributions on the Partnership Preferred
Securities out of funds legally available for distribution, the Trust will not
have sufficient funds to make distributions on the Trust Preferred Securities,
in which event the Trust Guarantee will not apply to such distributions until
the Trust has sufficient funds available therefor. See 'Description of the
Partnership Preferred Securities -- Distributions' and 'Description of the Trust
Guarantee.' In addition, as described under 'Risk Factors -- Risk Factors
Related to TOPrS -- Insufficient Income or Assets Available to Partnership,' the
Partnership may not have sufficient funds to pay current or liquidating
distributions on the Partnership Preferred Securities if (i) at any time that
the Partnership is receiving current payments in respect of the securities held
by the Partnership (including the Debentures), the General Partner, in its sole
discretion, does not declare distributions on the Partnership Preferred
Securities and the Partnership receives insufficient amounts to pay the
additional compounded distributions that will accrue in respect of the
Partnership Preferred Securities, (ii) the Partnership reinvests the proceeds
received in respect of the Debentures upon their retirement or at their
maturities in Affiliate Investment Instruments that do not generate income in an
amount that is sufficient to pay full distributions in respect of the
Partnership Preferred Securities or (iii) the Partnership invests in equity or
debt securities of Investment Affiliates that are not guaranteed by the Company
and that cannot be liquidated by the Partnership for an amount sufficient to pay
such distributions in full.
Distributions on the Trust Preferred Securities will be payable to the
holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which will be one Business Day (as defined herein) prior
to the relevant payment dates. Such distributions will be paid through the
Property Trustee who will hold amounts received in respect of the Partnership
Preferred Securities in the Property Account for the benefit of the holders of
the Trust Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment will be made as described under
' -- Book-Entry Only Issuance -- The Depository Trust Company' below. In the
event that the Trust Preferred Securities do not remain in book-entry only form,
the relevant record dates shall be the 15th day of the month of the relevant
payment dates. In the event that any date on which distributions are payable on
the Trust Preferred Securities is not a Business Day, payment of the
distribution payable on such date will be made on the next succeeding day which
is a Business Day (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. A 'Business
Day'
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shall mean any day other than a day on which banking institutions in The City of
New York are authorized or required by law to close.
TRUST ENFORCEMENT EVENTS
The occurrence, at any time, of (i) arrearages on distributions on the
Trust Preferred Securities that shall exist for six quarterly distribution
periods, (ii) a default by the Company in respect of any of its obligations
under the Trust Guarantee or (iii) a Partnership Enforcement Event under the
Limited Partnership Agreement, will constitute an enforcement event under the
Declaration with respect to the Trust Securities (a 'Trust Enforcement Event');
provided, that pursuant to the Declaration, the holder of the Trust Common
Securities will be deemed to have waived any Trust Enforcement Event with
respect to the Trust Common Securities until all Trust Enforcement Events with
respect to the Trust Preferred Securities have been cured, waived or otherwise
eliminated. Until such Trust Enforcement Events with respect to the Trust
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 Trust Preferred Securities and only the holders of the Trust Preferred
Securities will have the right to direct the Property Trustee with respect to
certain matters under the Declaration and, therefore, the Special Representative
with respect to certain matters under the Limited Partnership Agreement. See
'Description of the Partnership Preferred Securities -- Partnership Enforcement
Events' for a description of the events which will trigger the occurrence of a
Partnership Enforcement Event.
Upon the occurrence of a Trust Enforcement Event, (a) the Property Trustee,
as the holder of the Partnership Preferred Securities, shall have the right to
enforce the terms of the Partnership Preferred Securities, including the right
to direct the Special Representative to enforce (i) the Partnership's creditors'
rights and other rights with respect to the Affiliate Investment Instruments and
the Investment Guarantees, (ii) the rights of the holders of the Partnership
Preferred Securities under the Partnership Guarantee and (iii) the rights of the
holders of the Partnership Preferred Securities to receive distributions (only
if and to the extent declared out of funds legally available therefor) on the
Partnership Preferred Securities, and (b) the Trust Guarantee Trustee shall have
the right to enforce the terms of the Trust Guarantee, including the right to
enforce the covenant restricting certain payments by the Company and its
majority owned subsidiaries.
If the Property Trustee fails to enforce its rights under the Partnership
Preferred Securities after a holder of Trust Preferred Securities has made a
written request, such holder of record of Trust Preferred Securities may
directly institute a legal proceeding against the Partnership and the Special
Representative to enforce the Property Trustee's rights under the Partnership
Preferred Securities without first instituting any legal proceeding against the
Property Trustee, the Trust or any other person or entity. In addition, for so
long as the Trust holds any Partnership Preferred Securities, if the Special
Representative fails to enforce its rights on behalf of the Partnership under
the Affiliate Investment Instruments after a holder of Trust Preferred
Securities has made a written request, a holder of record of Trust Preferred
Securities may on behalf of the Partnership directly institute a legal
proceeding against the Investment Affiliates under the Affiliate Investment
Instruments, without first instituting any legal proceeding against the Property
Trustee, the Trust, the Special Representative or the Partnership. In any event,
for so long as the Trust is the holder of any Partnership Preferred Securities,
if a Trust Enforcement Event has occurred and is continuing and such event is
attributable to the failure of an Investment Affiliate to make any required
payment when due on any Affiliate Investment Instrument or the failure of the
Company to make any required payment when due on any Investment Guarantee, then
a holder of Trust Preferred Securities may on behalf of the Partnership directly
institute a proceeding against such Investment Affiliate with respect to such
Affiliate Investment Instrument or against the Company with respect to any such
Investment Guarantee, in each case for enforcement of payment.
Under no circumstances, however, shall the Special Representative have
authority to cause the General Partner to declare distributions on the
Partnership Preferred Securities. As a result, although the Special
Representative may be able to enforce the Partnership's creditors' rights to
accelerate and receive payments in respect of the Affiliate Investment
Instruments and the Investment Guarantees, the Partnership would be entitled to
reinvest such payments in additional Affiliate Investment Instruments,
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subject to satisfying the reinvestment criteria described under 'Description of
the Partnership Preferred Securities -- Partnership Investments,' and Eligible
Debt Securities, rather than declaring and making distributions on the
Partnership Preferred Securities.
The Company and the Trust are each required to file annually with the
Property Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
MANDATORY REDEMPTION
The Partnership Preferred Securities may be redeemed by the Partnership at
the option of the General Partner, in whole or in part, at any time on or after
September 30, 2006 or at any time in certain circumstances upon the occurrence
of a Partnership Special Event. Upon the repayment of the Partnership Preferred
Securities upon such redemption (either at the option of the General Partner or
pursuant to a Partnership Special Event), the proceeds from such repayment shall
simultaneously be applied to redeem Trust Securities having an aggregate
liquidation amount equal to the Partnership Preferred Securities so repaid at an
amount equal to the amount received in respect of the redeemed Partnership
Preferred Securities; provided, that holders of the Trust Securities shall be
given not less than 30 nor more than 60 days' notice of such redemption. See
'Description of the Partnership Preferred Securities -- General' and
'Description of the Partnership Preferred Securities -- Optional Redemption.'
TRUST SPECIAL EVENT REDEMPTION OR DISTRIBUTION
If, at any time, a Trust Tax Event or a Trust Investment Company Event
(each as hereinafter defined, and each, a 'Trust Special Event') shall occur and
be continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below, within 90
days following the occurrence of such Trust Special Event elect to either (i)
dissolve the Trust upon not less than 30 nor more than 60 days' notice with the
result that, after satisfaction of creditors of the Trust, if any, Partnership
Preferred Securities with an aggregate principal amount equal to the aggregate
stated liquidation amount of, with a distribution rate identical to the
distribution rate of, and accrued and unpaid distributions equal to accrued and
unpaid distributions on, and having the same record date for payment as, the
Trust Preferred Securities and the Trust Common Securities outstanding at such
time would be distributed on a pro rata basis to the holders of the Trust
Preferred Securities and the Trust Common Securities in liquidation of such
holders' interests in the Trust; provided, however, that if at the time there is
available to the Trust the opportunity to eliminate, within such 90-day period,
the Trust Special Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure which
in the sole judgment of the Company has or will cause no adverse effect on the
Trust, the Partnership, the Company or the holders of the Trust Securities and
will involve no material cost, the Trust will pursue such measure in lieu of
dissolution or (ii) cause the Trust Preferred Securities to remain outstanding,
provided that in the case of this clause (ii), the Company shall pay any and all
expenses incurred by or payable by the Trust attributable to the Trust Special
Event. Furthermore, if in the case of the occurrence of a Trust Tax Event, the
Regular Trustees have received an opinion (a 'Trust Redemption Tax Opinion') of
nationally recognized independent tax counsel experienced in such matters that
there is more than an insubstantial risk that interest payable by one or more of
the Investment Affiliates with respect to the Debentures issued by such
Investment Affiliate is not, or will not be, deductible by such Investment
Affiliate for United States federal income tax purposes even if the Partnership
Preferred Securities were distributed to the holders of the Trust Securities in
liquidation of such holders' interests in the Trust as described above, then the
General Partner shall have the right, within 90 days following the occurrence of
such Trust Tax Event, to elect to cause the Partnership to redeem the
Partnership Preferred Securities in whole (but not in part) for cash upon not
less than 30 nor more than 60 days' notice and promptly following such
redemption, the Trust Preferred Securities and Trust Common Securities will be
redeemed by the Trust at the Redemption Price.
'Trust Tax Event' means that the Company shall have requested and received
and shall have delivered to the Regular Trustees an opinion of nationally
recognized independent tax counsel experienced in such matters (a 'Trust
Dissolution Tax Opinion') to the effect that there has been (a) an
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amendment to, change in or announced proposed change in the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority thereof or therein, (b) a judicial decision interpreting,
applying, or clarifying such laws or regulations, (c) an administrative
pronouncement or action that represents an official position (including a
clarification of an official position) of the governmental authority or
regulatory body making such administrative pronouncement or taking such action,
or (d) a threatened challenge asserted in connection with an audit of the
Company or any of its subsidiaries, the Partnership, or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially similar
to the Debentures, the Partnership Preferred Securities, or the Trust Preferred
Securities, which amendment or change is adopted or which proposed change,
decision or pronouncement is announced or which action, clarification or
challenge occurs on or after the date of this Prospectus (collectively a 'Tax
Action'), which Tax Action relates to any of the items described in (i) through
(iii) below, and that there is more than an insubstantial risk that (i) the
Trust is, or will be subject to United States federal income tax with respect to
income accrued or received on the Partnership Preferred Securities, (ii) the
Trust is, or will be subject to more than a de minimis amount of other taxes,
duties or other governmental charges or (iii) interest payable by an Investment
Affiliate with respect to the Debenture issued by such Investment Affiliate is
not, or will not be, deductible by such Investment Affiliate for United States
federal income tax purposes.
'Trust Investment Company Event' means that the Company shall have
requested and received and shall have delivered to the Regular Trustees an
opinion of nationally recognized independent legal counsel experienced in such
matters to the effect that as a result of the occurrence on or after the date
hereof 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'), the Trust is or
will be considered an 'investment company' which is required to be registered
under the 1940 Act.
If the Partnership Preferred Securities are distributed to the holders of
the Trust Preferred Securities, the Company will use its best efforts to cause
the Partnership Preferred Securities to be listed on the New York Stock Exchange
or on such other national securities exchange or similar organization as the
Trust Preferred Securities are then listed or quoted.
On the date fixed for any distribution of Partnership Preferred Securities,
upon dissolution of the Trust, (i) the Trust Preferred Securities and the Trust
Common Securities will no longer be deemed to be outstanding and (ii)
certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities having an aggregate principal amount equal to
the stated liquidation amount of, and bearing accrued and unpaid distributions
equal to accrued and unpaid distributions on, such Trust Securities until such
certificates are presented to the Company or its agent for transfer or
reissuance.
There can be no assurance as to the market price for the Partnership
Preferred Securities which may be distributed in exchange for Trust Preferred
Securities if a dissolution and liquidation of the Trust were to occur.
Accordingly, the Partnership Preferred Securities which an investor may
subsequently receive on dissolution and liquidation of the Trust may trade at a
discount to the price of the Trust Preferred Securities exchanged.
REDEMPTION PROCEDURES
The Trust may not redeem fewer than all of the outstanding Trust Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Trust Preferred Securities for all quarterly distribution periods terminating on
or prior to the date of redemption.
If the Trust gives a notice of redemption in respect of Trust Preferred
Securities (which notice will be irrevocable), and if the Company has paid to
the Property Trustee a sufficient amount of cash in connection with the related
redemption of the Partnership Preferred Securities, then, by 12:00 noon, New
York time, on the redemption date, the Trust will irrevocably deposit with the
DTC funds sufficient to pay the amount payable on redemption of all book-entry
certificates and will give DTC irrevocable instructions and authority to pay
such amount to holders of the Trust Preferred Securities.
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See ' -- Book-Entry Only Issuance -- The Depository Trust Company.' If notice of
redemption shall have been given and funds are deposited as required, then upon
the date of such deposit, all rights of holders of such Trust Preferred
Securities so called for redemption will cease, except the right of the holders
of such Trust Preferred Securities to receive the Redemption Price, but without
interest on such Redemption Price. In the event that any date fixed for
redemption of Trust Preferred Securities is not a Business Day, then payment of
the amount payable on such date will be made on the next succeeding day which is
a Business Day (without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the event
that payment of the Redemption Price in respect of Trust Preferred Securities is
improperly withheld or refused and not paid either by the Trust or by the
Company pursuant to the Trust Guarantee described under 'Description of the
Trust Guarantee,' distributions on such Trust Preferred Securities will continue
to accrue at the then applicable rate, from the original redemption date to the
date of payment.
In the event that fewer than all of the outstanding Trust Preferred
Securities are to be redeemed, the Trust Preferred Securities will be redeemed
in accordance with the procedures of DTC. See ' -- Book-Entry Only
Issuance -- The Depository Trust Company.'
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or its subsidiaries may at
any time and from time to time purchase outstanding Trust Preferred Securities
by tender, in the open market or by private agreement.
SUBORDINATION OF TRUST COMMON SECURITIES
Payment of amounts upon liquidation of the Trust Securities shall be made
pro rata based on the liquidation amount of the Trust Securities; provided,
however, that upon (i) the occurrence of an Investment Event of Default by an
Investment Affiliate (including the Company) in respect of any Affiliate
Investment Instrument or (ii) default by the Company on any of its obligations
under any Guarantee, the holders of the Trust Preferred Securities will have a
preference over the holders of the Trust Common Securities with respect to
payments upon liquidation of the Trust.
In the case of any Trust Enforcement Event, the holder of Trust Common
Securities will be deemed to have waived any such Trust Enforcement Event until
all such Trust Enforcement Events with respect to the Trust Preferred Securities
have been cured, waived or otherwise eliminated. Until all Trust Enforcement
Events with respect to the Trust Preferred Securities have been so cured, waived
or otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of the Trust Preferred Securities and not on behalf of the holder of the
Trust Common Securities, and only the holders of the Trust Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of the Trust (each a 'Trust Liquidation'), the then
holders of the Trust Preferred Securities will be entitled to receive out of the
assets of the Trust, after satisfaction of liabilities to creditors,
distributions in cash or other immediately available funds in an amount equal to
the aggregate of the stated liquidation amount of $25 per Trust Preferred
Security plus accrued and unpaid distributions thereon to the date of payment
(the 'Trust Liquidation Distribution'), unless, in connection with such Trust
Liquidation, Partnership Preferred Securities in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with a distribution
rate identical to the distribution rate of, and accrued and unpaid distributions
equal to accrued and unpaid distributions on, the Trust Preferred Securities
have been distributed on a pro rata basis to the holders of the Trust Preferred
Securities.
If, upon any such Trust Liquidation, the Trust Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Trust Liquidation Distribution, then the amounts payable
directly by the Trust on the Trust Preferred Securities shall be paid on a pro
rata basis. The holders of the Trust Common Securities will be entitled to
receive distributions upon any such liquidation pro rata with the holders of the
Trust Preferred Securities,
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except in the limited circumstances described above under ' -- Subordination of
Trust Common Securities.'
Pursuant to the Declaration, the Trust shall terminate (i) upon the
bankruptcy of the Company, (ii) upon the filing of a certificate of dissolution
or the equivalent with respect to the Company, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent of at
least a majority in liquidation amount of the Trust Securities, voting together
as a single class, to file such certificate of cancellation, or the revocation
of the charter of the Company and the expiration of 90 days after the date of
revocation without a reinstatement thereof, (iii) upon the distribution of all
of the Partnership Preferred Securities upon the occurrence of a Trust Special
Event, (iv) upon the entry of a decree of a judicial dissolution of the Company
or the Trust, or (v) upon the redemption of all the Trust Securities.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and under 'Description of the Trust Guarantee -- Amendments and Assignment,' and
as otherwise required by law and the Declaration, the holders of the Trust
Preferred Securities will have no voting rights.
Subject to the requirement of the Property Trustee obtaining a tax opinion
as set forth in the last sentence of this paragraph, the holders of a majority
in liquidation amount of the Trust Preferred Securities have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Property Trustee, or 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 Partnership Preferred Securities, to (i)
exercise the remedies available to it under the Limited Partnership Agreement as
a holder of the Partnership Preferred Securities, including the right to direct
the Special Representative to exercise its rights in the manner described above
under ' -- Trust Enforcement Events' and (ii) consent to any amendment,
modification, or termination of the Limited Partnership Agreement or the
Partnership Preferred Securities where such consent shall be required; provided,
however, that where a consent or action under the Limited Partnership Agreement
would require the consent or act of the holders of more than a majority of the
aggregate liquidation amount of Partnership Preferred Securities affected
thereby, only the holders of the percentage of the aggregate stated liquidation
amount of the Trust Securities which is at least equal to the percentage
required under the Limited Partnership Agreement may direct the Property Trustee
to give such consent or take such action on behalf of the Trust. See
'Description of the Partnership Preferred Securities -- Voting Rights.' The
Property Trustee shall notify all holders of the Trust Preferred Securities of
any notice of any Partnership Enforcement Event received from the General
Partner with respect to the Partnership Preferred Securities and the Affiliate
Investment Instruments. Such notice shall state that such Partnership
Enforcement Event also constitutes a Trust Enforcement Event. Except with
respect to directing the time, method, and place of conducting a proceeding for
a remedy as described above, the Property Trustee shall be under no obligation
to take any of the actions described in clauses (i) or (ii) above unless the
Property Trustee has obtained an opinion of independent tax counsel to the
effect that as a result of such action, the Trust will not fail to be classified
as a grantor trust for United States federal income tax purposes and each holder
will be treated as owning an undivided beneficial ownership interest in the
Partnership Preferred Securities.
A waiver of a Partnership Enforcement Event with respect to the Partnership
Preferred Securities held by the Property Trustee will constitute a waiver of
the corresponding Trust Enforcement Event.
Any required approval or direction of holders of Trust Preferred Securities
may be given at a separate meeting of holders of Trust Preferred Securities
convened for such purpose, at a meeting of all of the holders of Trust
Securities or pursuant to written consent. The Regular Trustees will cause a
notice of any meeting at which holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
holders is to be taken, to be mailed to each holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of
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proxies or consents. No vote or consent of the holders of Trust Preferred
Securities will be required for the Trust to redeem and cancel Trust Preferred
Securities or distribute Partnership Preferred Securities in accordance with the
Declaration.
Notwithstanding that holders of Trust Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the Trust
Securities that are owned at such time by the Company or any entity directly or
indirectly controlled by, or under direct or indirect common control with, the
Company, shall not be entitled to vote or consent and shall, for purposes of
such vote or consent, be treated as if such Trust Securities were not
outstanding; provided however that persons (other than affiliates of the
Company) to whom the Company or any of its subsidiaries have pledged Trust
Preferred Securities may vote or consent with respect to such pledged Trust
Preferred Securities under any of the circumstances described herein.
The procedures by which holders of Trust Preferred Securities represented
by the global certificates may exercise their voting rights are described below.
See ' -- Book-Entry Only Issuance -- The Depository Trust Company.'
Holders of the Trust Preferred Securities will have no rights to appoint or
remove the Regular Trustees, who may be appointed, removed or replaced solely by
the Company, as the holder of all of the Trust Common Securities.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE TRUST
The Trust may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. The Trust may, with the consent of a majority of the Regular
Trustees and without the consent of the holders of the Trust Securities, the
Property Trustee or the Delaware 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 either (x) expressly assumes all of the obligations of the
Trust under the Trust Securities or (y) substitutes for the Trust Preferred
Securities other securities having substantially the same terms as the Trust
Preferred Securities (the 'Successor Securities'), so long as the Successor
Securities rank the same as the Trust Securities rank with respect to
distributions, assets and payments, (ii) the Company expressly acknowledges a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Partnership Preferred Securities, (iii)
the Trust Preferred Securities or any Successor Securities are listed, or any
Successor Securities will be listed upon notification of issuance, on any
national securities exchange or with another organization on which the Trust
Preferred Securities are then listed or quoted, (iv) such merger, consolidation,
amalgamation or replacement does not cause the Trust Preferred Securities
(including any Successor Securities) to be downgraded by any nationally
recognized statistical rating organization, (v) such merger, consolidation,
amalgamation or replacement does not adversely affect the rights, preferences
and privileges of the holders of the Trust Preferred Securities (including any
Successor Securities) in any material respect, (vi) such successor entity has a
purpose substantially identical to that of the Trust, (vii) the Company
guarantees the obligations of such successor entity under the Successor
Securities to the same extent as provided by the Trust Guarantee, (viii) prior
to such merger, consolidation, amalgamation or replacement, the Company has
received an opinion of a nationally recognized independent counsel to the Trust
experienced in such matters to the effect that: (A) such merger, consolidation,
amalgamation or replacement will not adversely affect the rights, preferences
and privileges of the holders of the Trust Preferred Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (B) following such merger,
consolidation, amalgamation or replacement, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act,
(C) following such merger, consolidation, amalgamation or replacement, the Trust
(or such successor trust) will not be treated as an association or a publicly
traded partnership taxable as a corporation for United States federal income tax
purposes and (D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of
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100% in liquidation amount of the Trust Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or replace it, if
such consolidation, amalgamation, merger or replacement would cause the Trust or
the successor entity to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal income tax
purposes.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by a majority of
the Regular Trustees (and in certain circumstances the Property Trustee and the
Delaware Trustee), provided, that if any proposed amendment provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Trust
Securities, whether by way of amendment to the Declaration or otherwise or (ii)
the dissolution, winding-up or termination of the Trust other than pursuant to
the terms of the Declaration, then the holders of the Trust Securities voting
together as a single class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of at least a majority in liquidation amount of the Trust Securities
affected thereby; provided, further that if any amendment or proposal referred
to in clause (i) above would adversely affect only the Trust Preferred
Securities or the Trust Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a majority in liquidation
amount of such class of Trust Securities.
The Declaration may be amended without the consent of the holders of the
Trust Securities to (i) cure any ambiguity, (ii) correct or supplement any
provision in the Declaration that may be defective or inconsistent with any
other provision of the Declaration, (iii) add to the covenants, restrictions or
obligations of the Sponsor, (iv) conform to any change in the 1940 Act, the
Trust Indenture Act or the rules or regulations of either such Act and (v)
modify, eliminate and add to any provision of the Declaration to such extent as
may be necessary or desirable; provided that no such amendment shall have a
material adverse effect on the rights, preferences or privileges of the holders
of the Trust Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause the Trust to
fail to be classified as a grantor trust for United States federal income tax
purposes, (ii) cause the Partnership to be classified as an association or
publicly traded partnership taxable as a corporation for such purposes, (iii)
reduce or otherwise adversely affect the powers of the Property Trustee or (iv)
cause the Trust or the Partnership to be deemed an 'investment company' which is
required to be registered under the 1940 Act.
BOOK-ENTRY ONLY ISSUANCE -- THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ('DTC') will act as securities depository (the
'Depository') for the Trust Preferred Securities and, to the extent distributed
to the holders of Trust Preferred Securities, the Partnership Preferred
Securities. The Trust Preferred Securities will be issued only as fully-
registered securities registered in the name of Cede & Co. (DTC's nominee). One
or more fully-registered global Trust Preferred Securities certificates ('Global
Certificates'), representing the total aggregate number of Trust Preferred
Securities, will be issued and will be deposited with DTC.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a 'banking organization' within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a 'clearing corporation' within the
meaning of the New York Uniform Commercial Code, and a 'clearing agency'
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
holds securities that its participants ('Participants') deposit with DTC. DTC
also facilitates the settlement among Participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in Participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Participants in DTC
include securities brokers and dealers, banks, trust companies, clearing
corporations and certain other organizations. DTC is owned by a number of its
Participants and by the New York Stock Exchange, the
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American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ('Indirect Participants'). The rules applicable to DTC and its
Participants are on file with the Commission.
Purchases of Trust Preferred Securities within the DTC system must be made
by or through Participants, which will receive a credit for the Trust Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
Trust Preferred Securities ('Beneficial Owner') is in turn to be recorded on the
Participants' and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their purchases, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the
Participants or Indirect Participants through which the Beneficial Owners
purchased Trust Preferred Securities. Transfers of ownership interests in the
Trust Preferred Securities are to be accomplished by entries made on the books
of Participants and Indirect Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Trust Preferred Securities, except in the event that use of the
book-entry system for the Trust Preferred Securities is discontinued.
DTC has no knowledge of the actual Beneficial Owners of the Trust Preferred
Securities; DTC's records reflect only the identity of the Participants to whose
accounts such Trust Preferred Securities are credited, which may or may not be
the Beneficial Owners. The Participants and Indirect Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Certificate, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Trust Preferred Securities represented thereby
for all purposes under the Declaration and the Trust Preferred Securities. No
beneficial owner of an interest in a Global Certificate will be able to transfer
that interest except in accordance with DTC's applicable procedures, in addition
to those provided for under the Declaration.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Trust Preferred Securities (including the presentation of
Trust Preferred Securities for exchange as described below) only at the
direction of one or more Participants to whose account the DTC interests in the
Global Certificates are credited and only in respect of such portion of the
aggregate liquidation amount of Trust Preferred Securities as to which such
Participant or Participants has or have given such direction. However, if there
is a Trust Enforcement Event under the Trust Preferred Securities, DTC will
exchange the Global Certificates for Certificated Securities, which it will
distribute to its Participants in accordance with its customary procedures.
Conveyance of notices and other communications by DTC to Participants, by
Participants to Indirect Participants, and by Participants and Indirect
Participants to Beneficial Owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the Trust Preferred Securities held in
book-entry form will be sent to Cede & Co. If less than all of the Trust
Preferred Securities are being redeemed, DTC will determine the amount of the
interest of each Participant to be redeemed in accordance with its procedures.
Although voting with respect to the Trust Preferred Securities is limited,
in those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Trust Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to the Trust as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or
voting rights to those Participants to whose accounts the Trust Preferred
Securities are allocated on the record date (identified in a listing attached to
the Omnibus Proxy).
Distributions on the Trust Preferred Securities held in book-entry form
will be made to DTC in immediately available funds. DTC's practice is to credit
Participants' accounts on the relevant payment date in accordance with their
respective holdings shown on DTC's records unless DTC has reason to
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believe that it will not receive payments on such payment date. Payments by
Participants and Indirect Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participants and Indirect Participants and not of DTC, the Trust or the
Company, subject to any statutory or regulatory requirements as may be in effect
from time to time. Payment of any distributions to DTC is the responsibility of
the Trust, disbursement of such payments to Participants is the responsibility
of DTC, and disbursement of such payments to the Beneficial Owners is the
responsibility of Participants and Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Certificate will not be entitled to receive physical delivery of Trust Preferred
Securities. Accordingly, each Beneficial Owner must rely on the procedures of
DTC to exercise any rights under the Trust Preferred Securities.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Certificates among Participants of DTC, DTC
is under no obligation to perform or continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Company nor the
Trust will have any responsibility for the performance by DTC or its
Participants or Indirect Participants under the rules and procedures governing
DTC. DTC may discontinue providing its services as securities depository with
respect to the Trust Preferred Securities at any time by giving notice to the
Trust. Under such circumstances, in the event that a successor securities
depository is not obtained, Trust Preferred Security certificates are required
to be printed and delivered to the Property Trustee. Additionally, the Trust
(with the consent of the Company) may decide to discontinue use of the system of
book-entry transfers through DTC or any successor depository. In that event,
certificates for the Trust Preferred Securities will be printed and delivered to
the Property Trustee. In each of the above circumstances, the Company will
appoint a paying agent with respect to the Trust Preferred Securities.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Trust
Preferred Securities as represented by a Global Certificate.
PAYMENT
Payments in respect of the Trust Preferred Securities represented by the
Global Certificates shall be made to DTC, which shall credit the relevant
accounts at DTC on the scheduled payment dates or, in the case of certificated
securities, if any, such payments shall be made by check mailed to the address
of the holder entitled thereto as such address shall appear on the register. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Regular Trustees. In the event that The First National Bank of
Chicago, N.A. shall no longer be the Paying Agent, the Regular Trustees shall
appoint a successor to act as Paying Agent (which shall be a bank or trust
company).
REGISTRAR, TRANSFER AGENT, AND PAYING AGENT
The Property Trustee will act as Registrar, Transfer Agent and Paying Agent
for the Trust Preferred Securities.
Registration of transfers of Trust Preferred Securities will be effected
without charge by or on behalf of the Trust, but upon payment (with the giving
of such indemnity as the Trust or the Company may require) in respect of any tax
or other government charges which may be imposed in relation to it.
The Trust will not be required to register or cause to be registered the
transfer of Trust Preferred Securities after such Trust Preferred Securities
have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, prior to the occurrence of a default with respect to
the Trust Securities, undertakes to perform only such duties as are specifically
set forth in the Declaration and, after default, shall exercise the same degree
of care as a prudent individual would exercise in the conduct of his or her own
affairs. Subject to such provisions, the Property Trustee is under no obligation
to exercise any of the powers vested in it by the Declaration at the request of
any holder of Trust Preferred Securities,
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unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The holders of Trust Preferred
Securities will not be required to offer such indemnity in the event such
holders, by exercising their voting rights, direct the Property Trustee to take
any action following a Trust Enforcement Event.
GOVERNING LAW
The Declaration and the Trust Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to conduct the affairs of
and to operate the Trust in such a way that the Trust will not be deemed to be
an 'investment company' required to be registered under the 1940 Act or
characterized as other than a grantor trust for United States federal income tax
purposes. In this connection, the Regular Trustees are authorized to take any
action, not inconsistent with applicable law, the certificate of trust or the
Declaration that the Regular Trustees determine in their discretion to be
necessary or desirable for such purposes as long as such action does not
adversely affect the interests of the holders of the Trust Preferred Securities.
Holders of the Trust Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust Guarantee
which will be executed and delivered by the Company for the benefit of the
holders from time to time of Trust Preferred Securities. The summary does not
purport to be complete and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Trust Guarantee, which is
filed as an exhibit to the Registration Statement of which this Prospectus is a
part. The Trust Guarantee incorporates by reference the terms of, and will be
qualified as an indenture under, the Trust Indenture Act. The First National
Bank of Chicago, N.A., as the Trust Guarantee Trustee, will hold the Trust
Guarantee for the benefit of the holders of the Trust Preferred Securities and
will act as indenture trustee for the purposes of compliance with the Trust
Indenture Act.
GENERAL
Pursuant to the Trust Guarantee, the Company will irrevocably agree, on a
subordinated basis and to the extent set forth therein, to pay in full to the
holders of the Trust Preferred Securities (except to the extent paid by the
Trust), as and when due, regardless of any defense, right of set off or
counterclaim which the Trust may have or assert, the following payments (the
'Trust Guarantee Payments'), without duplication: (i) any accrued and unpaid
distributions on the Trust Preferred Securities to the extent the Trust has
funds available therefor, (ii) the Redemption Price with respect to any Trust
Preferred Securities called for redemption by the Trust, to the extent the Trust
has funds available therefor and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the distribution of Partnership Preferred Securities to the holders of
Trust Preferred Securities or the redemption of all of the Trust Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on the Trust Preferred Securities and (b) the
amount of assets of the Trust remaining available for distribution to holders of
Trust Preferred Securities upon the liquidation of the Trust. The Company's
obligation to make a Trust Guarantee Payment may be satisfied by direct payment
of the required amounts by the Company to the holders of Trust Preferred
Securities or by causing the Trust to pay such amounts to such holders.
The Trust Guarantee will be a guarantee on a subordinated basis with
respect to the Trust Preferred Securities from the time of issuance of such
Trust Preferred Securities but will only apply to any payment of distributions
or Redemption Price, or to payments upon the dissolution, winding-up or
termination of the Trust, to the extent the Trust shall have funds available
therefor. If the Partnership fails to declare distributions on Partnership
Preferred Securities, the Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the Trust Preferred Securities
or otherwise, and in such event holders of the Trust Preferred Securities would
not be able to rely upon the Trust Guarantee for payment of such amounts.
Instead, holders of the Trust Preferred Securities will have the remedies
described herein under 'Description of the Trust Preferred Securities -- Trust
Enforcement Events', including the right to direct the Trust Guarantee Trustee
to enforce the covenant restricting certain payments by the Company and its
majority owned subsidiaries. See ' -- Certain Covenants of the Company' below.
The Guarantees, when taken together with the Company Debenture and the
Company's obligations to pay all fees and expenses of the Trust and the
Partnership, constitute a guarantee to the extent set forth herein by the
Company of the distribution, redemption and liquidation payments payable to the
holders of the Trust Preferred Securities. The Guarantees do not apply, however,
to current distributions by the Partnership unless and until such distributions
are declared by the Partnership out of funds legally available for payment or to
liquidating distributions unless there are assets available for payment in the
Partnership, each as more fully described under 'Risk Factors -- Risk Factors
Related to TOPrS -- Insufficient Income or Assets Available to Partnership.'
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CERTAIN COVENANTS OF THE COMPANY
The Company will covenant in the Trust Guarantee that, if (a) for any
distribution period, full distributions on a cumulative basis on any Trust
Preferred Securities have not been paid, (b) an Investment Event of Default by
any Investment Affiliate in respect of any Affiliate Investment Instrument has
occurred and is continuing or (c) the Company is in default of its obligations
under the Trust Guarantee, the Partnership Guarantee or any Investment
Guarantee, then, during such period the Company shall not, nor permit any
majority owned subsidiary to (i) declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to any of its capital stock or comparable equity interest (except
for dividends or distributions in shares of its capital stock, conversions or
exchanges of common stock of one class into common stock of another class and
dividends, distributions with respect to the Partnership or the Trust or
dividends and distributions on the common stock of wholly owned subsidiaries of
the Company), (ii) make, or permit the making of, any Affiliated Restricted
Payments except for Permissible Affiliated Payments, and (iii) make any
guarantee payments with respect to the foregoing.
'Affiliated Restricted Payments' means any payment (including, without
limitation, payments for the sale, purchase or lease of any assets or properties
or the rendering of any services) to any Affiliate of the Company, except for
Permissible Affiliated Payments. 'Affiliate' means, with respect to any
specified person, any other person that directly or indirectly controls or is
controlled by, or is under common control with, such specified person, provided,
that, with respect to the Company, 'Affiliate' shall be deemed to also include
any entity of which at least 20% of the capital stock is owned by a person that
directly or indirectly controls the Company. 'Permissible Affiliated Payments'
means (i) payments by the Company or its subsidiaries (other than the
Partnership or the Trust) to Affiliates of the Company for management or other
advisory services not to exceed $10 million per annum and (ii) transactions made
in good faith the terms of which are fair and reasonable to the Company or such
majority owned subsidiary, as the case may be, and are at least as favorable as
terms which could be obtained by the Company or such majority owned subsidiary,
as the case may be, in a comparable transaction made on an arm's length basis
with persons which are not Affiliates of the Company; provided, that with
respect to a payment or a series of payments not greater than $1 million, such
payment or payments shall be conclusively deemed to be on terms which are fair
and reasonable to the Company or any of its majority owned subsidiaries and on
terms which are at least as favorable as the terms which could be obtained on an
arm's length basis with persons who are not Affiliates if such payment or
payments are approved by a majority of the Company's independent directors;
provided, further, that with respect to a payment or a series of related
payments in excess of $1 million, the Company or such subsidiary shall either
(A) have received a written opinion of a nationally recognized investment bank
stating that the terms of such payment are fair to the Company or such
subsidiary, as the case may be, from a financial point of view, or (B) have
selected the Affiliate or Affiliates which are to receive such payments based
upon a competitive bid procedure in which the Company or such subsidiary shall
have received at least two independent bids, administered in good faith and on
commercially reasonable terms by the Company or such subsidiary.
EVENTS OF DEFAULT; ENFORCEMENT OF TRUST GUARANTEE
An event of default under the Trust Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trust Guarantee Trustee or to direct
the exercise of any trust or power conferred upon the Trust Guarantee Trustee
under the Trust Guarantee. If the Trust Guarantee Trustee fails to enforce its
rights under the Trust Guarantee after a holder of Trust Preferred Securities
has made a written request, such holder may institute a legal proceeding
directly against the Company to enforce the Trust Guarantee Trustee's rights
under the Trust Guarantee, without first instituting a legal proceeding against
the Trust, the Trust Guarantee Trustee or any other person or entity. In any
event, if the Company has failed to make a guarantee payment under the Trust
Guarantee, a holder of Trust Preferred Securities may directly
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institute a proceeding in such holder's own name against the Company for
enforcement of the Trust Guarantee for such payment.
STATUS OF THE TRUST GUARANTEE; SUBORDINATION
The Trust Guarantee will constitute an unsecured obligation of the Company
and will rank subordinate and junior to all other liabilities of the Company and
will rank pari passu with the most senior preferred stock issued from time to
time by the Company and with any guarantee now or hereafter entered into by the
Company in respect of any preferred stock of any affiliate of the Company. The
terms of the Trust Preferred Securities provide that each holder of Trust
Preferred Securities by acceptance thereof agrees to the subordination
provisions and other terms of the Trust Guarantee.
The Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the Trust Guarantee
without instituting a legal proceeding against any other person or entity).
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely affect
the rights of holders of Trust Preferred Securities (in which case no vote will
be required), the Trust Guarantee may be amended only with the prior approval of
the holders of at least a majority in liquidation amount of all the outstanding
Trust Preferred Securities. The manner of obtaining any such approval of holders
of the Trust Preferred Securities will be as set forth under 'Description of the
Trust Preferred Securities -- Voting Rights.' All guarantees and agreements
contained in the Trust Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Company and shall inure to the benefit of
the holders of the Trust Preferred Securities then outstanding. Except in
connection with any permitted merger or consolidation of the Company with or
into another entity or any permitted sale, transfer or lease of the Company's
assets to another entity as described below under 'Description of the
Partnership Preferred Securities -- Merger, Consolidation or Amalgamation of the
Partnership,' the Company may not assign its rights or delegate its obligations
under the Trust Guarantee without the prior approval of the holders of at least
a majority of the aggregate stated liquidation amount of the Trust Preferred
Securities then outstanding.
TERMINATION OF THE TRUST GUARANTEE
The Trust Guarantee will terminate as to each holder of Trust Preferred
Securities upon (i) full payment of the Redemption Price of all Trust Preferred
Securities, (ii) distribution of the Partnership Preferred Securities held by
the Trust to the holders of the Trust Preferred Securities or (iii) full payment
of the amounts payable in accordance with the Declaration upon liquidation of
the Trust. The Trust Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of Trust Preferred
Securities must restore payment of any sum paid under such Trust Preferred
Securities or such Trust Guarantee.
INFORMATION CONCERNING THE TRUST GUARANTEE TRUSTEE
The Trust Guarantee Trustee, prior to the occurrence of a default with
respect to the Trust Guarantee, undertakes to perform only such duties as are
specifically set forth in the Trust Guarantee and, after default with respect to
the Trust Guarantee, shall exercise the same degree of care as a prudent man
would exercise in the conduct of his own affairs. Subject to such provision, the
Trust Guarantee Trustee is under no obligation to exercise any of the powers
vested in it by the Trust Guarantee at the request of any holder of Trust
Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
GOVERNING LAW
The Guarantee will be governed by, and construed in accordance with, the
laws of the State of New York.
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DESCRIPTION OF THE PARTNERSHIP PREFERRED SECURITIES
GENERAL
All of the partnership interests in the Partnership other than the
Partnership Preferred Securities acquired by the Trust are owned directly by the
Company. The Company is the sole general partner of the Partnership. The Limited
Partnership Agreement authorizes and creates the Partnership Preferred
Securities, which represent limited partnership interests in the Partnership.
The limited partnership interests represented by the Partnership Preferred
Securities will have a preference with respect to distributions and amounts
payable on redemption or liquidation over the General Partner's interest in the
Partnership. Except as otherwise described herein or provided in the Limited
Partnership Agreement, the Limited Partnership Agreement does not permit the
issuance of any additional partnership interests, or the incurrence of any
indebtedness by the Partnership.
The summary of certain material terms and provisions of the Partnership
Preferred Securities set forth below does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the Limited
Partnership Agreement, which is filed as an exhibit to the Registration
Statement of which this Prospectus is a part, and the Partnership Act.
DISTRIBUTIONS
Holders of Partnership Preferred Securities will be entitled to receive
cumulative cash distributions, if, as and when declared by the General Partner
in its sole discretion out of assets of the Partnership legally available for
payment. The distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of % of the stated liquidation preference of $25
per Partnership Preferred Security. Distributions not paid on the scheduled
payment date will accumulate and compound quarterly at the rate per annum equal
to %. The amount of distributions payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months.
Distributions on the Partnership Preferred Securities will be payable
quarterly in arrears on March 31, June 30, September 30, and December 31 of each
year, commencing December 31, 1996. If distributions are not declared and paid
when scheduled, the accrued distributions shall be paid to the holders of record
of Partnership Preferred Securities as they appear on the books and records of
the Partnership on the record date with respect to the payment date for the
Partnership Preferred Securities.
The Partnership's earnings available for distribution to the holders of the
Partnership Preferred Securities will be limited to payments made on the
Affiliate Investment Instruments and Investment Guarantees and payments on
Eligible Debt Securities in which the Partnership has invested from time to
time. See ' -- Partnership Investments.' To the extent that the issuers
(including, where applicable, the Company, as guarantor) of the securities in
which the Partnership invests fail to make any payment in respect of such
securities (or, if applicable, such guarantees), the Partnership will not have
sufficient funds to pay and will not declare or pay distributions on the
Partnership Preferred Securities, in which event the Partnership Guarantee will
not apply to such distributions until the Partnership has sufficient funds
available therefor. See 'Description of the Partnership Guarantee.' In addition,
distributions on the Partnership Preferred Securities may be declared and paid
only as determined in the sole discretion of the Company, as the General Partner
of the Partnership. If the Partnership fails to declare and pay distributions on
the Partnership Preferred Securities out of funds legally available for
distribution, the Trust will not have sufficient funds to make distributions on
the Trust Preferred Securities, in which event the Trust Guarantee will not
apply to such distributions until the Trust has sufficient funds available
therefor. In addition, as described under 'Risk Factors -- Risk Factors Related
to TOPrS -- Insufficient Income or Assets Available to Partnership,' the
Partnership may not have sufficient funds to pay current or liquidating
distributions on the Partnership Preferred Securities if (i) at any time that
the Partnership is receiving current payments in respect of the securities held
by the Partnership (including the Debentures), the General Partner, in its sole
discretion, does not declare distributions on the Partnership Preferred
Securities and the Partnership receives insufficient amounts to pay the
additional compounded distributions that will accrue in respect of the
Partnership Preferred Securities, (ii) the Partnership reinvests the proceeds
received in respect of the Debentures upon their retirement
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or at their maturities in Affiliate Investment Instruments that do not generate
income in an amount that is sufficient to pay full distributions in respect of
the Partnership Preferred Securities or (iii) the Partnership invests in equity
or debt securities of Investment Affiliates that are not guaranteed by the
Company and that cannot be liquidated by the Partnership for an amount
sufficient to pay such distributions in full.
Distributions on the Partnership Preferred Securities will be payable to
the holders thereof as they appear on the books and records of the Partnership
on the relevant record dates, which, as long as the Trust Preferred Securities
remain (or, in the event that the Trust is liquidated in connection with a Trust
Special Event, as long as the Partnership Preferred Securities remain) in
book-entry-only form, will be one Business Day prior to the relevant payment
dates. In the event the Trust Preferred Securities (or in the event that the
Trust is liquidated in connection with a Trust Special Event, the Partnership
Preferred Securities) shall not continue to remain in book-entry only form, the
relevant record dates shall be the 15th day of the month of the relevant payment
dates. In the event that any date on which distributions are payable on the
Partnership Preferred 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.
PARTNERSHIP ENFORCEMENT EVENTS
If one or more of the following events shall occur and be continuing (each
a 'Partnership Enforcement Event'): (i) arrearages on distributions on the
Partnership Preferred Securities shall exist for six consecutive quarterly
distribution periods, (ii) the Company is in default on any of its obligations
under the Partnership Guarantee or any Investment Guarantee or (iii) an
Investment Event of Default occurs and is continuing on any Affiliate Investment
Instrument, then holders of the Partnership Preferred Securities will be
entitled by the vote of a majority in aggregate liquidation preference of such
holders (or, for so long as the Partnership Preferred Securities are held by the
Property Trustee), the Property Trustee, as the holder of the Partnership
Preferred Securities, will have the right (a) under the Limited Partnership
Agreement to enforce the terms of the Partnership Preferred Securities,
including the right to appoint and authorize a special representative of the
Partnership and the limited partners (a 'Special Representative') to enforce (1)
the Partnership's creditors' rights and other rights with respect to the
Affiliate Investment Instruments and the Investment Guarantees, (2) the rights
of the holders of the Partnership Preferred Securities under the Partnership
Guarantee and (3) the rights of the holders of the Partnership Preferred
Securities to receive distributions (only if and to the extent declared out of
funds legally available therefor) on the Partnership Preferred Securities, and
(b) under the Partnership Guarantee to enforce the terms of the Partnership
Guarantee, including the right to enforce the covenant restricting certain
payments by the Company and its majority owned subsidiaries.
If the Special Representative fails to enforce its rights under the
Affiliate Investment Instruments after a holder of Partnership Preferred
Securities has made a written request, such holder of record of Partnership
Preferred Securities may directly institute a legal proceeding against the
Company to enforce the rights of the Special Representative and the Partnership
under the Affiliate Investment Instruments without first instituting any legal
proceeding against the Special Representative, the Partnership or any other
person or entity. In any event, if a Partnership Enforcement Event has occurred
and is continuing and such event is attributable to the failure of an Investment
Affiliate to make any required payment when due on any Affiliate Investment
Instrument, then a holder of Partnership Preferred Securities may on behalf of
the Partnership directly institute a proceeding against such Investment
Affiliate with respect to such Affiliate Investment Instrument for enforcement
of payment. A holder of Partnership Preferred Securities may also bring a direct
action against the Company to enforce such holder's right under the Partnership
Guarantee. See 'Description of the Partnership Guarantee -- Events of Default;
Enforcement of Partnership Guarantee.'
Under no circumstances, however, shall the Special Representative have
authority to cause the General Partner to declare distributions on the
Partnership Preferred Securities. As a result, although the Special
Representative may be able to enforce the Partnership's creditors' rights to
accelerate and
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receive payments in respect of the Affiliate Investment Instruments and the
Investment Guarantees, the Partnership would be entitled to reinvest such
payments in additional Affiliate Investment Instruments, subject to satisfying
the reinvestment criteria described under 'Description of the Partnership
Preferred Securities -- Partnership Investments,' and the Eligible Debt
Securities, rather than declaring and making distributions on the Partnership
Preferred Securities. The Special Representative shall not, by virtue of acting
in such capacity, be admitted as a general partner in the Partnership or
otherwise be deemed to be a general partner in the Partnership and shall have no
liability for the debts, obligations or liabilities of the Partnership.
PARTNERSHIP INVESTMENTS
Approximately 99% of the proceeds from the issuance of the Partnership
Preferred Securities and the General Partner's contemporaneous capital
contribution (the 'Initial Partnership Proceeds') will be used by the
Partnership to purchase the Debentures and the remaining 1% of the Initial
Partnership Proceeds will be used to purchase Eligible Debt Securities. The
purchase of the Debentures by the Partnership will occur contemporaneously with
the issuance of the Partnership Preferred Securities.
The initial Affiliate Investment Instruments purchased by the Partnership
will consist of three debt instruments (the 'Debentures'). Approximately 85% of
the of the Initial Partnership Proceeds will be used to purchase a Debenture of
the Company (the 'Company Debenture'), and approximately 14% of the Initial
Partnership Proceeds will be used to purchase Debentures of two domestic wholly
owned subsidiaries of the Company (the 'Affiliate Debentures'). Each Debenture
is expected to have a term of 20 years and to provide for interest payable at
market rates for such Debentures. The Debentures will be general unsecured debt
obligations of the relevant issuer, except that the Company Debenture will rank
subordinate and junior to all senior indebtedness of the Company.
The payment of interest on each of the Debentures may be deferred at any
time, and from time to time, by the relevant issuer for a period not exceeding
six consecutive quarters. If an issuer were to so defer the payment of interest,
interest would continue to accrue and compound at the stated interest rate on
such Debenture. The Debentures will contain covenants appropriate for unsecured
debt securities issued by similar borrowers pursuant to a public offering or
private placement under Rule 144A of a comparable debt security, including a
limitation on consolidation, merger, sale or conveyance of assets of the
relevant issuer and a limitation on incurrence of secured debt and, in the case
of the Company Debenture, a limitation on its ability to incur senior
indebtedness unless at least one nationally recognized rating agency rates the
Company's long-term senior unsecured indebtedness in one of its generic rating
categories which signifies investment grade. The Debentures will contain a
mandatory redemption provision that is triggered upon a change of control of the
relevant issuer, as well as redemption provisions that correspond to the
redemption provisions applicable to the Partnership Preferred Securities,
including an option to redeem the Debentures by the relevant issuer, in whole or
in part, from time to time, on or after September 30, 2006, and following the
occurrence of a Partnership Special Event, in each case, in the same manner
described under ' -- Optional Redemption' and ' -- Partnership Special Event
Redemption.' The Debentures, and any other Affiliate Investment Instruments that
are debt instruments acquired by the Partnership in the future, will also
contain customary events of default (the 'Investment Events of Default'),
including events of default for defaults in payments on such securities when due
(provided that no default shall occur upon a valid deferral of an interest
payment by an issuer), defaults in the performance of the relevant issuer's
obligations under its Debenture or Affiliate Investment Instruments, as the case
may be, and certain bankruptcy, insolvency or reorganization events (subject to
customary exceptions and grace periods).
The payment of interest and principal when due and other payment terms of
the Debentures (other than the Company Debenture), will be guaranteed to the
extent described herein (each, an 'Investment Guarantee') by the Company for the
benefit of the holders of Partnership Preferred Securities. See ' -- Investment
Guarantees.'
Approximately 1% of the Initial Partnership Proceeds will be invested in
Eligible Debt Securities. 'Eligible Debt Securities' means cash or book-entry
securities, negotiable instruments, or other securities of entities not
affiliated with the Company represented by instruments in registered form which
evidence any of the following: (a) any security issued or guaranteed as to
principal or interest by
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the United States, or by a person controlled or supervised by and acting as an
instrumentality of the Government of the United States pursuant to authority
granted by the Congress of the United States, or any certificate of deposit for
any of the foregoing; (b) commercial paper issued pursuant to Section 3(a)(3) of
the Securities Act of 1933 (the 'Securities Act') and having, at the time of the
investment or contractual commitment to invest therein, a rating from each of
S&P and Moody's in the highest investment rating category granted by such rating
agency and having a maturity not in excess of nine months; (c) demand deposits,
time deposits and certificates of deposit which are fully insured by the Federal
Deposit Insurance Corporation ('FDIC'); (d) repurchase obligations with respect
to any security that is a direct obligation of, or fully guaranteed by, the
Government of the United States of America or any agency or instrumentality
thereof, the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution (as defined
herein) and the deposits of which are insured by the FDIC; and (e) any other
security which is identified as a permitted investment of a finance subsidiary
pursuant to Rule 3a-5 under the 1940 Act at the time it is acquired by the
Partnership.
'Eligible Institution' means (a) a depository institution organized under
the laws of the United States or any one of the states thereof or the District
of Columbia (or any domestic branch of a foreign bank), (1) (i) which has either
(A) a long-term unsecured debt rating of AA or better by S&P and Aa or better by
Moody's or (B) a short-term unsecured debt rating or a certificate of deposit
rating of A-1+ by S&P and P-1 by Moody's and (ii) whose deposits are insured by
the FDIC or (2) (i) the parent of which has a long-term or short-term unsecured
debt rating which signifies investment grade and (ii) whose deposits are insured
by the FDIC.
The Partnership may, from time to time and subject to the restrictions
described below, reinvest payments received with respect to the Affiliate
Investment Instruments (including the Debentures) and the Eligible Debt
Securities in additional Affiliate Investment Instruments and Eligible Debt
Securities. As of the date of this Prospectus, the Company, as the General
Partner, does not intend to cause the Partnership to reinvest payments received
by the Partnership in the manner described below, although there can be no
assurance that the General Partner's intention in respect of such reinvestments
will not change in the future.
The specific terms of all Affiliate Investment Instruments (including the
Debentures) will be determined by a nationally recognized investment banking
firm that does not (and whose directors, officers, employees and affiliates do
not) have a direct or indirect material equity interest in the Company or any of
its subsidiaries and which is either among the five largest underwriters of debt
or preferred securities in the United States or was selected by the Company and
approved by the holders of a majority in liquidation amount of the Partnership
Preferred Securities (the 'Independent Financial Advisor'). Merrill Lynch & Co.
will serve as the initial Independent Financial Advisor.
The Partnership may reinvest in additional Affiliate Investment Instruments
only if certain procedures and criteria are satisfied with respect to such
Affiliate Investment Instrument, including the satisfaction of the following
conditions: (i) the Partnership did not hold debt or equity securities of the
issuer of the proposed Affiliate Investment Instrument within the three-year
period ending on the date of such proposed investment; (ii) there was never a
default on any debt obligation of, or arrearages of dividends on preferred stock
issued by, the issuer of the proposed Affiliate Investment Instrument that was
previously or is currently owned by the Partnership; and (iii) the applicable
terms and provisions with respect to the proposed Affiliate Investment
Instrument have been determined by the Independent Financial Advisor to be at
least as favorable as terms which could be obtained by the Partnership in a
public offering or private placement under Rule 144A of a comparable security
issued by the relevant Investment Affiliate and (iv) the requesting Investment
Affiliate shall not be deemed to be an investment company by reason of Section
3(a) or 3(b) of the 1940 Act. The term 'Investment Affiliate' means the Company
or any corporation, partnership, limited liability company or other entity
(other than the Partnership or the Trust) that is controlled by the Company. If
the Partnership is unable to reinvest payments and proceeds from Affiliate
Investment Instruments in additional Affiliate Investment Instruments meeting
the above criteria, the Partnership may only invest such funds in Eligible Debt
Securities (subject to restrictions of applicable law, including the 1940 Act).
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INVESTMENT GUARANTEES
General
The Company will agree, on a subordinated basis and to the extent set forth
therein, to execute and deliver an Investment Guarantee for the benefit of the
holders of Partnership Preferred Securities with respect to each Debenture
issued by an Investment Affiliate (other than the Company Debenture) to the
extent set forth below. The Investment Guarantees shall be enforceable
regardless of any defense, right of set-off or counterclaim that the Company may
have or assert. The Investment Guarantees will be full and unconditional
guarantees with respect to the applicable Debentures from the time of issuance.
To the extent that, as described above, the Partnership invests in additional
Affiliate Investment Instruments, the determination as to whether such Affiliate
Investment Instrument will contain an Investment Guarantee will be made at the
date of its issuance and will be based, among other things, upon its approval by
the Independent Financial Advisor in accordance with the reinvestment criteria
described above.
The Investment Guarantees will constitute guarantees of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the applicable
Investment Guarantee without instituting a legal proceeding against any other
person or entity). If no Special Representative has been appointed to enforce
any Investment Guarantee, the General Partner has the right to enforce such
Investment Guarantee on behalf of the holders of the Partnership Preferred
Securities. The holders of not less than a majority in aggregate liquidation
preference of the Partnership Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available in
respect of any Investment Guarantee, including the giving of directions to the
General Partner or the Special Representative, as the case may be. If the
General Partner or the Special Representative fails to enforce any Investment
Guarantee as above provided, any holder of Trust Preferred Securities may
institute its own legal proceeding to enforce such Investment Guarantee. No
Investment Guarantee will be discharged except by payment in full of all amounts
guaranteed by such Investment Guarantee (without duplication of amounts
theretofore paid by the relevant Investment Affiliate).
Amendments and Assignment
Except with respect to any changes that do not adversely affect the rights
of holders of Partnership Preferred Securities (in which case no consent will be
required), the Investment Guarantees may be amended only with the prior approval
of the holders of not less than a majority in liquidation preference of the
outstanding Partnership Preferred Securities, provided that for so long as the
Property Trustee of the Trust is the holder of the Partnership Preferred
Securities, such amendment will not be effective without the prior written
approval of a majority in liquidation preference of the outstanding Trust
Preferred Securities. All guarantees and agreements contained in the Investment
Guarantees shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
Partnership Preferred Securities.
Status of the Investment Guarantees
The Company's obligations under the Investment Guarantees will constitute
unsecured obligations of the Company and will rank subordinate and junior to all
other liabilities of the Company and will rank pari passu with the most senior
preferred stock issued from time to time by the Company and with any guarantee
now or hereafter entered into by the Company in respect of any preferred stock
of any affiliate of the Company.
Governing Law
The Investment Guarantees will be governed by and construed in accordance
with the laws of the State of New York.
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OPTIONAL REDEMPTION
The Partnership Preferred Securities are redeemable, at the option of the
General Partner, in whole or in part, from time to time, on or after September
30, 2006, upon not less than 30 nor more than 60 days' notice, at an amount per
Partnership Preferred Security equal to $25 plus accrued and unpaid
distributions thereon. If the Partnership redeems Partnership Preferred
Securities in accordance with the terms thereof, Trust Securities will be
mandatorily redeemed at the Redemption Price. If a partial redemption would
result in the delisting of the Trust Preferred Securities (or, if the Trust is
liquidated in connection with a Trust Special Event, the delisting of the
Partnership Preferred Securities), the Partnership may only redeem the
Partnership Preferred Securities in whole.
PARTNERSHIP SPECIAL EVENT REDEMPTION
If, at any time, a Partnership Tax Event or a Partnership Investment
Company Event (each as hereinafter defined, and each a 'Partnership Special
Event') shall occur and be continuing, the General Partner shall, within 90 days
following the occurrence of such Partnership Special Event, elect to either (i)
redeem the Partnership Preferred Securities in whole (but not in part), upon not
less than 30 or more than 60 days' notice at the Redemption Price, provided
that, if at the time there is available to the Partnership the opportunity to
eliminate, within such 90-day period, the Partnership Special Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable such measure that in the sole judgment of
the Company has or will cause no adverse effect on the Partnership, the Trust or
the Company, the General Partner will pursue such measure in lieu of redemption;
or (ii) cause the Partnership Preferred Securities to remain outstanding,
provided that in the case of this clause (ii), the General Partner shall pay any
and all costs and expenses incurred by or payable by the Partnership
attributable to the Partnership Special Event.
'Partnership Tax Event' means that the General Partner shall have requested
and received an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that there has been a Tax Action which
affects any of the events described in (i) through (iii) below and that there is
more than an insubstantial risk that (i) the Partnership is, or will be, subject
to United States federal income tax with respect to income accrued or received
on the Affiliate Investment Instruments or the Eligible Debt Securities, (ii)
the Partnership is, or will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest payable by
an Investment Affiliate with respect to the Debenture issued by such Investment
Affiliate to the Partnership is not, or will not be, deductible by such
Investment Affiliate for United States federal income tax purposes.
'Partnership Investment Company Event' means that the General Partner shall
have requested and received an opinion of nationally recognized independent
legal counsel experienced in such matters to the effect that as a result of the
occurrence on or after the date hereof of a Change in 1940 Act Law, the
Partnership is or will be considered an 'investment company' which is required
to be registered under the 1940 Act.
REDEMPTION PROCEDURES
The Partnership may not redeem fewer than all the outstanding Partnership
Preferred Securities unless all accrued and unpaid distributions have been paid
on all Partnership Preferred Securities for all quarterly distribution periods
terminating on or prior to the date of redemption.
If the Partnership gives a notice of redemption in respect of Partnership
Preferred Securities (which notice will be irrevocable) then, by 12:00 noon, New
York City time, on the redemption date, the Partnership (i) if the Partnership
Preferred Securities are in book entry form with DTC, will deposit irrevocably
with DTC funds sufficient to pay the applicable Redemption Price and will give
DTC irrevocable instructions and authority to pay the Redemption Price in
respect of the Partnership Preferred Securities held through DTC in global form
or (ii) if the Partnership Preferred Securities are held in certificated form,
will deposit with the paying agent for the Partnership Preferred Securities
funds sufficient to pay such amount in respect of any Partnership Preferred
Securities in certificated form and will give such paying agent irrevocable
instructions and authority to pay such amounts to the
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holders of Partnership Preferred Securities upon surrender of their
certificates. See ' -- Book-Entry-Only Issuance -- The Depository Trust
Company.'
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of holders of such
Partnership Preferred Securities so called for redemption will cease, except the
right of the holders of such Partnership Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price. In the event
that any date fixed for redemption of Partnership Preferred Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and 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. In the event that payment of the Redemption
Price in respect of Partnership Preferred Securities is improperly withheld or
refused and not paid either by the Partnership or by the Company pursuant to the
Partnership Guarantee described under 'Description of the Partnership
Guarantee,' distributions on such Partnership Preferred Securities will continue
to accrue, from the original redemption date to the date of payment.
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), the Company or any of its subsidiaries
may at any time and from time to time purchase outstanding Partnership Preferred
Securities by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary dissolution, winding-up or
termination of the Partnership, the holders of the Partnership Preferred
Securities at the time will be entitled to receive out of the assets of the
Partnership available for distribution to partners after satisfaction of
liabilities of creditors as required by the Partnership Act, before any
distribution of assets is made to the General Partner, an amount equal to, in
the case of holders of Partnership Preferred Securities, the aggregate of the
stated liquidation preference of $25 per Partnership Preferred Security plus
accrued and unpaid distributions thereon to the date of payment (such amount
being the 'Partnership Liquidation Distribution').
Pursuant to the Limited Partnership Agreement, the Partnership shall be
dissolved and its affairs shall be wound up: (i) upon the bankruptcy of the
General Partner, (ii) upon the assignment by the General Partner of its entire
interest in the Partnership when the assignee is not admitted to the Partnership
as a general partner of the Partnership in accordance with the Limited
Partnership Agreement, or the filing of a certificate of dissolution or its
equivalent with respect to the General Partner, or the revocation of the General
Partner's charter and the expiration of 90 days after the date of notice to the
General Partner of revocation without a reinstatement of its charter, or if any
other event occurs that causes the General Partner to cease to be a general
partner of the Partnership under the Partnership Act, unless the business of the
Partnership is continued in accordance with the Partnership Act, (iii) if the
Partnership has redeemed or otherwise purchased all the Partnership Preferred
Securities, (iv) upon the entry of a decree of judicial dissolution or (v) upon
the written consent of all partners of the Partnership.
VOTING RIGHTS
Except as provided below and under 'Description of the Partnership
Guarantee -- Amendments and Assignment' and as otherwise required by law and the
Limited Partnership Agreement, the holders of the Partnership Preferred
Securities will have no voting rights.
Not later than 30 days after any Partnership Enforcement Event occurs, the
General Partner will convene a meeting for the purpose of appointing a Special
Representative. If the General Partner fails to convene such meeting within such
30-day period, the holders of 10% in liquidation preference of the outstanding
Partnership Preferred Securities will be entitled to convene such meeting. The
provisions of the Limited Partnership Agreement relating to the convening and
conduct of the meetings of the partners will apply with respect to any such
meeting. In the event that, at any such meeting, holders of less than a majority
in aggregate liquidation preference of Partnership Preferred Securities entitled
to
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vote for the appointment of a Special Representative vote for such appointment,
no Special Representative shall be appointed. Any Special Representative
appointed shall cease to be a Special Representative of the Partnership and the
limited partners if (1) the Partnership (or the Company pursuant to the
Partnership Guarantee) shall have paid in full all accrued and unpaid
distributions on the Partnership Preferred Securities, (2) such Investment Event
of Default, as the case may be, shall have been cured, and (3) the Company is in
compliance with all its obligations under the Partnership Guarantee and the
Company, in its capacity as the General Partner, shall continue the business of
the Partnership without dissolution. Notwithstanding the appointment of any such
Special Representative, the Company shall continue as General Partner and shall
retain all rights under the Limited Partnership Agreement, including the right
to declare, in its sole discretion, the payment of distributions on the
Partnership Preferred Securities for which the failure of such declaration would
not constitute a default under the Limited Partnership Agreement.
If any proposed amendment to the Limited Partnership Agreement provides
for, or the General Partner otherwise proposes to effect, (i) any action that
would adversely affect the powers, preferences or special rights of the
Partnership Preferred Securities, whether by way of amendment to the Limited
Partnership Agreement or otherwise (including, without limitation, the
authorization or issuance of any limited partner interests in the Partnership
ranking, as to participation in the profits or distributions or in the assets of
the Partnership, senior to the Partnership Preferred Securities), or (ii) the
dissolution, winding-up or termination of the Partnership, other than (x) in
connection with the occurrence of a Partnership Special Event or (y) as
described under 'Merger, Consolidation or Amalgamation of the Partnership'
above, then the holders of outstanding Partnership Preferred Securities will be
entitled to vote on such amendment or proposal of the General Partner (but not
on any other amendment or proposal) as a class, and such amendment or proposal
shall not be effective except with the approval of the holders of a majority in
liquidation preference of such outstanding Partnership Preferred Securities
having a right to vote on the matter; provided, however, that if the Property
Trustee on behalf of the Trust is the holder of the Partnership Preferred
Securities, any such amendment or proposal not excepted by clauses (x) and (y)
above shall not be effective without the prior or concurrent approval of the
holders of a majority in liquidation amount of the outstanding Trust Preferred
Securities having a right to vote on such matters.
The General Partner shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available, (ii) waive any Investment
Event of Default that is waivable under the Affiliate Investment Instruments,
(iii) exercise any right to rescind or annul a declaration that the principal of
any Affiliate Investment Instruments which are debt instruments shall be due and
payable, (iv) waive the breach of the covenant by the Company to restrict
certain payments by the Company and its majority owned subsidiaries, or (v)
consent to any amendment, modification termination of any Affiliate Investment
Instrument, where such consent shall be required from the investor, without, in
each case, obtaining the prior approval of the holders of at least a majority in
liquidation preference of the Partnership Preferred Securities; provided,
however, that if the Property Trustee on behalf of the Trust is the holder of
the Partnership Preferred Securities, such waiver, consent or amendment or other
action shall not be effective without the prior or concurrent approval of at
least a majority in liquidation amount of the outstanding Trust Preferred
Securities having a right to vote on such matters. The General Partner shall not
revoke any action previously authorized or approved by a vote of the holders of
the Partnership Preferred Securities. The General Partner shall notify all
holders of the Partnership Preferred Securities of any notice of an Investment
Event of Default received with respect to any Affiliate Investment Instrument.
Any required approval of holders of Partnership Preferred Securities may be
given at a separate meeting of holders of Partnership Preferred Securities
convened for such purpose, at a meeting of all of the partners in the
Partnership or pursuant to written consent. The Partnership will cause a notice
of any meeting at which holders of Partnership 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 Partnership Preferred
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 matters upon which written consent
is sought and (iii) instruction for the delivery of proxies or consents.
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No vote or consent of the holders of Partnership Preferred Securities will
be required for the Partnership to redeem and cancel Partnership Preferred
Securities in accordance with the Limited Partnership Agreement.
Notwithstanding that holders of Partnership Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Partnership Preferred Securities at such time that are owned by the
Company or by any entity more than 50% of which is owned by the Company, either
directly or indirectly, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding;
provided, however, that persons (other than affiliates of the Company) to whom
the Company or any of its subsidiaries have pledged Trust Preferred Securities
may vote or consent with respect to such pledged Trust Preferred Securities
under any of the circumstances described herein.
Holders of the Partnership Preferred Securities will have no rights to
remove or replace the General Partner.
MERGER, CONSOLIDATION OR AMALGAMATION OF THE PARTNERSHIP
The Partnership may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. The Partnership may, without the consent of the holders of the
Partnership Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by a limited partnership, limited liability company or trust
organized as such under the laws of any state of the United States of America,
provided that (i) such successor entity either (x) expressly assumes all of the
obligations of the Partnership under the Partnership Preferred Securities or (y)
substitutes for the Partnership Preferred Securities other securities having
substantially the same terms as the Partnership Preferred Securities (the
'Partnership Successor Securities') so long as the Partnership Successor
Securities are not junior to any other equity securities of the successor
entity, with respect to participation in the profits and distributions, and in
the assets, of the successor entity, (ii) the Investment Affiliates expressly
acknowledge such successor entity as the holder of the Affiliate Investment
Instruments, (iii) the Partnership 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 other
organization on which the Partnership Preferred Securities, if so listed, are
then listed, (iv) such merger, consolidation, amalgamation or replacement does
not cause the Trust Preferred Securities (or, in the event that the Trust is
liquidated in connection with a Trust Special Event, the Partnership Preferred
Securities (including any Partnership Successor Securities)) to be downgraded by
any nationally recognized statistical rating organization, (v) such merger,
consolidation, amalgamation or replacement does not adversely affect the powers,
preferences and other special rights of the holders of the Trust Preferred
Securities or Partnership Preferred Securities (including any Partnership
Successor Securities)) in any material respect (other than, in the case of the
Partnership Preferred Securities, with respect to any dilution of the holders'
interest in the new resulting entity), (vi) such successor entity has a purpose
substantially identical to that of the Partnership, (vii) prior to such merger,
consolidation, amalgamation or replacement, the Company has received an opinion
of nationally recognized independent counsel to the Partnership experienced in
such matters to the effect that (A) such successor entity will be treated as a
partnership for United States federal income tax purposes, (B) such merger,
consolidation, amalgamation or replacement would not cause the Trust to be
classified as an association taxable as a corporation for United States federal
income tax purposes, (C) following such merger, consolidation, amalgamation or
replacement, the Company and such successor entity will be in compliance with
the 1940 Act without registering thereunder as an investment company, and (D)
such merger, consolidation, amalgamation or replacement will not adversely
affect the limited liability of the holders of the Partnership Preferred
Securities and (viii) the Company guarantees the obligations of such successor
entity under the Partnership Successor Securities at least to the extent
provided by the Partnership Guarantee.
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BOOK-ENTRY AND SETTLEMENT
If the Partnership Preferred Securities are distributed to holders of Trust
Preferred Securities in connection with the involuntary or voluntary
dissolution, winding-up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event, the Partnership Preferred Securities will
be issued in the form of one or more global certificates (each a 'Global
Partnership Security') registered in the name of DTC as the depository or its
nominee. For a description of DTC and the specific terms of the Depository
arrangements, see 'Description of the Trust Preferred Securities -- Book-Entry
Only Issuance -- The Depository Trust Company.' As of the date of this
Prospectus, the description therein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Trust Preferred Securities apply in all material respects to any
Partnership Preferred Securities represented by one or more Global Partnership
Securities.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
The General Partner will act as registrar, transfer agent and paying agent
for the Partnership Preferred Securities for so long as the Partnership
Preferred Securities are held by the Trust or, if the Trust is liquidated in
connection with a Trust Special Event, for so long as the Partnership Preferred
Securities remain in book-entry only form. In the event the Partnership
Preferred Securities are distributed in connection with a Trust Special Event
and the book-entry system for the Partnership Preferred Securities is
discontinued, it is anticipated that The First National Bank of Chicago, N.A. or
one of its affiliates will act as registrar, transfer agent and paying agent for
the Partnership Preferred Securities.
Registration of transfers of Partnership Preferred Securities will be
effected without charge by or on behalf of the Partnership, but upon payment
(with the giving of such indemnity as the Partnership or the General Partner may
require) in respect of any tax or other governmental charges that may be imposed
in relation to it.
The Partnership will not be required to register or cause to be registered
the transfer of Partnership Preferred Securities after such Partnership
Preferred Securities have been called for redemption.
MISCELLANEOUS
The General Partner is authorized and directed to conduct its affairs and
to operate the Partnership in such a way that (i) the Partnership will not be
deemed to be an 'investment company' required to be registered under the 1940
Act or characterized as an association taxable as a corporation for United
States federal income tax purposes, (ii) the Affiliate Investment Instruments
that are debt instruments will be treated as indebtedness of the issuer of such
debt instruments for United States federal income tax purposes and (iii) the
Partnership will not be treated as an association or as a 'publicly traded
partnership' (within the meaning of Section 7704 of the Code) taxable as a
corporation. In this connection, the General Partner is authorized to take any
action, not inconsistent with applicable law, the certificate of limited
partnership of the Partnership or the Limited Partnership Agreement, that the
General Partner determines in its discretion to be necessary or desirable for
such purposes as long as such action does not adversely affect the interests of
the holders of the Partnership Preferred Securities.
DESCRIPTION OF THE PARTNERSHIP GUARANTEE
Set forth below is a summary of information concerning the Partnership
Guarantee that will be executed and delivered by the Company for the benefit of
the holders from time to time of Partnership Preferred Securities. The summary
does not purport to be complete and is subject in all respects to the provisions
of, and is qualified in its entirety by reference to, the Partnership Guarantee,
which is filed as an exhibit to the Registration Statement of which this
Prospectus is a part. The General Partner will hold the Partnership Guarantee
for the benefit of the holders of the Partnership Preferred Securities.
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GENERAL
Pursuant to the Partnership Guarantee, the Company will irrevocably agree,
on a subordinated basis to the extent set forth therein, to pay in full to the
holders of the Partnership Preferred Securities (without duplication of amounts
theretofore paid by the Partnership), as and when due, regardless of any
defense, right of set-off or counterclaim that the Partnership may have or
assert, the following payments (the 'Partnership Guarantee Payments'): (i) any
accrued and unpaid distributions that have theretofore been declared on the
Partnership Preferred Securities out of funds legally available therefor, (ii)
the redemption price with respect to any Partnership Preferred Securities called
for redemption by the Partnership out of funds legally available therefor, and
(iii) upon a liquidation of the Partnership, the lesser of (a) the aggregate of
the liquidation preference and all accrued and unpaid distributions on the
Partnership Preferred Securities to the date of payment and (b) the amount of
assets of the Partnership after satisfaction of all liabilities remaining
available for distribution to holders of Partnership Preferred Securities in
liquidation of the Partnership. The Company's obligation to make a Partnership
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of Partnership Preferred Securities or by causing the
Partnership to pay such amounts to such holders.
The Partnership Guarantee will be a guarantee on a subordinated basis with
respect to the Partnership Preferred Securities from the time of issuance of
such Partnership Preferred Securities but will not apply to any payment of
distributions or Redemption Price, or to payments upon the dissolution,
winding-up or termination of the Trust, except to the extent the Partnership
shall have funds available therefor. If Investment Affiliates (including, where
applicable, the Company, as guarantor) of the Affiliate Investment Instruments
in which the Partnership invests fail to make any payment in respect of such
securities (or, if applicable, guarantees), the Partnership may not declare or
pay dividends on the Partnership Preferred Securities. In such event, holders of
the Partnership Preferred Securities would not be able to rely upon the
Partnership Guarantee for payment of such amounts. Instead, holders of the
Partnership Preferred Securities will have the remedies described herein under
'Description of the Partnership Preferred Securities -- Partnership Enforcement
Events,' including the right to direct the General Partner or the Special
Representative, as the case may be, to enforce the covenant restricting certain
payments by the Company and its majority owned subsidiaries. See ' -- Certain
Covenants of the Company' below.
The Guarantees, when taken together with the Company Debenture and the
Company's obligations to pay all fees and expenses of the Trust and the
Partnership, constitute a guarantee to the extent set forth herein by the
Company of the distribution, redemption and liquidation payments payable to the
holders of the Trust Preferred Securities. The Guarantees do not apply, however,
to current distributions by the Partnership unless and until such distributions
are declared by the Partnership out of funds legally available for payment or to
liquidating distributions unless there are assets available for payment in the
Partnership, each as more fully described under 'Risk Factors -- Risk Factors
Related to TOPrS -- Insufficient Income or Assets Available to Partnership.'
CERTAIN COVENANTS OF THE COMPANY
The Company will covenant in the Partnership Guarantee that if (a) for any
distribution period, full distributions on a cumulative basis on any Partnership
Preferred Securities have not been paid or declared and set apart for payment,
(b) an Investment Event of Default by any Investment Affiliate in respect of any
Affiliate Investment Instrument has occurred and is continuing or (c) the
Company is in default of its obligations under the Trust Guarantee, the
Partnership Guarantee or any Investment Guarantee, then, during such period the
Company shall not, nor permit any majority owned subsidiary to (i) declare or
pay dividends on, make distributions with respect to, or redeem, purchase or
acquire, or make a liquidation payment with respect to any of its capital stock
or comparable equity interest (except for dividends or distributions in shares
of its capital stock, conversions or exchanges of common stock of one class into
common stock of another class and dividends, distributions with respect to the
Partnership or the Trust or dividends and distributions on the common stock of
wholly owned subsidiaries of the Company), (ii) make, or permit the making of,
any Affiliated Restricted Payments
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except for Permissible Affiliated Payments, and (iii) make any guarantee
payments with respect to the foregoing.
EVENTS OF DEFAULT; ENFORCEMENT OF PARTNERSHIP GUARANTEE
An event of default under the Partnership Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder.
The holders of a majority in liquidation amount of the Partnership
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Special Representative
in respect of the Partnership Guarantee or to direct the exercise of any trust
or power conferred upon the Special Representative under the Partnership
Guarantee. If the Special Representative fails to enforce its rights under the
Partnership Guarantee, after a holder of Partnership Preferred Securities has
made a written request, such holder of Partnership Preferred Securities may
institute a legal proceeding directly against the Company to enforce the Special
Representative's rights under the Partnership Guarantee without first
instituting a legal proceeding against the Partnership, the Special
Representative or any other person or entity. Notwithstanding the foregoing, if
the Company has failed to make a guarantee payment, a holder of Partnership
Preferred Securities may directly institute a proceeding against the Company for
enforcement of the Partnership Guarantee for such payment.
STATUS OF THE PARTNERSHIP GUARANTEE; SUBORDINATION
The Partnership Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior to all other liabilities of the
Company and will rank pari passu with the most senior preferred stock issued
from time to time by the Company and with any guarantee now or hereafter entered
into by the Company in respect of any preferred stock of any affiliate of the
Company. The Limited Partnership Agreement provides that each holder of
Partnership Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Partnership Guarantee.
The Partnership Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may directly institute a legal
proceeding against the Company to enforce its rights under the Partnership
Guarantee without instituting a legal proceeding against any other person or
entity).
The Partnership Guarantee will be deposited with the General Partner to be
held for the benefit of the holders of the Partnership Preferred Securities. In
the event of the appointment of a Special Representative to, among other things,
enforce the Partnership Guarantee, the Special Representative may take
possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee, the
General Partner has the right to enforce the Partnership Guarantee on behalf of
the holders of the Partnership Preferred Securities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Partnership Preferred Securities (in which case no consent will be
required), the Partnership Guarantee may be amended only with the prior approval
of the holders of not less than a majority in liquidation preference of the
outstanding Partnership Preferred Securities. All guarantees and agreements
contained in the Partnership Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Partnership Preferred Securities then outstanding.
Except in connection with any permitted merger or consolidation of the Company
with or into another entity or any permitted sale, transfer or lease of the
Company's assets to another entity as described above under 'Description of the
Partnership Preferred Securities -- Merger, Consolidation or Amalgamation of the
Partnership,' the Company may not assign its rights or delegate its obligations
under the Partnership Guarantee without the prior approval of the holders of at
least a majority of the aggregate stated liquidation amount of the Partnership
Preferred Securities then outstanding.
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TERMINATION OF THE PARTNERSHIP GUARANTEE
The Partnership Guarantee will terminate and be of no further force and
effect as to the Partnership Preferred Securities upon (i) full payment of the
redemption price of all Partnership Preferred Securities or (ii) full payment of
the amounts payable in accordance with the Limited Partnership Agreement upon
liquidation of the Partnership. The Partnership Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Partnership Preferred Securities must in accordance with the Partnership Act
restore payment of any sums paid under the Partnership Preferred Securities or
the Partnership Guarantee. The Partnership Act provides that a limited partner
of a limited partnership who wrongfully receives a distribution may be liable to
the limited partnership for the amount of such distribution.
GOVERNING LAW
The Partnership Guarantee will be governed by and construed in accordance
with the laws of the State of New York.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
In the opinion of Simpson Thacher & Bartlett, special tax counsel to the
Company, the Trust and the Partnership ('Tax Counsel'), the following summary
accurately describes the material United States federal income tax consequences
that may be relevant to the purchase, ownership and disposition of Trust
Preferred Securities. Unless otherwise stated, this summary deals only with
Trust Preferred Securities held as capital assets by United States Persons
(defined below) who purchase the Trust Preferred Securities upon original
issuance. As used herein, a 'United States Person' means a person that is a
citizen or resident of the United States, a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, or an estate or trust the income of which is
subject to United States federal income taxation regardless of its source. The
tax treatment of a holder may vary depending on its particular situation. This
summary does not address all the tax consequences that may be relevant to
holders who may be subject to special tax treatment, such as banks, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, or foreign investors. This
summary does not include any description of any alternative minimum tax
consequences or the tax laws of any state or local government or of any foreign
government that may be applicable to the Trust Preferred Securities. This
summary is based on the Internal Revenue Code of 1986, as amended (the 'Code'),
the Treasury regulations promulgated thereunder and administrative and judicial
interpretations thereof, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis.
The Trust Preferred Securities are not being marketed to persons that are
not United States Persons ('non-United States Persons') and, consequently, the
following discussion does not discuss the tax consequences that might be
relevant to non-United States Persons. Moreover, in order to protect the Trust
and the Partnership from potential adverse consequences, non-United States
Persons will be subject to withholding on distributions on the Trust Preferred
Securities held by such non-United States Persons at a rate of 30%. In
determining a holder's status, the United States entity otherwise required to
withhold taxes may rely on an IRS form W-8, an IRS form W-9, or a holder's
certification of its non-foreign status signed under penalty of perjury.
Non-United States Persons should consult their own tax advisors as to the
specific United States federal income tax consequences of the purchase,
ownership, and disposition of Trust Preferred Securities.
Tax Counsel has advised that there is no authority directly on point
dealing with securities such as the Trust Preferred Securities or transactions
of the type described herein and that the opinions of Tax Counsel are not
binding on the Internal Revenue Service ('IRS') or the courts, either of which
could take a contrary position. No rulings have been or will be sought from the
IRS. Accordingly, there can be no assurance that the IRS will not challenge the
opinions expressed herein or that a court would not sustain such a challenge.
Nevertheless, Tax Counsel has advised that it is of the view that, if
challenged, the opinions expressed herein would be sustained by a court with
jurisdiction in a properly presented case.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE TRUST
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN, AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE
TRUST PREFERRED SECURITIES OR REDEMPTION OF THE PARTNERSHIP PREFERRED SECURITIES
UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE 'DESCRIPTION OF THE TRUST
PREFERRED SECURITIES -- TRUST SPECIAL EVENT REDEMPTION OR DISTRIBUTION' AND
'DESCRIPTION OF THE PARTNERSHIP PREFERRED SECURITIES -- PARTNERSHIP SPECIAL
EVENT' RESPECTIVELY.
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CLASSIFICATION OF THE TRUST
Tax Counsel is of the opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the Trust will
be classified for United States federal income tax purposes as a grantor trust
and not as an association taxable as a corporation. Accordingly, for United
States federal income tax purposes, each holder of Trust Preferred Securities
will be considered the owner of an undivided interest in the Partnership
Preferred Securities held by the Trust, and each holder will be required to
include in its gross income its distributive share of income attributable to the
Partnership, which generally will be equal to such holder's allocable share of
amounts accrued on the Partnership Preferred Securities. No amount included in
income with respect to the Trust Preferred Securities will be eligible for the
corporate dividends-received deduction.
CLASSIFICATION OF THE PARTNERSHIP
Tax Counsel is of the opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the
Partnership will be classified for United States federal income tax purposes as
a partnership and not as an association or publicly traded partnership taxable
as a corporation.
Tax Counsel's opinion is based on certain factual assumptions relating to
the organization and operation of the Partnership and is conditioned upon
certain representations made by the General Partner and the Partnership as to
factual matters, such as the organization and the operation of the Partnership
and the type and frequency of investments made by the Partnership.
The General Partner has represented that it intends to operate the
Partnership in a manner such that it will continue to constitute a partnership
for all future taxable periods in which any Partnership Preferred Securities
remain outstanding. In particular, pursuant to the Limited Partnership
Agreement, the General Partner is prohibited from taking any action that would
cause the Partnership to constitute a 'publicly traded partnership' taxable as a
corporation under section 7704(a) of the Code. Accordingly, it is expected that
the Partnership will continue to qualify as a partnership, and therefore will
not constitute a publicly traded partnership taxable as a corporation, for all
taxable years in which the Partnership Preferred Securities remain outstanding.
If, however, the Partnership were to constitute a publicly traded partnership
taxable as a corporation with respect to a future taxable year, the
Partnership's net income would be subject to United States federal income tax at
the applicable corporate rates.
CLASSIFICATION OF THE DEBENTURES
The Partnership, the Company, the relevant Investment Affiliates and the
holders of the Trust Securities (by acceptance of a beneficial interest in a
Trust Security) will agree to treat the Debentures as indebtedness for all
United States tax purposes. In connection with the issuance of the Debentures,
Tax Counsel is of the opinion that, under current law, and based on certain
representations, facts and assumptions set forth in such opinion, the Debentures
will be classified as indebtedness for United States federal income tax
purposes.
INCOME AND DEDUCTIONS
A holder's distributive share of income attributable to the Partnership
generally will equal the amount of the cash distributions payable with respect
to the Trust Preferred Securities. Accordingly, if quarterly distributions on
the Trust Preferred Securities are paid currently, the amount of income
recognized by a holder during a taxable year generally will equal the cash
distributions received by the holder with respect to its Trust Preferred
Securities. Holders who are individuals, trusts or estates may be subject to
limitations on the deductibility of their pro rata share of the expenses
attributable to the Trust.
The nature and timing of the income that is allocated to holders of Trust
Preferred Securities, however, will depend on the United States federal income
tax characterization of the Debentures held by the Partnership during the period
in question. Because the Partnership will be an accrual basis
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taxpayer for United States federal income tax purposes, income will accrue on
the Trust Preferred Securities and will be allocated to holders of Trust
Preferred Securities on a daily accrual basis, generally at a rate that is
expected to be equal to (and that will not be greater than) the distribution
rate on the Trust Preferred Securities, regardless of the holders' method of
accounting. Actual cash distributions on the Trust Preferred Securities,
however, will not be separately reported as taxable income to the holders at the
time they are received.
If distributions on the Partnership Preferred Securities are not made
currently, the corresponding distributions on the Trust Preferred Securities
will not be made currently. Because the Partnership is an accrual basis taxpayer
it can be expected that during a period in which payment on the Debentures or
distributions on the Partnership Preferred Securities are deferred (for whatever
reason), holders will generally recognize income in advance of their receipt of
any cash distributions with respect to their Trust Preferred Securities. The
amount of income that will be allocated to holders of Trust Preferred Securities
during any such deferral period will equal their pro rata share of the amount
accruing on the Partnership Preferred Securities during such deferral period.
RECEIPT OF PARTNERSHIP PREFERRED SECURITIES UPON LIQUIDATION OF THE TRUST
Under certain circumstances, as described under the caption 'Description of
the Trust Preferred Securities -- Trust Special Event Redemption or
Distribution', Partnership Preferred Securities may be distributed to holders of
Trust Preferred Securities in exchange for their Trust Preferred Securities and
in liquidation of the Trust. Unless the liquidation of the Trust occurs as a
result of the Trust being subject to United States federal income tax with
respect to income accrued or received on the Partnership Preferred Securities,
such a distribution to holders would, for United States federal income tax
purposes, be treated as a nontaxable event to each holder, each holder would
receive an aggregate tax basis in the Partnership Preferred Securities equal to
such holder's aggregate tax basis in its Trust Preferred Securities, and a
holder's holding period in the Partnership Preferred Securities so received in
liquidation of the Trust would include the period during which the Trust
Preferred Securities were held by such holder. If, however, the liquidation of
the Trust were to occur because the Trust is subject to United States federal
income tax with respect to income accrued or received on the Partnership
Preferred Securities, the distribution of Partnership Preferred Securities to
holders by the Trust would be a taxable event to each holder, and a holder would
recognize gain or loss as if the holder had exchanged its Trust Preferred
Securities for the Partnership Preferred Securities it received upon the
liquidation of the Trust.
REDEMPTION OF TRUST PREFERRED SECURITIES FOR CASH
Under certain circumstances, as described under the caption 'Description of
the Trust Preferred Securities -- Optional Redemption', 'Description of the
Trust Preferred Securities -- Trust Special Event Redemption or Distribution'
and 'Description of the Partnership Preferred Securities -- Partnership Special
Event Redemption', the General Partner may cause the Partnership to redeem the
Partnership Preferred Securities for cash, in which event the Trust would use
the proceeds of such redemption to redeem the Trust Preferred Securities. Under
current law, such a redemption would constitute, for United States federal
income tax purposes, a taxable disposition, and a holder would recognize gain or
loss as if it sold the holder's proportionate interest in the redeemed
Partnership Preferred Securities for an amount of cash equal to the proceeds
received upon redemption. See ' -- Disposition of Trust Preferred Securities.'
DISPOSITION OF TRUST PREFERRED SECURITIES
A holder that sells Trust Preferred Securities will recognize gain or loss
equal to the difference between the amount realized on the sale of the Trust
Preferred Securities and the holder's adjusted tax basis in such Trust Preferred
Securities. Such gain or loss will be a capital gain or loss and will be a long-
term capital gain or loss if the Trust Preferred Securities have been held for
more than one year at the time of the sale. A holder will be required to include
accrued but unpaid interest on the Debentures through the date of disposition in
income as ordinary income, and to add such amount to the adjusted
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tax basis of its Trust Preferred Securities. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
A holder's tax basis in its Trust Preferred Securities generally will equal
(i) the amount paid by such holder for its Trust Preferred Securities, (ii)
increased by the amount includible in income by such holder, and (iii) reduced
by the amount of cash or other property distributed to such holder with respect
to its Trust Preferred Securities.
OTHER PARTNERSHIP PROVISIONS
Section 708. Under Section 708 of the Code, the Partnership will be deemed
to terminate for United States federal income tax purposes if 50% or more of the
capital and profits interests in the Trust are sold or exchanged within a
12-month period. If such a deemed termination were to occur, the Partnership
would be considered to have distributed its assets to the partners who would
then be treated as having recontributed those assets to a new partnership. If
any such constructive termination occurs, the General Partner does not intend to
comply with certain technical requirements that might be applicable for various
reasons including the likely lack of relevant data. As a result, the Partnership
may be subject to certain tax penalties and may incur additional expenses, which
would be the obligation of the General Partner. Proposed Treasury regulations,
should they become effective, will mitigate some of the effects of a
constructive termination.
Section 701. The Department of Treasury has promulgated regulations under
Section 701 of the Code that permit it to disregard or recast a transaction if a
partnership is 'formed or availed of' with 'a principal purpose to reduce
substantially the present value of the partners' aggregate tax liability in a
manner inconsistent with the intent of [the partnership provisions of the
Code]'. The Partnership has been formed for, and will engage in, activities
typical for partnerships. Although there is no precedent that applies to the
transactions contemplated herein, Tax Counsel believes that the Partnership is
not of the type intended to fall within the scope of these regulations.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Income on the Trust Preferred Securities will be reported to holders on an
IRS Form 1099-MISC, which form should be mailed to holders of Trust Preferred
Securities by January 31 following each calendar year. Payments made on and
proceeds from the sale of Trust Preferred Securities may be subject to a
'back-up' withholding tax of 31% unless the holder complies with certain
identification requirements. Any withheld amount generally will be allowed as a
credit against the holder's United States federal income tax, provided the
required information is timely filed with the IRS.
PROPOSED LEGISLATION
On March 19, 1996, as part of President Clinton's Fiscal 1997 Budget
Proposal, the Treasury Department proposed legislation (the 'Proposed
Legislation') that would, among other things, deny the borrower an interest
deduction with respect to certain types of debt instruments that are payable in
stock of the issuer or a related party. The Proposed Legislation also would
treat as equity for United States federal income tax purposes instruments with a
maximum term of more than 20 years that are not shown as indebtedness on the
consolidated balance sheet of the issuer. On March 29, 1996, Senate Finance
Committee Chairman William V. Roth and House Ways and Means Committee Chairman
Bill Archer issued a joint statement (the 'Joint Statement') indicating their
intent that certain legislative proposal initiated by the Clinton
administration, including the Proposed Legislation, that may be adopted by
either of the tax-writing committees of Congress, would have an effective date
that is no earlier than the date of 'appropriate Congressional action'. In
addition, subsequent to the publication of the Joint Statement, Senator Daniel
Patrick Moynihan and Representatives Sam M. Gibbons and Charles B. Rangel wrote
letters to Treasury Department officials concurring with the view expressed in
the Joint Statement (the 'Democrat Letters'). If the principles contained in the
Joint Statement and the Democrat Letters were followed and the Proposed
Legislation were enacted, such legislation would not apply to the Debentures.
There can be no assurances, however, that legislation enacted after the date
hereof will not adversely affect the tax treatment of the Debentures, or whether
such tax treatment
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would cause a Partnership Tax Event or a Trust Tax Event that may result in the
redemption of the Partnership Preferred Securities and, consequently, the Trust
Preferred Securities.
UNDERWRITING
Subject to the terms and conditions set forth in a purchase agreement (the
'Purchase Agreement'), the Trust has agreed to sell to each of the Underwriters
named below, and each of the Underwriters, for whom Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co., Lehman Brothers, PaineWebber
Incorporated and Prudential Securities Incorporated are acting as
representatives (the 'Representatives'), has severally agreed to purchase the
number of Trust Preferred Securities set forth opposite its name below. In the
Purchase Agreement, the several Underwriters have agreed, subject to the terms
and conditions set forth therein, to purchase all the Trust Preferred Securities
offered hereby if any of the Trust Preferred Securities are purchased. In the
event of default by an Underwriter, the Purchase Agreement provides that, in
certain circumstances, the purchase commitments of the non-defaulting
Underwriters may be increased or the Purchase Agreement may be terminated.
<TABLE>
<CAPTION>
NUMBER OF TRUST
UNDERWRITERS PREFERRED SECURITIES
------------ --------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................
Goldman, Sachs & Co.......................................................
Lehman Brothers...........................................................
PaineWebber Incorporated..................................................
Prudential Securities Incorporated........................................
--------------------
Total....................................................... 8,000,000
--------------------
--------------------
</TABLE>
The Underwriters propose to offer the Trust Preferred Securities, in part,
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus, and, in part, to certain securities dealers at
such price less a concession of $. per Trust Preferred Security. The
Underwriters may allow, and such dealers may re-allow, a concession not in
excess of $. per Trust Preferred Security to certain brokers and dealers. After
the Trust Preferred Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
Representatives.
In view of the fact that the proceeds of the sale of the Trust Preferred
Securities will ultimately be used to purchase the investment instruments of the
Company and its subsidiaries, the Purchase Agreement provides that Company will
pay as compensation ('Underwriters' Compensation') to the Underwriters arranging
the investment therein of such proceeds, an amount in immediately available
funds of $ per Trust Preferred Security (or $ in the aggregate) for the
accounts of the several Underwriters; provided that, such compensation for sales
of 10,000 or more Trust Preferred Securities to any single purchaser will be $
per Trust Preferred Security. Therefore, to the extent of such sales, the actual
amount of Underwriters' Compensation will be less than the aggregate amount
specified in the preceding sentence.
During a period of 30 days from the date of the Prospectus, neither the
Trust nor the Company will, without the prior written consent of the
Underwriters, directly or indirectly, sell, offer to sell, grant any option for
sale of, or otherwise dispose of, any Trust Preferred Securities, any
Partnership Preferred Securities, any preferred stock of the Company or any
security convertible into or exchangeable into or exercisable for Trust
Preferred Securities or Partnership Preferred Securities or any preferred stock
of the Company.
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The Trust Preferred Securities have been approved, subject to issuance, for
listing on the New York Stock Exchange. Trading of the Trust Preferred
Securities on the New York Stock Exchange is expected to commence within a
30-day period after the initial delivery of the Trust Preferred Securities. The
Representatives have advised the Trust that they intend to make a market in the
Trust Preferred Securities prior to the commencement of trading on the New York
Stock Exchange. The Representatives will have no obligation to make a market in
the Trust Preferred Securities, however, and may cease market making activities,
if commenced, at any time.
Prior to this offering there has been no public market for the Trust
Preferred Securities. In order to meet one of the requirements for listing the
Trust Preferred Securities on the New York Stock Exchange, the Underwriters will
undertake to sell lots of 100 or more Trust Preferred Securities to a minimum of
400 beneficial holders.
The Trust, the Company, and the Partnership have agreed to indemnify the
Underwriters against, or contribute to payments that the Underwriters may be
required to make in respect of, certain liabilities, including liabilities under
the Securities Act of 1933, as amended.
The Underwriters have agreed to reimburse the Company for $ in expenses
incurred in connection with the issuance and sale of the Trust Preferred
Securities offered hereby.
Certain of the Underwriters engage in transactions with, and, from time to
time, have performed services for, the Company and its subsidiaries in the
ordinary course of business.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Robert J. Ingato, Senior Vice President, General Counsel and
Secretary of the Company. Certain matters of Delaware law relating to the
legality of the Trust Preferred Securities, the validity of the Trust Agreement,
the formation of the Trust and the Partnership and the legality under state law
of the Trust Preferred Securities and the Partnership Preferred Securities are
being passed upon by Richards, Layton & Finger, special Delaware counsel to the
Trust, the Partnership and the Company. The legality under state law of the
Trust Guarantee, the Partnership Guarantee, the Company Debenture and the
Investment Guarantees with respect to the Affiliate Debentures will be passed
upon on behalf of the Trust, the Partnership and the Company by Simpson Thacher
& Bartlett (a partnership which includes professional corporations), New York,
New York. The validity of the Trust Preferred Securities, the Partnership
Preferred Securities and the Trust Guarantee, the Partnership Guarantee, the
Company Debenture and the Investment Guarantees with respect to the Affiliate
Debentures will be passed upon on behalf of the Underwriters by Skadden, Arps,
Slate, Meagher & Flom, New York, New York, counsel to the Underwriters. Simpson
Thacher & Bartlett and Skadden, Arps, Slate, Meagher & Flom will rely upon the
opinion of Richards, Layton & Finger as to certain matters of Delaware law.
EXPERTS
The consolidated balance sheets as of December 31, 1995 and 1994 and the
consolidated statements of income, changes in shareowners' equity and cash flows
for each of the three years in the period ended December 31, 1995 of AT&T
Capital Corporation which are incorporated by reference in this Prospectus and
Registration Statement have been incorporated herein by reference in reliance on
the reports of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
The balance sheet of each of the Trust and the Partnership, each dated as
of October 14, 1996 and included in this Prospectus have been so included in
reliance on the reports of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
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INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
DEFINED TERMS PAGE NO.
- ------------------------------------------------------------------------------------------------------- --------
<S> <C>
Affiliate.............................................................................................. 51
Affiliate Debentures................................................................................... 55
Affiliated Restricted Payments......................................................................... 51
AT&T................................................................................................... 7
AT&T Restructuring..................................................................................... 8
AT&T Capital........................................................................................... 1
AT&T Entities.......................................................................................... 8
Babcock & Brown........................................................................................ 7
Change in 1940 Act Law................................................................................. 42
Code................................................................................................... 34
Commission............................................................................................. 4
Common Stock........................................................................................... 7
Company................................................................................................ 1
Company Debenture...................................................................................... 55
Debentures............................................................................................. 55
Declaration............................................................................................ 36
Delaware Trustee....................................................................................... 36
DTC.................................................................................................... 46
Duff & Phelps.......................................................................................... 16
Eligible Institution................................................................................... 56
Eligible Debt Securities............................................................................... 55
Exchange Act........................................................................................... 4
Fitch.................................................................................................. 16
General Partner........................................................................................ 1
GRSH................................................................................................... 7
Guarantees............................................................................................. 2
Holdings............................................................................................... 7
Initial Partnership Proceeds........................................................................... 55
Intercompany Agreement................................................................................. 8
Investment Affiliates.................................................................................. 56
Investment Event of Default............................................................................ 55
Investment Guarantees.................................................................................. 2
IRS.................................................................................................... 66
License Agreement...................................................................................... 8
Limited Partnership Agreement.......................................................................... 36
Lucent................................................................................................. 8
Management Investors................................................................................... 7
Merger................................................................................................. 7
Merger Agreement....................................................................................... 7
Merger Sub............................................................................................. 7
Moody's................................................................................................ 16
NCR.................................................................................................... 8
New York Stock Exchange................................................................................ 1
1940 Act............................................................................................... 13
Nomura................................................................................................. 7
Non-United States Persons.............................................................................. 66
Operating Agreements................................................................................... 8
Partnership............................................................................................ 1
Partnership Act........................................................................................ 37
Partnership Enforcement Event.......................................................................... 54
Partnership Guarantee.................................................................................. 2
Partnership Guarantee Payments......................................................................... 62
</TABLE>
72
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
DEFINED TERMS PAGE NO.
- ------------------------------------------------------------------------------------------------------- --------
<S> <C>
Partnership Investment Company Event................................................................... 58
Partnership Preferred Securities....................................................................... 1
Partnership Special Event.............................................................................. 23
Partnership Successor Securities....................................................................... 61
Partnership Tax Event.................................................................................. 58
Property Account....................................................................................... 36
Property Trustee....................................................................................... 36
Purchase Agreement..................................................................................... 70
Redemption Price....................................................................................... 3
Registration Statement................................................................................. 4
Regular Trustees....................................................................................... 36
Representatives........................................................................................ 70
S&P.................................................................................................... 16
Securities Act......................................................................................... 4
Special Representative................................................................................. 54
Tax Action............................................................................................. 42
Tax Counsel............................................................................................ 66
Trust.................................................................................................. 1
Trust Act.............................................................................................. 36
Trust Common Securities................................................................................ 1
Trust Dissolution Tax Opinion.......................................................................... 41
Trust Enforcement Event................................................................................ 40
Trust Guarantee........................................................................................ 2
Trust Guarantee Trustee................................................................................ 36
Trust Indenture Act.................................................................................... 36
Trust Investment Company Event......................................................................... 41
Trust Liquidation...................................................................................... 43
Trust Liquidation Distribution......................................................................... 10
Trust Preferred Securities............................................................................. 1
Trust Redemption Tax Opinion........................................................................... 41
Trust Securities....................................................................................... 1
Trust Special Event.................................................................................... 41
Trust Tax Event........................................................................................ 41
</TABLE>
73
<PAGE>
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
CAPITA PREFERRED FUNDING L.P.
Report of Independent Accountants................................................................. F-2
Balance Sheet of the Partnership.................................................................. F-3
Notes to Balance Sheet of the Partnership......................................................... F-3
CAPITA PREFERRED TRUST
Report of Independent Accountants................................................................. F-4
Balance Sheet of the Trust........................................................................ F-5
Notes to Balance Sheet of the Trust............................................................... F-5
</TABLE>
F-1
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the General Partner and Initial Limited Partner of
CAPITA PREFERRED FUNDING L.P.
We have audited the accompanying balance sheet of Capita Preferred Funding
L.P. (the 'Partnership') as of October 14, 1996. This balance sheet is the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on this balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Capita Preferred Funding L.P. at
October 14, 1996, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
October 14, 1996
F-2
<PAGE>
<PAGE>
BALANCE SHEET OF
CAPITA PREFERRED FUNDING L.P.
OPENING BALANCE SHEET
OCTOBER 14, 1996
<TABLE>
<S> <C>
Assets -- cash............................................................................................ $100
----
----
Partnership securities
Limited partnership interest......................................................................... $ 85
General partnership interest......................................................................... 15
----
$100
----
----
</TABLE>
NOTES TO BALANCE SHEET OF THE PARTNERSHIP
------------------------
Capita Preferred Funding L.P. (the 'Partnership') is a limited partnership
that was formed under the Delaware Revised Uniform Limited Partnership Act on
August 29, 1996 for the exclusive purposes of purchasing certain eligible
securities of AT&T Capital Corporation (the 'Company') and wholly owned
subsidiaries of the Company (the 'Affiliate Investment Instruments') with the
proceeds from the sale of Partnership Preferred Securities (the 'Partnership
Preferred Securities') to Capita Preferred Trust (the 'Trust') and a capital
contribution from the Company in exchange for the general partnership interest
in the Partnership (collectively, the 'Partnership Proceeds').
The Partnership Proceeds will be used initially to purchase debt
instruments from the Company and certain domestic wholly owned subsidiaries of
the Company. The Partnership shall have a perpetual existence subject to certain
termination events. The Company serves as the sole general partner of the
Partnership. The Company, in its capacity as General Partner of the Partnership,
has agreed to pay all fees and expenses related to the organization and
operations of the Partnership (including any taxes, duties, assessments or
government charges of whatever nature (other than withholding taxes) imposed by
the United States or any other domestic taxing authority upon the Partnership)
and the offering of the Partnership Preferred Securities and be responsible for
all debts and other obligations of the Partnership (other than with respect to
the Partnership Preferred Securities). The General Partner has agreed to
indemnify certain officers and agents of the Partnership.
F-3
<PAGE>
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustee of
CAPITA PREFERRED TRUST
We have audited the accompanying balance sheet of Capita Preferred Trust
(the 'Trust'), as of October 14, 1996. This balance sheet is the responsibility
of the Trust's management. Our responsibility is to express an opinion on this
balance sheet based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the balance sheet referred to above presents fairly, in all
material respects, the financial position of Capita Preferred Trust at October
14, 1996, in conformity with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
1301 Avenue of the Americas
New York, New York
October 14, 1996
F-4
<PAGE>
<PAGE>
BALANCE SHEET OF
CAPITA PREFERRED TRUST
OPENING BALANCE SHEET
OCTOBER 14, 1996
<TABLE>
<S> <C>
Assets....................................................................................................... $ 0
---
---
Trust securities............................................................................................. $ 0
---
---
</TABLE>
NOTES TO BALANCE SHEET OF THE TRUST
------------------------
Capita Preferred Trust (the 'Trust') is a statutory business trust formed
on August 29, 1996 under the laws of the State of Delaware for the exclusive
purposes of (i) issuing the Trust Originated Preferred Securities (the 'Trust
Preferred Securities') and the Trust Common Securities (together with the Trust
Preferred Securities, the 'Trust Securities') representing undivided beneficial
ownership interests in the assets of the Trust, (ii) purchasing Partnership
Preferred Securities (the 'Partnership Preferred Securities') representing the
limited partnership interests of Capita Preferred Funding L.P. (the
'Partnership') with the proceeds from the sale of the Trust Securities and (iii)
engaging in only those other activities necessary or incidental thereto. The
Trust has a perpetual existence, subject to certain termination events as
provided in the Declaration of Trust under which it was formed. Subsequent to
October 14, 1996, the Trust intends to issue and sell its Trust Preferred
Securities in a public offering. No Trust Preferred Securities have been
authorized or issued as of October 14, 1996.
The proceeds from the Trust's sale of the Trust Securities will be used to
purchase the Partnership Preferred Securities from the Partnership. AT&T Capital
Corporation (the 'Company') will be obligated to pay compensation to the
underwriters of the offering of the Trust Preferred Securities. The Company will
pay all fees and expenses related to the organization and operations of the
Trust (including any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States or
any other domestic taxing authority upon the Trust) and the offering of the
Trust Preferred Securities and be responsible for all debts and other
obligations of the Trust (other than the Trust Securities). The Company has also
agreed to indemnify the Trustees and certain other persons.
F-5
<PAGE>
<PAGE>
_____________________________________ _____________________________________
NO DEALER, SALESPERSON OR ANY OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS
PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, THE TRUST PREFERRED SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE
FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................................................................................................... 4
Incorporation of Certain Documents By Reference............................................................................. 5
Prospectus Summary.......................................................................................................... 6
Risk Factors................................................................................................................ 17
Use of Proceeds............................................................................................................. 26
Capitalization.............................................................................................................. 26
Ratio of Earnings to Fixed Charges of the Company........................................................................... 27
Selected Financial Data..................................................................................................... 28
Business of the Company..................................................................................................... 30
The Merger.................................................................................................................. 33
Relationship With AT&T Entities............................................................................................. 34
Capita Preferred Trust...................................................................................................... 36
Capita Preferred Funding L.P................................................................................................ 37
Description of the Trust Preferred Securities............................................................................... 38
Description of the Trust Guarantee.......................................................................................... 50
Description of the Partnership Preferred Securities......................................................................... 53
Description of the Partnership Guarantee.................................................................................... 62
Certain Federal Income Tax Considerations................................................................................... 66
Underwriting................................................................................................................ 70
Legal Matters............................................................................................................... 71
Experts..................................................................................................................... 71
Index of Defined Terms...................................................................................................... 72
Index to Financial Statements............................................................................................... F-1
</TABLE>
8,000,000
TRUST PREFERRED SECURITIES
CAPITA PREFERRED TRUST
% TRUST ORIGINATED
PREFERRED SECURITIES'SM' ('TOPrS'SM'')
GUARANTEED TO THE EXTENT SET
FORTH HEREIN BY
[LOGO]
---------------------------
PROSPECTUS
---------------------------
MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
, 1996
_____________________________________ _____________________________________
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below are estimates of other expenses of issuance and
distribution, all of which will be paid by AT&T Capital:
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee................................... $ 60,607
Printing and Distributing Registration Statement, Prospectus, and Miscellaneous
Material...................................................................... 175,000
Accountants' Fee................................................................ 50,000
Legal Fees and Expenses......................................................... 500,000
Blue Sky Fees and Expenses...................................................... 15,000
New York Stock Exchange Listing Fee............................................. 58,300
Rating Agency Fee............................................................... 255,000
Miscellaneous Expenses.......................................................... 25,000
----------
Total................................................................. $1,138,907
----------
----------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware and the Company's
Restated Certificate of Incorporation and By-Laws provide for the
indemnification of directors and officers of the Company under certain
circumstances, and on a case by case basis, against expenses reasonably incurred
in connection with a civil or criminal action to which they were a party, or
threatened to be made a party, by reason of being a director or officer. The
Company's Restated Certificate of Incorporation and By-Laws provide for
indemnity of directors and officers to the fullest extent permitted by law.
The Amended and Restated Declaration of Trust of Capita Preferred Trust
(the 'Trust') provides, to the fullest extent permitted by applicable
law, for indemnity of the Regular Trustees, any Affiliate of any Regular
Trustee, any officer, director, shareholder, member, partner, employee,
representative or agent of any Regular Trustee, or any officer, director,
shareholder, member, partner, employee, representative or agent of the Trust or
its Affiliates (each a 'Company Indemnified Person'), from and against losses
and expenses incurred by such Company Indemnified Person in connection with
any action, suit or proceeding, except that if such action, suit or proceeding
is by or in the right of the Trust, the indemnity shall be limited to expenses
of such Company Indemnified Person.
The Limited Partnership Agreement of Capita Preferred Funding L.P. (the
'Partnership') provides that to the fullest extent permitted by applicable law,
the Partnership shall indemnify and hold harmless
II-1
<PAGE>
<PAGE>
each of the General Partner, and any Special Representative, any Affiliate of
the General Partner or any Special Representative, any officer, director,
shareholder, member, partner, employee, representative or agent of the General
Partner or any Special Representative, or any of their respective Affiliates,
or any employee or agent of the Partnership or its Affiliates (each a
'Partnership Indemnified Person'), from and against any loss, damage or claim
incurred by such Partnership Indemnified Person by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of the Partnership and in a manner such Partnership Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Partnership Indemnified Person by the Limited Partnership Agreement, except that
no Partnership Indemnified Person shall be entitled to be indemnified in respect
of any loss, damage or claim incurred by such Partnership Indemnified Person by
reason of gross negligence or willful misconduct with respect to such acts
or omissions. The Limited Partnership Agreement also provides that, to the
fullest extent permitted by applicable law, expenses (including legal fees)
incurred by a Partnership Indemnified Person in defending any claim, demand,
action, suit or proceeding shall, from time to time, be advanced by the
Partnership prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by the Partnership of an undertaking by or on behalf
of the Partnership Indemnified Person to repay such amount if it shall be
determined that the Partnership Indemnified Person is not entitled to be
indemnified as authorized in the Limited Partnership Agreement.
The directors and officers of the Company and the Regular Trustees of the
Trust are covered by insurance policies indemnifying them against certain
liabilities, including certain liabilities arising under the Act, which might be
incurred by them in such capacities and against which they cannot be indemnified
by the Company or the Trust. Any agents, dealers or underwriters who execute the
agreement filed as Exhibit 1.1 of this Registration Statement will agree to
indemnify the Company's directors and their officers and the Trustees who signed
the Registration Statement against certain liabilities that may arise under the
Securities Act with respect to information furnished to the Company or the Trust
by or on behalf of any such indemnifying party.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO.
- -------
<C> <S>
1.1 -- Form of Purchase Agreement for the offering of the Trust Preferred Securities being registered under this
Registration Statement.
4.1'D' -- Certificate of Trust dated August 29, 1996, of Capita Preferred Trust.
4.2 -- Form of Amended and Restated Declaration of Trust of Capita Preferred Trust.
4.3'D' -- Certificate of Limited Partnership, dated as of August 28, 1996, of Capita Preferred Funding L.P.
4.4'D' -- Amended and Restated Certificate of Limited Partnership of Capita Preferred Funding L.P. dated as of
October 2, 1996.
4.5 -- Form of Amended and Restated Agreement of Limited Partnership of Capita Preferred Funding L.P.
4.6 -- Form of Trust Preferred Securities Guarantee Agreement by AT&T Capital Corporation and The First National
Bank of Chicago, N.A., as guarantee trustee.
4.7 -- Form of Partnership Guarantee Agreement by AT&T Capital Corporation.
4.8 -- Form of Indenture between AT&T Capital Corporation and The First National Bank of Chicago, N.A., as
trustee.
4.9 -- Form of Affiliate Debenture Guarantee Agreement by AT&T Capital Corporation and The First National Bank
of Chicago, N.A., as guarantee trustee.
</TABLE>
II-2
<PAGE>
<PAGE>
<TABLE>
<C> <S>
4.10 -- Form of Trust Preferred Security (included in Exhibit 4.2 above).
4.11 -- Form of Partnership Preferred Security (included in Exhibit 4.5 above).
4.12 -- Form of Subordinated Debenture (included in Exhibit 4.8 above).
5.1 -- Opinion of Simpson Thacher & Bartlett.
5.2 -- Opinion of Richards Layton & Finger.
8.1 -- Opinion of Simpson Thacher & Bartlett as to certain federal income tax matters.
12.1 -- Computation of Ratio of Earnings to Fixed Charges of AT&T Capital Corporation.
23.1'D' -- Consent of Coopers & Lybrand L.L.P.
23.2 -- Consent of Simpson Thacher & Bartlett (contained in Exhibits No. 5.1 and 8.1).
23.3 -- Consent of Richards, Layton & Finger (contained in Exhibit 5.2).
24.1'D' -- Powers of Attorney.
25.1 -- Form T-1, Statement of Eligibility Under the Trust Indenture Act of 1939, as amended, of The First
National Bank of Chicago, N.A., under the Amended and Restated Declaration of Trust.
25.2 -- Form T-1, Statement of Eligibility Under the Trust Indenture Act of 1939, as amended, of The First
National Bank of Chicago, N.A., under the Trust Preferred Securities Guarantee Agreement.
25.3 -- Form T-1, Statement of Eligibility Under the Trust Indenture Act of 1939, as amended, of The First
National Bank of Chicago, N.A, under the Indenture.
25.4 -- Form T-1, Statement of Eligibility Under the Trust Indenture Act of 1939, as amended, of The First
National Bank of Chicago, N.A., under the Affiliate Debenture Guarantee Agreements.
</TABLE>
- ------------
'D' Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrants hereby undertake:
1. that for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrants pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective;
2. that for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at
the time shall be deemed to be the initial bona fide offering thereof; and
3. that for purposes of determining any liability under the Securities
Act of 1933, each filing of the Company's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered herein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
------------------------
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of a
registrant pursuant to the foregoing provisions or otherwise, the registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by a registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against a
registrant by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 18th day of October, 1996.
AT&T CAPITAL CORPORATION
By: /s/ ROBERT J. INGATO
...................................
ROBERT J. INGATO
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ --------------------------------------------
<C> <S> <C>
* Chairman of the Board of Directors and Chief
......................................... Executive Officer
(THOMAS C. WAJNERT) (Principal Executive Officer)
* Senior Vice President and Chief
......................................... Financial Officer (Principal
(EDWARD M. DWYER) Financial Officer)
* Vice President, Controller (Principal
......................................... Accounting Officer)
(RAMON OLIU)
* Director
.........................................
(HIROMI YAMAJI)
* Director
.........................................
(JOHN APPLETON)
* Director
.........................................
(GUY HANDS)
* Director
.........................................
(JEFFERY NASH)
* Director
.........................................
(DAVID BANKS)
*By power of attorney
By: /s/ ROBERT J. INGATO
.........................................
(ROBERT J. INGATO)
ATTORNEY-IN-FACT
Date: October 18, 1996
</TABLE>
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 18th day of October, 1996.
CAPITA PREFERRED FUNDING L.P.
By: AT&T CAPITAL CORPORATION,
as General Partner
By: /s/ ROBERT J. INGATO
...................................
ROBERT J. INGATO
SENIOR VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ --------------------------------------------
<C> <S> <C>
* Director
.........................................
(THOMAS C. WAJNERT)
* Director
.........................................
(HIROMI YAMAJI)
* Director
.........................................
(JOHN APPLETON)
* Director
.........................................
(GUY HANDS)
* Director
.........................................
(JEFFERY NASH)
* Director
.........................................
(DAVID BANKS)
*By power of attorney
By: /S/ ROBERT J. INGATO
.........................................
(ROBERT J. INGATO)
ATTORNEY-IN-FACT
Date: October 18, 1996
</TABLE>
II-5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, on the 18th day of October, 1996.
CAPITA PREFERRED TRUST
By: /s/ JEFFERY F. NASH
...................................
JEFFERY F. NASH
REGULAR TRUSTEE
II-6
STATEMENT OF DIFFERENCES
------------------------
The dagger symbol shall be expressed as......... `D'
The service mark symbol shall be expressed as ...'SM'
The section mark symbol shall be expressed as ...'ss'
<PAGE>
<PAGE>
================================================================================
AT&T Capital Corporation
(a Delaware corporation)
Capita Preferred Funding L.P.
(a Delaware limited partnership)
Capita Preferred Trust
(a Delaware business trust)
__% Trust Originated Preferred Securitites ("TOPrS")'SM'
PURCHASE AGREEMENT
Dated: October __, 1996
- --------------------------------------------------------------------------------
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
SECTION 1. Representations and Warranties......................................... .. 4
(a) Representations and Warranties by the Company............................. 4
(i) Compliance with Registration Requirements.......................... 4
(ii) Incorporated Documents............................................. 4
(iii) Independent Accountants............................................ 5
(iv) Good Standing of the Company and Subsidiaries...................... 5
(v) Authorization of Agreement......................................... 5
(vi) Authorization of the Debentures and Indentures..................... 5
(vii) Authorization of Investment Guarantees............................. 5
(viii) Absence of Defaults and Conflicts; Absence of Further Requirements. 5
(ix) The Operating Agreements, the Intercompany Agreement and the License
Agreement........................................................ 6
(x) Absence of Conflicts; Operating Agreements, Etc.................... 6
(xi) Material Adverse Change............................................ 6
(xii) Rating of Securities............................................... 7
(xiii) Investment Company Act............................................. 7
(b) Representations and Warranties by the Trust, Partnership and Company...... 7
(i) Good Standing of Trust............................................. 7
(ii) Authorization of Declaration....................................... 7
(iii) Authorization of Trust Common Securities........................... 7
(iv) Authorization of Trust Preferred Securities........................ 7
(v) Authorization of Trust Guarantee................................... 8
(vi) Regular Trustees................................................... 8
(vii) Good Standing of the Partnership................................... 8
(viii) Authorization of Partnership Agreement............................. 8
(ix) Authorization of Partnership Preferred Securities.................. 8
(x) Authorization of Partnership Guarantee............................. 8
(xi) General Partner Status............................................. 9
(xii) Investment Company Act............................................. 9
(xiii) Absence of Conflicts............................................... 9
(xiv) Absence of Further Requirements.................................... 9
(xv) Absence of Proceedings............................................. 9
SECTION 2. Sale and Delivery to Underwriters; Closing................................ 9
(a) Securities................................................................ 9
(b) Payment................................................................... 10
(c) Denominations; Registration............................................... 10
SECTION 3. Covenants of the Offerors................................................. 10
(a) Compliance with Securities Regulations and Commission Requests............ 10
(b) Filing of Amendments...................................................... 11
(c) Delivery of Registration Statements....................................... 11
(d) Delivery of Prospectuses.................................................. 11
(e) Continued Compliance with Securities Laws................................. 11
</TABLE>
i
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
(f) Blue Sky Qualifications.............................................. 12
(g) Rule 158............................................................. 12
(h) Use of Proceeds...................................................... 12
(i) Listing.............................................................. 12
(j) Restriction on Sale of Securities.................................... 12
(k) Reporting Requirements............................................... 12
SECTION 4. Payment of Expenses.................................................. 13
(a) Expenses............................................................. 13
(b) Termination of Agreement............................................. 13
SECTION 5. Conditions of Underwriters' Obligations.............................. 13
(a) Effectiveness of Registration Statement.............................. 13
(b) Opinion of Counsel for Company....................................... 13
(c) Opinion of Counsel for Underwriters.................................. 14
(d) Opinion of Counsel for the Property of Trustee....................... 14
(e) Officers' Certificate................................................ 14
(f) Accountant's Comfort Letter.......................................... 14
(g) Bring-down Comfort Letter............................................ 14
(h) Maintenance of Rating................................................ 14
(i) Approval of Listing.................................................. 15
(j) Additional Documents................................................. 15
(k) Termination of Agreement............................................. 15
SECTION 6. Indemnification...................................................... 15
(a) Indemnification of Underwriters...................................... 15
(b) Indemnification of Company, Directors and Officers................... 16
(c) Actions against Parties; Notification................................ 16
(d) Settlement without Consent if Failure to Reimburse................... 17
SECTION 7. Contribution......................................................... 17
SECTION 8. Representations, Warranties and Agreements to Survive Delivery....... 18
SECTION 9. Termination of Agreement............................................. 18
(a) Termination; General................................................. 18
(b) Liabilities.......................................................... 19
SECTION 10. Default by One or More of the Underwriters........................... 19
SECTION 11. Notices.............................................................. 19
SECTION 12. Parties.............................................................. 20
SECTION 13. GOVERNING LAW AND TIME............................................... 20
</TABLE>
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<TABLE>
<CAPTION>
Page
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<S> <C> <C>
SECTION 14. Effect of Headings................................................... 20
SCHEDULE A.................................................................Schedule A-1
SCHEDULE B.................................................................Schedule B-1
EXHIBIT A...........................................................................A-1
ANNEX A ......................................................................Annex A-1
Miscellaneous Riders........................................................Page 1 of 1
</TABLE>
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Capita Preferred Trust
(a Delaware business trust)
________ Trust Preferred Securities
__% Trust Originated Preferred Securities ("TOPrS") sm
(Liquidation Amount of $25 per Preferred Security)
PURCHASE AGREEMENT
October __, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Lehman Brothers
PaineWeber Incorporated
Prudential Securities Incorporated
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Capita Preferred Trust (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Trust Act") of the State
of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. 'ss' 'ss'
3801 et seq.), Capita Preferred Funding L.P. (the "Partnership"), a limited
partnership organized under the Revised Uniform Limited Partnership Act (the
"Delaware Partnership Act") of the State of Delaware (Chapter 17, Title 6, of
the Delaware Code, 6 Del. C. 'ss' 'ss' 17- 101 et seq.), and AT&T Capital
Corporation, a Delaware corporation (the "Company" and, together with the Trust
and the Partnership, the "Offerors") confirm their agreement (the "Agreement")
with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
(together, "Merrill Lynch") and each
- -------------------
'SM' "Trust Originated Preferred Securities" and "TOPrS" are service marks of
Merrill Lynch & Co., Inc.
<PAGE>
<PAGE>
of the other Underwriters named in Schedule A hereto (collectively, the
"Underwriters", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Goldman,
Sachs & Co., Lehman Brothers, PaineWeber Incorporated and Prudential Securities
Incorporated are acting as representatives (in such capacity, they shall
hereinafter be referred to as the "Representatives"), with respect to the sale
by the Trust and the purchase by the Underwriters, acting severally and not
jointly, of the respective numbers of [ ]% Trust Originated Preferred Securities
(liquidation amount of $25 per preferred security) representing preferred
undivided beneficial ownership interests in the assets of the of the Trust
("TOPrS" or the "Trust Preferred Securities") set forth in said Schedule A. The
Company will own all the common securities (the "Trust Common Securities" and,
together with the Trust Partnership Securities, the "Trust Securities"),
representing undivided beneficial ownership interests in the assets of the
Trust. The Trust Preferred Securities and the Trust Common Securities will be
issued pursuant to the amended and restated declaration of trust of the Trust,
dated as of October ___, 1996 (the "Declaration"), among the Company, as
Sponsor, [ ], as regular trustees (the "Regular Trustees"), First National Bank
of Chicago, N.A., a national banking corporation, as institutional trustee (the
"Property Trustee") and First Chicago Delaware Inc., a Delaware corporation, as
Delaware trustee (the "Delaware Trustee" and, together with the Regular Trustees
and the Property Trustee, the "Issuer Trustees"), and the holders from time to
time of undivided beneficial interests in the assets of the Trust. The Trust
Preferred Securities will be guaranteed by the Company, to the extent set forth
in the Prospectus with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the Trust Preferred Securities Guarantee
Agreement (the "Trust Guarantee"), dated as of October __, 1996, between the
Company and The First National Bank of Chicago, N.A., as trustee (the "Guarantee
Trustee").
The proceeds from the sale of the Trust Securities will be used
by the Trust to purchase partnership preferred securities ("Partnership
Preferred Securities"), representing all of the limited partnership interests of
the Partnership. All of the general partnership interests will be owned by the
Company, which shall be sole general partner (in such capacity, the "General
Partner"). The Partnership Preferred Securities will be issued pursuant to an
amended and restated agreement of limited partnership, dated as of October __,
1996 (the "Partnership Agreement"), among the Company, as general partner, and
Jeffrey F. Nash, as initial limited partner, and such other persons who become
limited partners thereto, and will be guaranteed by the Company, to the extent
set forth in the Prospectus, with respect to distributions and payments upon
liquidation and redemption pursuant to the Partnership Guarantee Agreement (the
"Partnership Guarantee" and, together with the Trust Guarantee, the
"Guarantees"). The Trust Preferred Securities and the related Trust Guarantee,
together with the Partnership Preferred Securities and the related Partnership
Guarantee, are referred to herein as the "Offered Securities."
The Partnership will use the proceeds from the sale of the
Partnership Preferred Securities and the capital contribution of the General
Partner to acquire, among other things, (i) a subordinated debenture of the
Company, (ii) a senior debenture of Subsidiary I ("Subsidiary I"), a wholly
owned subsidiary of the Company, and (iii) a senior debenture of Subsidiary II
("Subsidiary II"), a wholly owned subsidiary of the Company, and, together with
the Company and Subsidiary I, the "Investment Affiliates"). The debentures to be
issued (collectively, the "Subsidiary Debentures") by Subsidiary I and
Subsidiary II (collectively the "Investment Subsidiaries") are to be fully and
unconditionally guaranteed by the Company (the "Investment Guarantees"). Each of
the debentures (the "Debentures") shall be issued pursuant to an indenture (each
an "Indenture"), to be dated as of October , 1996, among the applicable
Investment Affiliate, The First National Bank of Chicago, N.A., as trustee (the
"Debt Trustee"), and in the case of the Debentures issued by Subsidiary I and
Subsidiary II, the Company, as guarantor (the "Debenture Guarantor").
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The Offerors have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-11243) covering the registration under the Securities Act of 1933 (the "1933
Act") of (i) the Trust Preferred Securities, (ii) the Trust Guarantee, (iii) the
Partnership Preferred Securities, (iv) the Partnership Guarantee, (v) the
Debentures of the Company, and (vi) the Investment Guarantees.
The Offerors understand that the Underwriters propose to make a
public offering of the Offered Securities as soon as the Representative(s)
deem(s) advisable after this Agreement has been executed and delivered and the
Declaration and Trust Guarantee Agreement have been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act").
Promptly after execution and delivery of this Agreement, the
Offerors will either (i) prepare and file a prospectus in accordance with the
provisions of Rule 430A ("Rule 430A") of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and paragraph (b) of
Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if the Company has
elected to rely upon Rule 434 ("Rule 434") of the 1933 Act Regulations, prepare
and file a term sheet (a "Term Sheet") in accordance with the provisions of Rule
434 and Rule 424(b). The information included in such prospectus or in such Term
Sheet, as the case may be, that was omitted from such registration statement at
the time it became effective but that is deemed to be part of such registration
statement at the time it became effective (a) pursuant to paragraph (b) of Rule
430A is referred to as "Rule 430A Information" or (b) pursuant to paragraph (d)
of Rule 434 is referred to as "Rule 434 Information." Each prospectus used
before such registration statement became effective, and any prospectus that
omitted, as applicable, the Rule 430A Information or the Rule 434 Information,
that was used after such effectiveness and prior to the execution and delivery
of this Agreement, is herein called a "preliminary prospectus." Such
registration statement, including the exhibits thereto, schedules thereto, if
any, and the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, at the time it became effective and including the
Rule 430A Information and the Rule 434 Information, as applicable, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The final
prospectus, including the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the 1933 Act, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated October ___, 1996 together with the
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" in
the Registration Statement, any preliminary prospectus or the Prospectus (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document
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<PAGE>
under the Securities Exchange Act of 1934 (the "1934 Act") which is incorporated
by reference in the Registration Statement, such preliminary prospectus or the
Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, and as of the
Closing Time referred to in Section 2(b) hereof, as follows:
(i) Compliance with Registration Requirements. The Offerors meet
the requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has become
effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request on the part of the Commission for additional
information has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time, the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue statement of
a material fact or omitted or will omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. If Rule 434 is used, the Offerors will
comply with the requirements of Rule 434. The representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through
Merrill Lynch expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part of
the Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for use
in connection with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed
to be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the Commission,
complied and will comply in all material respects with the requirements of the
1934 Act and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information in the
Prospectus, at the time the Registration Statement became effective, at the time
the Prospectus was issued and at the Closing Time, did not and will not contain
an
4
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<PAGE>
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified the
financial statements included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(iv) Good Standing of the Company and Subsidiaries. Each of the
Company and each of its subsidiaries has been duly incorporated, is validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation, is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which its respective ownership of
properties or the conduct of its respective businesses requires such
qualification (except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole), and has the power and authority necessary to own
or hold its respective properties and to conduct the businesses in which it is
engaged, as described in the Prospectus.
(v) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Offerors.
(vi) Authorization of the Debentures and Indentures. Each
Indenture has been duly authorized, and at the Closing Time, will have been duly
executed and delivered by the applicable Investment Affiliate and, in the case
of the Subsidiary Debentures, the Debenture Guarantor and, when duly executed
and delivered by the Debt Trustee, will constitute a valid and binding agreement
of such Investment Affiliate and, in the case of the Subsidiary Debentures, the
Debenture Guarantor, enforceable against such Investment Affiliate and, in the
case of the Subsidiary Debentures, the Debenture Guarantor, in accordance with
its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law) (the "Bankruptcy Exceptions"). The Indenture
of the Company has duly qualified under the 1939 Act. The Debentures have been
duly authorized and, at the Closing Time, will have been duly executed by the
applicable Investment Affiliate and, when authenticated, issued and delivered in
the manner provided for in the Indenture and delivered against payment of the
purchase price therefor as provided in this Agreement, will constitute valid and
binding obligations of such Investment Affiliate, enforceable against such
Investment Affiliate in accordance with their terms, except as the enforcement
thereof may be limited by the Bankruptcy Exceptions.
(vii) Authorization of Investment Guarantees. The Investment
Guarantees have been duly authorized and, at the Closing Time, will have been
duly executed and delivered by the Debenture Guarantor, and, when authenticated
in the manner provided in the Investment Guarantee, will constitute a valid and
binding obligation of the Debenture Guarantor, enforceable against the Debenture
Guarantor in accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(viii) Absence of Defaults and Conflicts; Absence of Further
Requirements. The execution, delivery and performance of this Agreement, the
Declaration, the Partnership Agreement, the Trust Guarantee, the Partnership
Guarantee, the Debentures and the Indentures (collectively, the "Transaction
Documents") by the Company and the execution, delivery and performance of the
Deben-
5
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<PAGE>
tures and the Indentures by the applicable Investment Affiliate and the
consummation of the transactions contemplated hereby and thereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties of assets, the effect of which breach,
violation or default would be material to the Company and its subsidiaries taken
as a whole; and except such as have been obtained or required under the 1983 Act
or the 1933 Act Regulations, 1934 Act or the 1934 Act Regulations or state
securities laws and the qualification of the Declaration, the Trust Preferred
Guarantee Agreement and the Indentures under the 1939 Act, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required in connection with the offering,
issuance, and sale of the Offered Securities, the Debentures and Investment
Guarantees or, the consummation of the transactions contemplated by this
Agreement or the execution, delivery and performance by the Company and, where
applicable, the Investment Subsidiaries of the Transaction Documents.
(ix) The Operating Agreements, the Intercompany Agreement and the
License Agreement. Each of the Operating Agreements, the Intercompany Agreement
and the License Agreement (each such term, as defined in the Registration
Statement) has been duly authorized, executed and delivered by the Company and
each such agreement constitutes a valid and binding agreement of the Company
except as enforcement thereof may be limited by the Bankruptcy Exceptions.
(x) Absence of Conflicts; Operating Agreements, Etc. The
compliance by the Company with all of the provisions of the Operating
Agreements, the Intercompany Agreement and the License Agreement will not
conflict with or result in a breach or the violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which the Company or
any of its subsidiaries is bound or to which the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of the
provisions of the certificate of incorporation or by-laws of the Company or any
statute or any orders rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties or assets (except for such conflicts, breaches, violations and
defaults as would not have a material adverse effect on the Company and its
subsidiaries taken as a whole); and no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental agency or
body is required for the execution and delivery by the Company of, and
compliance by the Company with, the provisions of the Operating Agreements, the
Intercompany Agreement and the License Agreements (except for such consents,
approvals, authorizations, orders, filings, registrations and qualifications the
failure to obtain which would not have a material adverse effect on the Company
and its subsidiaries taken as a whole).
(xi) Material Adverse Change. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
except as otherwise stated therein, there has been no material adverse change in
the condition, financial or otherwise, or in the earnings or business affairs or
business prospects of the Company and its subsidiaries taken as a whole, whether
or not arising in the ordinary course of business.
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(xii) Rating of Securities. Subsequent to the execution and
delivery of this Agreement (i) no downgrading shall have occurred in the rating
accorded the Trust Preferred Securities or the Company's debt securities by any
"nationally recognized statistical rating organization", as that term is defined
by the Commission for purposes of rule 436(g)(2) under the Act and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of the Trust Preferred
Securities or the any of the Company's debt securities.
(xiii) Investment Company Act. Each of the Company and the
Investment Subsidiaries is not, and after giving effect to the offering and sale
of the Trust Preferred Securities and the application of the net proceeds
therefrom as described in the Prospectus will not be, an "investment company" as
such term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
(b) Representations and Warranties by the Trust, Partnership and
Company. The Offerors, jointly and severally, represent and warrant to each
Underwriter as of the date hereof, as of the Closing Time referred to in Section
2(b) herein, as follows:
(i) Good Standing of Trust. The Trust has been duly created and
is validly existing in good standing as a business trust under the Delaware
Trust Act with the power and authority to own property and to conduct its
business as described in the Registration Statement and Prospectus and to enter
into and perform its obligations under this Agreement, the Trust Preferred
Securities, the Trust Common Securities and the Declaration; the Trust is duly
qualified to transact business as a foreign business trust and is in good
standing in any other jurisdiction in which such qualification is necessary,
except to the extent that the failure to so qualify or be in good standing would
not have a material adverse effect on the Trust; the Trust is not a party to or
otherwise bound by any agreement other than those described in the Prospectus;
and the Trust is and will be treated as a consolidated subsidiary of the Company
pursuant to generally accepted accounting principles.
(ii) Authorization of Declaration. The Declaration has been duly
authorized by the Company and, at the Closing Time, will have been duly executed
and delivered by the Company, as Sponsor, and the Trustees, and assuming due
authorization, execution and delivery of the Declaration by the Property
Trustee, the Declaration will, at the Closing Time, be a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and will conform to all statements relating thereto in
the Prospectus; and at the Closing Time, the Declaration will have been duly
qualified under the 1939 Act.
(iii) Authorization of Trust Common Securities. The Trust Common
Securities have been duly authorized by the Declaration and, when issued and
delivered by the Trust to the Company against payment therefor as described in
the Registration Statement and Prospectus, will be validly issued and (subject
to the terms of the Declaration) fully paid undivided beneficial interests in
the assets of the Trust and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Trust Common Securities is not
subject to preemptive or other similar rights; and at the Closing Time all of
the issued and outstanding Trust Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity.
(iv) Authorization of Trust Preferred Securities. The Trust
Preferred Securities have been duly authorized by the Declaration and, when
issued and delivered against payment of the consideration set forth in this
Agreement, will be validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; the issuance of the
Trust Preferred Securities
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is not subject to preemptive or other similar rights; and (subject to the terms
of the Declaration) holders of Trust Preferred Securities will be entitled to
the same limitation of personal liability under Delaware law as extended to
stockholders of private corporations for profit.
(v) Authorization of Trust Guarantee. The Trust Guarantees has
been duly authorized by the Company and, when validly executed and delivered by
the Company, and, assuming due authorization, execution and delivery of the
Trust Guarantee by the Guarantee Trustee, will constitute a valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, the Trust Guarantee will conform to all statements
relating thereto contained in the Prospectus; and the Trust Preferred Guarantee
Agreement, at the Closing Time, will have been duly qualified under the 1939
Act.
(vi) Regular Trustees. Each of the Regular Trustees of the Trust
is an employee of the Company; the Declaration has been duly executed and
delivered by the Regular Trustees and is a valid and binding obligation of each
Regular Trustee, enforceable against such Regular Trustee in accordance with its
terms except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(vii) Good Standing of the Partnership. The Partnership has been
duly formed and is validly existing in good standing as a limited partnership
under the Delaware Partnership Act with the power and authority to own property
and to conduct its business as described in the Registration Statement and
Prospectus and to enter into and perform its obligations under this Agreement,
the Partnership Preferred Securities and the Partnership Agreement; the
Partnership is duly qualified to transact business as a foreign limited
partnership and is in good standing in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse effect on the
Partnership; the Partnership is not a party to or otherwise bound by any
agreement other than those described in the Prospectus; and the Partnership is
and will be treated as a consolidated subsidiary of the Company pursuant to
generally accepted accounting principles.
(viii) Authorization of Partnership Agreement. The Partnership
Agreement has been duly authorized by the Company as general partner and, on the
Closing Date, will have been duly executed and delivered by the Company, and
will be a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions, and will
conform to the description thereof in the Prospectus.
(ix) Authorization of Partnership Preferred Securities. The
Partnership Preferred Securities have been duly authorized by the Partnership
Agreement and, when issued and delivered pursuant to the Partnership Agreement
against payment of the consideration set forth therein, will be duly issued and
fully paid and not subject to assessment for additional capital contributions,
will be entitled to the benefits of the Partnership Agreement and will conform
to the description thereof in the Prospectus; the issuance of the Partnership
Preferred Securities is not subject to preemptive or other similar rights;
assuming that the holders of Partnership Preferred Securities in their
capacities as such do not participate in the control of the business of the
Company, the holders of the Partnership Preferred Securities, in their
capacities as such, will have no liability in excess of their obligations to
make payments provided for in the Limited Partnership Agreement (subject to the
obligation of a holder of Partnership Preferred Securities to repay any funds
distributed to it).
(x) Authorization of Partnership Guarantee. The Partnership
Guarantee has been duly authorized by the Company and, when validly executed and
delivered by the Company will constitute a valid
8
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and binding obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(xi) General Partner Status. The Company is the sole general
partner of the Partnership.
(xii) Investment Company Act. Neither the Trust nor the
Partnership is and, after giving effect to the offering and sale of the Trust
Preferred Securities and the application of the proceeds thereof as described in
the Prospectus, neither will be an "investment company" under the 1940 Act.
(xiii) Absence of Conflicts. The Trust is not in violation of the
Declaration or its certificate of trust filed with the State of Delaware August
28, 1996 (the "Certificate of Trust"); the Partnership is not in violation of
the Partnership Agreement or the certificate of limited partnership, dated
August 28, 1996 (the "Certificate of Partnership"); and the execution, delivery
and performance of applicable Transaction Documents by the Partnership and the
Trust and the consummation of the transactions contemplated herein and therein
and compliance by the Partnership and the Trust with their respective
obligations hereunder and thereunder have been duly authorized by all necessary
action on the part of the Partnership and the Trust and do not and will not
result in any violation of the Declaration or Certificate of Trust or the
Partnership Agreement or the Certificate of Partnership and do not and will not
conflict with, or result in a breach of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Trust or the
Partnership under any existing applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other governmental
body having jurisdiction over the Trust or the Partnership of their respective
properties.
(xiv) Absence of Further Requirements. No authorization,
approval, consent or order of any court or governmental authority or agency is
necessary in connection with the issuance, offer and sale of the Trust
Securities and the Partnership Preferred Securities, the consummation of the
transactions contemplated by this Agreement by the Partnership or the Trust, or
the execution, delivery, and performance by the Partnership or the Trust of the
applicable Transaction Documents, except such as may be required under the 1933
Act or the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations or
state securities laws and the qualification of the Declaration and the Trust
Preferred Securities Guarantee Agreement under the 1939 Act.
(xv) Absence of Proceedings. Except as disclosed in the
Prospectus, there is no action, suit or proceeding before or by any government,
governmental instrumentality or court, domestic or foreign, now pending or, to
the knowledge of the Trust or the Partnership, threatened against or affecting
the Trust or the Partnership that is required to be disclosed in the Prospectus
or that would result in any material adverse change in the condition (financial
or otherwise), earnings or business affairs of the Trust or the Company and its
subsidiaries, taken as a whole, or that could materially and adversely affect
the properties or assets of the Trust or the Partnership, or that could
adversely affect the consummation of the transactions contemplated in this
Agreement.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Trust agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Trust, at
the initial public offering price set forth in Schedule B, the number of Trust
Preferred Securities set forth in Schedule A opposite the name of
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such Underwriter, plus any additional number of Trust Preferred Securities which
such Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Trust Preferred Securities shall be made at the offices of
Skadden, Arps, Slate, Meagher & Flom, or at such other place as shall be agreed
upon by the Representative(s) and the Company, at 9:00 A.M. (Eastern time) on
the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representative(s)
and the Company (such time and date of payment and delivery being herein called
"Closing Time").
Payment shall be made to the Trust by wire transfer of
immediately available funds to a bank account designated by the Company, against
delivery to such persons designated by the Representative(s) for the respective
accounts of the Underwriters of a certificate in global form for the Trust
Preferred Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative(s), for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Trust
Preferred Securities which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Trust Preferred
Securities to be purchased by any Underwriter whose funds have not been received
by the Closing Time, but such payment shall not relieve such Underwriter from
its obligations hereunder.
The purchase price per Trust Preferred Security to be paid by the
several Underwriters for the Preferred Securities shall be an amount equal to
the initial public offering price as set forth in Schedule B. The initial public
offering price per Preferred Security shall be a fixed price to be determined by
agreement between the Representatives and the Offerors. The initial public
offering price and the purchase price, when so determined, shall be set forth in
Schedule B.
As compensation to the Underwriters for their commitments
hereunder and in view of the fact that the proceeds of the sale of the Trust
Preferred Securities will ultimately be used to purchase the Debentures of the
Company and the Investment Subsidiaries, the Company hereby agrees to pay at
Closing Time to the Representatives, for the accounts of the several
Underwriters, a commission per Trust Preferred Security set forth on Schedule B.
At the Closing Time, the Company will pay, or cause to be paid,
the commission payable at such time to the Underwriters under Section 2 hereof
by wire transfer of immediately available funds to a bank account designated by
Merrill Lynch, Pierce, Fenner & Smith Incorporated for the account of
Underwriters.
(c) Denominations; Registration. Certificates for the Trust Preferred
Securities shall be in such denominations and registered in such names as the
Representative(s) may request in writing at least one full business day before
the Closing Time. The Trust Preferred Securities will be made available for
examination and packaging by the Representative(s) in The City of New York not
later than 9:00 A.M. (Eastern time) on the business day prior to the Closing
Time.
SECTION 3. Covenants of the Offerors. The Offerors covenant with each
Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Offerors, subject to Section 3(b), will comply with the requirements of Rule
430A or Rule 434, as applicable, and will notify the
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Representative(s) immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Offered Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of
such purposes. The Offerors will promptly effect the filings necessary pursuant
to Rule 424(b) and will take such steps they deem necessary to ascertain
promptly whether the form of prospectus transmitted for filing under Rule 424(b)
was received for filing by the Commission and, in the event that it was not, it
will promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. During the period when the Underwriters are
required to deliver a prospectus with respect to the Offered Securities, the
Offerors will give the Representative(s) notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act
or otherwise, will furnish the Representative(s) with copies of any such
documents a reasonable amount of time prior to such proposed filing or use, as
the case may be, and will not file or use any such document to which the
Representative(s) or counsel for the Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Offerors have furnished or
will deliver to the Representative(s) and counsel for the Underwriters, without
charge, conformed copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and conformed copies of all consents and certificates of
experts, and will also deliver to the Representative(s), without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the Underwriters. The copies of
the Registration Statement and each amendment thereto furnished to the
Underwriters will be identical to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(d) Delivery of Prospectuses. The Offerors have delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Offerors hereby consent to the
use of such copies for purposes permitted by the 1933 Act. The Offerors will
furnish to each Underwriter, without charge, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Offerors will comply
with the 1933 Act and the 1933 Act Regulations, the 1934 Act and the 1934 Act
Regulations and the 1939 Act and the 1939 Act Regulations with respect to the
offer of the Offered Securities so as to permit the completion of the
distribution of the Trust Preferred Securities as contemplated in this Agreement
and in the Prospectus. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Trust Preferred Securities,
any event shall occur or condition shall exist as a result of which it is
necessary, in the opinion of
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counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriters, to qualify the Offered Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions as the Representative(s) may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Offered Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Offerors will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use or cause to be used the net
proceeds received from the sale of the Offered Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect the listing
of the Offerors Securities on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 30 days from
the date of the Prospectus, neither the Trust nor the Company will, without the
prior written consent of the Underwriters, directly or indirectly, sell, offere
to sell, grant any option for sale of, or otherwise dispose of, any Trust
Preferred Securities, any Partnership Preferred Securities, any preferred stock
of the Company or any security convertible into or exchangeable into or
exercisable for Trust Preferred Securities or Partnership Preferred Securities
or any preferred stock of the Company.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to be filed with the Commission pursuant to the 1934
Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.
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SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and filing of the Registration Statement (including
financial statements and exhibits) as originally filed and of each amendment
thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, the Declaration, the Partnership Agreement, and the Indentures and
such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Securities (other than fees and
expenses of counsel for the Underwriters related thereto), (iii) the
preparation, issuance and delivery of the certificates for the Trust Preferred
Securities to the Underwriters, (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors, (v) the qualification of the Offered
Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Underwriters in connection therewith and in connection with the
preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing
and delivery to the Underwriters of copies of each preliminary prospectus, any
Term Sheets and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
the Property Trustee and the Trust Preferred Guarantee Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indentures, the Investment Guarantees and the Debentures, (ix) any fees payable
in connection with the rating of the Trust Preferred Securities, and (x) the
fees and expenses incurred in connection with the listing of the Offered
Securities on the New York Stock Exchange; provided, however that the
Underwriters shall reimburse the Company for certain expenses incurred in
connection with the transactions contemplated by this Agreement as may be agreed
upon in writing.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative(s) in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Offerors contained in Section 1 hereof or
in certificates of any officer of the Company, the Trust, the Partnership or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the
performance by the Offerors of its covenants and other obligations hereunder,
and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).
(b) Opinion of Counsel for Company. At Closing Time, the
Representative(s) shall have received the favorable opinion, dated as of Closing
Time, of (i) Simpson Thacher & Bartlett, counsel to the Company, the Trust and
the Partnership, in form and substance satisfactory to counsel for the
Underwriters, together with
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signed or reproduced copies of such letter for each of the other Underwriters to
the effect set forth in Exhibit A hereto and (ii) Richards, Layton & Finger,
special Delaware counsel to the Company, the Trust, and the Partnership, in form
and substance satisfactory to counsel for the Underwriters, together with signed
or reproduced copies of such letter for each of the Underwriters to the effect
set forth in Exhibit B hereto. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials.
(c) Opinion of Counsel for Underwriters. At Closing Time, the
Representative(s) shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters in form and substance satisfactory to the Underwriters.
(d) Opinion of Counsel for the Property of Trustee. At Closing Time, the
Representative(s) shall have received the favorable opinion, dated as of Closing
Time, of Pepper Hamilton & Scheetz, counsel for the Property Trustee in form and
substance satisfactory to counsel for the Underwriters, together with signed or
reproduced copies of such letters for each of the other Underwriters to the
effect set forth in Exhibit C hereto and to such further effect as counsel to
the Underwriters may reasonably request.
(e) Officers' Certificate. At Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, and the Representative(s) shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.
(f) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative(s) shall have received from Coopers & Lybrand
L.L.P. a letter dated such date, in form and substance satisfactory to the
Representative(s), together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(g) Bring-down Comfort Letter. At Closing Time, the Representative(s)
shall have received from Coopers & Lybrand L.L.P. a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (f) of this Section, except that the specified
date referred to shall be a date not more than five business days prior to
Closing Time.
(h) Maintenance of Rating. At Closing Time, the Trust Preferred
Securities shall be rated at least "ba2" by Moody's Investor's Service Inc.,
"BBB-" by Standard & Poor's Ratings Group, a division of McGraw- Hill, Inc.,
"BBB-" by Duff & Phelps Credit Rating Co. and "BBB-" by Fitch Investors Service,
Inc. and the Company shall have delivered to the Representative(s) a letter
dated on or prior to the Closing Time, from each such rating agency, or other
evidence satisfactory to the Representative(s), confirming that the Trust
Preferred
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Securities have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the Trust Preferred
Securities or the Company's debt securities by any "nationally recognized
statistical rating agency," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, and no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Trust Preferred Securities or any of
the Company's debt securities.
(i) Approval of Listing. At Closing Time, the Trust Preferred Securities
shall have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(j) Additional Documents. At Closing Time, counsel for the Underwriters
shall have been furnished with such documents as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy of any
of the representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Securities as herein contemplated
shall be reasonably satisfactory in form and substance to the Representative(s)
and counsel for the Underwriters.
(k) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative(s) by notice to the Company at
any time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 6 and 7 shall survive any such termination and remain in
full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Offerors agree jointly and
severally to indemnify and hold harmless each Underwriter and each person, if
any, who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the fees and disbursements of
counsel chosen by Merrill Lynch), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency
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or body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Offerors by any
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto). The foregoing indemnity
with respect to any untrue statement or alleged untrue statement contained in or
omission or alleged omission from a preliminary prospectus shall not inure to
the benefit of the Underwriter (or any person controlling such Underwriter) from
whom the person asserting any loss, liability, claim, damage or expense
purchased any of the Offered Securities which are the subject thereof if the
Company shall sustain the burden of proving that such person was not sent or
given a copy of the Prospectus (or the Prospectus as amended or supplemented) at
or prior to the written confirmation of the sale of such Offered Securities to
such person and the untrue statement contained in or omission from such
preliminary prospectus was corrected in the Prospectus (or the Prospectus as
amended or supplemented) and the Company had previously furnished copies thereof
to such Underwriter.
(b) Indemnification of Company, Directors and Officers. Each Underwriter
severally agrees to indemnify and hold harmless the Offerors, directors of the
Company, the General Partner of the Partnership, the Issuer Trustees of the
Trust, each of the officers of the Offerors who signed the Registration
Statement, and each person, if any, who controls any of the Offerors within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the
Rule 430A Information and the Rule 434 Information, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company provided that if it so
elects within a reasonable time after receipt of such notice, an indemnifying
party, jointly with any other indemnifying parties receiving such notice, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. An indemnifying party may participate at its own
expense in the defense of any such action; provided, however, that counsel to
the indemnifying party
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shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel, such indemnifying
party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i)
such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Offeror on the one
hand and the Underwriters on the other hand from the offering of the Trust
Preferred Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative benefits received by the Offerors on the one hand
and the Underwriters on the other hand in connection with the offering of the
Trust Preferred Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Trust Preferred Securities pursuant to this Agreement (before deducting
expenses but after deducting the total underwriting commission received by the
Underwriters) received by the Offerors and the total underwriting commission
received by the Underwriters, in each case as set forth on the cover of the
Prospectus, or, if Rule 434 is used, the corresponding location on the Term
Sheet, bear to the aggregate initial public offering price of the Trust
Preferred Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the
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Offerors or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Trust Preferred Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls
an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, the General Partner of the Partnership, the Issuer
Trustees of the Trust, each officer of the Offerors who signed the Registration
Statement, and each person, if any, who controls any of the Offerors within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have
the same rights to contribution as the Company. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the principal amount of Securities set forth opposite their respective names
in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Offerors or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or controlling
person, or by or on behalf of the Offerors, and shall survive delivery of the
Trust Preferred Securities to the Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representative(s) may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings or business affairs or business prospects of the Company and its
subsidiaries taken as a whole, whether or not arising in the ordinary course of
business, or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the
18
<PAGE>
<PAGE>
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the
judgment of the Representative(s), impracticable to market the Trust Preferred
Securities or to enforce contracts for the sale of the Trust Preferred
Securities, or (iii) if trading in any securities of the Company has been
suspended or materially limited by the Commission or the New York Stock Exchange
or if trading generally on the American Stock Exchange or the New York Stock
Exchange or in the Nasdaq National Market has been suspended or materially
limited, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or (iv) if a banking moratorium has
been declared by either Federal or New York State authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Trust Preferred
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative(s) shall have the right, within 24
hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representative(s) shall not have
completed such arrangements within such 24-hour period, then:
if the number of Defaulted Securities does not exceed 10% of the
aggregate number of the Securities to be purchased hereunder, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
if the number of Defaulted Securities exceeds 10% of the aggregate
number of the Securities to be purchased hereunder, this Agreement shall
terminate without liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section shall relieve any
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Representative(s) or the Company shall
have the right to postpone Closing Time for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or Prospectus
or in any other documents or arrangements. As used herein, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
directed to the Representative(s) at North Tower, World Financial Center, New
19
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<PAGE>
York, New York 10281-1201, attention of Edward Higgins; and notice to the
Company shall be directed to it at AT&T Capital Corporation, 44 Whippany Road,
Morristown, New Jersey, 07962, attention of Glenn Votek.
SECTION 12. Parties. This Agreement shall each inure to the benefit of and be
binding upon the Underwriters and the Offerors and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters
and the Offerors and their respective successors and the controlling persons and
officers and directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Offerors and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Trust Preferred Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein and the
Table of Contents are for convenience only and shall not affect the construction
hereof.
20
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
AT&T CAPITAL CORPORATION
By:
--------------------------
Name:
Title:
CAPITA PREFERRED FUNDING L.P.
By:
--------------------------
Name:
Title:
CAPITA PREFERRED TRUST
By:
--------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
GOLDMAN, SACHS & CO.
LEHMAN BROTHERS
PAINEWEBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By
---------------------------------------
Authorized Signatory
For themselves and as Representative(s) of the other Underwriters named in
Schedule A hereto.
21
<PAGE>
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of
Name of Underwriter Trust Preferred Securities
------------------- --------------------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith Incorporated........
-------------
Goldman, Sachs & Co.......................................
-------------
Lehman Brothers...........................................
-------------
PaineWeber Incorporated...................................
-------------
Prudential Securities Incorporated........................
-------------
Total..............................................
=============
</TABLE>
Schedule A-1
<PAGE>
<PAGE>
SCHEDULE B
1. The initial public offering price per security for the
Trust Preferred Securities, determined as provided in said Section 2,
shall be $25.00.
2. The purchase price per security for the Trust Preferred
Securities to be paid by the several Underwriters shall be $25.00, being
an amount equal to the initial public offering price set forth above.
3. The compensation per Trust Preferred Security to be
paid by the Company to the several Underwriters in respect of their
commitments hereunder shall be .7875; provided, however, that the
compensation per Trust Preferred Security for sales of 10,000 or more
Trust Preferred Securities to a single purchaser shall be .50.
Schedule B-1
<PAGE>
<PAGE>
[Form of Amended and
Restated Declaration of
Trust for non-convertible
securities]
================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
CAPITA PREFERRED TRUST
Dated as of October __, 1996
================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS..................... 2
SECTION 1.1 Definitions........................................ 2
ARTICLE II
TRUST INDENTURE ACT.......................... 12
SECTION 2.1 Trust Indenture Act; Application................... 12
SECTION 2.2 Lists of Holders of Trust Securities............... 12
SECTION 2.3 Reports by the Property Trustee.................... 13
SECTION 2.4 Periodic Reports to Property Trustee............... 13
SECTION 2.5 Evidence of Compliance with Conditions
Precedent.......................................... 13
SECTION 2.6 Trust Enforcement Events; Waiver................... 13
SECTION 2.7 Trust Enforcement Event; Notice.................... 15
ARTICLE III
ORGANIZATION.............................. 16
SECTION 3.1 Name............................................... 16
SECTION 3.2 Office............................................. 16
SECTION 3.3 Purpose............................................ 16
SECTION 3.4 Authority.......................................... 16
SECTION 3.5 Title to Property of the Trust..................... 17
SECTION 3.6 Powers and Duties of the Regular Trustees.......... 17
SECTION 3.7 Prohibition of Actions by the Trust and
the Trustees....................................... 21
SECTION 3.8 Powers and Duties of the Property Trustee.......... 22
SECTION 3.9 Certain Duties and Responsibilities of
the Property Trustee............................... 24
SECTION 3.10 Certain Rights of Property Trustee................. 26
SECTION 3.11 Delaware Trustee................................... 29
SECTION 3.12 Execution of Documents............................. 29
SECTION 3.13 Not Responsible for Recitals or Issuance
of Trust Securities................................ 29
SECTION 3.14 Duration of Trust.................................. 29
SECTION 3.15 Mergers............................................ 29
i
<PAGE>
<PAGE>
Page
----
ARTICLE IV
SPONSOR................................ 32
SECTION 4.1 Responsibilities of the Sponsor.................... 32
SECTION 4.2 Indemnification and Expenses of the
Trustees........................................... 32
ARTICLE V
TRUSTEES................................ 33
SECTION 5.1 Company's Purchase of Trust Common
Securities............................................
SECTION 5.2 Covenants of the Trust Common
Securities Holder.....................................
ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees................................. 33
SECTION 6.2 Delaware Trustee................................... 34
SECTION 6.3 Property Trustee; Eligibility...................... 34
SECTION 6.4 Qualifications of Regular Trustees and
Delaware Trustee Generally......................... 35
SECTION 6.5 Regular Trustees................................... 35
SECTION 6.6 Delaware Trustee................................... 36
SECTION 6.7 Appointment, Removal and Resignation of
Trustees........................................... 36
SECTION 6.8 Vacancies among Trustees........................... 37
SECTION 6.9 Effect of Vacancies................................ 38
SECTION 6.10 Meetings........................................... 38
SECTION 6.11 Delegation of Power................................ 39
SECTION 6.12 Compensation and Reimbursement..................... 39
SECTION 6.13 Merger, Conversion, Consolidation or
Succession to Business............................. 40
ARTICLE VII
DISTRIBUTIONS............................. 40
SECTION 7.1 Distributions...................................... 40
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES...................... 41
SECTION 8.1 Designation and General Provisions Re-
garding Trust Securities........................... 41
SECTION 8.2 Redemption of Trust Securities..................... 44
ii
<PAGE>
<PAGE>
Page
----
SECTION 8.3 Redemption Procedures.............................. 45
SECTION 8.4 Voting Rights of Trust Preferred Securities........ 47
SECTION 8.5 Voting Rights of Trust Common Securities........... 50
SECTION 8.6 Paying Agent....................................... 52
SECTION 8.7 Listing............................................ 53
SECTION 8.8 Acceptance of Guarantee and Agreements,
Limited Partnership Agreement...................... 53
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST............. 53
SECTION 9.1 Termination of Trust............................... 53
SECTION 9.2 Liquidation Distribution Upon Termina-
tion and Dissolution of the Trust.................. 54
ARTICLE X
TRANSFER OF INTERESTS......................... 55
SECTION 10.1 Transfer of Trust Securities....................... 55
SECTION 10.2 Transfer of Certificates........................... 55
SECTION 10.3 Deemed Security Holders............................ 56
SECTION 10.4 Book Entry Interests............................... 56
SECTION 10.5 Notices to Clearing Agency......................... 57
SECTION 10.6 Appointment of Successor Clearing Agency........... 57
SECTION 10.7 Definitive Trust Preferred Security Certificates... 58
SECTION 10.8 Mutilated, Destroyed, Lost or Stolen
Certificates....................................... 59
ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS......... 59
SECTION 11.1 Liability.......................................... 59
SECTION 11.2 Exculpation........................................ 60
SECTION 11.3 Fiduciary Duty..................................... 60
SECTION 11.4 Indemnification.................................... 61
SECTION 11.5 Outside Businesses................................. 65
ARTICLE XII
ACCOUNTING............................... 66
SECTION 12.1 Fiscal Year........................................ 66
iii
<PAGE>
<PAGE>
Page
----
SECTION 12.2 Certain Accounting Matters......................... 66
SECTION 12.3 Banking............................................ 67
SECTION 12.4 Withholding........................................ 67
ARTICLE XIII
AMENDMENTS AND MEETINGS........................ 68
SECTION 13.1 Amendments......................................... 68
SECTION 13.2 Meetings of the Holders of Trust Securities;
Action by Written Consent.......................... 70
ARTICLE XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE....................... 72
SECTION 14.1 Representations and Warranties of Property
Trustee............................................ 72
SECTION 14.2 Representations and Warranties of Delaware
Trustee............................................ 73
ARTICLE XV
MISCELLANEOUS............................. 74
SECTION 15.1 Notices............................................ 74
SECTION 15.2 Governing Law...................................... 75
SECTION 15.3 Intention of the Parties........................... 75
SECTION 15.4 Headings........................................... 76
SECTION 15.5 Successors and Assigns............................. 76
SECTION 15.6 Partial Enforceability............................. 76
SECTION 15.7 Counterparts....................................... 76
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE.................................... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE.............. A2-1
EXHIBIT B PURCHASE AGREEMENT............................... B-1
iv
<PAGE>
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a) ........................................... 6.3(a)
310(c) ........................................... Inapplicable
311(c) ........................................... Inapplicable
312(a) ........................................... 2.2(a)
312(b) ........................................... 2.2(b)
313 ........................................... 2.3
314(a) ........................................... 2.4
314(b) ........................................... Inapplicable
314(c) ........................................... 2.5
314(d) ........................................... Inapplicable
314(f) ........................................... Inapplicable
315(a) ........................................... 3.9(b)
315(c) ........................................... 3.9(a)
315(d) ........................................... 3.9(a)
316(a) ........................................... Annex I
316(c) ........................................... 3.6(e)
- ----------
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CAPITA PREFERRED TRUST
October __, 1996
AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") dated
and effective as of October __, 1996, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the Holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees and the Sponsor established CAPITA
PREFERRED TRUST (the "Trust"), a trust under the Delaware Business Trust Act
(the "Trust Act") pursuant to a Declaration of Trust dated as of August 28,
1996, (the "Original Declaration") and a Certificate of Trust filed with the
Secretary of State of the State of Delaware on August 29, 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 the Partnership Preferred Securities;
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 ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
<PAGE>
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has
the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits 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 term used in this Agreement and not otherwise defined herein
shall have the meaning ascribed to such term in the Partnership Agreement.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with such specified person provided that with respect to the
Company, "Affiliate" shall be deemed to also include any entity of which at
least 20% of the capital stock is owned by a person that directly or indirectly
controls the Company.
"Affiliate Investment Instrument" has the meaning set forth in
Section 7.1 of the Limited Partnership Agreement.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
2
<PAGE>
<PAGE>
"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 set forth in Section 10.4 of this
Declaration.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. Section 3801 et seq., as it may be
amended from time to time, or any successor legislation.
"Certificate" means a Trust Common Security Certificate or a Trust
Preferred Security Certificate.
"Change in 1940 Act Law" means any 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 with the result that
the Trust is or will be considered an "investment company" which is required to
be registered under the 1940 Act.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Trust Preferred Securities and in whose name or in the name of a nominee
of that organization shall be registered a Global Certificate and which shall
undertake to effect book entry transfers and pledges of beneficial interests in
the Trust Preferred Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of interest in securities
deposited with the Clearing Agency.
"Closing Date" means ____________, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Security Holder of the Trust" means the Company in its
capacity as Holder of the Trust Common Security.
3
<PAGE>
<PAGE>
"Company" means AT&T Capital Corporation, successor by merger to
Antigua Acquisition Corporation.
"Company Indemnified Person" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, director, shareholder, member, partner, employee,
representative or agent of the Trust or its Affiliates.
"Compounded Distributions" has the meaning set forth in Section
7.1(a) of this Declaration.
"Corporate Trust Office" means the office of the Property Trustee at
which the corporate trust business of the Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Agreement is located at 153 West 53rd Street, New York, New
York 10019.
"Covered Person" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or (ii) the
Trust's Affiliates; and (b) any Holder of Trust Securities.
"Definitive Trust Preferred Security Certificates" has the meaning
set forth in Section 10.4 of this Declaration.
"Delaware Trustee" has the meaning set forth in Section 6.2 of this
Declaration.
"Distribution" has the meaning set forth in Section 7.1(a) of this
Declaration.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in Section
11.4(b) of this Declaration.
"Fiscal Year" has the meaning set forth in Section 12.1 of this
Declaration.
"General Partner" means the AT&T Capital Corporation in its capacity
as the general partner of the Partnership, its permitted successors, or any
successor general partner in the
4
<PAGE>
<PAGE>
Partnership admitted as such pursuant to the Limited Partnership Agreement.
"Global Certificate" has the meaning set forth in Section 10.4 of
this Declaration.
"Holder" means a Person in whose name a Certificate representing a
Trust 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.
"Initial Debentures" has the meaning set forth in Section 7.1(b) of
the Limited Partnership Agreement.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
investment company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Company" means an investment company as defined in the
1940 Act.
"Investment Guarantee" means any guarantee by the Company with
respect to (1) payment of interest, principal and other payment terms of
Affiliate Investment Instruments that are debt securities of an Investment
Affiliate and (2) the payment of dividends, distributions and other payment
terms of Affiliate Investment Instruments that are preferred or preference stock
of an Investment Affiliate when, as and if declared by such Investment
Affiliate.
"Legal Action" has the meaning set forth in Section 3.6(h) of this
Declaration.
"Limited Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Capita Preferred Funding L.P. dated as of
October __, 1996.
"List of Holders" has the meaning set forth in Section 2.2(a) of
this Declaration.
"Majority in liquidation amount of the Trust Securities" means,
except as provided in the terms of the Trust Preferred Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities voting together
as a single class or, as the context may require, Holders of outstanding Trust
5
<PAGE>
<PAGE>
Preferred Securities or Holders of outstanding Trust 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
Trust Securities of the relevant class.
"Ministerial Action" means, a ministerial action (such as filing a
form or making an election or pursuing some other similar reasonable measure)
where the taking of such action does not involve a material cost.
"Nasdaq" means the National Association of Securities Dealers
Automated Quotation System.
"1940 Act" means the Investment Company Act of 1940, as amended from
time to time, or any successor legislation.
"Officers' Certificate" means, with respect to any Person (who is
not an individual), a certificate signed by two authorized officers of such
Person. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each 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.
"Partnership" means Capita Preferred Funding L.P., a Delaware
limited partnership formed pursuant to the Limited Partnership Agreement.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of the Limited Partnership Agreement.
6
<PAGE>
<PAGE>
"Partnership Guarantee" means the Partnership Guarantee Agreement
dated as of October __, 1996, by the Company in favor of the Partnership
Preferred Security Holders with respect to the Partnership Preferred Securities,
as amended or supplemented from time to time.
"Partnership Preferred Securities" has the meaning set forth in
Section 1.1 of the Limited Partnership Agreement.
"Partnership Special Event" has the meaning set forth in Section 1.1
of the Limited Partnership Agreement.
"Payment Amount" has the meaning set forth in Section 7.1(a) of this
Declaration.
"Paying Agent" has the meaning set forth in Section 3.8(g) of this
Declaration.
"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 Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, or each case in accordance
with the rules of such Clearing Agency).
"Property Account" has the meaning set forth in Section 3.8(c) of
this Declaration.
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3 of this Declaration.
"Pro Rata" means, in reference to any distributions on or
redemptions of Trust Securities or the distribution or any other payment with
respect to Trust Securities in connection with a Trust Special Event, pro rata
to each Holder of Trust Securities according to the aggregate liquidation amount
of the Trust Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Trust Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
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"Redemption Price" has the meaning set forth in Section 8.2(a) of
this Declaration.
"Regular Trustee" has the meaning set forth in Section 6.1 of this
Declaration.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any 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 officer within the Corporate Trust Office of the Property 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 Property Trustee customarily performing functions similar to those
performed by any of the above designated officers, who has direct responsibility
for the administration of the Trust, 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 1940 Act.
"Securities Act" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"Special Representative" has the meaning set forth in Section 6.2(i)
of the Limited Partnership Agreement.
"Sponsor" means the Company or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in Section
6.7(b) of this Declaration.
"Successor Entity" has the meaning set forth in Section 3.15 of this
Declaration.
"Successor Property Trustee" has the meaning set forth in Section
6.7(b) of this Declaration.
"Successor Trust Securities" has the meaning set forth in Section
3.15 of this Declaration.
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"Super Majority" has the meaning set forth in Section 2.6(a)(ii)
of this Declaration.
"Tax Action" means (a) an amendment to, change in or announced
proposed change in the laws (or any regulations thereunder) of the United States
or any political subdivision or taxing authority thereof or therein, (b) a
judicial decision interpreting, applying or clarifying such laws or regulations,
(c) an administrative pronouncement or action that represents an official
position (including a clarification of an official position) of the governmental
authority or regulatory body making such administrative pronouncement or taking
such action, or (d) a threatened challenge asserted in connection with an audit
of the Company or any of its subsidiaries, the Partnership, or the Trust, or a
threatened challenge asserted in writing against any other taxpayer that has
raised capital through the issuance of securities that are substantially similar
to the Debentures, the Partnership Preferred Securities, or the Trust Preferred
Securities, which amendment or change is adopted or which decision,
pronouncement or proposed change is announced or which action, clarification or
challenge occurs on or after the date of the prospectus related to the issuance
of the Trust Preferred Securities.
"10% in liquidation amount of the Trust Securities" means, except as
provided in the terms of the Trust Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Trust Securities voting together as a
single class or, as the context may require, Holders of outstanding Trust
Preferred Securities or Holders of outstanding Trust 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
Trust 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 Department, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Common Security" has the meaning set forth in Section 8.1 of
this Declaration.
"Trust Common Security Certificate" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
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"Trust Common Securities Guarantee" means the Trust Common
Securities Guarantee Agreement dated as of October __, 1996, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Common
Securities.
"Trust Dissolution Tax Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters to the effect
that there has been a Trust Tax Event.
"Trust Enforcement Event" means the occurrence, at any time, of (i)
arrearages on distributions on the Trust Preferred Securities that shall exist
for six quarterly distribution periods, (ii) a default by the Company in respect
of any of its obligations under the Trust Guarantee or (iii) a Partnership
Enforcement Event (as defined in the Limited Partnership Agreement).
"Trust Guarantees" means the Trust Common Securities Guarantee and
The Trust Preferred Securities Guarantee, collectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Investment Company Event" means that the Company shall have
requested and received and shall have delivered to the Regular Trustees an
opinion of nationally recognized independent legal counsel experienced in such
matters to the effect that as a result of a Change in 1940 Act Law, the Trust is
or will be considered an "investment company" which is required to be registered
under the 1940 Act.
"Trust Liquidation" has the meaning set forth in Section 9.2(a) of
this Declaration.
"Trust Preferred Securities Guarantee" has the meaning set forth in
Section 1.1 of the Limited Partnership Agreement.
"Trust Liquidation Distribution" has the meaning set forth in
Section 9.2(a) of this Declaration.
"Trust Preferred Security" has the meaning set forth in Section 8.1
of this Declaration.
"Trust Preferred Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency
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Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Trust Preferred Security Certificate" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"Trust Redemption Tax Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters that there has
been a Trust Tax Event, and following such Trust Tax Event there is more than an
insubstantial risk that interest payable by one or more of the Investment
Affiliates with respect to the Debentures is not, or will not be deductible by
an Investment Affiliate for United States federal income tax purposes even if
the Partnership Preferred Securities were distributed to the Holders of the
Trust Securities in liquidation of such Holders' interests in the Trust.
"Trust Securities" means the Trust Common Securities and the Trust
Preferred Securities.
"Trust Special Event" means a Trust Tax Event or a Trust Investment
Company Event.
"Trust Tax Event" means that there has been a Tax Action which
relates to any of the items described in (i) through (iii) below, and that there
is more than an insubstantial risk that (i) the Trust is, or will be subject to
United States federal income tax with respect to income accrued or received on
the Partnership Preferred Securities, (ii) the Trust is, or will be subject to
more than a de minimis amount of other taxes, duties or other governmental
charges or (iii) interest payable by one or more of the Investment Affiliates
with respect to the Debentures is not, or will not be, deductible by such
Investment Affiliate for United States federal income tax purposes.
"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.
ARTICLE II
TRUST INDENTURE ACT
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SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to ___,
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 Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Trust Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the Trust
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the 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 Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
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Within 60 days after May 1 of each year, the Property Trustee shall
provide to the Holders of the Trust Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form and in
the manner provided by Section 313 of the Trust Indenture Act. The Property
Trustee shall also comply with the requirements of Section 313(d) of the Trust
Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
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 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in liquidation amount of Trust
Preferred Securities may, by vote, on behalf of the Holders of all of the Trust
Preferred Securities, waive any past Trust Enforcement Event in respect of the
Trust Preferred Securities and its consequences, provided that, if the
underlying event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Preferred Securities Guarantee
or the Limited Partnership Agreement, the Trust Enforcement Event under
this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than a
Majority in liquidation amount of the Trust Preferred Securities to be
waived under the Trust Preferred Securities Guarantee or the Partnership
Preferred Securities to be waived under the Limited Partnership Agreement
(a
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"Super Majority"), the Trust Enforcement Event under this Declaration may
only be waived by the vote of the Holders of at least the relevant Super
Majority in liquidation amount of the Trust Preferred Securities.
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
Trust Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Trust Enforcement Event with respect
to the Trust Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration, but no such waiver shall extend to
any subsequent or other default or Trust Enforcement Event with respect to the
Trust Preferred Securities or impair any right consequent thereon. Any waiver by
the Holders of the Trust Preferred Securities of Trust Enforcement Events with
respect to the Trust Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Trust Common Securities of any such Trust
Enforcement Event with respect to the Trust Common Securities for all purposes
of this Declaration without any further act, vote, or consent of the Holders of
the Trust Common Securities.
(b) The Holders of a Majority in liquidation amount of the Trust
Common Securities may, by vote, on behalf of the Holders of all of the Trust
Common Securities, waive any past Trust Enforcement Event with respect to the
Trust Common Securities and its consequences, provided that, if the underlying
event of default or Partnership Enforcement Event:
(i) is not waivable under the Trust Common Securities Guarantee or
the Limited Partnership Agreement, except where the Holders of the Trust
Common Securities are deemed to have waived such Trust Enforcement Event
under this Declaration as provided below in this Section 2.6(b), the Trust
Enforcement Event under this Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of a Super Majority
to be waived, except where the Holders of the Trust Common Securities are
deemed to have waived such Trust Enforcement Event under the Declaration
as provided below in this Section 2.6(b), the Trust Enforcement Event
under this Declaration may only be waived by the vote of the Holders of at
least the relevant Super Majority in liquidation amount of the Trust
Common Securities;
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provided further, each Holder of Trust Common Securities will be deemed to have
waived any such Trust Enforcement Event and all Trust Enforcement Events with
respect to the Trust Common Securities and its consequences until all Trust
Enforcement Events with respect to the Trust Preferred Securities have been
cured, waived or otherwise eliminated, and until such Trust Enforcement Events
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 Trust Preferred
Securities and only the Holders of the Trust Preferred Securities will have the
right to direct the Property Trustee in accordance with the terms of the Trust
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 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 Trust 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 Trust
Enforcement Event with respect to the Trust 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 Trust Enforcement
Event with respect to the Trust Common Securities or impair any right consequent
thereon.
(c) A waiver of Partnership Enforcement Events under the Limited
Partnership Agreement by the Property Trustee at the direction of the Holders of
the Trust Preferred Securities constitutes a waiver of the corresponding Trust
Enforcement Event 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 Trust Securities, as permitted by the
Trust Indenture Act.
SECTION 2.7 Trust Enforcement Event; Notice.
The Property Trustee shall, within 90 days after the occurrence of a
Trust Enforcement Event, transmit by mail, first class postage prepaid, to the
Holders of the Trust Securities, notices of all defaults with respect to the
Trust Securities actually known to a Responsible Officer of the Property
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7 being hereby defined
to be defaults as defined in the Trust Guarantees or the Limited Partnership
Agreement, 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
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interest on any of the Affiliate Investment Instruments or in the payment of any
sinking fund installment established for the Affiliate Investment Instruments,
the Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Trust Securities.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Capita Preferred Trust," as such name may be
modified from time to time by the Regular Trustees following written notice to
the Holders of Trust 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 AT&T Capital
Corporation, 44 Whippany Road, Morristown, New Jersey 07962. On ten Business
Days written notice to the Holders of Trust 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 Trust Securities and to use the proceeds from such sale to acquire the
Partnership Preferred Securities, and (b) except as otherwise limited herein, to
engage in only those other activities necessary, or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
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. An
action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Proper-
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ty Trustee on behalf of the Trust in accordance with its powers shall constitute
the act of and serve to bind the Trust. In dealing with the Trustees acting on
behalf of the Trust, no person shall be required to inquire into the authority
of the Trustees to bind the Trust. Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Partnership
Preferred Securities and the Property 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 ownership interest in the assets
of the Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Trust Preferred Securities and the Trust
Common Securities in accordance with this Declaration; provided, however,
that the Trust may issue no more than one series of Trust Preferred
Securities and no more than one series of Trust Common Securities, and,
provided further, that there shall be no interests in the Trust other than
the Trust Securities, and the issuance of Trust Securities shall be
limited to a one-time, simultaneous issuance of both Trust Preferred
Securities and Trust Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Trust Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration
statement on Form S-3 prepared by the Sponsor, including any
amendments thereto, pertaining to the Trust Preferred Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the Trust
Preferred Securities in any
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State in which the Sponsor has determined to qualify or register
such Trust Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to the New York Stock Exchange, Inc. or any other national
stock exchange or the Nasdaq Stock Market's National Market for
listing upon notice of issuance of any Trust Preferred Securities;
(iv) 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 Trust Preferred
Securities, the Partnership Preferred Securities, the Trust
Preferred Securities Guarantee and the Partnership Guarantee under
Section 12(b) of the Exchange Act; and
(v) execute and enter into an underwriting agreement
providing for the sale of the Trust Preferred Securities and perform
the duties and obligations of the Trust thereunder;
(c) to acquire the Partnership Preferred Securities with the
proceeds of the sale of the Trust Preferred Securities and the Trust
Common Securities; provided, however, that the Regular Trustees shall
cause legal title to the Partnership Preferred Securities to be held of
record in the name of the Property Trustee for the benefit of the Holders
of the Trust Preferred Securities and the Holders of Trust Common
Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Trust 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 Trust Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and
with respect to, for the purposes of Section 316(c) of the Trust Indenture
Act, Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Trust Preferred Securities and Holders
of Trust Common Securities as to such actions and applicable record dates;
(f) to give prompt written notice to the Holders of
the Trust Securities of any notice received from the Part-
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nership of the General Partner's election not to make a current, quarterly
distribution on the Partnership Preferred Securities under the Limited
Partnership Agreement;
(g) to take all actions and perform such duties as may be required
of the Regular Trustees pursuant to the terms of the Trust Securities;
(h) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(f), the Property
Trustee has the exclusive power to bring such Legal Action;
(i) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors,
and consultants and pay reasonable compensation for such services;
(j) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(k) 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;
(l) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
(m) to act as, or appoint another Person to act as, registrar and
transfer agent for the Trust Securities;
(n) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Trust Preferred Securities or to enable the Trust to effect the
purposes for which the Trust was created;
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(p) to take any action, or to take no action, not inconsistent with
this Declaration or with applicable law, that the Regular Trustees
determine in their discretion to be necessary or desirable in carrying out
the activities of the Trust as set out in this Section 3.6, including, but
not limited to:
(i) causing the Trust not to be deemed to be an Investment
Company required to be registered under the 1940 Act; and
(ii) taking no action which would be reasonably likely to
cause the Trust to be classified as an association or a publicly
traded partnership taxable as a corporation for United States
federal income tax purposes;
provided that such action does not adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
the Trust to be duly prepared and filed by the Regular Trustees, on behalf
of the Trust.
The Regular Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Regular Trustees shall not take any
action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Sponsor pursuant to Section 10.1.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property
Trustee) shall cause the Trust not to, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Property Trustee) shall cause the Trust not to:
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(i) invest any proceeds received by the Trust from holding the
Partnership Preferred Securities, but shall distribute all such proceeds
to Holders of Trust Securities pursuant to the terms of this Declaration
and of the Trust Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness or acquire any
securities other than the Partnership Preferred Securities;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Trust Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Trust Securities;
(vii) other than as set forth herein, (A) cause the Special
Representative to direct the time, method and place of conducting any
proceeding for any remedy available to the Special Representative or
exercising any trust or power conferred upon the Special Representative
with respect to the Partnership Preferred Securities, the Affiliate
Investment Instruments, and the Investment Guarantees, (B) cause the
Special Representative to waive any past default that is waivable under
the Limited Partnership Agreement, the Affiliate Investment Instruments or
the Investment Guarantees, (C) cause the Special Representative to
exercise any right to rescind or annul any declaration that the principal
of, or other amounts in respect of, any Affiliate Investment Instruments
is due and payable or (D) consent to any amendment, modification or
termination of the Limited Partnership Agreement or the Partnership
Preferred Securities where such consent shall be required; and
(viii) other than in connection with the liquidation of the Trust
pursuant to a Trust Special Event or upon redemption of all the Trust
Securities, file a certificate of cancellation of the Trust.
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SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Partnership Preferred Securities 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 Trust Securities. The right, title and interest of
the Property Trustee to the Partnership Preferred Securities shall vest
automatically in each Person who may hereafter be appointed as Property Trustee
in accordance with Section 6.7. Such vesting and cessation of title shall be
effective whether or not conveyancing documents with regard to the Partnership
Preferred Securities have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Partnership Preferred Securities 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 Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the Holders of the Trust
Securities and, upon the receipt of payments of funds made in respect of
the Partnership Preferred Securities held by the Property Trustee, deposit
such funds into the Property Account and make payments to the Holders of
the Trust Preferred Securities and Holders of the Trust Common Securities
from the Property Account in accordance with Section 7.1. Funds in the
Property Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property Account shall be an account that is
maintained with a banking institution authorized to exercise corporate
trust powers and having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or state
authority;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Trust Preferred Securities and
the Trust Common Securities to the extent the Partnership Preferred
Securities are redeemed; and
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Trust Securities, engage in
such ministerial activities as shall be necessary or appropriate to effect
the distribution
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of the Partnership Preferred Securities to Holders of Trust Securities
upon the occurrence of a Trust Special Event.
(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 Trust Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with a Trust Enforcement Event of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act.
(f) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a Holder of Partnership Preferred
Securities and, if a Trust Enforcement Event occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Trust Securities,
enforce its rights as Holder of the Partnership Preferred Securities subject to
the rights of the Holders pursuant to the terms of such Trust Securities.
(g) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Trust Securities and any
such Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any time
by the Property Trustee.
(h) The Property Trustee shall continue to serve as a Trustee until
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Trust Securities pursuant to the
terms of the Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.7.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the
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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 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Property Trustee. In case a Trust Enforcement Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event and after
the curing or waiving of all such Trust Enforcement Events that may have
occurred:
(A) the duties and obligations of the Property Trustee
shall be determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable except for
the performance of such duties and obligations as are specifically
set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the Property
Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Property
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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;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) subject to the requirement of the Property Trustee receiving a
tax opinion as set forth in Section 8.4(d) or 8.5(c), as the case may be,
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 Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, 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;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Partnership Preferred
Securities and the Property Account shall be to deal with such property in
a similar manner as the Property Trustee deals with similar property for
its own account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Partnership Preferred Securities or the payment of any taxes or
assessments levied thereon or in connection therewith;
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(vii) money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and
except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee
be liable for any default or misconduct of the Regular Trustees or the
Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
acting on behalf of the Trust 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 conclusively
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Sponsor or the Regular Trustees;
(iv) the 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 or other experts
and the advice or opinion of such counsel and experts with respect to
legal matters or advice within
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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 (a) such Holder shall have
provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property 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 and (b)
the Property Trustee has obtained the legal opinions, if any, required by
Section 8.4(b) or 8.5(c), as the case may be, of this Agreement; provided,
that, nothing contained in this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon the occurrence of a Trust Enforcement
Event, 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, 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, custodians, nominees 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 Trust Securities,
and the signature of the Property Trustee
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or its agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the authority
of the Property Trustee to so act or as to its compliance with any of the
terms and provisions of this Declaration, both of which shall be
conclusively evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the
Trust Securities which instructions may only be given by the Holders of
the same proportion in liquidation amount of the Trust Securities as would
be entitled to direct the Property Trustee under the terms of the Trust
Securities in respect of such remedy, right or action, (ii) may refrain
from enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such instructions; provided,
however, that the Property Trustee shall not be required to take any
action unless it shall have received such legal opinions, if any, required
by Sections 8.4(d) or 8.5(c), as the case may be, of this Agreement; and
(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.
(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 3.11 Delaware Trustee.
Notwithstanding any provision of this Declaration other than Section
6.2, 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
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Property Trustee described in this Declaration. Except as set forth in Section
6.2, 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.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except as
otherwise required by the Business Trust Act, any Regular Trustee is authorized
to execute on behalf of the Trust any documents that the Regular Trustees have
the power and authority to cause the Trust to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by or on behalf of a majority
of the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Trust Securities.
The recitals contained in this Declaration and the Trust 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 Trust Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article
VIII hereof, shall have perpetual existence.
SECTION 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Trust 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:
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(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 Trust Securities; or
(B) substitutes for the Trust Preferred Securities other
securities having substantially the same terms as the Trust
Preferred Securities (the "Successor Trust Securities") so long as
the Successor Trust Securities rank the same as the Trust Preferred
Securities rank with respect to Distributions, assets and payments
upon liquidation, redemption and otherwise;
(ii) the Company expressly acknowledges a trustee of the Successor
Entity that possesses the same powers and duties as the Property Trustee
as the Holder of the Partnership Preferred Securities;
(iii) the Trust Preferred Securities or any Successor Trust
Securities are listed, or any Successor Trust Securities will be listed
upon notification of issuance, on any national securities exchange or with
another organization on which the Trust Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Trust Preferred Securities (including any Successor Trust
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 Trust Preferred Securities (including any Successor Trust Securities)
in any material respect;
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) the Company guarantees the obligations of such Successor
Entity under the Successor Trust Securities at least to the extent
provided by the Trust Guarantees; and
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of
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a nationally recognized independent counsel to the Trust 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 Trust Preferred Securities (including any
Successor Trust Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new entity);
and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be
required to register as an Investment Company under the 1940 Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will not be
classified as an association or a publicly traded partnership
taxable as a corporation for United States federal income tax
purposes; and
(D) following such merger, consolidation, amalgamation or
replacement, the Partnership will not be classified as an
association or a publicly traded partnership taxable as a
corporation for United States federal income tax purposes.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Trust Preferred
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes.
ARTICLE IV
SPONSOR
SECTION 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
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(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Trust Preferred
Securities, including any amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Trust Preferred Securities
and to do any and all such acts, other than actions which must be taken by
the Trust, and advise the Trust of actions it must take, and prepare for
execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing, Partnership Preferred Securities, the Trust
Preferred Securities Guarantee and the Partnership Guarantee upon notice
of issuance of any Trust 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
Trust Preferred Securities, the Partnership Preferred Securities, the
Trust Preferred Securities Guarantee, and the Partnership Guarantee under
Section 12(b) of the Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of an underwriting agreement and any
pricing agreement providing for the sale of the Trust Preferred
Securities.
SECTION 4.2 Indemnification and Expenses of the Trustee
The Partnership agrees, and to the extent the Partnership fails to
do so, the Sponsor agrees to indemnify the Property Trustee and the Delaware
Trustee for, and to hold each of them harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Property
Trustee or the Delaware Trustee, as the case may be, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending either of them against
any claim or liability in connection with the exercise or performance of any of
their respective powers or duties hereunder; the provisions of this Section 4.2
shall survive the resignation or removal of the
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Delaware Trustee or the Property Trustee or the termination of this Declaration.
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1 Company's Purchase of Trust Common Securities.
On the Closing Date the Company will purchase all of the Trust
Common Securities issued by the Trust, for an amount at least equal to 3% of the
capital of the Trust, at the same time as the Trust Preferred Securities are
sold.
SECTION 5.2 Covenants of the Trust Common Securities Holder.
For so long as the Trust Preferred Securities remain outstanding,
the Company will covenant (i) to maintain directly 100 percent ownership of the
Trust Common Securities, (ii) to cause the Trust to remain a statutory business
trust and not to voluntarily dissolve, wind up, liquidate, or be terminated,
except as permitted by this Declaration, (iii) to use its commercially
reasonable efforts to ensure that the Trust will not be an investment company
for purposes of the 1940 Act, and (iv) to take no action which would be
reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
ARTICLE VI
TRUSTEES
SECTION 6.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Trust Securities, the
Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) after the issuance of any Trust Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
Majority in liquidation amount of the Trust Common Securities voting as a
class at a meeting of the Holders of the Trust Common Securities;
provided, however, that the number of Trustees shall in no event be less
than
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three (3); provided further that (1) if required by the Business Trust
Act, one Trustee is the Delaware Trustee; (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the
Company (each, a "Regular Trustee"); and (3) one Trustee shall be the
Property Trustee for so long as this Declaration is required to qualify as
an indenture under the Trust Indenture Act, and such Property Trustee may
also serve as Delaware Trustee if it meets the applicable requirements.
SECTION 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the 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 (in which case
Section 3.11 shall have no application).
SECTION 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section
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6.3(a)(ii), the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 6.3(a), the Property Trustee shall immediately resign in
the manner and with the effect set forth in Section 6.7(c).
(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 Trust Common Securities (as if it were
the obligor referred to in Section 310(b) of the Trust Indenture Act) shall in
all respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Trust Guarantee shall be deemed to be specifically described
in this Declaration for purposes of clause (i) of the first provision contained
in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The First National Bank of Chicago, N.A.
SECTION 6.4 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 6.5 Regular Trustees.
The initial Regular Trustees shall be:
Robert J. Ingato
Glenn A. Votek
Edward M. Dwyer
(a) Except as expressly set forth in this Declaration and except if
a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
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(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6(b)(i), including any amendments thereto, shall be signed by or on
behalf of a majority of the Regular Trustees.
SECTION 6.6 Delaware Trustee.
The initial Delaware Trustee shall be:
First Chicago Delaware Inc.
SECTION 6.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 6.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Trust Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Trust Securities, by vote of the
Holders of a Majority in liquidation amount of the Trust Common Securities
voting as a class at a meeting of the Holders of the Trust Common
Securities.
(b)(i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 6.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 6.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 6.2 and 6.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death,
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removal or resignation. Any Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing signed by the
Trustee and delivered to the Sponsor and the Trust, which resignation shall take
effect upon such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts as the 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 Trust Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Trust Common Securities shall use their best
efforts to promptly appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
6.7 within 60 days after delivery to the Sponsor and the Trust of an instrument
of resignation, the resigning Property Trustee or Delaware Trustee, 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.
(f) 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.
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SECTION 6.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is
increased pursuant to Section 6.1, 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 6.7.
SECTION 6.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 6.7, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
SECTION 6.10 Meetings.
If there is more than one Regular Trustee, meetings of the Regular
Trustees shall be held from time to time upon the call of any Regular Trustee.
Regular meetings of the Regular Trustees may be held at a time and place fixed
by resolution of the Regular Trustees. Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Regular
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
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without a meeting by the unanimous written consent of the Regular Trustees.
Notwithstanding the foregoing, any and all actions of the Regular Trustees may
be taken by the unanimous written consent of all Regular Trustees.
SECTION 6.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate from time to
time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 6.12 Merger, Conversion, Consolidation or Succession to Business.
Any corporation 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 resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation 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
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VII
DISTRIBUTIONS
SECTION 7.1 Distributions.
(a) Holders of Trust Securities shall be entitled to receive
cumulative cash distributions at the rate per annum of % of the stated
liquidation amount of $25 per Trust Security,
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calculated on the basis of a 360-day year consisting of twelve 30-day months.
For any period shorter than a full 90-day quarter, distributions will be
computed on the basis of the actual number of days elapsed in such 90-day
quarter. Distributions shall be made on the Trust Preferred Securities and the
Trust Common Securities on a Pro Rata basis. Distributions on the Trust
Securities shall, from the date of original issue, accrue and be cumulative and
shall be payable quarterly only to the extent that the Trust has funds available
for the payment of such Distributions in the Property Account. Distributions not
paid on the scheduled payment date will accumulate and compound quarterly at the
rate of __% per annum ("Compounded Distributions"). "Distributions" shall mean
ordinary cumulative distributions in respect of each Fiscal Period together with
any Compounded Distributions. If and to the extent that the Partnership makes a
distribution on the Partnership Preferred Securities held by the Property
Trustee or the Company makes a payment under the Partnership Guarantee (the
amount of any such partnership distribution, including any compounded
partnership distributions or guarantee payment being a "Payment Amount"), the
Trust shall and the Property Trustee is directed, to the extent funds are
available for that purpose, to make a Pro Rata Distribution of the Payment
Amount to Holders.
(b) Distributions on the Trust Securities will be cumulative, will
accrue from the date of initial issuance and will be payable quarterly in
arrears on each March 31, June 30, September 30 and December 31, commencing
December 31, 1996, when, as and if available for payment, by the Property
Trustee, except as otherwise described below. If Distributions are not paid when
scheduled, the accrued Distributions shall be paid to the Holders of record of
Trust Securities as they appear on the books and records of the Trust on the
record date as determined under Section 7.1(d) below.
(c) Amounts available to the Trust for distribution to the Holders
of the Trust Securities will be limited to payments received by the Trust from
the Partnership on the Partnership Preferred Securities or from the Company on
the Partnership Guarantees paid by the Company to the Trust. If the Property
Trustee, as the holder of the Partnership Preferred Securities for the benefit
of the Holders of the Trust Securities, receives notice of any determination by
the Partnership not to pay distributions on such Partnership Preferred
Securities, the Property Trustee shall give notice of such determination to the
Holders.
(d) Distributions on the Trust Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant
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record date, as long as the Trust Preferred Securities remain in book-entry only
form, will be one Business Day prior to the relevant payment dates. Such
distributions will be paid through the Property Trustee who will hold amounts
received in respect of the Partnership Preferred Securities in the Property
Account for the benefit of the Holders of the Trust Securities. In the event
that the Trust Securities do not remain in book-entry only form, the relevant
record dates shall be the 15th of the month of the relevant payment dates. In
the event that any date on which distributions are payable on the Trust
Securities is not a Business Day, payment of the distribution payable on such
date will be made on the next succeeding day which is a Business Day (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.
ARTICLE VIII
ISSUANCE OF TRUST SECURITIES
SECTION 8.1 Designation and General Provisions Regarding Trust Securities.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of preferred securities representing undivided beneficial ownership
interests in the assets of the Trust (the "Trust Preferred Securities") and one
class of common securities representing undivided beneficial ownership interests
in the assets of the Trust (the "Trust Common Securities") as follows:
(i) Trust Preferred Securities. [________________] Trust Preferred
Securities of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of [_______________] dollars
($[_________________]) and a liquidation amount with respect to the assets
of the Trust of $25 per preferred security, are hereby designated for the
purpose of identification only as ___% Trust Originated Preferred
Securities'SM' (the "Trust Preferred Securities"). The Trust Preferred
Security Certificates evidencing the Trust Preferred Securities shall be
substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Trust Preferred Securities are listed.
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(ii) Trust Common Securities. [________________] Trust Common
Securities of the Trust with an aggregate liquidation amount with respect
to the assets of the Trust of [_______________] dollars
($[_______________]) and a liquidation amount with respect to the assets
of the Trust of $25 per common security, are hereby designated for the
purposes of identification only as ___% Trust Common Securities (the
"Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities"). The Trust Common Security
Certificates evidencing the Trust 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.
(b) Except as provided in Section 8.2(b) of this Declaration, the
Trust Preferred Securities rank pari passu and payment thereon shall be made Pro
Rata with the Trust Common Securities. The Trust shall issue no securities or
other interests in the assets of the Trust other than the Trust Preferred
Securities and the Trust Common Securities.
(c) Any Regular Trustee shall sign the Trust Securities for the
Trust by manual or facsimile signature. In case any Regular Trustee of the Trust
who shall have signed any of the Trust Securities shall cease to be a Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Trust Security, shall be the Regular Trustees of the Trust,
although at the date of the execution and delivery of the Declaration any such
person was not such a Regular Trustee. Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Trust Securities may be listed, or to conform to
usage.
A Trust Security shall not be valid until authenticated by the
manual signature of an authorized officer of the Property Trustee. Such
signature shall be conclusive evidence that the Trust Security has been
authenticated under this Declaration.
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Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Trust Securities for original issue as
set forth in paragraph 5 of the Securities. The aggregate number of Preferred
Securities outstanding at any time shall not exceed the number set forth in the
Terms of the Trust Securities.
The Property Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Trust Securities. An authenticating agent may
authenticate Trust Preferred Securities whenever the Property Trustee may do so.
Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate of the
Sponsor.
(d) The consideration received by the Trust for the issuance of the
Trust Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e) Upon issuance of the Trust Securities as provided in this
Declaration, the Trust Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable, subject to Section 11.1 with respect to
the Trust Common Securities.
(f) Every Person, by virtue of having become a Holder or a Trust
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 8.2 Redemption of Trust Securities.
(a) Upon a purchase of the Partnership Preferred Securities by the
Partnership upon redemption or otherwise, the proceeds from such purchase shall
be simultaneously applied Pro Rata to redeem Trust Securities having an
aggregate liquidation amount equal to the Partnership Preferred Securities so
purchased or redeemed for an amount equal to $25 plus an amount equal to accrued
and unpaid Distributions, including any Compounded Distributions thereon through
the date of the redemption or such lesser amount as shall be received by the
Trust in respect of the Partnership Preferred Securities so purchased or
redeemed (the "Redemption Price"). Holders will be given not less than 30 nor
more than 60 days notice of such redemption.
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(b) If fewer than all the outstanding Trust Securities are to be so
redeemed, the Trust Common Securities and the Trust Preferred Securities will be
redeemed Pro Rata and the Trust Preferred Securities to be redeemed will be
redeemed as described in Section 8.3 below.
(c) If, at any time, a Trust Special Event shall occur and be
continuing, the Regular Trustees shall, unless the Partnership Preferred
Securities are redeemed in the limited circumstances described below, within 90
days following the occurrence of such Trust Special Event elect to either (i)
dissolve the Trust upon not less than 30 nor more than 60 days' notice with the
result that, after satisfaction of creditors, if any, of the Trust, Partnership
Preferred Securities with an aggregate principal amount equal to the aggregate
stated liquidation amount of, with a distribution rate identical to the
distribution rate of, and accrued and unpaid distributions equal to accrued and
unpaid distributions on, and having the same record date for payment as, the
Trust Preferred Securities and the Trust Common Securities outstanding at such
time would be distributed on a Pro Rata basis to the Holders of the Trust
Preferred Securities and the Trust Common Securities in liquidation of such
Holders' interests in the Trust; provided, however, that if at the time there is
available to the Trust the opportunity to eliminate, within such 90-day period,
the Trust Special Event by taking some ministerial action, such as filing a form
or making an election, or pursuing some other similar reasonable measure which
in the sole judgment of the Sponsor has or will cause no adverse effect on the
Trust, the Partnership, the Sponsor or the Holders of the Trust Securities and
will involve no material cost, the Trust will pursue such measure in lieu of
dissolution or (ii) cause the Trust Preferred Securities to remain outstanding,
provided that in the case of this clause (ii), the Sponsor shall pay any and all
expenses incurred by or payable by the Trust attributable to the Trust Special
Event. Furthermore, if in the case of the occurrence of a Trust Tax Event, the
Regular Trustees have received a Trust Redemption Tax Opinion, then the General
Partner shall have the right, within 90 days following the occurrence of such
Trust Tax Event, to elect to cause the Partnership to redeem the Partnership
Preferred Securities in whole (but not in part) for cash upon not less than 30
nor more than 60 days' notice and promptly following such redemption, the Trust
Securities will be redeemed by the Trust at the Redemption Price.
(d) If the Partnership Preferred Securities are distributed to the
Holders of the Trust Preferred Securities, the Sponsor will use its best efforts
to cause the Partnership Preferred Securities to be listed on the New York Stock
Exchange
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or on such other national securities exchange or similar organization as the
Trust Preferred Securities are then listed or quoted.
(e) On the date fixed for any distribution of Partnership Preferred
Securities, upon dissolution of the Trust, (i) the Trust Preferred Securities
and the Trust Common Securities will no longer be deemed to be outstanding and
(ii) certificates representing Trust Securities will be deemed to represent the
Partnership Preferred Securities having an aggregate principal amount equal to
the stated liquidation amount of, and bearing accrued and unpaid distributions
equal to accrued and unpaid distributions on, such Trust Securities until such
certificates are presented to the Sponsor or its agent for transfer or
reissuance.
SECTION 8.3 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of
Partnership Preferred Securities in exchange for, the Trust Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to each
Holder of Trust 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
Partnership Preferred Securities. For purposes of the calculation of the date of
redemption or exchange and the dates on which notices are given pursuant to this
Section 8.3, 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 Trust Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Trust 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.
(b) In the event that fewer than all the outstanding Trust
Securities are to be redeemed, the Trust Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Trust Securities, provided that, in
respect of Preferred Securities registered in the name of and held of record by
DTC or its nominee (or any successor Clearing Agency or its nominee) or any
nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such agency or
nominee.
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(c) If Trust Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Partnership Preferred Securities are redeemed as set out in this Section 8.3
(which notice will be irrevocable), then (A) while the Trust Preferred
Securities are in book-entry only form, by 12:00 noon, New York City time, on
the redemption date, the Property Trustee will deposit irrevocably with the DTC
or its nominee (or successor Clearing Agency or its nominee) funds sufficient to
pay the applicable Redemption Price with respect to the Trust Preferred
Securities and will give the DTC irrevocable instructions and authority to pay
the Redemption Price to the Holders of the Trust Preferred Securities, and (B)
with respect to Trust Preferred Securities issued in definitive form and Trust
Common Securities, the Property Trustee will pay the relevant Redemption Price
to the Holders of such Trust Securities by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been given and
funds deposited as required, if applicable, then immediately prior to the close
of business on the date of such deposit, or on the redemption date, as
applicable, distributions will cease to accrue on the Trust Securities so called
for redemption and all rights of Holders of such Trust Securities will cease,
except the right of the Holders of such Trust Securities to receive the
Redemption Price, but without interest on such Redemption Price. If any date
fixed for redemption of Trust 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 (and 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 Trust
Securities is improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the relevant Trust Guarantee,
Distributions on such Trust Securities will continue to accrue at the then
applicable rate from the original redemption date to the actual date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price. For these purposes,
the applicable Redemption Price shall not include Distributions which are being
paid to Holders who were Holders on a relevant record date. Upon satisfaction of
the foregoing conditions, then immediately prior to the close of business on the
date of such deposit or payment, all rights of Holders of such Trust Preferred
Securities so called for redemption will cease, except the right of the Holders
to received the Redemption Price, but without interest on such
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Redemption Price, and from and after the date fixed for redemption, such Trust
Preferred Securities will not accrue distributions or bear interest.
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer of any Trust Securities that
have been called for redemption.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding Trust
Preferred Securities by tender, in the open market or by private agreement.
SECTION 8.4 Voting Rights of Trust Preferred Securities.
(a) Except as provided under Sections 6.1(b) and this Article VIII
and as otherwise required by the Business Trust Act, the Trust Indenture Act and
other applicable law, the Holders of the Trust Preferred Securities will have no
voting rights.
(b) Subject to the requirement of the Property Trustee obtaining a
tax opinion in certain circumstances set forth in Section 8.4(d) below, the
Holders of a Majority in liquidation amount of the Trust Preferred Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Property Trustee, or 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 Partnership
Preferred Securities, to (i) exercise the remedies available to it under the
Limited Partnership Agreement as a Holder of the Partnership Preferred
Securities, including the right to direct the Special Representative of the
Partnership as elected by the Holders of the Partnership Preferred Securities in
accordance with the Limited Partnership Agreement (A) to enforce the
Partnership's creditors rights and other rights with respect to the Affiliate
Investment Instruments and any Investment Guarantees, (B) to enforce the rights
of the Holders of the Partnership Preferred Securities under the Partnership
Guarantee, and (C) to enforce the rights of the Holders of the Partnership
Preferred Securities to receive distributions (if and to the extent such
distributions have been declared out of funds legally available therefor by the
General Partner in its sole discretion) on the Partnership Preferred Securities
or (ii) consent to any amendment, modification, or termination of the Limited
Partnership Agreement or the Partnership Preferred Securities where such consent
shall be required; provided, however, that where a consent or action under the
Limited Partnership Agreement would
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require the consent or act of the Holders of more than a majority of the
aggregate liquidation amount of Partnership Preferred Securities affected
thereby, only the Holders of the percentage of the aggregate stated liquidation
amount of the Trust Preferred Securities which is at least equal to the
percentage required under the Limited Partnership Agreement may direct the
Property Trustee to give such consent or take such action.
(c) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Preferred
Securities has made a written request, such Holder of record of Trust Preferred
Securities may institute a legal proceeding directly against the General Partner
or the Special Representative, to enforce the Property Trustee's rights under
the Limited Partnership Agreement without first instituting any legal proceeding
against the Property Trustee or any other person or entity. Notwithstanding the
foregoing, if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of an Investment Affiliate to make any
required payment when due on any Affiliate Investment Instrument, then a Holder
of Trust Preferred Securities may directly institute a proceeding against such
Investment Affiliate for enforcement of payment with respect to such Affiliate
Investment Instrument.
(d) The Property Trustee shall notify all Holders of the Trust
Preferred Securities of any notice of any Partnership Enforcement Event received
from the General Partner with respect to the Partnership Preferred Securities
and the Affiliate Investment Instruments. Such notice shall state that such
Partnership Enforcement Event also constitutes a Trust Enforcement Event. Except
with respect to directing the time, method, and place of conducting a proceeding
for a remedy, the Property Trustee shall be under no obligation to take any of
the actions described in clause 8.4(b)(i) and (ii) above unless the Property
Trustee has obtained an opinion of independent tax counsel to the effect that as
a result of such action, the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes and each Holder will be
treated as owning an undivided beneficial ownership interest in the Partnership
Preferred Securities.
(e) In the event the consent of the Property Trustee, as the Holder
of the Partnership Preferred Securities, is required under the Limited
Partnership Agreement with respect to any amendment, modification or termination
of the Limited Partnership Agreement, the Property Trustee shall request the
direction of the Holders of the Trust Securities with respect to such amendment,
modification or termination and shall vote with
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respect to such amendment, modification or termination as directed by a Majority
in liquidation amount of the Trust Securities voting together as a single class;
provided, however, that where a consent under the Limited Partnership Agreement
would require the consent of the Holders of more than a majority of the
aggregate principal amount of the Partnership Preferred Securities, the Property
Trustee may only give such consent at the direction of the Holders of at least
the same proportion in aggregate stated liquidation amount of the Trust
Securities. The Property Trustee shall not take any such action in accordance
with the directions of the Holders of the Trust Securities unless the Property
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, the Trust will not be classified as other than a grantor trust
for United States federal income tax purposes.
(f) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(g) Any required approval or direction of Holders of Trust Preferred
Securities may be given at a separate meeting of Holders of Trust Preferred
Securities convened for such purpose, at a meeting of all of the Holders of
Trust Securities or pursuant to written consent. The Regular Trustees will cause
a notice of any meeting at which Holders of Trust Preferred Securities are
entitled to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Trust Preferred
Securities. Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the date by which such
action is to be taken; (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought; and (iii) instructions for the
delivery of proxies or consents.
(h) No vote or consent of the Holders of Trust Preferred Securities
will be required for the Trust to redeem and cancel Trust Preferred Securities
or distribute Partnership Preferred Securities in accordance with the
Declaration.
(i) Notwithstanding that Holders of Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Trust Securities that are owned at such time by the Company or any entity
directly or indirectly controlled by, or under direct or indirect common control
with, the Company, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be
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treated as if such Trust Securities were not outstanding, provided, however that
persons otherwise eligible to vote to whom the Company or any of its
subsidiaries have pledged Trust Preferred Securities may vote or consent with
respect to such pledged Trust Preferred Securities under any of the
circumstances described herein.
(j) Holders of the Trust Preferred Securities will have no rights to
appoint or remove the Regular Trustees, who may be appointed, removed or
replaced solely by the Company, as the Holder of all of the Trust Common
Securities.
SECTION 8.5 Voting Rights of Trust Common Securities.
(a) Except as provided under this Section 8.5 or as otherwise
required by the Business Trust Act, the Trust Indenture Act or other applicable
law or provided by the Declaration, the Holders of the Trust Common Securities
will have no voting rights.
(b) The Holders of the Trust 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 all
Trust Enforcement Events with respect to the Trust Preferred Securities have
been cured, waived, or otherwise eliminated and subject to the requirement of
the Property Trustee obtaining a tax opinion in certain circumstances set forth
in this paragraph (c), the Holders of a Majority in liquidation amount of the
Trust Common Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
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 Partnership Preferred Securities, to (i) exercise the remedies
available to it under the Limited Partnership Agreement as a Holder of the
Partnership Preferred Securities, including the right to direct the Special
Representative of the Partnership as elected by the Holders of the Partnership
Preferred Securities in accordance with the Limited Partnership Agreement (A) to
enforce the Partnership's creditors rights and other rights with respect to the
Affiliate Investment Instruments and any Investment Guarantees, (B) to enforce
the rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee, and (C) to enforce the rights of the Holders of the
Partnership Preferred Securities to receive distributions (if and to the extent
such distributions have been declared out
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of funds legally available therefor by the General Partner in its sole
discretion) on the Partnership Preferred Securities or (ii) consent to any
amendment, modification, or termination of the Limited Partnership Agreement or
the Partnership Preferred Securities where such consent shall be required;
provided, however, that where a consent or action under the Limited Partnership
Agreement would require the consent or act of the Holders of more than a
majority of the aggregate liquidation amount of Partnership Preferred Securities
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the Trust Common Securities which is at least equal to the
percentage required under the Limited Partnership Agreement may direct the
Property Trustee to give such consent or take such action. Except with respect
to directing the time, method, and place of conducting a proceeding for a
remedy, the Property Trustee shall be under no obligation to take any of the
actions described in clause 8.5(c)(i) and (ii) above unless the Property Trustee
has obtained an opinion of independent tax counsel to the effect that, as a
result of such action, for United States federal income tax purposes the Trust
will not fail to be classified as a grantor trust and each Holder will be
treated as owning an undivided beneficial ownership interest in the Partnership
Preferred Securities.
(d) If the Property Trustee fails to enforce its rights under the
Partnership Preferred Securities after a Holder of record of Trust Common
Securities has made a written request, such Holder of record of Trust Common
Securities may directly institute a legal proceeding directly against the
Company, as General Partner of the Partnership or the Special Representative, to
enforce the Property Trustee's rights under the Partnership Preferred Securities
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if a Trust
Enforcement Event has occurred and is continuing and such event is attributable
to the failure of an Investment Affiliate to make any required payment when due
on any Affiliate Investment Instrument, then a Holder of Trust Common Securities
may directly institute a proceeding against such Investment Affiliate for
enforcement of payment with respect to such Affiliate Investment Instrument.
(e) A waiver of a Partnership Enforcement Event with respect to the
Partnership Preferred Securities will constitute a waiver of the corresponding
Trust Enforcement Event.
(f) Any required approval or direction of Holders of Trust Common
Securities may be given at a separate meeting of Holders of Trust Common
Securities convened for such purpose, at a meeting of all of the Holders of
Trust Securities or pursuant
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to written consent. The Regular Trustees will cause a notice of any meeting at
which Holders of Trust 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 Trust Common Securities. Each such notice
will include a statement setting forth the following information: (i) the date
of such meeting or the date by which such action is to be taken; (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought; and (iii) instructions for the delivery of proxies or consents.
(g) No vote or consent of the Holders of the Trust Common Securities
shall be required for the Trust to redeem and cancel Trust Common Securities or
to distribute Partnership Preferred Securities in accordance with the
Declaration and the terms of the Trust Securities.
SECTION 8.6 Paying Agent.
In the event that the Trust Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan, City
of New York, State of New York, an office or agency where the Trust Preferred
Securities may be presented for payment ("Paying Agent). The Trust may appoint
the Paying Agent and may appoint one or more additional paying agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent. The Trust may change any Paying Agent without prior
notice to any Holder. The Trust shall notify the Property Trustee of the name
and address of any Paying Agent not a party to this Declaration. If the Trust
fails to appoint or maintain another entity as Paying Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent. The First National Bank of Chicago, N.A. shall initially act as Paying
Agent for the Trust Preferred Securities and the Trust Common Securities.
SECTION 8.7 Listing
The Sponsor shall use its best efforts to cause the Trust Preferred
Securities to be listed for quotation on the New York Stock Exchange.
SECTION 8.8 Acceptance of Guarantee and Agreements, Limited Partnership
Agreement.
Each Holder of Trust Preferred Securities and Trust Common
Securities, by the acceptance thereof, agrees to the provisions of the
applicable Trust Guarantee, the Partnership
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Guarantee, and the Investment Guarantee, respectively, including the
subordination provisions therein.
ARTICLE IX
TERMINATION AND LIQUIDATION OF THE TRUST
SECTION 9.1 Termination of Trust.
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of Trust Common Securities or
the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor, the filing of a certificate of
cancellation with respect to the Trust after having obtained the consent
of at least a Majority in Liquidation Amount of the Trust Securities,
voting together as a single class, to file such certificate of
cancellation, or the revocation of the Sponsor's charter and the
expiration of 90 days after the date of revocation without a reinstatement
thereof;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust;
(iv) when all of the Trust Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the Trust
Securities;
(v) upon the election of the Regular Trustees, following the
occurrence and continuation of a Trust Special Event, pursuant to which
the Trust shall have been dissolved in accordance with the terms of the
Trust Securities and all of the Partnership Preferred Securities shall
have been distributed to the Holders of Trust Securities in exchange for
all of the Trust Securities; or
(vi) before the issuance of any Trust Securities, with the consent
of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 9.1(a), the Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
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(c) The provisions of Section 3.9 and Article XI shall survive the
termination of the Trust.
SECTION 9.2 Liquidation Distribution Upon Termination and Dissolution of the
Trust.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of the Trust (each a "Trust
Liquidation"), the Holders of the Trust Preferred Securities on the date of the
Trust Liquidation will be entitled to receive, out of the assets of the Trust
available for distribution to Holders of Trust Securities after satisfaction of
the Trusts' liabilities and creditors, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the stated
liquidation amount of $25 per Trust Security plus accrued and unpaid
Distributions thereon to the date of payment (such amount being the "Trust
Security Liquidation Distribution"), unless, in connection with such Trust
Liquidation, Partnership Preferred Securities in an aggregate stated liquidation
amount equal to the aggregate stated liquidation amount of, with a distribution
rate identical to the distribution rate of, and accrued and unpaid distributions
equal to accrued and unpaid distributions on, such Trust Securities shall be
distributed on a Pro Rata basis to the Holders of the Trust Securities in
exchange for such Trust Securities.
(b) If, upon any such Trust Liquidation, the Trust Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Trust Liquidation Distribution, then the
amounts payable directly by the Trust on the Trust Securities shall be paid on a
Pro Rata basis. The Holders of the Trust Common Securities will be entitled to
receive distributions upon any such Trust Liquidation Pro Rata with the Holders
of the Trust Preferred Securities except that if the Company is in default on
any of its obligations under the Trust Preferred Securities Guarantee, the
Partnership Guarantee, or any Investment Guarantee, any Investment Event of
Default has occurred and is continuing with respect to an Affiliate Investment
Instrument, the Trust Preferred Securities shall have a preference over the
Trust Common Securities with regard to such distributions as provided below.
Such preference is effectuated by the Holder of the Trust Common Securities
hereby agreeing to provide limited recourse guarantees as follows: (i) to the
Holders of the Trust Preferred Securities, of the Company's obligations under
the Trust Preferred Securities Guarantee; (ii) to the Trust and the Holders of
the Trust Preferred Securities, of the Company's obligations under the
Partnership Guarantee; and (iii) to the Partnership and the Holders of the Trust
Preferred Securities, of the Company's
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obligations under any Investment Guarantee and/or the obligations of any
Investment Affiliate under an Affiliate Investment Instrument. In the case of
the limited recourse guarantee given by the Holder of the Trust Common
Securities to the Partnership and the Holder of the Trust Preferred Securities
in respect of the Company's obligations under any Investment Guarantee and/or
any Investment Affiliate's obligations under an Affiliate Investment Instrument,
(i) the Trust Common Securities Holder will be deemed to have pledged the amount
due in respect of its Trust Common Securities upon a liquidation of the Trust to
the Partnership and the Holders of Trust Preferred Securities; (ii) the Trust
Common Securities Holder will be deemed to have paid such amount to the
Partnership in respect of such defaulted Investment Guarantee and/or Affiliate
Investment Instrument, as the case may be; (iii) the Partnership will be deemed
to have paid such amount to the Trust; and (iv) the Property Trustee is hereby
authorized to distribute such amount to the Holders of Trust Preferred
Securities (on a pro rata basis among such Trust Preferred Securities Holders)
in respect of the Trust Common Securities Holder's pledge of such amounts to
such Trust Preferred Securities Holders. In the case of a limited recourse
guarantee given by the Holder of the Trust Common Securities to the Trust and
the Holders of the Trust Preferred Securities in respect of the Company's
obligations under the Partnership Guarantee, (i) the Holder of the Trust Common
Securities will be deemed to have pledged the amount due in respect of its Trust
Common Securities upon a liquidation of the Trust to the Trust and the Holders
of the Trust Preferred Securities; (ii) the Holder of the Trust Common
Securities will be deemed to have paid such amount to the Trust in respect of
its obligations under the Partnership Guarantee; and (iii) the Property Trustee
is hereby authorized to distribute such amount to the Holders of the Trust
Preferred Securities (on a pro rata basis among such Trust Preferred Securities
Holders) in respect of the Trust Common Securities Holder's pledge of such
amount to such Trust Preferred Securities Holders.
ARTICLE X
TRANSFER OF INTERESTS
SECTION 10.1 Transfer of Trust Securities.
(a) Trust Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Trust Securities. Any transfer or purported transfer of any
Trust Security not made in accordance with this Declaration shall be null and
void.
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(b) Subject to this Article X, Trust Preferred Securities shall be
freely transferable.
SECTION 10.2 Transfer of Certificates.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 10.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole Holder of
such Certificate and of the Trust 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 Trust Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 10.4 Book Entry Interests.
Unless otherwise specified in the terms of the Trust Preferred
Securities, the Trust Preferred Securities Certificates, on original issuance,
will be issued in the form of one or more fully registered, global Trust
Preferred Security Certificates (each a "Global Certificate"), to be delivered
to DTC, the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the Trust
in the name of Cede & Co., the nominee
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of DTC, and no Trust Preferred Security Beneficial Owner will receive a
definitive Trust Preferred Security Certificate representing such Trust
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 10.7. Unless and until definitive, fully
registered Trust Preferred Security Certificates (the "Definitive Trust
Preferred Security Certificates") have been issued to the Trust Preferred
Security Beneficial Owners pursuant to Section 10.7:
(a) the provisions of this Section 10.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Certificates and receiving
approvals, votes or consents hereunder) as the Holder of the Trust
Preferred Securities and the sole Holder of the Global Certificates and
shall have no obligation to the Trust Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section 10.4 conflict
with any other provisions of this Declaration, the provisions of this
Section 10.4 shall control; and
(d) the rights of the Trust Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such Trust Preferred
Security Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants and the Clearing Agency shall receive and transmit
payments of Distributions on the Global Certificates to such Clearing
Agency Participants. The Clearing Agency will make book entry transfers
among the Clearing Agency Participants; provided, that solely for the
purposes of determining whether the Holders of the requisite amount of
Trust Preferred Securities have voted on any matter provided for in this
Declaration, so long as Definitive Trust Preferred Security Certificates
have not been issued, the Trustees may conclusively rely on, and shall be
protected in relying on, any written instrument (including a proxy)
delivered to the Trustees by the Clearing Agency setting forth the Trust
Preferred Security Beneficial Owners' votes or assigning the right to vote
on any matter to any other Persons either in whole or in part.
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SECTION 10.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Trust Preferred
Security Holders is required under this Declaration, unless and until Definitive
Trust Preferred Security Certificates shall have been issued to the Trust
Preferred Security Beneficial Owners pursuant to Section 10.7, the Regular
Trustees shall give all such notices and communications specified herein to be
given to the Trust Preferred Security Holders to the Clearing Agency, and shall
have no notice obligations to the Trust Preferred Security Beneficial Owners.
SECTION 10.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities, the
Regular Trustees may, in their sole discretion, appoint a successor Clearing
Agency with respect to such Trust Preferred Securities.
SECTION 10.7 Definitive Trust Preferred Security Certificates.
If:
(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Trust Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 10.6 or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with
respect to the Trust Preferred Securities,
(c) there is a Trust Enforcement Event,
then:
(d) Definitive Trust Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to
such Trust Preferred Securities; and
(e) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees
shall cause Definitive Trust Preferred Security Certificates to be
delivered to Trust Preferred Security Beneficial Owners in accordance with
the instructions of the Clearing Agency. Neither the Trustees nor the
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Trust shall be liable for any delay in delivery of such instructions and
each of them may conclusively rely on and shall be protected in relying
on, said instructions of the Clearing Agency. The Definitive Trust
Preferred Security Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation and
such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which Trust Preferred Securities may be listed, or to
conform to usage.
SECTION 10.8 Mutilated, Destroyed, Lost or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Regular Trustee on behalf of the Trust shall execute
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Certificate, a new Certificate of like denomination. In connection
with the issuance of any new Certificate under this Section 10.8, the Regular
Trustees may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an ownership interest in the relevant Trust Securities, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
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ARTICLE XI
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 11.1 Liability.
(a) Except as expressly set forth in this Declaration, the Trust
Guarantees and the terms of the Trust Securities, the Sponsor and the Trustees
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 Trust
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of Trust
Securities any deficit upon dissolution of the Trust or otherwise.
(b) Notwithstanding any other provision herein, the Holder of the
Trust Common Securities, by entering into this Agreement, agrees that it shall
be liable directly to any creditor or claimant of or against the Trust for the
entire amount of all of the debts and obligations of the Trust (other than
obligations to the Holders of Trust Securities in their capacities as Holders)
to the extent not satisfied out of the Trust's assets as if the Holder of the
Trust Common Securities were the General Partner of a limited partnership
organized under the Delaware Revised Uniform Limited Partnership Act.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Trust Preferred Securities shall be entitled to the same
limitation of personal liability extended to shareholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 11.2 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
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the Property Trustee, negligence) or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Trust Securities might properly be paid.
SECTION 11.3 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 or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term
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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 11.4 Indemnification.
(a) (i) To the fullest extent permitted by applicable law, the
Sponsor shall indemnify and hold harmless any Company Indemnified Person
who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by
or in the right of the Trust) by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere
or its equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent
permitted by law, any Company Indemnified Person who was or
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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 11.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the fullest
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 11.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Regular Trustees by a majority vote of a quorum consisting of such
Regular Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Holder of the Trust Common
Securities.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding
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referred to in paragraphs (i) and (ii) of this Section 11.4(a) shall be
paid by the Sponsor in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of such
Company Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 11.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Regular Trustees by a majority vote of a quorum
of disinterested Regular Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion or
(iii) the Holder of the Trust Common Securities, that, based upon the
facts known to the Regular Trustees, counsel or the Holder of the Trust
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 Holder of the Trust Common
Securities reasonably determine that such person deliberately breached his
duty to the Trust or Holders of Trust Common Securities.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 11.4(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 shareholders or disinterested directors of the Sponsor
or Holders of the Trust Preferred Securities 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
11.4(a) shall be deemed to be provided by a contract between the Sponsor
and each Company Indemnified Person who serves in such capacity at any
time while this Section 11.4(a) is in effect. Any repeal or modification
of this Section 11.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or the Trust may purchase and maintain insurance
on behalf of any person who is or was a Company Indemnified Person against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Spon-
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sor would have the power to indemnify him against such liability under the
provisions of this Section 11.4(a).
(viii) For purposes of this Section 11.4(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 11.4(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 11.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be
a Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Sponsor agrees to indemnify 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 loss, damage, claim,
liability or expense including taxes (other than taxes based on the income of
the Trustee) incurred without negligence or bad faith on the part of the Trustee
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 11.4(b) shall survive the satisfaction and discharge of this
Declaration.
SECTION 11.5 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, indepen-
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dently or with others, similar or dissimilar to the business of the Trust, and
the Trust and the Holders of Trust 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, nor 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 transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of Holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XII
ACCOUNTING
SECTION 12.1 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 or the Treasury Regulations.
SECTION 12.2 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 books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the Regular
Trustees.
(b) The Sponsor shall cause to be prepared and delivered to each of
the Holders of Trust Securities, within 90 days after the end of each Fiscal
Year of the Company, annual financial statements of the Company, including a
balance sheet of the
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Company 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 Trust Securities, any annual United States
federal income tax information statement, required by the Code, containing such
information with regard to the Trust Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Regular Trustees on behalf of the Trust with any state or local taxing
authority.
SECTION 12.3 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 Partnership Preferred Securities held by the Property Trustee
shall be made directly to the Property Account and no other funds of the Trust
shall be deposited in the Property 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 Account.
SECTION 12.4 Withholding.
The Trust and the Regular Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority
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with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed over withholding, Holders shall be limited
to an action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding. Notwithstanding
anything herein to the contrary, the Trust and the Regular Trustees shall,
absent receipt of an opinion of nationally recognized tax counsel to the
contrary, withhold thirty percent (30%) (or such other rate as may be imposed as
a result of an amendment to the Code or such lower rate as may be imposed under
an applicable income tax treaty) on the gross amount of any Distributions on
Trust Preferred Securities held by a Holder that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code.
ARTICLE XIII
AMENDMENTS AND MEETINGS
SECTION 13.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Trust 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
Trust Securities);
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(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 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 Trust 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) cause the Partnership to be classified for purposes of
United States federal income tax as an association or publicly
traded partnership taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act; or
(D) cause the Trust to be deemed to be an Investment Company
required to be registered under the 1940 Act.
(c) In the event the consent of the Property Trustee, as the Holder
of the Partnership Preferred Securities is required under the Limited
Partnership Agreement with respect to any amendment, modification or termination
of the Limited Partnership Agreement or the Partnership Preferred Securities the
Property Trustee shall request the direction of the Holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a Majority in liquidation amount of the Trust Securities voting together as a
single class; provided, however, that where a consent under the Limited
Partnership Agreement would require the consent of a Super Majority of the
Holders of Partnership Preferred Securities the Property Trustee may only give
such consent at the direction of the Holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super Majority
represents of the aggregate liquidation amount of the Partnership Preferred
Securities outstanding; provided, further, that the Property Trustee shall not
be obligated to take any action in accordance with the directions of the Holders
of the Trust Securities under this Section 13.1(c) unless the Property Trustee
has obtained an
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opinion of independent tax counsel to the effect that for United States federal
income tax purposes the Trust will continue to be classified as a grantor trust
after consummation of such action and each Holder will be treated as owning an
undivided beneficial ownership interest in the Partnership Preferred Securities.
(d) at such time after the Trust has issued any Trust Securities
that remain outstanding, any amendment that would (I) adversely affect the
powers, preferences or special rights of the Trust Securities or (II) provide
for the dissolution, winding-up or termination of the Trust other than pursuant
to the terms of this Declaration, may be effected only with the approval of the
Holders of at least a Majority in liquidation amount of the Trust Securities
affected thereby; provided, further, that if any amendment or proposal referred
to in clause (I) hereof would adversely affect only the Trust Preferred
Securities or the Trust Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or proposal
shall not be effective except with the approval of a Majority in liquidation
amount of such class of Trust Securities;
(e) Section 11.1(c) and this Section 13.1 shall not be
amended without the consent of all of the Holders of the Trust
Securities;
(f) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Trust Common Securities and;
(g) the rights of the Holders of the Trust 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 Trust Common Securities; and
(h) notwithstanding Section 13.1(c), this Declaration may be amended
without the consent of the Holders of the Trust Securities:
(i) to cure any ambiguity;
(ii) to correct or supplement any provision in this Declaration that
may be defective or inconsistent with any other provision of this
Declaration;
(iii) to add to the covenants, restrictions or obliga-
tions of the Sponsor;
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(iv) to conform to any change in the 1940 Act or written change in
interpretation or application of the rules and regulations promulgated
thereunder by any legislative body, court, government agency or regulatory
authority;
(v) to conform to any change in the Trust Indenture Act or written
change in interpretation or application of the rules and regulations
promulgated thereunder by any legislative body, court, government agency
or regulatory authority; and
(vi) to modify, eliminate and add to any provision of this
Declaration to such extent as may be necessary;
provided that such amendments do not have a material adverse effect
on the rights, preferences or privileges of the Holders.
SECTION 13.2 Meetings of the Holders of Trust Securities; Action by Written
Consent.
(a) Meetings of the Holders of any class of Trust Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Trust Securities) to consider and act on any matter on which Holders of such
class of Trust Securities are entitled to act under the terms of this
Declaration, the terms of the Trust Securities, the Limited Partnership
Agreement, the rules of any stock exchange on which the Trust Preferred
Securities are listed or admitted for trading, the Business Trust Act or other
applicable law. 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 Trust 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 Trust Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of Trust
Securities calling a meeting shall specify in writing the Certificates held by
the Holders of Trust Securities exercising the right to call a meeting and only
those Trust Securities specified shall be counted for purposes of determining
whether the required percentage set forth in the second sentence of this
paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Trust Securities, the following provisions shall apply to meetings of Holders of
Trust Securities:
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(i) notice of any such meeting shall be given to all the Holders of
Trust Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Any action that may be
taken at a meeting of the Holders of Trust Securities may be taken without
a meeting if a consent in writing setting forth the action so taken is
signed by the Holders of Trust Securities owning not less than the minimum
amount of Trust Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Trust 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 Trust Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Holder for the purpose of taking any action without a
meeting shall be returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Trust Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Trust 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
Trust 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 Trust Securities were
shareholders of a Delaware corporation;
(iii) each meeting of the Holders of the Trust 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 Trust Securities, the Trust Indenture Act or the listing rules of any
stock exchange on which the Trust Preferred Securities are then listed for
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Trust 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 Trust Securities,
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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 XIV
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 14.1 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
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 with
trust powers, duly organized, validly existing and in good standing under
the laws of the United States, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the terms
of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee, and it constitutes a
legal, valid and binding obligation of the Property Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity and the
discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Property Trustee;
(d) no consent, approval or authorization of, or registration with
or notice to, any State or Federal banking
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authority is required for the execution, delivery or performance by the
Property Trustee of the Declaration; and
(e) the Property Trustee, pursuant to this Declaration, shall hold
legal title to, and a valid ownership interest on behalf of the Holders of
the Trust Securities, in the Partnership Preferred Securities and agrees
that, except as expressly provided or contemplated by this Agreement, it
will not create, incur or assume, or suffer to exist any mortgage, pledge,
hypothecation, encumbrance, lien or other charge or security interest upon
the Partnership Preferred Securities.
SECTION 14.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation with, 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 Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The
Declaration under Delaware law constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance
with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with
or notice to, any State or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of the
Declaration.
(d) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
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ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.
All notices provided for in this Declaration shall be in writing,
duly signed by the party giving such notice, and shall be delivered, telecopied
or mailed by registered or certified 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 Trust Securities):
CAPITA PREFERRED TRUST
c/o AT&T CAPITAL CORPORATION
44 Whippany Road
Morristown, New Jersey 07962
Attention: [Robert J. Ingato]
(b) 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 other Trustees):
First Chicago Delaware Inc.
c/o FCC National Bank
300 King Street
Wilmington, Delaware 19801
(c) if given to the Property Trustee, at its Corporate Trust Office
to the attention of Mary R. Fonti, Assistant Vice President (or such other
address as the Property Trustee may give notice of to the Holders of the
Trust Securities and the other Trustee)
(d) if given to the Holder of the Trust Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as
the Holder of the Trust Common Securities may give notice of to the
Trust):
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Attention: Robert J. Ingato
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
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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 15.2 Governing Law.
This Declaration and the rights of the parties hereunder shall be
governed by and construed in accordance with the internal 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 15.3 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 15.4 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 15.5 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 15.6 Partial Enforceability.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
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SECTION 15.7 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 and a duly authorized officer of the Sponsor
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, each of the undersigned has caused these
presents to be executed as of the day and year first above written.
_____________________________________
Robert J. Ingato, as Regular Trustee
_____________________________________
Glenn A. Votek, as Regular Trustee
_____________________________________
Edward M. Dwyer, as Regular Trustee
First Chicago Delaware Inc.
as Delaware Trustee
By:_________________________________
Name:
Title:
First National Bank of Chicago, as
Property Trustee
By:_________________________________
Name:
Title:
AT&T Capital Corporation, as Spon-
sor
By:_________________________________
Name:
Title:
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EXHIBIT A-1
FORM OF TRUST PREFERRED SECURITY CERTIFICATE
[IF THE TRUST PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT: This Trust Preferred Security is a Global Certificate within the meaning
of the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary. This
Trust Preferred Security is exchangeable for Trust Preferred Securities
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration and no transfer of
this Trust Preferred Security (other than a transfer of this Trust Preferred
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Trust Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York, New York) to the Trust or its agent for registration of transfer, exchange
or payment, and any Trust Preferred Security issued is registered in the name of
Cede & Co. or such other name as requested by an authorized representative of
the Depositary and any payment hereon is made to Cede & Co. or such other name
as requested by or authorized representations of the Depositary, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since
the registered owner hereof, Cede & Co., has an interest herein.]
<PAGE>
<PAGE>
Certificate Number Number of Trust Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Trust Preferred Securities
of
CAPITA PREFERRED TRUST
____% Trust Preferred Securities
(liquidation amount $25 per Trust Preferred Security)
CAPITA PREFERRED TRUST, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of preferred securities of
the Trust representing undivided beneficial ownership interests in the assets of
the Trust designated the _____% Trust Preferred Securities (liquidation amount
$25 per Trust Preferred Security) (the "Trust Preferred Securities"). The Trust
Preferred Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Trust Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust dated as of
October _, 1996, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Trust Preferred Securities Guarantee Agreement to the extent provided
therein. The Sponsor will provide a copy of the Declaration, the Trust Preferred
Securities Guarantee Agreement and the Limited Partnership Agreement to a Holder
without charge upon written request to the Trust at its principal place of
business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
2
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<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this
___ day of __, 199_.
CAPITA PREFERRED TRUST
as Regular Trustee
By:_________________________
Name:
3
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<PAGE>
[FORM OF REVERSE OF SECURITY]
Holders of Trust Preferred Securities shall be entitled to
receive cumulative cash distributions at a rate per annum of ______% of the
stated liquidation amount of $25 per Trust Preferred Security. Distributions on
the Trust Preferred Securities shall, from the date of original issue, accrue
and be cumulative and shall be payable quarterly only to the extent that the
Trust has funds available for the payment of such distributions in the Property
Account. Distributions not paid on the scheduled payment date will accumulate
and compound quarterly (to the extent permitted by applicable law) at the rate
of ____ % per annum. The term "Distributions" as used herein shall mean ordinary
cumulative distributions in respect of each Fiscal Period together with any
Compounded Distributions. Amounts available to the Trust for distribution to the
holders of the Trust Preferred Securities will be limited to payments received
by the Trust from the Partnership on the Partnership Preferred Securities or
from the Company on the Partnership Guarantee. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the Company, as the General Partner of the Partnership. If and to
the extent that the Partnership makes a distribution on the Partnership
Preferred Securities held by the Property Trustee or the Company makes a payment
under the Partnership Guarantee (the amount of any such partnership
distribution, including any compounded partnership distributions or guarantee
payment being a "Payment Amount"), the Trust shall and the Property Trustee is
directed, to the extent funds are available for that purpose, to make a Pro Rata
Distribution of the Payment Amount to Holders.
The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full quarterly
Distribution period for which Distributions are computed, Distributions will be
computed on the basis of the actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the Trust
Preferred Securities will be cumulative, will accrue from the date of initial
issuance and will be payable quarterly in arrears, on March 31, June
4
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30, September 30 and December 31 of each year, commencing on December 31, 1996
if, as and when available for payment by the Property Trustee. As long as the
Trust Preferred Securities remain in book-entry-only form, Distributions will be
payable to the Holders of record of Trust Preferred Securities as they appear on
the books and records of the Trust on the relevant record dates, which will be
one Business Day prior to the relevant payment dates. In the event that the
Trust Preferred Securities do not remain in book-entry-only form, the relevant
record dates shall be the 15th day of the month of the relevant payment dates.
In the event that any date on which distributions are payable is not a Business
Day, payment of the Distribution shall be made on the next succeeding day which
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 succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, with
the same force and effect as if made on such date. Payments of accrued
Distributions will be payable to Holders of record of Trust Preferred Securities
as they appear on the books and records of the Trust on the record date with
respect to the payment date for the Trust Preferred Securities which corresponds
to the payment date fixed by the Partnership with respect to the payment of
cumulative distributions on the Partnership Preferred Securities.
The Trust Preferred Securities shall be redeem-
able as provided in the Declaration.
5
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---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred
Security Certificate to:
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ------------------------
(Insert assignee's social security or tax identification number)
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
- --------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ---------------------------------------------------------
- ---------------------------------------------------------
- ---------------------------------------------------------
agent to transfer this Trust Preferred Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Trust Preferred
Security Certificate)
1
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AMENDED AND RESTATED AGREEMENT
OF
LIMITED PARTNERSHIP
OF
CAPITA PREFERRED FUNDING L.P.
Dated as of October __, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINED TERMS...................................... 2
Section 1.1 DEFINITIONS.............................................. 2
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER...................... 11
Section 2.1 CONTINUATION OF THE PARTNERSHIP.......................... 11
Section 2.2 NAME..................................................... 11
Section 2.3 PURPOSES OF THE PARTNERSHIP.............................. 11
Section 2.4 TERM..................................................... 12
Section 2.5 REGISTERED AGENT AND OFFICE.............................. 12
Section 2.6 PRINCIPAL PLACE OF ACTIVITY.............................. 12
Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER...................... 13
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES...................... 13
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP
PREFERRED SECURITIES; WITHDRAWAL OF
INITIAL LIMITED PARTNER.................................. 13
ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS................................. 14
Section 3.1 CAPITAL CONTRIBUTIONS.................................... 14
Section 3.2 PARTNERSHIP PREFERRED SECURITY
HOLDER'S INTEREST REPRESENTED BY
PARTNERSHIP PREFERRED SECURITIES......................... 14
Section 3.3 CAPITAL ACCOUNTS......................................... 15
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS........................ 15
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL
CONTRIBUTIONS............................................ 15
ARTICLE IV
ALLOCATIONS....................................... 16
Section 4.1 PROFITS AND LOSSES....................................... 16
Section 4.2 SPECIAL ALLOCATION....................................... 17
Section 4.3 WITHHOLDING.............................................. 19
ARTICLE V
DISTRIBUTIONS...................................... 20
Section 5.1 DISTRIBUTIONS............................................ 20
i
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Page
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Section 5.2 LIMITATIONS ON DISTRIBUTIONS............................. 20
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES................... 20
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP
PREFERRED SECURITIES..................................... 20
Section 6.2 PARTNERSHIP PREFERRED SECURITIES......................... 22
ARTICLE VII
PARTNERSHIP INVESTMENTS............................. 32
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS................. 32
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED
BY THE PARTNERSHIP....................................... 33
ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS...................... 35
Section 8.1 BOOKS AND RECORDS........................................ 35
Section 8.2 ACCOUNTING METHOD........................................ 36
Section 8.3 ANNUAL AUDIT............................................. 36
ARTICLE IX
PAYMENT OF EXPENSES............................... 36
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES.......... 36
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES.................... 36
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS............................. 37
Section 10.1 LIMITATIONS.............................................. 37
Section 10.2 LIABILITY................................................ 37
Section 10.3 PRIORITY................................................. 38
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER.............................. 38
Section 11.1 AUTHORITY................................................ 38
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER..................... 38
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY
GENERAL PARTNER.......................................... 40
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Section 11.4 LIABILITY................................................ 41
Section 11.5 OUTSIDE ACTIVITIES....................................... 42
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS....................... 42
Section 11.7 EXCULPATION.............................................. 43
Section 11.8 FIDUCIARY DUTY........................................... 44
Section 11.9 INDEMNIFICATION.......................................... 45
Section 11.10 TAX MATTERS ............................................. 45
Section 11.11 CONSOLIDATION, MERGER OR SALE OF
ASSETS................................................... 46
ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS........................ 48
Section 12.1 TRANSFER OF INTERESTS.................................... 48
Section 12.2 TRANSFER OF L.P. CERTIFICATES............................ 48
Section 12.3 PERSONS DEEMED PARTNERSHIP PREFERRED SECURITY HOLDERS.... 49
Section 12.4 BOOK ENTRY PROVISIONS.................................... 50
Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT............... 53
ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS...................... 54
Section 13.1 WITHDRAWAL OF PARTNERS................................... 54
Section 13.2 DISSOLUTION OF THE PARTNERSHIP........................... 54
Section 13.3 LIQUIDATION.............................................. 55
Section 13.4 DISTRIBUTION IN LIQUIDATION.............................. 56
Section 13.5 RIGHTS OF LIMITED PARTNERS............................... 56
Section 13.6 TERMINATION.............................................. 57
ARTICLE XIV
AMENDMENTS AND MEETINGS............................. 57
Section 14.1 AMENDMENTS............................................... 57
Section 14.2 AMENDMENT OF CERTIFICATE................................. 57
Section 14.3 MEETINGS OF PARTNERS..................................... 58
ARTICLE XV
MISCELLANEOUS...................................... 59
Section 15.1 NOTICES.................................................. 59
Section 15.2 POWER OF ATTORNEY........................................ 60
Section 15.3 ENTIRE AGREEMENT......................................... 60
Section 15.4 GOVERNING LAW............................................ 61
Section 15.5 EFFECT................................................... 61
Section 15.6 PRONOUNS AND NUMBER...................................... 61
Section 15.7 CAPTIONS................................................. 61
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Section 15.8 PARTIAL ENFORCEABILITY................................... 61
Section 15.9 COUNTERPARTS............................................. 61
Section 15.10 WAIVER OF PARTITION...................................... 62
Section 15.11 REMEDIES................................................. 62
Schedule 1 LIST OF PARTNERS
Annex A FORM OF L.P. CERTIFICATE
Exhibit A FORM OF INDENTURE OF AT&T CAPITAL CORPORATION
Exhibit B FORM OF INDENTURE FOR SUBSIDIARIES
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AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
CAPITA PREFERRED FUNDING L.P.
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP of Capita
Preferred Funding L.P., a Delaware limited partnership (the "Partnership"),
dated as of October __, 1996, among AT&T Capital Corporation, a Delaware
corporation (the "Company"), as the general partner, Jeffery F. Nash, an
individual, as the initial limited partner (the "Initial Limited Partner") and
such other Persons (as defined herein) who become Limited Partners (as defined
herein) as provided herein.
WHEREAS, Antigua Acquisition Corporation, a corporation recently
merged with and into the Company, and the Initial Limited Partner entered into
an Agreement of Limited Partnership, dated as of August 29, 1996, as amended by
that certain Amendment to Agreement of Limited Partnership of Capita Preferred
Funding L.P., dated October 2, 1996 by and between the Company and the Initial
Limited Partner (the "Original Partnership Agreement"), and the Partners (as
defined herein) desire to continue the Partnership under the Act (as defined
herein) and to amend and restate the Original Partnership Agreement in its
entirety;
WHEREAS, the Certificate of Limited Partnership of the Partnership
was filed with the Office of the Secretary of State of the State of Delaware on
August 29, 1996, as amended and restated by that certain Amended and Restated
Certificate of Limited Partnership of Capita Preferred Funding L.P., dated
October 2, 1996 and filed with the Office of the Secretary of State of the State
of Delaware on October 3, 1996;
NOW, THEREFORE, in consideration of the agreements and obligations
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree to amend
and restate the Original Partnership Agreement as follows:
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ARTICLE I
DEFINED TERMS
Section 1.1 DEFINITIONS. Unless the context otherwise requires, the
terms defined in this Article I shall, for the purposes of this Agreement, have
the meanings herein specified. Terms used in this Agreement and not otherwise
defined herein shall have the meanings ascribed to such terms in the
Declaration.
"Act" means the Delaware Revised Uniform Limited Partnership Act,
Del. Code Ann. tit. 6, 'ss' 17-101 et seq., as amended from time to time.
"Affiliate" has the meaning set forth in Section 1.1 of the
Declaration.
"Affiliate Investment Instruments" has the meaning set forth in
Section 7.1 of this Agreement.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended or supplemented from time to time.
"Beneficiaries" has the meaning set forth in Section 11.3 of this
Agreement.
"Book-Entry Interest" means a beneficial interest in the L.P.
Certificates, ownership and transfers of which shall be maintained and made
through book entries of a Clearing Agency as set forth in Section 12.4 of this
Agreement.
"Business Day" means a day other than a day on which banking
institutions in The City of New York are authorized or required by law to close.
"Capital Account" has the meaning set forth in Section 3.3 of this
Agreement.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed with the Secretary of State of the State of Delaware on August
29, 1996, as it may be amended and restated from time to time.
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"Change in 1940 Act Law" has the meaning set forth in Section 1.1 of
the Declaration.
"Closing Date" has the meaning set forth in Section 1.1 of the
Declaration.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"Company" means AT&T Capital Corporation, a Delaware corporation.
"Compounded Distributions" has the meaning set forth in Section 6.2
of this Agreement.
"Declaration" means the Amended and Restated Declaration of Trust by
and among the Company, as Sponsor, the Property Trustee, the Delaware Trustee,
and the Regular Trustees, dated as of October __, 1996.
"Definitive L.P. Certificates" has the meaning set forth in Section
12.4(a) of this Agreement.
"Delaware Trustee" has the meaning set forth in Section 6.2 of the
Declaration.
"Distribution Payment Date" has the meaning set forth in Section
6.2(b)(ii) of this Agreement.
"Distributions" means the right to receive the amount of the
cumulative cash distributions payable by the Partnership with respect to the
Interests represented by the Partnership Preferred Securities, which amounts
will accrue on the $25 liquidation preference of each Partnership Preferred
Security from the Closing Date and are payable quarterly in arrears in
accordance with Sections 5.1 and 6.2(b) of this Agreement.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"Eligible Debt Securities" means cash or book-entry securities,
negotiable instruments, or other securities of entities not affiliated with the
Company represented by instruments in registered form which evidence any of the
following: (a) any security issued or guaran-
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teed as to principal or interest by the United States, or by a person controlled
or supervised by and acting as an instrumentality of the Government of the
United States pursuant to authority granted by the Congress of the United
States, or any certificate of deposit for any of the foregoing; (b) commercial
paper issued pursuant to Section 3(a)(3) of the Securities Act of 1933 (the
"Securities Act") and having, at the time of the investment or contractual
commitment to invest therein, a rating from each of S&P and Moody's in the
highest rating category granted by such rating agency and having a maturity not
in excess of nine months; (c) demand deposits, time deposits and certificates of
deposit which are fully insured by the FDIC; (d) repurchase obligations with
respect to any security that is a direct obligation of, or fully guaranteed by,
the Government of the United States of America or any agency or instrumentality
thereof, the obligations of which are backed by the full faith and credit of the
United States of America, in either case entered into with a depository
institution or trust company which is an Eligible Institution and the deposits
of which are insured by the FDIC; and (e) any other security which is identified
as a permitted investment of a finance subsidiary pursuant to Rule 3a-5 under
the 1940 Act at the time it is acquired by the Partnership.
"Eligible Institution" means a depository institution organized
under the laws of the United States of America or any one of the states thereof
or the District of Columbia (or any domestic branch of a foreign bank), (1)(i)
which has either (A) a long-term unsecured debt rating of AA or better by S&P
and Aa or better by Moody's or (B) a short-term unsecured debt rating or a
certificate of deposit rating of A-1+ or better by S&P and P-1 or better by
Moody's and (ii) whose deposits are insured by the FDIC or (2)(i) the parent of
which has a long-term or short-term unsecured debt rating which signifies
investment grade and (ii) whose deposits are insured by the FDIC.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Fiscal Period" means each calendar quarter.
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"Fiscal Year" means (i) the period commencing upon the formation of
the Partnership and ending on December 31, 1996, and (ii) any subsequent
calendar year.
"General Partner" means AT&T Capital Corporation in its capacity as
the general partner of the Partnership, its permitted successors, or any
successor general partner in the Partnership admitted as such pursuant to the
terms of this Agreement.
"General Partner Capital Contribution" means the contribution by the
General Partner to the Partnership made contemporaneous with the issuance of the
Partnership Preferred Securities.
"General Partner Interest" means the Interest of the General Partner
in the Partnership.
"Holder" or "Partnership Preferred Security Holder" means a Limited
Partner in whose name an L.P. Certificate representing Partnership Preferred
Securities is registered.
"Indentures" means the Indentures between the Company or certain of
its subsidiaries, as the case may be, and ______________, as Indenture Trustee,
dated as of ___________, 1996, four of which are attached hereto as Exhibits A
and B, respectively.
"Independent Financial Adviser" shall mean (i) Merrill Lynch,
Pierce, Fenner & Smith Incorporated or (ii) such other nationally recognized
investment banking firm which shall be designated by the Company and which firm
(1) does not (and whose directors, officers, employees and affiliates do not)
have a direct or indirect material equity interest in the Company or any of its
subsidiaries and (2) is either (a) ranked among the five largest underwriters of
debt or preferred securities (in terms of U.S. dollar value) in the United
States for the immediately preceding calendar year or (b) is approved by the
Holders of a Majority in Liquidation Preference of Partnership Preferred
Securities.
"Initial Affiliate Debentures" has the meaning set forth in Section
7.1(b) of this Agreement.
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"Initial Company Debenture" has the meaning set forth in Section
7.1(b) of this Agreement.
"Initial Debentures" means collectively, the Initial Company
Debentures and the Initial Affiliate Debentures.
"Initial Limited Partner" means Jeffery F. Nash, an individual.
"Initial Partnership Proceeds" means the aggregate proceeds received
by the Partnership from the sale of the Partnership Preferred Securities and the
General Partner Capital Contribution.
"Interest" means the entire ownership interest of a Partner in the
Partnership at any particular time, including, without limitation, its interest
in the capital, profits, and losses of, and distributions from, the Partnership.
"Investment Affiliate" means the Company or any corporation,
partnership, limited liability company or other entity (other than the
Partnership or the Trust) that is controlled by the Company and is not an
investment company by reason of Section 3(a) or 3(b) of the 1940 Act.
"Investment Event of Default" means an event of default under any
Affiliate Investment Instrument that is a debt instrument or the breach by an
Investment Affiliate of its obligations under any Affiliate Investment
Instrument that is an equity instrument.
"Investment Guarantee" has the meaning specified in Section 1.1 of
the Declaration.
"Investment Offer" has the meaning specified in Section 7.2(b) of
this Agreement.
"Limited Partner" means any Person who is admitted to the
Partnership as a limited partner pursuant to the terms of this Agreement, in
such Person's capacity as a limited partner of the Partnership.
"Liquidator" has the meaning specified in Section 13.3 of this
Agreement.
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"L.P. Certificate" means a certificate substantially in the form
attached hereto as Annex A, evidencing the Partnership Preferred Securities held
by a Limited Partner.
"Majority in Liquidation Preference" means Holder(s) of Partnership
Preferred Securities who are the record owners of Partnership Preferred
Securities whose aggregate liquidation preferences represent more than 50% of
the aggregate liquidation preference of all Partnership Preferred Securities
then outstanding.
"Moody's" means Moody's Investors Service, Inc. or any successor
thereto.
"Net Income" and "Net Loss", respectively, for any Fiscal Period
mean the income and loss, respectively, of the Partnership for such Fiscal
Period as determined in accordance with the method of accounting followed by the
Partnership for United States federal income tax purposes, including, for all
purposes, the net income, if any, from the Affiliate Investment Instruments,
Eligible Debt Securities and any income exempt from tax and any noncapital,
nondeductible expenditures of the Partnership which are described in the Code.
"1940 Act" has the meaning set forth in Section 1.1 of the
Declaration.
"Original Partnership Agreement" has the meaning set forth in the
recitals to this Agreement.
"Partners" means the General Partner and the Limited Partners,
collectively, where no distinction is required by the context in which the term
is used.
"Partnership Covered Person" means any Partner, any Affiliate of a
Partner or any officers, directors, shareholders, partners, members, employees,
representatives or agents of a Partner of its respective Affiliates, or any
employee or agent of the Partnership or its Affiliates or any Special
Representative.
"Partnership Enforcement Event" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
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"Partnership Guarantee" means the Partnership Guarantee Agreement
dated as of October __, 1996 by the Company in favor of the Partnership
Preferred Security Holders with respect to the Partnership Preferred Securities,
as amended or supplemented from time to time.
"Partnership Indemnified Person" means the General Partner, any
Special Representative, any Affiliate of the General Partner or any Special
Representative or any officers, directors, shareholders, members, partners,
employees, representatives or agents of the General Partner or any Special
Representative, or any of their respective Affiliates, or any employee or agent
of the Partnership or its Affiliates.
"Partnership Investment Company Event" means that the General
Partner shall have requested and received an opinion of nationally recognized
independent legal counsel experienced in such matters to the effect that as a
result of the occurrence on or after the date hereof of a Change in 1940 Act
Law, the Partnership is or will be considered an "investment company" which is
required to be registered under the 1940 Act.
"Partnership Liquidation Distribution" has the meaning set forth in
Section 6.2(g) of this Agreement.
"Partnership Preferred Securities" represent the Interests of
Limited Partners and have the preference and designation set forth in Section
6.2(a) of this Agreement.
"Partnership Preferred Securities Purchase Agreement" means the
partnership purchase agreement between the Trust and the Partnership providing
for the purchase of the Partnership Preferred Securities.
"Partnership Preferred Security 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 DTC, or on the books of a Person maintaining an
account with DTC (directly as a participant or as an indirect participant, in
each case in accordance with the rules of DTC or such participant).
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"Partnership Special Event" means either a Partnership Tax Event or
a Partnership Investment Company Event.
"Partnership Successor Securities" has the meaning set forth in
Section 11.11 of this Agreement.
"Partnership Tax Event" means that the General Partner shall have
requested and received an opinion of nationally recognized independent tax
counsel experienced in such matters to the effect that there has been a Tax
Action which affects any of the events described in (i) through (iii) below and
that there is more than an insubstantial risk that (i) the Partnership is, or
will be, subject to United States federal income tax with respect to income
accrued or received on the Affiliate Investment Instruments or the Eligible Debt
Securities, (ii) the Partnership is, or will be, subject to more than a de
minimis amount of other taxes, duties or other governmental charges or (iii)
interest payable by an Investment Affiliate with respect to any Debenture issued
by such Investment Affiliate to the Partnership is not, or will not be,
deductible by such Investment Affiliate for United States federal income tax
purposes.
"Paying Agent" shall have the meaning set forth in Section 12.5 of
this Agreement.
"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.
"Power of Attorney" means the Power of Attorney granted pursuant to
Section 15.2 of this Agreement.
"Property Trustee" has the meaning set forth in Section 1.1 of the
Declaration.
"Record Date" means (i) as long as the Trust Preferred Securities
remain (or, in the event that the Trust is liquidated in connection with a Trust
Special Event, as long as the Partnership Preferred Securities remain) in
book-entry only form, one Business Day prior to the relevant payment dates and
(ii) in the event that
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the Trust Preferred Securities (or in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred Securities)
shall not continue to remain in book-entry only form, the 15th day of the month
of the relevant payment date.
"Redemption Notice" has the meaning set forth in Section 6.2(e) of
this Agreement.
"Redemption Price" has the meaning set forth in Section 6.2(c) of
this Agreement.
"Registrar" has the meaning set forth in Section 12.5 of this
Agreement.
"Regular Trustees" has the meaning set forth in Section 1.1 of the
Declaration.
"Reinvestment Criteria" has the meaning specified in Section 7.2(c)
of this Agreement.
"Special Representations" has the meaning set forth in Section
6.2(h)(i) of this Agreement.
"Tax Action" has the meaning set forth in Section 1.1 of the
Declaration.
"Tax Matters Partner" means the General Partner designated as such
in Section 11.10 of this Agreement.
"10% in Liquidation Preference" means Holders of the Partnership
Preferred Securities voting together as a single class representing 10% 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 the Partnership
Preferred Securities.
"Treasury Regulations" has the meaning set forth in Section 1.1 of
the Declaration.
"Trust" means the Capita Preferred Trust, a Delaware business trust,
formed under the Declaration.
"Trust Common Securities" has the meaning specified in Section 8.1
of the Declaration.
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"Trust Common Securities Guarantee" means the Trust Common
Securities Guarantee Agreement dated as of October __, 1996, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Common
Securities.
"Trust Preferred Securities" has the meaning specified in Section
8.1 of the Declaration.
"Trust Preferred Securities Guarantee" means the Trust Preferred
Securities Guarantee Agreement dated as of October __, 1996, entered into by the
Company, as Guarantor, for the benefit of the holders of the Trust Preferred
Securities.
ARTICLE II
CONTINUATION OF THE PARTNERSHIP;
ADMISSION OF PARTNERSHIP PREFERRED SECURITIES HOLDERS;
WITHDRAWAL OF INITIAL LIMITED PARTNER
Section 2.1 CONTINUATION OF THE PARTNERSHIP. The parties hereto
agree to continue the Partnership in accordance with the terms of this
Agreement. The General Partner, for itself and as agent for the Limited
Partners, shall make every reasonable effort to assure that all certificates and
documents are properly executed and shall accomplish all filing, recording,
publishing and other acts necessary or appropriate for compliance with all the
requirements for the continuation of the Partnership as a limited partnership
under the Act and under all other laws of the State of Delaware or such other
jurisdictions in which the General Partner determines that the Partnership may
conduct activities. The rights and duties of the Partners shall be as provided
herein and, subject to the terms hereof, under the Act.
Section 2.2 NAME. The name of the Partnership is "Capita Preferred
Funding L.P.", as such name may be modified from time to time by the General
Partner following written notice to the Limited Partners.
Section 2.3 PURPOSES OF THE PARTNERSHIP. The purposes of the
Partnership are (a) to issue limited partnership interests in the Partnership in
the form of Partnership Preferred Securities, (b) to receive the
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General Partner Capital Contribution, (c) to use substantially all of the
Initial Partnership Proceeds to purchase, as an investment, the Initial
Debentures, (d) to invest, at all times, an amount equal to at least 1% of the
Initial Partnership Proceeds in Eligible Debt Securities, (e) to receive
interest and other payments on the Affiliate Investment Instruments and the
Eligible Debt Securities held by the Partnership from time to time, (f) to make
Distributions on the Partnership Preferred Securities and distributions on the
General Partner Interest if, as and when declared by the General Partner in its
sole discretion, (g) subject to the restrictions and conditions contained in
this Agreement, to make additional investments in Affiliate Investment
Instruments and Eligible Debt Securities and to dispose of any such investments
and (h) except as otherwise limited herein, to enter into, make and perform all
contracts and other undertakings, and engage in those activities and
transactions as the General Partner may reasonably deem necessary or advisable
for the carrying out of the foregoing purposes of the Partnership. The
Partnership may not engage in any other activities or operations except as
contemplated by the preceding sentence.
Section 2.4 TERM. The term of the Partnership shall commence upon
the filing of the Certificate in the Office of the Secretary of State of the
State of Delaware and shall continue until the Partnership is dissolved in
accordance with the provisions of this Agreement.
Section 2.5 REGISTERED AGENT AND OFFICE. The Partnership's
registered agent and office in Delaware shall be Prentice-Hall Corporation
System, Inc., 1013 Centre Road, Wilmington, New Castle County, Delaware 19805.
At any time, the General Partner may designate another registered agent and/or
registered office.
Section 2.6 PRINCIPAL PLACE OF ACTIVITY. The principal place of
activity of the Partnership shall be c/o AT&T Capital Corporation, 44 Whippany
Road, Morristown, New Jersey 07962. Upon ten days' written notice to the
Partners, the General Partner may change the location of the Partnership's
principal place of activity, provided that such change has no material adverse
effect upon any Partner.
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Section 2.7 NAME AND ADDRESS OF GENERAL PARTNER. The name and
address of the General Partner are as follows:
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Attention: Treasurer
The General Partner may change its name or address from time to time, in which
event the General Partner shall promptly notify the Limited Partners of any such
change.
Section 2.8 QUALIFICATION TO CONDUCT ACTIVITIES. The General Partner
shall cause the Partnership to become qualified, formed or registered under the
applicable qualification, fictitious name or similar laws of any jurisdiction in
which the Partnership conducts activities.
Section 2.9 ADMISSION OF HOLDERS OF PARTNERSHIP PREFERRED
SECURITIES; WITHDRAWAL OF INITIAL LIMITED PARTNER.
(a) Without execution of this Agreement, upon the receipt of an L.P.
Certificate by a Person, whether by purchase, gift, devise or other valid
transfer, which receipt shall be deemed to constitute a request by such Person
that the books and records of the Partnership reflect such Person's admission as
a Limited Partner, such Person shall be admitted to the Partnership as a Limited
Partner and shall become bound by this Agreement.
(b) Following the first admission of a Partnership Preferred
Security Holder to the Partnership as a Limited Partner, the Initial Limited
Partner shall withdraw from the Partnership and shall receive the return of its
capital contribution without interest or deduction.
(c) The name and mailing address of each Partner and the amount
contributed by such Partner to the capital of the Partnership shall be listed on
the books and records of the Partnership. The General Partner shall be required
to update the books and records from time to time as necessary to accurately
reflect such information.
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ARTICLE III
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST;
CAPITAL ACCOUNTS
Section 3.1 CAPITAL CONTRIBUTIONS.
(a) The General Partner has, prior to the date hereof, contributed
an aggregate of $15.00 to the capital of the Partnership, which amount is equal
to at least 15% of the total capital contributions to the Partnership, after
taking into account the contribution of the Initial Limited Partner referred to
in Section 3.1(b). Contemporaneous with the issuance of the Partnership
Preferred Securities, the General Partner shall make the General Partner Capital
Contribution. The General Partner shall, from time to time, make such additional
capital contributions as are necessary to maintain at all times a positive
Capital Account balance equal to at least one percent (1%) of the aggregate
positive Capital Account balances of all Partners at the end of such period.
(b) The Initial Limited Partner has, prior to the date hereof,
contributed the amount of $85.00 to the capital of the Partnership, which amount
shall be returned to the Initial Limited Partner as contemplated by Section
2.9(b).
(c) On the Closing Date, the Trust shall, in exchange for a
definitive L.P. Certificate contribute to the capital of the Partnership on
behalf of the Trust an amount in cash equal to the gross proceeds from the sale
of the Trust Preferred Securities and the Trust Common Securities (such amount
being a capital contribution to the Partnership). On such date, immediately
following the withdrawal of the Initial Limited Partner, the Trust shall be the
sole Limited Partner.
(d) No Limited Partner shall at any time be required to make any
additional capital contributions to the Partnership, except as may be required
by law.
Section 3.2 PARTNERSHIP PREFERRED SECURITY HOLDER'S INTEREST
REPRESENTED BY PARTNERSHIP PREFERRED SECURITIES. A Partnership Preferred
Security Holder's Interest shall be represented by the Partnership Preferred
Securities held by or on behalf of such Partner. Each Partnership Preferred
Security Holder's respective ownership of Partnership Preferred Securities shall
be
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set forth on the books and records of the Partnership. Each Partner hereby
agrees that its Interest in the Partnership shall for all purposes be personal
property. No Partner shall have an interest in specific Partnership property.
Section 3.3 CAPITAL ACCOUNTS.
(a) Establishment and Maintenance of Capital Accounts. The
Partnership shall establish and maintain a separate account (the "Capital
Account") for each Partner. The initial balance of the Capital Account for each
Partner shall be the amount as set out opposite the name of each of the Partners
on Schedule 1 attached hereto. The Capital Account of each Partner shall be
increased by (i) the dollar amount of any additional contributions made by such
Partner and (ii) allocations to such Partner of income and gain (including
income exempt from tax). The Capital Account of each Partner shall be decreased
by (i) the dollar amount of any distributions made to such Partner, and (ii)
allocations to such Partner of loss and deduction (including noncapital,
nondeductible expenditures not deductible in computing the Partnership's income
or loss for United States federal income tax purposes).
(b) Compliance with Regulations. Notwithstanding any other provision
of this Agreement to the contrary, the provisions of Section 3.3(a) hereof
regarding the maintenance of Capital Accounts shall be construed so as to comply
with the Treasury Regulations promulgated under section 704 of the Code. The
General Partner, in its sole discretion, is authorized to modify such provisions
to the minimum extent necessary to comply with such Treasury regulations.
Section 3.4 INTEREST ON CAPITAL CONTRIBUTIONS. Except as provided
herein, no Partner shall be entitled to interest on or with respect to any
capital contribution to the Partnership.
Section 3.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS. Subject
to Section 3.1(b) hereof, no Partner shall be entitled to withdraw any part of
such Partner's capital contribution to the Partnership. No Partner shall be
entitled to receive any distributions
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from the Partnership, except as provided in this Agreement.
ARTICLE IV
ALLOCATIONS
Section 4.1 PROFITS AND LOSSES. After giving effect to the special
allocation provisions set forth in Section 4.2 which special allocations shall
take precedence over any allocations made pursuant to this Section 4.1,
(a) the Partnership's Net Income for each Fiscal Period of the
Partnership shall be allocated as follows:
(i) First, to each Holder of a Partnership Preferred Security in an
amount equal to the excess, if any, of (x) all Net Losses, if any,
allocated to each such Holder from the date of issuance of the Partnership
Preferred Security through and including the close of such Fiscal Period
pursuant to Section 4.1(b)(ii) below over (y) the amount of Net Income, if
any, allocated to each such Holder pursuant to this Section 4.1(a)(i) in
all prior Fiscal Periods.
(ii) Second, to each Holder of a Partnership Preferred Security, an
amount of Net Income equal to the excess of (x) the Distributions accrued
on the Partnership Preferred Securities held by such Holder from the date
of their issuance through and including the last day of such Fiscal
Period, including any Compounded Distributions payable with respect
thereto, over (y) the amount of Net Income allocated to the Holders of the
Partnership Preferred Securities held by such Holder pursuant to this
Section 4.1(a)(ii) in all prior Fiscal Periods. Amounts allocated to all
Partnership Preferred Security Holders shall be allocated among such
Holders in proportion to the number of Partnership Preferred Securities
held by such Holders.
(iii) Any remaining Net Income shall be allocated to the General
Partner.
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(b) The Partnership's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the General Partner until the balance of the General
Partner's Capital Account is reduced to zero, provided, however, that the
aggregate amount of Net Losses allocated to the General Partner pursuant
to this Section 4.1(b)(i) shall not exceed the sum of 14% of the total
capital contributions of all Partners plus the aggregate Net Income
allocated to the General Partner pursuant to this Section 4.1.
(ii) Second, among the Holders in proportion to their respective
aggregate Capital Account balances, until the Capital Account balances of
such Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the General
Partner.
(c) DAILY DETERMINATION. For purposes of determining the profits,
losses or any other items allocable to any period, profits, losses and any such
other items shall be determined on a daily basis, unless the General Partner
determines that another method is permissible under Section 704 of the Code and
the Treasury Regulations promulgated thereunder. Unless otherwise specified,
such profits, losses or other items shall be determined for each Fiscal Period.
Section 4.2 SPECIAL ALLOCATION.
(a) All expenditures that are (i) incurred by, or on behalf of, the
Partnership and (ii) paid, or otherwise reimbursed, by the General Partner out
of its own funds shall be allocated entirely to the General Partner.
(b) In the event any Partner unexpectedly receives any adjustments,
allocations or distributions described in Treasury Regulation Section 1.704-
1(b)(2)(ii)(d)(4), (5) or (6), items of the Partnership's Net Income shall be
specially allocated to such Partner in a manner sufficient to eliminate the
deficit, if any, in the balance of the Capital Account of such Partner as
quickly as possible. The foregoing is intended to be a "qualified income offset"
provision as described in Trea-
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sury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted and
applied in all respects in accordance with such Treasury Regulation.
(c) SECTION 704 COMPLIANCE. While this Agreement does not
specifically provide for certain provisions required by Treasury Regulation
Sections 1.704-1(b) and 1.704-2 because those provisions apply to transactions
that are not expected to occur as regards the Partnership, the Partners intend
that the allocations under Section 4.1 conform to Treasury Regulations Sections
1.704-1(b) and 1.704-2 (including, without limitation, the minimum gain
chargeback, chargeback of partner nonrecourse debt minimum gain and partner
nonrecourse debt provisions of such Treasury Regulations), and, to the extent
necessary due to the occurrence of unexpected events, the General Partner shall
make such changes in the allocations under Section 4.1 as it believes are
reasonably necessary to meet the requirements of such Treasury Regulations.
(d) ADJUSTMENT OF ALLOCATIONS. If the allocations set forth in this
Article IV are adjusted by the Internal Revenue Service and the Tax Matters
Partner agrees to such adjustments, such allocations shall be amended to the
minimum extent necessary to conform with such adjustments.
(e) ADDITIONAL ALLOCATIONS. Notwithstanding the foregoing, if, upon
the final dissolution and termination of the Partnership and after taking into
account all allocations of Net Income and Net Losses (and other tax items) under
this Article IV, the distributions to be made in accordance with the positive
Capital Account balances would result in a distribution that would be different
from a distribution under Article XIII, then gross items of income and gain (and
other tax items) for the taxable year of the final dissolution and termination
(and, to the extent permitted under section 761(c) of the Code, gross items of
income and gain, and other tax items, for the immediately preceding taxable
year) shall be allocated to the Partners to increase or decrease their
respective Capital Account balances so that the final distribution will occur in
the same manner as a distribution under Section 13.4.
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(f) GENERAL PARTNER ALLOCATIONS. Notwithstanding any provision of
this Agreement to the contrary, the interest of the General Partner in each item
of Partnership income, gain, loss, deduction, or credit shall, at all times
during the existence of the Partnership, be equal to at least (A) at any time
that the aggregate capital contributions to the Partnership are equal to or less
than $50,000,000, one percent (1%) of each such item and (B) at any time that
the aggregate capital contributions to the Partnership are greater than
$50,000,000, at least a percentage equal to the product of (i) one percent (1%)
and (ii) a fraction (not exceeding 1 and not less the 0.2), the numerator of
which is $50,000,000 and the denominator of which is the lesser of (x) the
aggregate Capital Account balances of the Capital Accounts of all Partners at
such time and (y) the aggregate capital contributions to the Partnership of all
Partners at such time.
Section 4.3 WITHHOLDING. The Partnership shall comply with
withholding requirements under Federal, state and local law and shall remit
amounts withheld to and file required forms with applicable jurisdictions. To
the extent that the Partnership is required to withhold and pay over any amounts
to any authority with respect to distributions or allocations to any Partner,
the amount withheld shall be deemed to be a distribution in the amount of the
withholding to the Partner. In the event of any claimed over-withholding,
Partners shall be limited to an action against the applicable jurisdiction. If
the amount withheld was not withheld from actual distributions, the Partnership
may reduce subsequent distributions by the amount of such withholding. Each
Partner agrees to furnish the Partnership with any representations and forms as
shall reasonably be requested by the Partnership to assist it in determining the
extent of, and in fulfilling, its withholding obligations.
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ARTICLE V
DISTRIBUTIONS
Section 5.1 DISTRIBUTIONS. Limited Partners shall receive periodic
Distributions and Compounded Distributions, if any, redemption payments and
liquidation distributions in accordance with the terms of the Partnership
Preferred Securities set forth in Article VI. The General Partner shall in its
sole discretion determine whether and when Distributions shall be payable;
provided, however, that if the General Partner shall determine a Distribution
will not be paid on a scheduled Distribution Payment Date, the General Partner
shall give notice of its determination not to pay Distributions to Limited
Partners of record as of the Record Date for the payment of such Distribution.
Section 5.2 LIMITATIONS ON DISTRIBUTIONS. The Partnership shall not
make a Distribution to any Partner on account of such Partner's Interest if such
Distribution would violate Section 17-607 of the Act or other applicable law.
ARTICLE VI
ISSUANCE OF PARTNERSHIP PREFERRED SECURITIES
Section 6.1 GENERAL PROVISIONS REGARDING PARTNERSHIP PREFERRED
SECURITIES.
(a) There is hereby authorized for issuance and sale Partnership
Preferred Securities having an aggregate liquidation preference not greater than
$________ and having the designation, annual distribution rate, liquidation
preference, redemption terms, and other powers, preferences and special rights
and limitations set forth in this Article VI.
(b) The payment of Distributions (including payments of
distributions by the Partnership in liquidation or on redemption in respect of
Partnership Preferred Securities) shall be guaranteed by the Company pursuant to
and to the extent set forth in the Partnership Guarantee. The Partnership
Preferred Security Holders hereby authorize the General Partner to hold the
Guarantee on
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behalf of the Partnership Preferred Security Holders. In the event of an
appointment of a Special Representative pursuant to Section 6.2(i), among other
things, to enforce the Partnership Guarantee, the Special Representative may
take possession of the Partnership Guarantee for such purpose. If no Special
Representative has been appointed to enforce the Partnership Guarantee, the
General Partner has the right to enforce the Partnership Guarantee on behalf of
the Partnership Preferred Security Holders. The Partnership Preferred Security
Holders, by acceptance of such Partnership Preferred Securities, acknowledge and
agree to the subordination provisions in, and other terms of, the Partnership
Guarantee.
(c) The Partnership may not issue any interests in the Partnership
other than the Partnership Preferred Securities and the General Partner
Interest, provided that the Partnership may accept consideration for additional
capital contributions from the General Partner with respect to the General
Partner Interest. All Partnership Preferred Securities shall rank senior to all
other Interests in the Partnership in respect of the right to receive
Distributions or other distributions. All Partnership Preferred Securities
redeemed, purchased or otherwise acquired by the Partnership shall be canceled.
The Partnership Preferred Securities will be issued in registered form only.
(d) No Holder shall be entitled as a matter of right to subscribe
for or purchase, or have any preemptive right with respect to, any part of any
new or additional limited partnership interests, or of securities convertible
into any Partnership Preferred Securities or other limited partnership
interests, whether now or hereafter authorized and whether issued for cash or
other consideration or by way of a distribution.
(e) Any of the Partnership Preferred Securities that are owned by
the Company or by any entity more than 50% of which is owned by the Company,
either directly or indirectly, shall not be entitled to vote or consent with
respect to any Partnership Preferred Security owned by it, and shall, for
purposes of such vote or consent, be treated as if they were not outstanding;
provided, however, that persons otherwise eligible to vote to whom the Company
or any of its subsidiaries have pledged Partnership Preferred Securities may
vote or consent with
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respect to such pledged Partnership Preferred Securities under any of the
circumstances described in Section 6.2.
Section 6.2 PARTNERSHIP PREFERRED SECURITIES.
(a) DESIGNATION. A total of ______ Partnership Preferred Securities,
liquidation preference $25 per Partnership Preferred Security, are hereby
designated as "__% Partnership Preferred Securities".
(b) DISTRIBUTIONS. (i) Partnership Preferred Security Holders shall
be entitled to receive cumulative Distributions and Compounded Distributions (as
defined below) (if any), if, as and when declared by the General Partner, in its
sole discretion, out of the assets of the Partnership legally available
therefor, at a rate per annum of ___% of the stated liquidation preference of
$25 per Partnership Preferred Security, calculated on the basis of a 360-day
year consisting of twelve 30-day months. For any period shorter than a full
90-day quarter, Distributions will be computed on the basis of the actual number
of days elapsed in such 90-day quarter. Such Distributions shall, from the date
of original issue, accrue and be cumulative and shall be payable quarterly,
when, if, and as declared by the General Partner on the dates specified in
Section 6.2(b)(ii) below. Distributions and Compounded Distributions (as defined
below) (if any) on the Partnership Preferred Securities shall be cumulative from
the Closing Date. Distributions not paid on the scheduled Distribution Payment
Date will accumulate and compound quarterly at the rate of [___]% per annum
("Compounded Distributions"). In the event that any date on which Distributions
are payable on the Partnership Preferred Securities is not a Business Day, then
payment of the Distribution 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.
(ii) Distributions on the Partnership Preferred Securities will be
payable quarterly in arrears if, as and when, declared by the General Partner on
March 31, June 30, September 30 and December 31 of each year, com-
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mencing on December 31, 1996 (each a "Distribution Payment Date").
Distributions will be payable to the Holders as they appear on the
books and records of the Partnership on the relevant Record Date. If the Trust
or the Property Trustee is the Holder of the Partnership Preferred Securities,
all distributions of cash shall be made by wire transfer of same day funds to
such Holder by 10:00 a.m., New York City time, on the applicable Distribution
Payment Date. Distributions payable on any Partnership Preferred Securities that
are not punctually paid on any Distribution Payment Date will cease to be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the relevant record date, and such Distribution will instead be
payable to the Person in whose name such Partnership Preferred Securities are
registered on the special record date or other specified date for payment of
such defaulted or accrued Distribution.
(c) OPTIONAL REDEMPTION. Partnership Preferred Securities shall be
redeemable at the option of the General Partner, in whole or in part, from time
to time, on or after October 1, 2006, upon not less than 30 nor more than 60
days' notice, at an amount per Partnership Preferred Securities equal to $25
plus accrued and unpaid Distributions thereon, including any Compounded
Distributions (the "Redemption Price"). The Partnership may not redeem the
Partnership Preferred Securities in part unless all accumulated and unpaid
Distributions, including any Compounded Distributions, have been paid in full on
all Partnership Preferred Securities for all Fiscal Periods terminating on or
prior to the date of redemption. If a partial redemption of the Partnership
Preferred Securities would result in the delisting of the Trust Preferred
Securities (or, if the Trust is liquidated in connection with a Trust Special
Event, the delisting of the Partnership Preferred Securities), the Partnership
may only redeem the Partnership Preferred Securities in whole but not in part.
(d) SPECIAL EVENT REDEMPTIONS. (i) If, at any time, a Partnership
Special Event shall occur and be continuing, the General Partner shall, within
90 days following the occurrence of such Partnership Special Event, elect to
either (i) redeem the Partnership Pre-
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ferred Securities in whole (but not in part), upon not less than 30 or more than
60 days' notice at the Redemption Price, provided that if at the time there is
available to the Partnership the opportunity to eliminate, within such 90-day
period, the Partnership 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 General Partner has or will cause no
adverse effect on the Partnership, the Trust, or the Company, the General
Partner will pursue such measure in lieu of redemption; or (ii) cause the
Partnership Preferred Securities to remain outstanding, provided that in the
case of this clause (ii), the General Partner shall pay any and all costs and
expenses incurred by or payable by the Partnership which are attributable to the
Partnership Special Event.
(e) REDEMPTION PROCEDURES. (i) Notice of any redemption of
Partnership Preferred Securities (a "Redemption Notice") will be given by the
Partnership by mail to each Holder of Partnership Preferred Securities to be
redeemed not fewer than 30 nor more than 60 days before the date fixed for
redemption. For purposes of the calculation of the date of redemption and the
dates on which notices are given pursuant to this Section 6.2(e)(i), a
Redemption Notice shall be deemed to be given on the day such notice is first
mailed, by first-class mail, postage prepaid, to Holders of Partnership
Preferred Securities. Each Redemption Notice shall be addressed to the Holders
of Partnership Preferred Securities at the address of each such Holder appearing
in the books and records of the Partnership. No defect in the Redemption Notice
or in the mailing thereof with respect to any Holder shall affect the validity
of the redemption proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding Partnership
Preferred Securities are to be redeemed, the Partnership Preferred Securities to
be redeemed shall be redeemed pro rata provided, that, in the event Partnership
Preferred Securities are held in book-entry only form by DTC or its nominee (or
any successor Clearing Agency or its nominee), DTC will reduce, in accordance
with DTC's customary procedures, the amount of the interest of each Clearing
Agency Participant in the Partnership Preferred Securities to be redeemed;
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provided, that if, as a result of such pro rata redemption, Holders would hold
fractional interests in the Partnership Preferred Securities, the General
Partner will adjust the amount of the interest of each Holder to be redeemed may
be adjusted to avoid such fractional
interests.
(iii) If the Partnership gives a Redemption Notice (which notice
will be irrevocable), then by 12:00 noon, New York City time, on the redemption
date, the Partnership (A) if the Partnership Preferred Securities are in
book-entry only form with DTC, will deposit irrevocably with DTC funds
sufficient to pay the applicable Redemption Price and will give DTC irrevocable
instructions and authority to pay the Redemption Price in respect of the
Partnership Preferred Securities held through DTC in global form or (B) if the
Partnership Preferred Securities are held in certificated form, will deposit
with the Paying Agent, funds sufficient to pay the applicable Redemption Price
of the amount of any such Partnership Preferred Securities and will give to the
Paying Agent irrevocable instructions and authority to pay such amounts to the
Holders of Partnership Preferred Securities, upon surrender of their
certificates, by check, mailed to the address of the relevant Holder appearing
on the books and records of the Partnership on the redemption date; provided,
however, that for so long as the Trust or the Property Trustee of the Trust
shall hold the Partnership Preferred Securities, payment of cash shall be made
by wire in same day funds to the Holder by 12:00 Noon, New York City time, on
the redemption date. For these purposes, the applicable Redemption Price shall
not include Distributions which are being paid to Holders who were Holders on a
relevant record date. Upon satisfaction of the foregoing conditions, then
immediately prior to the close of business on the date of such deposit or
payment, all rights of Holders of such Partnership Preferred Securities so
called for redemption will cease, except the right of the Holders to receive the
Redemption Price, but without interest on such Redemption Price, and from and
after the date fixed for redemption, such Partnership Preferred Securities will
not accrue distributions or bear interest.
In the event that any date fixed for redemption of Partnership
Preferred Securities is not a Business Day, then payment of the Redemption Price
payable on such
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date will be made on the next succeeding Business Day (and without any interest
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. In the event that payment of the Redemption Price is
improperly withheld or refused and not paid by either the Partnership or the
Company pursuant to the Partnership Guarantee, Distributions on the Partnership
Preferred Securities called for Redemption will continue to accrue, to the
extent that payment of such interest is legally available, from the original
redemption date until the Redemption Price is actually paid.
The Partnership shall not be required to register or cause to be
registered the transfer of any Partnership Preferred Securities which have been
called for redemption.
(f) COMPANY PURCHASES. Subject to the provisions of this Section 6.2
and applicable law (including, without limitation, Federal securities laws), if
Partnership Preferred Securities have been distributed to the Holders (as
defined in the Declaration) of Trust Preferred Securities, the Company or any of
its subsidiaries may at any time and from time to time purchase outstanding
Partnership Preferred Securities by tender, in the open market, or by private
agreement.
(g) LIQUIDATION DISTRIBUTION UPON DISSOLUTION. In the event of any
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Partnership, the Holders of Partnership Preferred Securities at the time
outstanding will be entitled to receive out of the assets of the Partnership
such amount as is determined in accordance with Section 13.4 (the "Partnership
Liquidation Distribution") payable in cash.
(h) VOTING RIGHTS.
(i) SPECIAL REPRESENTATIVE. (1) If one or more of the following
events shall occur and be continuing (each a "Partnership Enforcement Event"):
(i) arrearages on distributions on the Partnership Preferred Securities shall
exist for six consecutive quarterly distribution periods, (ii) the Company is in
default on
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any of its obligations under the Partnership Guarantee or (iii) an Investment
Event of Default occurs and is continuing on any Affiliate Investment Instrument
or a default under any Investment Guarantee, as the case may be, the Holders of
the Partnership Preferred Securities, upon the affirmative vote of at least a
Majority in Liquidation Preference of the Partnership Preferred Securities,
shall have the right, to the exclusion of the General Partner, (a) to appoint
and authorize a special representative of the Partnership and the Limited
Partners (a "Special Representative") to enforce (1) to the maximum extent
permitted by applicable law, the Partnership's creditors' rights and other
rights with respect to the Affiliate Investment Instruments and the Investment
Guarantees, (2) the rights of the Holders of the Partnership Preferred
Securities under the Partnership Guarantee, and (3) the rights of the Holders of
the Partnership Preferred Securities to receive Distributions (only if, and to
the extent, declared by the General Partner, in its sole discretion, out of
funds legally available therefor) on the Partnership Preferred Securities, and
(b) under the Partnership Guarantee to enforce the terms of the Partnership
Guarantee, including the right to enforce the covenant restricting certain
payments of the Company and its majority owned subsidiaries. Under no
circumstances, however, shall the Special Representative have authority to cause
the General Partner to declare Distributions on the Partnership Preferred
Securities nor to have any authority concerning the selection of Partnership
Investments. When the Special Representative acts to enforce the Partnership's
creditors' rights and other rights with respect to the Affiliate Investment
Instruments and the Investment Guarantees, the Special Representative acts as an
agent of the Partnership. When the Special Representative acts to enforce the
rights of the Holders of the Partnership Preferred Securities under the
Partnership Guarantee or their rights to receive Distributions on the
Partnership Preferred Securities, the Special Representative acts as an agent of
the Holders of the Partnership Preferred Securities. In addition, the Special
Representative shall not, by virtue of acting in such capacity, be admitted as a
general or limited partner in the Partnership or otherwise be deemed to be a
general or limited partner in the Partnership and shall have no liability for
the debts, obligations, or liabilities of the Partnership.
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(2) In furtherance of the foregoing, and without limiting the powers
of any Special Representative so appointed and to avoid any doubt concerning the
powers of the Special Representative, any Special Representative, in its own
name, in the name of the Partnership, in the name of the Limited Partners, or
otherwise, may institute, or cause to be instituted, a proceeding, including,
without limitation, any suit in equity, an action at law or other judicial or
administrative proceeding, to enforce on behalf of the Partnership the
Partnership's rights directly against the Company or any other obligor in
connection with its obligations to the Partnership, and may prosecute such
proceeding to judgment or final decree, and enforce the same against the Company
or any other obligor in connection with such obligations and collect, out of the
property, wherever situated, of the Company or any such other obligor upon such
obligations, the monies adjudged or decreed to be payable in the manner provided
by law. The General Partner agrees to execute and deliver such documents as may
be necessary, appropriate or convenient for the Special Representative to
enforce the foregoing rights and obligations on behalf and in the name of the
Partnership.
(3) For purposes of determining whether the Partnership has deferred
payment of Distributions for six (6) consecutive quarters, Distributions shall
be deemed to remain in arrears, notwithstanding any payments in respect thereof,
until full cumulative Distributions, including Compounded Distributions, have
been or contemporaneously are paid with respect to all quarterly Distribution
periods terminating on or prior to the date of payment of such full cumulative
Distributions. Not later than 30 days after such right to appoint a Special
Representative arises, the General Partner will convene a meeting for election
of a Special Representative. If the General Partner fails to convene such
meeting within such 30-day period, the Holders of not less than 10% in
Liquidation Preference of the Outstanding Partnership Preferred Securities will
be entitled to convene such meeting. The provisions of Section 14.3 relating to
the convening and conduct of meetings of the Partners will apply with respect to
any such meeting. In the event that, at any such meeting, Holders of less than a
Majority in Liquidation Preference of Partnership Preferred Securities entitled
to vote for the appointment of a Special Representative vote for such
appointment, no
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Special Representative shall be appointed. Any Special Representative appointed
shall cease to be a Special Representative of the Partnership and/or the Limited
Partners if (x) the Partnership (or the Company pursuant to the Partnership
Guarantee) shall have paid in full all accrued and unpaid Distributions on the
Partnership Preferred Securities, (y) the relevant Investment Event of Default
shall have been cured, and (z) the Company is in compliance with all its
obligations under the Partnership Guarantee, and the Company, in its capacity as
the General Partner, shall continue the activities of the Partnership without
dissolution. Notwithstanding the appointment of any such Special Representative,
the Company shall continue as General Partner and shall retain all rights under
this Agreement, including the right to determine whether to declare, in its sole
discretion, the payment of Distributions on the Partnership Preferred
Securities.
(ii) CERTAIN AMENDMENTS; WAIVER. (1) If any proposed amendment of
this Agreement provides for, or the General Partner otherwise proposes to
effect, (x) any action that would adversely affect the powers, preferences or
special rights of the Holders of the Partnership Preferred Securities, whether
by way of amendment of this Agreement or otherwise (including, without
limitation, the authorization or issuance of any limited partnership interests
in the Partnership ranking, as to participation in profits or distributions, or
in the assets of the Partnership, senior to the Partnership Preferred
Securities); or (y) the dissolution, winding-up or termination of the
Partnership, other than (1) in connection with the occurrence of a Partnership
Special Event or (2) as described under Sections 11.11 and 13.2 of this
Agreement, then the Holders of outstanding Partnership Preferred Securities will
be entitled to vote on such amendment or proposal of the General Partner (but
not on any other amendment or proposal) as a class and such amendment or
proposal shall not be effective except with the approval of Holders of a
Majority in Liquidation Preference of such outstanding Partnership Preferred
Securities having a right to vote on the matter; provided, however, that if the
Property Trustee on behalf of the Trust is the Holder of the Partnership
Preferred Securities, any such amendment or proposal not excepted by (1) or (2)
above shall not be effective without the prior or concurrent approval of the
Holders of a majority in liquidation amount of the
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outstanding Trust Preferred Securities having a right to vote on such matters;
provided, further that no such approval shall be required if the dissolution,
winding-up or termination of the Partnership is proposed or initiated upon the
initiation of proceedings, or after proceedings have been initiated, for the
dissolution, winding-up, liquidation or termination of the Company.
(2) The Holders of a Majority in Liquidation Preference of
Partnership Preferred Securities may, by vote, on behalf of the Holders of all
of the Partnership Preferred Securities, waive any past Partnership Enforcement
Event with respect to the Partnership Preferred Securities and its consequences;
provided that, if the underlying Investment Event of Default:
(A) is not waivable under the related Affiliate Investment Instrument,
such Partnership Enforcement Event shall also not be waivable; or
(B) requires the consent or vote of the Holders of greater than a
majority in principal amount or liquidation preference of the
Affiliate Investment Instruments (a "Super Majority") to be waived
under the related Affiliate Investment Instrument, the Partnership
Enforcement Event may only be waived by the vote of the Holders of
the relevant Super Majority in liquidation amount of the Partnership
Preferred Securities.
Upon such waiver, any such Partnership Enforcement Event shall cease to exist,
and shall be deemed to have been cured, for every purpose of this Agreement, but
no such waiver shall extend to any subsequent or other Partnership Enforcement
Event or impair any right consequent thereon.
(3) A waiver of an Investment Event of Default by the Special
Representative, acting at the direction of the Holders of the Partnership
Preferred Securities, constitutes a waiver of the corresponding Partnership
Enforcement Event.
(iii) GENERAL VOTING. (1) Neither the General Partner nor the
Special Representative shall (i) direct the time, method and place of conducting
any proceeding for any remedy available, (ii) waive any In-
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vestment Event of Default that is waivable under the Affiliate Investment
Instruments, (iii) exercise any right to rescind or annul a declaration that the
principal of any Affiliate Investment Instruments that are debt instruments
shall be due and payable, (iv) waive the breach of the covenant by the Company
in the Partnership Guarantee to restrict certain payments by the Company and its
majority owned subsidiaries, or (v) consent to any amendment, modification or
termination of any Affiliate Investment Instrument, where such consent shall be
required from the investor, without, in each case, obtaining the prior approval
of the Holders of at least a Majority in Liquidation Preference of the
Partnership Preferred Securities; provided, however, that if the Property
Trustee on behalf of the Trust is the Holder of the Partnership Preferred
Securities, such waiver, consent or amendment or other action shall not be
effective without the prior or concurrent approval of at least a majority in
liquidation amount of the outstanding Trust Preferred Securities having a right
to vote on such matters. The General Partner shall not revoke any action
previously authorized or approved by a vote of the Holders of the Partnership
Preferred Securities. The General Partner shall notify all Holders of the
Partnership Preferred Securities of any notice of an Investment Event of Default
received with respect to any Affiliate Investment Instrument.
(2) Any required approval of Holders of Partnership Preferred
Securities may be given at a separate meeting of such Holders convened for such
purpose or pursuant to written consent. The General Partner will cause a notice
of any meeting at which Holders of Partnership Preferred Securities are entitled
to vote, or of any matter upon which the action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Partnership
Preferred Securities. Each such notice will include a statement setting forth
(x) the date of such meeting or the date by which such action is to be taken,
(y) a description of any matter proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matters upon which written consent
is sought and (z) instructions for the delivery of proxies or consents. No vote
or consent of the Holders of Partnership Preferred Securities will be required
for the Partnership to redeem and cancel Partnership Preferred Securities in
accordance with this Agreement.
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(3) Notwithstanding that Holders of Partnership Preferred Securities
are entitled to vote or consent under any of the circumstances described above,
any of the Partnership Preferred Securities at such time that are owned by the
Company or by any entity more than 50% of which is owned by the Company, either
directly or indirectly, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if they were not outstanding;
provided, however, that persons otherwise eligible to vote to whom the Company
or any of its subsidiaries have pledged Partnership Preferred Securities may
vote or consent with respect to such pledged Partnership Preferred Securities
under any of the circumstances described herein.
(4) Holders of the Partnership Preferred Securities shall have no
rights to remove or replace the General Partner.
(5) Holders of Partnership Preferred Securities shall have no
preemptive rights.
ARTICLE VII
PARTNERSHIP INVESTMENTS
Section 7.1 INITIAL AFFILIATE INVESTMENT INSTRUMENTS.
(a) All Partnership funds will be invested in the securities of
Investment Affiliates (the "Affiliate Investment Instruments") and Eligible Debt
Securities. No more than 99% of the Initial Partnership Proceeds will be used by
the Partnership to purchase the Initial Debentures meeting the criteria set
forth in this Section 7.1. The remaining funds from the Initial Partnership
Proceeds will be used to purchase Eligible Debt Securities in accordance with
the terms of this Agreement.
(b) The Partnership shall apply approximately 99% of the Initial
Partnership Proceeds to purchase (1) a debt instrument of the Company (the
"Initial Company Debenture") in the aggregate principal amount of $___________
and (2) a debt instrument of a wholly owned United States subsidiary of the
Company and a debt instrument of a second wholly owned United States subsid-
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iary of the Company (such debt instruments collectively referred to as the
"Initial Affiliate Debentures"). The Initial Company Debenture and the Initial
Affiliate Debentures are collectively referred to as the "Initial Debentures".
The Partnership may purchase the Initial Debentures only upon receipt of an
opinion of the Independent Financial Advisor to the effect that (i) if such
Initial Debentures were to be rated, at least one Rating Agency would rate all
the Initial Debentures investment grade at the time such Initial Debentures are
purchased by the Partnership, (ii) the Company and each Investment Affiliate
which is a subsidiary of the Company would have been capable of issuing and
selling debt instruments with the same terms and conditions as the applicable
Initial Debentures to unrelated third party investors, (iii) the terms and
conditions of the Initial Debentures are consistent with the terms and
conditions of a public offering or a private placement pursuant to Rule 144A
under the Securities Act of 1933 of such Initial Debentures and are no more
favorable to the relevant Investment Affiliate than could have been obtained by
such Investment Affiliate from unrelated third party investors pursuant to such
a public offering or private placement of such Initial Debentures. On the
Closing Date, the Partnership shall invest at least 1% of such Initial
Partnership Proceeds in Eligible Debt Securities. The terms of the Initial
Debentures will be as set forth in the Indentures attached hereto as Exhibits A
and B.
Section 7.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE PARTNERSHIP.
(a) The Partnership must at all times invest an amount equal to at
least 1% of the Initial Partnership Proceeds in Eligible Debt Securities.
(b) The Partnership may reinvest any payments it receives in respect
of its investments in (i) Eligible Debt Securities without limitation or (ii)
additional Affiliate Investment Instruments but only upon (A) the acceptance of
a written offer setting forth the terms and conditions on which an Investment
Affiliate would be willing to issue an Affiliate Investment Instrument to the
Partnership (an "Investment Offer") and (B) the receipt of an opinion of the
Independent Financial Advisor that the terms of such Affiliate Investment
Instru-
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ment set forth in such Investment Offer satisfy the Reinvestment Criteria (as
defined below).
(c) If the Independent Financial Advisor determines that the terms
of an Affiliate Investment Instrument (as set forth in the Investment Offer) do
not satisfy the Reinvestment Criteria, the Partnership shall be prohibited from
making any investment in such Affiliate Investment Instrument.
(d) Each Affiliate Investment Instrument shall satisfy the following
criteria (the "Reinvestment Criteria"): (i) the economic terms of each Affiliate
Investment Instrument shall be no less favorable to the Partnership than terms
that would otherwise be obtainable through a public offering or private
placement under Rule 144A of the Securities Act of 1933 of securities by the
requesting Investment Affiliate and any other the terms and conditions of each
Affiliate Reinvestment Instrument are substantially similar to the terms and
conditions of similar securities that are offered to the public in a public
offering or private placement under Rule 144A of the Securities Act of 1933 of
such securities; (ii) the Partnership shall not have held any Affiliate
Investment Instruments of the Investment Affiliate submitting the Investment
Offer within the three-year period ending on the date of the Investment Offer;
(iii) there shall not have been a default on any debt obligation of the
Investment Affiliate submitting the Investment Offer that was owned by the
Partnership; (iv) no dividend arrearages shall have existed on any equity
security of the Investment Affiliate submitting the Investment Offer that was
owned by the Partnership; and (v) the Investment Affiliate submitting the
Investment Offer shall not be deemed to be an investment company by reason of
Section 3(a) or 3(b) of the 1940 Act.
(e) Any payments received by the Partnership in respect of its
investments that are not invested in additional Affiliate Investment
Instruments, may be reinvested only in Eligible Debt Securities.
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ARTICLE VIII
BOOKS OF ACCOUNT, RECORDS AND REPORTS
Section 8.1 BOOKS AND RECORDS.
(a) Proper and complete records and books of account of the
Partnership shall be kept by the General Partner, in which shall be entered
fully and accurately all transactions and other matters relative to the
Partnership's investments. The books and records of the Partnership, together
with a certified copy of this Agreement and of the Certificate, shall at all
times be maintained at the principal office of the General Partner and shall be
open to the inspection and examination of the Partners or their duly authorized
representatives for any proper purpose reasonably related to its Interest during
reasonable business hours.
(b) Notwithstanding any other provision of this Agreement to the
contrary, the General Partner may, to the maximum extent permitted by applicable
law, keep confidential from the Partners any information with respect to the
Partnership, the disclosure of which the General Partner reasonably believes is
not in the best interests of the Partnership, or is adverse to the interests of
the Partnership, or which the Partnership or the General Partner is required by
law or by an agreement with any Person to keep confidential.
(c) (i) For so long as the Partnership Preferred Securities are held
by the Property Trustee on behalf of the Trust, within one month after the close
of each Fiscal Year, the General Partner shall transmit to each Partner a
statement indicating such Partner's share of each item of Partnership income,
gain, loss, deduction or credit, for United States federal income tax purposes,
for such Fiscal Year.
(ii) In the event that the Partnership Preferred Securities are no
longer held by the Property Trustee on behalf of the Trust, as soon as
reasonably possible after the close of the Fiscal Year, the General Partner
shall transmit to each Partner the statement referred to in Section 8.1(c)(i)
hereof.
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Section 8.2 ACCOUNTING METHOD. For both financial and tax reporting
purposes, the books and records of the Partnership shall be kept on the accrual
method of accounting applied on a consistent basis and shall reflect all
Partnership transactions.
Section 8.3 ANNUAL AUDIT. As soon as practical after the end of each
Fiscal Year, but not later than 90 days after such end, the financial statements
of the Partnership shall be audited by a firm of independent certified public
accountants selected by the General Partner in accordance with applicable law.
The cost of such audits will be an expense of the Partnership and shall be paid
by the General Partner.
ARTICLE IX
PAYMENT OF EXPENSES
Section 9.1 PAYMENT OF TRUST EXPENSES AND PARTNERSHIP TAXES. Since
the Trust is being formed solely to facilitate a direct investment in the
Partnership Preferred Securities, the Partnership hereby agrees, at any time
while the Property Trustee is the Holder of any Partnership Preferred
Securities, to pay all the expenses of the Trust, including, but not limited to,
any taxes, duties, assessments or governmental charges of whatever nature (other
than withholding taxes) imposed on the Trust by the United States, or any other
taxing authority, so that the net amounts received and retained by the Trust and
the Property Trustee after paying such expenses will be equal to the amounts the
Trust and the Property Trustee would have received had no such costs or expenses
been incurred by or imposed on the Trust. The General Partner shall be liable
for, and shall pay all such expenses solely out of its own funds. In addition,
if the Partnership 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 case, the
General Partner will pay such taxes, duties, assessments or other governmental
charges out of its own funds.
Section 9.2 PAYMENT OF OTHER PARTNERSHIP EXPENSES. In connection
with the offering, sale and
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issuance of the Partnership Preferred Securities by the Partnership, the General
Partner shall:
(a) pay all costs and expenses of the Partnership (including, but
not limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of the Partnership Preferred
Securities (including commissions to the underwriters in connection therewith)
the fees and expenses of the Special Representatives (if any), and the costs and
expenses relating to the operation of the Partnership, 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
(b) be primarily and fully liable for any indemnification
obligations arising with respect to this Agreement.
ARTICLE X
POWERS, RIGHTS AND DUTIES
OF THE LIMITED PARTNERS
Section 10.1 LIMITATIONS. The Limited Partners shall not participate
in the management or control of the Partnership's investment activity, property
or other assets, nor shall the Limited Partners engage in any activities for the
Partnership, nor shall the Limited Partners have the power to act for or bind
the Partnership, such powers being vested solely and exclusively in the General
Partner (and, upon appointment, and to the extent set forth herein, the Special
Representative). The Limited Partners shall have such rights as are set forth
herein and in the Partnership Guarantee. The Limited Partners shall have no
interest in the properties or assets of the General Partner, or any equity
therein, or in any proceeds of any sales thereof (which sales shall not be
restricted in any respect), by virtue of acquiring or owning an Interest in the
Partnership.
Section 10.2 LIABILITY. Subject to the provisions of the Act, no
Limited Partner shall be liable for
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the repayment, satisfaction or discharge of any debts or other obligations of
the Partnership in excess of the Capital Account balance of such Limited
Partner.
Section 10.3 PRIORITY. No Limited Partner shall have priority over
any other Limited Partner as to Partnership allocations or distributions.
ARTICLE XI
POWERS, RIGHTS AND DUTIES
OF THE GENERAL PARTNER
Section 11.1 AUTHORITY. Subject to the provisions of Section
6.2(h)(i) with respect to the Special Representative, the General Partner shall
have exclusive and complete authority and discretion to manage the operations
and affairs of the Partnership and to make all decisions regarding the
investment activity of the Partnership. Any action taken by the General Partner
shall constitute the act of and serve to bind the Partnership. In dealing with
the General Partner acting on behalf of the Partnership no Person shall be
required to inquire into the authority of the General Partner to bind the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the General Partner as set forth in
this Agreement.
Section 11.2 POWERS AND DUTIES OF GENERAL PARTNER. Subject to the
provisions of Section 6.2(h)(i) with respect to the Special Representative, the
General Partner shall have all rights and powers of a general partner under the
Act, and shall have all authority, rights and powers in the management of the
Partnership's investment activity to do any and all other acts and things
necessary, proper, convenient or advisable to effectuate the purposes of this
Agreement, including by way of illustration but not by way of limitation, the
following:
(a) to secure the necessary goods and services required in
performing the General Partner's duties for the Partnership;
(b) to exercise all powers of the Partnership, on behalf of the
Partnership, in connection with
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enforcing the Partnership's rights under the Affiliate Investment
Instruments and the Partnership Guarantee;
(c) to issue Partnership Preferred Securities and to admit Limited
Partners in connection therewith in accordance with this Agreement;
(d) to act as registrar and transfer agent for the Partnership
Preferred Securities or designate an entity to act as registrar and
transfer agent;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including with
respect to Distributions and voting rights and to make determinations as
to the payment of Distributions, and make or cause to be made all other
required payments to Holders of the Partnership Preferred Securities and
to the General Partner;
(f) to open, maintain and close bank accounts and to draw checks and
other orders for the payment of money;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the
Partnership;
(h) to deposit, withdraw, invest, pay, retain and distribute the
Partnership's funds in a manner consistent with the provisions of this
Agreement;
(i) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Partnership's valid existence,
rights, franchises and privileges as a limited partnership 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 Limited
Partners or to enable the Partnership to invest in the Affiliate
Investment Instruments and Eligible Debt Securities;
(j) to take all action not inconsistent with applicable law, the
Certificate or this Agreement,
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that the General Partner or, upon appointment pursuant to Section
6.2(h)(i), the Special Representative determines in its sole discretion to
be necessary or desirable to ensure, as long as such action does not
adversely affect the interests of the Partnership Preferred Security
Holders, or cause (i) the Partnership to be deemed to be an "investment
company" required to be registered under the 1940 Act, (ii) any Initial
Debenture (or any subsequent Affiliate Investment Instrument that is
intended to be classified as debt) to not be treated as indebtedness for
United States federal income tax purposes, or (iii) the Partnership to be
treated as an association, or as a publicly traded partnership, taxable as
a corporation;
(k) to cause the Partnership to enter into and perform the
Partnership Preferred Securities Purchase Agreement and to purchase
Eligible Debt Securities and Affiliate Investment Instruments, as the case
may be, without any further act, vote or approval of any Partner; and
(l) to execute and deliver any and all documents or instruments,
perform all duties and powers and do all things for and on behalf of the
Partnership in all matters necessary or desirable or incidental to the
foregoing.
Section 11.3 OBLIGATIONS AND EXPENSES PAYABLE BY GENERAL PARTNER.
(a) The General Partner hereby assumes and shall be liable for the debts,
obligations and liabilities of the Partnership, including, but not limited to,
any liabilities arising under the Securities Act or the Exchange Act and all
costs and expenses relating to the investment by the Partnership in any
Affiliate Investment Instruments (but not any losses related to any non-payment
with respect to such investments), and agrees to pay to each Person to whom the
Partnership is now or hereafter becomes indebted or liable (the
"Beneficiaries"), whether such indebtedness, obligations or liabilities arise in
contract, tort or otherwise (excluding payment obligations of the Company to
Holders of the Partnership Preferred Securities in such Holders' capacities as
Holders of such Partnership Preferred Securities, such obligations being
separately guaranteed under the Partnership Guarantee), the full payment of such
indebtedness
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and any and all liabilities, when and as due. This Agreement is intended to be
for the benefit of and to be enforceable by all such Beneficiaries whether or
not such Beneficiaries have received notice hereof.
(b) The General Partner agrees to pay and be responsible for:
(i) all costs and expenses of the Partnership including, but
not limited to, costs and expenses relating to the organization of the
Partnership, the offering, sale and issuance of Partnership Preferred
Securities, the costs and expenses relating to the operation of the Partnership
(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
agents, duplicating, travel and telephone and other telecommunications expenses)
and costs and expenses incurred in connection with the acquisition, financing,
and disposition of the Partnership's assets; and
(ii) any and all taxes (other than Federal, state and local
withholding taxes) and all liabilities, costs and expenses with respect to such
taxes of the Partnership.
Section 11.4 LIABILITY. Except as expressly set forth in this
Agreement or in the Guarantee Agreements, (a) the General Partner shall not be
personally liable for the return of any portion of the capital contributions (or
any return thereon) of the Limited Partners; (b) the return of such capital
contributions (or any return thereon) shall be made solely from assets of the
Partnership; and (c) the General Partner shall not be required to pay to the
Partnership or to any Limited Partner any deficit in any Limited Partner's
Capital Account upon dissolution, winding up or otherwise. Other than as
expressly provided in this Agreement or under the Act, no Limited Partner shall
have the right to demand or receive property other than cash for its respective
Interest in the Partnership. The General Partner shall be liable to an unlimited
extent for the debts and other obligations of the Partnership.
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Section 11.5 OUTSIDE ACTIVITIES. Any Partner or Affiliate thereof
may engage in or possess an interest in other ventures of any nature or
description, independently or with others, similar or dissimilar to the
activities of the Partnership, and the Partnership and the Partners shall have
no rights by virtue of this Agreement 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 activities of the Partnership, shall not be deemed
wrongful or improper. No Partner or Affiliate thereof shall be obligated to
present any particular investment opportunity to the Partnership even if such
opportunity is of a character that, if presented to the Partnership, could be
taken by the Partnership, and any Partner or Affiliate thereof 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 opportunity.
Section 11.6 LIMITS ON GENERAL PARTNER'S POWERS. Anything in this
Agreement to the contrary notwithstanding, the General Partner shall not cause
or permit the Partnership to:
(i) acquire any assets other than as expressly provided
herein;
(ii) do any act which would make it impractical or impossible
to carry on the ordinary activity of the Partnership as set forth in
Section 2.3;
(iii) possess Partnership property for other than a
Partnership purpose;
(iv) admit a Person as a Partner, except as expressly provided
in this Agreement;
(v) make any advances of funds to the General Partner or its
Affiliates, other than such as represented by the Affiliate Investment
Instruments;
(vi) perform any act that would subject any Limited Partner to
liability as a general partner in any jurisdiction;
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(vii) engage in any activity that is not consistent with the
purposes of the Partnership, as set forth in Section 2.3;
(viii) without the written consent of the Holders of 66-2/3%
in Liquidation Preference of the Partnership Preferred Securities, have an
order for relief entered with respect to the Partnership or commence a
voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or consent to the entry of an
order for relief in an involuntary case under any such law, or consent to
the appointment of or taking possession by a receiver, trustee or other
custodian for all or a substantial part of the Partnership's property, or
make any assignment for the benefit of creditors of the Partnership; or
(ix) borrow money or become liable for the borrowings of any
third party or to engage in any financial or other trade or business.
Section 11.7 EXCULPATION. (a) No Partnership Indemnified Person
shall be liable, responsible or accountable in damages or otherwise to the
Partnership or any Partnership Covered Person for any loss, damage or claim
incurred by reason of any act or omission performed or omitted by such
Partnership Indemnified Person in good faith on behalf of the Partnership and in
a manner such Partnership Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Partnership Indemnified Person by
this Agreement or by law, except that a Partnership Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Partnership
Indemnified Person's gross negligence or willful misconduct with respect to such
acts or omissions.
(b) A Partnership Indemnified Person shall be fully protected in
relying in good faith upon the records of the Partnership and upon such
information, opinions, reports or statements presented to the Partnership by any
Person as to matters the Partnership 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 Partnership, including
information, opinions, reports or statements as
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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 Partners might properly be paid.
Section 11.8 FIDUCIARY DUTY. (a) To the extent that, at law or in
equity, a Partnership Indemnified Person has duties (including fiduciary duties)
and liabilities relating thereto to the Partnership or to any other Partnership
Covered Person, a Partnership Indemnified Person acting under this Agreement
shall not be liable to the Partnership or to any other Partnership Covered
Person for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of a Partnership Indemnified Person otherwise existing at law or in
equity, are agreed by the parties hereto to replace such other duties and
liabilities of such Partnership Indemnified Person.
(b) Unless otherwise expressly provided herein, (i) whenever a
conflict of interest exists or arises between Partnership Covered Persons, or
(ii) whether this Agreement or any other agreement contemplated herein or
therein provides that a Partnership Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Partnership or
any Partner, the Partnership Indemnified Person shall resolve such conflict of
interest, take such action or provide such terms, considering in each case the
relative interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating to
such interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Partnership Indemnified Person, the resolution, action or term so
made, taken or provided by the Partnership Indemnified Person shall not
constitute a breach of this Agreement or any other agreement contemplated herein
or of any duty or obligation of the Partnership Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Agreement a Partnership Indemnified Person is
permitted or required to make a decision (i) in its "discretion" or under a
grant of similar authority, the Partnership Indemnified Person
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shall be entitled to consider such interests and factors as it desires,
including its own interest, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Partnership or any
other Person, or (ii) in its "good faith" or under another express standard, the
Partnership Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this Agreement or
by applicable law.
Section 11.9 INDEMNIFICATION. (a) To the fullest extent permitted by
applicable law, the Partnership shall indemnify and hold harmless each
Partnership Indemnified Person from and against any loss, damage or claim
incurred by such Partnership Indemnified Person by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of the Partnership and in a manner such Partnership Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Partnership Indemnified Person by this Agreement, except that no Partnership
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Partnership Indemnified Person by reason of
gross negligence or willful misconduct with respect to such acts or omissions;
provided, however, that any indemnity under this Section 11.9 shall be provided
out of and to the extent of Partnership assets only, and no Partnership Covered
Person shall have any personal liability on account thereof.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees) incurred by a Partnership Indemnified Person in defending
any claim, demand, action, suit or proceeding shall, from time to time, be
advanced by the Partnership prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Partnership of an
undertaking by or on behalf of the Partnership Indemnified Person to repay such
amount if it shall be determined that the Partnership Indemnified Person is not
entitled to be indemnified as authorized in Section 11.9(a).
Section 11.10 TAX MATTERS
(a) For purposes of section 6231(a)(7) of the Code, the "Tax Matters
Partner" shall be the Company as
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long as it remains the general partner of the Partnership. The Tax Matters
Partner shall keep the Limited Partners fully informed of any inquiry,
examination or proceeding.
(b) Neither the Partnership, nor the Tax Matters Partner on behalf
of the Partnership, shall make an election under section 754 of the Code.
(c) The General Partner and the Partnership Preferred Security
Holders acknowledge that they intend, for United States federal income tax
purposes, that the Partnership shall be treated as a "partnership" (other than a
publicly traded partnership taxable as a corporation) and that the General
Partner and the Partnership Preferred Security Holders shall be treated as
"partners" of the Partnership.
(d) The General Partner shall retain, at the expense of the
Partnership and at its sole discretion, a nationally recognized firm of
certified public accountants which shall prepare all United States federal,
state, local or other tax and information returns of the Partnership, as
required by law, and the Schedule K-1's or any successor or similar forms or
schedules.
Section 11.11 CONSOLIDATION, MERGER OR SALE OF ASSETS. The
Partnership may not consolidate, amalgamate, merge with or into, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to, any corporation or other body, except as permitted pursuant to this
Section 11.11. The Partnership may, without the consent of the Holders of the
Partnership Preferred Securities, consolidate, amalgamate, merge with or into,
or be replaced by a limited partnership, limited liability company or trust
organized as such under the laws of any state of the United States of America,
provided that (i) such successor entity either (x) expressly assumes all of the
obligations of the Partnership under the Partnership Preferred Securities or (y)
substitutes for the Partnership Preferred Securities other securities having
substantially the same terms as the Partnership Preferred Securities (the
"Partnership Successor Securities") so long as the Partnership Successor
Securities are not junior to any other equity securities of the successor
entity, with respect to participation in the profits and distributions, and in
the
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assets, of the successor entity, (ii) the Investment Affiliates expressly
acknowledge such successor entity as the holder of the Affiliate Investment
Instruments, (iii) the Partnership Preferred Securities continue to be or any
Partnership Successor Securities are or will be listed, upon notification of
issuance, on any national securities exchange or other organization on which the
Partnership Preferred Securities, if so listed, are then listed, (iv) such
merger, consolidation, amalgamation or replacement does not cause the Trust
Preferred Securities (or, in the event that the Trust is liquidated in
connection with a Trust Special Event, the Partnership Preferred Securities
(including any Partnership Successor Securities)) to be downgraded by any
nationally recognized statistical securities rating organization, (v) such
merger, consolidation, amalgamation or replacement does not adversely affect the
powers, preferences and other special rights of the holders of the Trust
Preferred Securities or the Holders of the Partnership Preferred Securities
(including any Partnership Successor Securities)) in any material respect (other
than, in the case of the Partnership Preferred Securities, with respect to any
dilution of the Holders' interest in the new resulting entity), (vi) such
successor entity has a purpose substantially identical to that of the
Partnership, (vii) prior to such merger, consolidation, amalgamation or
replacement, the Company has received an opinion of nationally recognized
independent counsel to the Partnership experienced in such matters to the effect
that (A) such successor entity will be treated as a "partnership" for United
States federal income tax purposes and not as an association or a publicly
traded partnership taxable as a corporation, (B) such merger, consolidation,
amalgamation or replacement will not cause the Trust to be classified as an
association or a publicly traded partnership taxable as a corporation for United
States federal income tax purposes, (C) following such merger, consolidation,
amalgamation or replacement, the Company and such successor entity will be in
compliance with the 1940 Act without registering thereunder as an investment
company, and (D) such merger, consolidation, amalgamation or replacement will
not adversely affect the limited liability of the Holders of the Partnership
Preferred Securities and (viii) the Company guarantees the obligations of such
successor entity under the Partnership Successor Securities at least to the
extent provided by the Partnership Guarantee.
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ARTICLE XII
TRANSFERS OF INTERESTS BY PARTNERS
Section 12.1 TRANSFER OF INTERESTS.
(a) Partnership Preferred Securities shall be freely transferable by
a Holder.
(b) Except as provided in the next sentence, the General Partner may
not assign or transfer its Interest in the Partnership in whole or in part
unless, prior to such assignment or transfer, the General Partner has obtained
the consent of the Holders of not less than 66-2/3% in Liquidation Preference
of the Partnership Preferred Securities. The General Partner may assign or
transfer its Interest in the Partnership without such consent only to an entity
that is the survivor of a merger or consolidation of the General Partner in a
transaction that meets the requirements of Section 11.11 and only if prior to
such assignment or transfer the Company has received an opinion of nationally
recognized independent tax counsel to the Partnership experienced in such
matters to the effect that after such assignment or transfer the Partnership
will continue to be treated as a partnership for United States federal income
tax purposes and will not be treated as an association or a publicly traded
partnership taxable as a corporation. "Permitted Successor" shall mean an entity
that is an assignee or transferee of the Interest of the General Partner as
permitted by this Section 12.1(b). The admission of a Permitted Successor as a
general partner of the Partnership shall be effective upon the filing of an
amendment to the Certificate with the Secretary of State of the State of
Delaware which indicates that the Permitted Successor has been admitted as a
general partner of the Partnership. If the General Partner assigns its entire
Interest, the General Partner shall cease to be a general partner of the
Partnership simultaneously with the admission of the Permitted Successor as a
general partner of the Partnership. Any such Permitted Successor is hereby
authorized to and shall continue the business of the Partnership without
dissolution.
(c) Except as provided above, no Interest shall be transferred, in
whole or in part, except in
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accordance with the terms and conditions set forth in this Agreement. Any
transfer or purported transfer of any Interest not made in accordance with this
Agreement shall be null and void.
Section 12.2 TRANSFER OF L.P. CERTIFICATES. The General Partner
shall provide for the registration of L.P. Certificates and of transfers of L.P.
Certificates. Upon surrender for registration of transfer of any L.P.
Certificate, the General Partner shall cause one or more new L.P. Certificates
to be issued in the name of the designated transferee or transferees. Every L.P.
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the General Partner duly
executed by the Partnership Preferred Security Holder or his or her attorney
duly authorized in writing. Each L.P. Certificate surrendered for registration
of transfer shall be cancelled by the General Partner. A transferee of an L.P.
Certificate shall be admitted to the Partnership as a Limited Partner, shall
become bound by this Agreement and shall be entitled to the rights and subject
to the obligations of a Partnership Preferred Security Holder hereunder upon the
receipt by the transferee of an L.P. Certificate, which receipt shall be deemed
to constitute a request by such transferee that the books and records of the
Partnership reflect such transferee's admission as a limited partner. The
transferor of an L.P. Certificate, in whole, shall cease to be a Limited Partner
at the time that the transferee of such L.P. Certificate is admitted to the
Partnership as a Limited Partner in accordance with this Section 12.2.
Section 12.3 DEFINITIVE L.P. CERTIFICATES; PERSONS DEEMED
PARTNERSHIP PREFERRED SECURITY HOLDERS. (a) DEFINITIVE L.P. CERTIFICATES. Unless
and until the Partnership issues a global L.P. Certificate pursuant to Section
12.4(a), the Partnership shall only issue definitive L.P. Certificates to the
Partnership Preferred Security Holders. (b) The Partnership may treat the Person
in whose name any L.P. Certificate shall be registered on the books and records
of the Partnership as the sole holder of such L.P. Certificate and of the
Partnership Preferred Securities represented by such L.P. Certificate for
purposes of receiving Distributions and for all other purposes whatsoever
(including without limitation, tax returns and information reports) and, accord-
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ingly, shall not be bound to recognize any equitable or other claim to or
interest in such L.P. Certificate or in the Partnership Preferred Securities
represented by such L.P. Certificate on the part of any other Person, whether or
not the Partnership shall have actual or other notice thereof.
Section 12.4 BOOK ENTRY PROVISIONS.
(a) General. The provisions of this Section 12.4 shall apply only in
the event that the Partnership Preferred Securities are distributed to the
Holders of Trust Securities in connection with the involuntary or voluntary
dissolution, winding up or liquidation of the Trust as a result of the
occurrence of a Trust Special Event. Upon the occurrence of such event, a global
L.P. Certificate representing the Book-Entry Interests, shall be delivered to
DTC, the initial Clearing Agency, by, or on behalf of, the Partnership and any
previously issued and still outstanding definitive L.P. Certificates shall be of
no further force and effect. The global L.P. Certificate shall initially be
registered on the books and records of the Partnership in the name of Cede &
Co., the nominee of DTC, and no Holder of a Partnership Preferred Security will
receive a new definitive L.P. Certificate representing such Holder's interests
in such L.P. Certificate, except as provided in Section 12.4(c). In connection
with the involuntary or voluntary dissolution, winding up or liquidation of the
Trust as a result of the occurrence of a Trust Special Event, Cede & Co., the
nominee of DTC, shall automatically be admitted to the Partnership as a Limited
Partner. Receipt of the global L.P. Certificate shall be deemed to constitute a
request by Cede & Co., the nominee of DTC, that the books and records of the
Partnership reflect its admission as a Limited Partner. Unless and until new
definitive, fully registered L.P. Certificates (the "Definitive L.P.
Certificates") have been issued to the Partnership Preferred Security Owners
pursuant to Section 12.4(c):
(i) The provisions of this Section shall be in full force and
effect;
(ii) The Partnership, the General Partner and any Special
Representative shall be entitled to deal with the Clearing Agency for all
purposes of this Agreement (including the payment of Distributions,
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Redemption Price and liquidation proceeds on the L.P. Certificates and
receiving approvals, votes or consents hereunder) as the Partnership
Preferred Security Holder and the sole holder of the L.P. Certificates and
shall have no obligation to the Partnership Preferred Security Owners;
(iii) None of the Partnership, the Trust, the General Partner, any
Special Representative or any agents of any of the foregoing shall have
any liability or responsibility for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a global
L.P. Certificate for such beneficial ownership interests or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests; and
(iv) Except as provided in Section 12.4(c) below, the Holders of
Partnership Preference Securities will not be entitled to receive physical
delivery of the Partnership Preferred Securities in definitive form and
will not be considered Holders thereof for any purpose under this
Agreement, and no global L.P. Certificate representing Partnership
Preferred Securities shall be exchangeable, except for another global L.P.
Certificate of like denomination and tenor to be registered in the name of
DTC or Cede & Co., or to a successor Depositary or its nominee.
Accordingly, each Partnership Preferred Security Owner must rely on the
procedures of DTC or if such person is not a Participant, on the
procedures of the Participant through which such person owns its interest
to exercise any rights of a Holder under the Agreement.
(b) NOTICES TO CLEARING AGENCY. Whenever a notice or other
communication to the Partnership Preferred Security Holders is required under
this Agreement, unless and until Definitive L.P. Certificates shall have been
issued to the Partnership Preferred Security Owners pursuant to Section 12.4(c),
the General Partner and any Special Representative shall give all such notices
and communications specified herein to be given to the Partnership Preferred
Security Holders to the Clearing Agency, and shall have no obligations to the
Partnership Preferred Security Owners.
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(c) DEFINITIVE L.P. CERTIFICATES. Definitive L.P. Certificates shall
be prepared by the Partnership and exchangeable for the global L.P. Certificate
or L.P. Certificates if and only if (i) the Depositary notifies the Company that
it is unwilling or unable to continue its services as a securities depositary
and no successor depositary shall have been appointed, (ii) the Depositary, at
any time, ceases to be a clearing agency registered under the Exchange Act at
such time as the Depositary is required to be so registered to act as such
depositary and no successor depositary shall have been appointed, or (iii) the
Company, in its sole discretion, determines that such global L.P. Certificate
shall be so exchangeable. Upon surrender of the global L.P. Certificate or L.P.
Certificates representing the Book-Entry Interests by the Clearing Agency,
accompanied by registration instructions, the General Partner shall cause
Definitive L.P. Certificates to be delivered to Partnership Preferred Security
Owners in accordance with the instructions of the Clearing Agency. Neither the
General Partner nor the Partnership shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Any Person receiving a Definitive L.P.
Certificate in accordance with this Section 12.4 shall be admitted to the
Partnership as a Limited Partner upon receipt of such Definitive L.P.
Certificate and shall be registered on the books and records of the Partnership
as a Partnership Preferred Security Holder. The Clearing Agency or the nominee
of the Clearing Agency, as the case may be, shall cease to be a Limited Partner
under this Section 12.4(c) at the time that at least one additional Person is
admitted to the Partnership as a Limited Partner in accordance herewith. The
Definitive L.P. Certificates shall be printed, lithographed or engraved or may
be produced in any other manner as may be required by any national securities
exchange on which Partnership Preferred Securities may be listed and is
reasonably acceptable to the General Partner, as evidenced by its execution
thereof.
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Section 12.5 REGISTRAR, TRANSFER AGENT AND PAYING AGENT.
(a) The General Partner will act as Registrar, Transfer Agent and
Paying Agent for the Partnership Preferred Securities for so long as the
Partnership Preferred Securities are held by the Trust or, if the Trust is
liquidated in connection with a Trust Special Event, for so long as the
Partnership Preferred Securities remain in book-entry only form.
(b) Except in such case where the General Partner shall act as
Registrar or Paying Agent pursuant to Section 12.5(a) hereof, the Partnership
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Partnership Preferred Securities may be presented
for registration of transfer or for exchange ("Registrar") and (ii) an office or
agency where Partnership Preferred Securities may be presented for payment
("Paying Agent"). The Registrar shall keep a register of the Partnership
Preferred Securities and of their transfer and exchange. The Partnership may
appoint the Registrar and the Paying Agent and may appoint one or more
co-registrars and one or more additional paying agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
agent. The Partnership may change any Paying Agent, Registrar or co-registrar
without prior notice to any Holder. If the Partnership fails to appoint or
maintain another entity as Registrar or Paying Agent, the General Partner shall
act as such.
(c) Registration of transfers of Partnership Preferred Securities
shall be effected without charge by or on behalf of the Partnership, but upon
payment (with the giving of such indemnity as the Partnership or the General
Partner may require) in respect of any tax or other governmental charges that
may be imposed.
(d) The Partnership will not be required to register or cause to be
registered the transfer of Partnership Preferred Securities after such
Partnership Preferred Securities have been called for redemption.
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ARTICLE XIII
WITHDRAWAL, DISSOLUTION;
LIQUIDATION AND DISTRIBUTION OF ASSETS
Section 13.1 WITHDRAWAL OF PARTNERS. The General Partner shall not
at any time retire or withdraw from the Partnership except as otherwise
permitted hereunder. If the General Partner retires or withdraws in
contravention of this Section 13.1, it shall indemnify, defend and hold harmless
the Partnership and the other Partners from and against any losses, expenses,
judgments, fines, settlements or damages suffered or incurred by the Partnership
or such other Partners arising out of or resulting from such retirement or
withdrawal.
Section 13.2 DISSOLUTION OF THE PARTNERSHIP.
(a) The Partnership shall not be dissolved by the admission of
Partners in accordance with the terms of this Agreement. The death, withdrawal,
bankruptcy or dissolution of a Limited Partner, or the occurrence of any other
event which terminates the Interest of a Limited Partner in the Partnership,
shall not, in and of itself, cause the Partnership to be dissolved and its
affairs wound up. To the fullest extent permitted by applicable law, upon the
occurrence of any such event, the General Partner may, without any further act,
vote on approval of any Partner, admit any Person to the Partnership as an
additional or substitute limited partner in the Partnership, which admission
shall be effective as of the date of the occurrence of such event, and the
business of the Partnership shall be continued without dissolution.
(b) The Partnership shall be dissolved and its affairs shall be
wound up upon the earliest to occur of any of the following events:
(i) upon the bankruptcy or insolvency of the General Partner;
(ii) the Partnership has redeemed or otherwise purchased all of the
Partnership Preferred Securities;
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(iii) the entry of a decree of judicial dissolution under Section
17-802 of the Act; or
(iv) the written consent of all Partners.
(c) Upon dissolution of the Partnership, the Liquidator shall
promptly notify the Partners of such dissolution.
Section 13.3 LIQUIDATION.
(a) In the event of the dissolution of the Partnership for any
reason, the General Partner (or, if the Partnership is dissolved pursuant to
Section 13.2(b)(i) or (ii), then a liquidating agent appointed by Holders of not
less than 66 2/3% in Liquidation Preference of the Partnership Preferred
Securities (the General Partner or such Person so appointed is hereinafter
referred to as the "Liquidator")) shall commence to wind up the affairs of the
Partnership and to liquidate the Partnership's assets; provided, however, that a
reasonable time shall be allowed for the orderly liquidation of the assets of
the Partnership and the satisfaction of liabilities to creditors so as to enable
the Partners to minimize the normal losses attendant upon liquidation. The
Partners shall continue to share all income, losses and distributions during the
period of liquidation in accordance with Articles IV and V. Subject to the
provisions of this Article XIII, the Liquidator shall have full right and
unlimited discretion to determine the time, manner and terms of any sale or
sales of Partnership property pursuant to such liquidation, giving due regard to
the activity and condition of the relevant market and general financial and
economic conditions.
(b) The Liquidator shall have all of the rights and powers with
respect to the assets and liabilities of the Partnership in connection with the
liquidation and termination of the Partnership that the General Partner would
have with respect to the assets and liabilities of the Partnership during the
term of the Partnership, and the Liquidator is hereby expressly authorized and
empowered to execute any and all documents necessary or desirable to effectuate
the liquidation and termination of the Partnership and the transfer of any
assets.
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(c) Notwithstanding the foregoing, a Liquidator that is not a
General Partner shall not, by virtue of acting in such capacity, be deemed a
Partner in this Partnership and shall not have any of the economic interests in
the Partnership of a Partner; and such Liquidator may be compensated for its
services to the Partnership at normal customary and competitive rates for its
services to the Partnership as reasonably determined by all the Limited
Partners.
Section 13.4 DISTRIBUTION IN LIQUIDATION. The proceeds of
liquidation shall be applied in the following order of priority (and without
regard to the non-mandatory provisions of Section 17-804 of the Act):
(i) first, to creditors of the Partnership, including Partners who
are creditors, to the extent otherwise permitted by law, in satisfaction
of the liabilities of the Partnership (whether by payment or the making of
reasonable provisions for payment thereof), other than liabilities for
distributions (including Distributions) to Partners;
(ii) second, following any allocations required under Section 4.2(e)
of the Agreement, to the Limited Partners, an amount equal to the
aggregate liquidation preference of their Partnership Preferred
Securities, plus the amount of Distributions (including any Compounded
Distributions) that are accrued and unpaid as of the date of such
liquidating distribution; and
(iii) thereafter, to the General Partner.
Section 13.5 RIGHTS OF LIMITED PARTNERS. Each Limited Partner shall
look solely to the assets of the Partnership for all distributions with respect
to the Partnership and such Partner's capital contribution (including returns
thereof), and such Partner's share of profits or losses thereof, and shall have
no recourse therefor (upon dissolution or otherwise) against the General
Partner, except under the Partnership Guarantee. No Partner shall have any right
to demand or receive property other than cash upon dissolution and termination
of the Partnership.
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Section 13.6 TERMINATION. The Partnership shall terminate when all
of the assets of the Partnership shall have been disposed of and the assets
shall have been distributed as provided in Section 13.4 and the Liquidator has
executed and caused to be filed a certificate of cancellation of the
Partnership.
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS. Except as provided by Section 3.3(b) and
Section 6.2(i), this Agreement may be amended by, and only by, a written
instrument executed by the General Partner without the consent of any Limited
Partner; provided, however, that no amendment shall be made, and any such
purported amendment shall be void and ineffective, to the extent the result
thereof would be to (A) cause the Partnership to be treated for United States
federal income tax purposes as an association or a publicly traded partnership
taxable as a corporation, (B) require the Partnership to register under the 1940
Act or (C) materially adversely affect the rights, privileges or preferences of
the Partnership Preferred Securities. Notwithstanding any provision to the
contrary, in the event of (i) a liquidation of the Trust for any reason or (ii)
any other distribution which effectively causes Partnership Preferred Securities
to be distributed to Holders of Trust Preferred Securities, the General Partner
may amend this Agreement without the consent of the Limited Partners to provide
for (A) orderly dissemination, purchase, sale, exchange and replacement of such
Partnership Preferred Securities, (B) all other matters to the extent required
by or desirable under then applicable law and (C) such other matters reasonably
incidental or related thereto; provided, however, that no such amendment may
materially adversely affect the rights, privileges, or preferences of the
Partnership Preferred Securities without the consent of a majority in interest
of the Partners so effected.
Section 14.2 AMENDMENT OF CERTIFICATE. In the event this Agreement
shall be amended pursuant to Section 14.1, the General Partner shall amend the
Certificate to reflect such change if it deems such amendment of the Certificate
to be necessary or appropriate.
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Section 14.3 MEETINGS OF PARTNERS.
(a) Meetings of the Limited Partners who are Holders may be called
at any time by the General Partner to consider and act on any matter on which
Limited Partners are entitled to act under the terms of this Agreement or the
Act. The General Partner shall call a meeting of Holders if directed to do so by
Holders of no less than 10% in Liquidation Preference as permitted by this
Agreement. Such direction shall be given by delivering to the General Partner a
request in writing stating that the signing Limited Partners desire to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Limited Partners calling a meeting shall specify in writing
the L.P. Certificates held by the Limited Partners exercising the right to call
a meeting and only those specified Interests shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met. Except to the extent otherwise provided in this
Agreement, the following provisions shall apply to meetings of Partners.
(b) Notice of any such meeting shall be given to all Limited
Partners having a right to vote thereat not less than seven Business Days nor
more than 60 days prior to the date of such meeting. Each such notice shall set
forth the date, time and place of the meeting, a description of any matter on
which Holders are entitled to vote and instructions for the delivery of proxies
or written consents.
(c) Any action that may be taken at a meeting of the Limited
Partners may be taken without a meeting if a consent in writing setting forth
the action so taken is signed by Limited Partners owning not less than the
minimum Interests that would be necessary to authorize or take such action at a
meeting in which all Limited Partners 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 Limited Partners entitled to vote who have not consented
in writing. The General Partner may provide that any written ballot submitted to
the Limited Partners for the purpose of taking any action without a meeting
shall be returned to the Partnership within a specified time.
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(d) Each Partner may authorize any Person to act for it by proxy on
all matters as to which a Partner is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. Every proxy must
be signed by the Partner or its attorney-in-fact. 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 Partner
executing it. Except as otherwise provided herein, or pursuant to Section
14.3(f), 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 Partnership were a
Delaware corporation and the Limited Partners were stockholders of a Delaware
corporation.
(e) Each meeting of Partners shall be conducted by the General
Partner or by such other Person that the General Partner may designate.
(f) The General Partner may establish all other reasonable
procedures relating to meetings of Limited Partners or the giving of written
consents, in addition to those expressly provided, including notice of time,
place or purpose of any meeting at which any matter is to be voted on by any
Partners, 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 XV
MISCELLANEOUS
Section 15.1 NOTICES. All notices provided for in this Agreement
shall be in writing, and shall be delivered or mailed by first class or
registered or certified mail or, with respect to the Partnership and General
Partner, telecopied, as follows:
(a) if given to the Partnership, in care of the General Partner at
the Partnership's mailing address set forth below:
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AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Attention: Treasurer
(b) if given to the General Partner, at its mailing address set
forth below:
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Attention: Treasurer
(c) if given to any other Partner at the address set forth on the
books and records of the Partnership.
Section 15.2 POWER OF ATTORNEY. Each Holder of a Partnership
Preferred Security does hereby constitute and appoint the General Partner, and
if applicable, any Special Representative appointed pursuant to Section
6.2(h)(i) of this Agreement, as its true and lawful representative and
attorney-in-fact, in its name, place and stead to make, execute, sign, deliver
and file (a) any amendment of the Certificate required because of an amendment
of this Agreement or in order to effect any change in the Partnership, (b) this
Agreement, (c) any amendments to this Agreement and (d) all such other
instruments, documents and certificates which from time to time may be required
by the laws of the United States of America, the State of Delaware or any other
jurisdiction, or any political subdivision or agency thereof, to effectuate,
implement and continue the valid and subsisting existence of the Partnership or
to dissolve the Partnership for any other purpose consistent with this Agreement
and the transactions contemplated hereby.
The power of attorney granted hereby is coupled with an interest and
shall (a) survive and not be affected by the subsequent death, incapacity,
disability, dissolution, termination, or bankruptcy of the Holder granting the
same or the transfer of all or any portion of such Holder's Interest and (b)
extend to such Holder's successors, assigns and legal representatives.
Section 15.3 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among the parties. It
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supersedes any prior agreement or understandings among them, and it may not be
modified or amended in any manner other than as set forth herein.
Section 15.4 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE
LAW 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 15.5 EFFECT. Except as herein otherwise specifically
provided, this Agreement shall be binding upon and inure to the benefit of the
parties and their legal representatives, successors and assigns.
Section 15.6 PRONOUNS AND NUMBER. Wherever from the context it
appears appropriate, each term stated in either the singular or the plural shall
include the singular and the plural, and pronouns stated in either the
masculine, feminine or neuter shall include the masculine, feminine and neuter.
Section 15.7 CAPTIONS. Captions, headings, and subheadings contained
in this Agreement are included for convenience and identification purposes only
and in no way define, limit or extend the scope or intent of this Agreement or
any provision herein.
Section 15.8 PARTIAL ENFORCEABILITY. If any provision of this
Agreement, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 15.9 COUNTERPARTS. This Agreement may contain more than one
counterpart of the signature page and this Agreement may be executed by the
affixing of the signature of each of the Partners 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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Section 15.10 WAIVER OF PARTITION. Each Partner hereby irrevocably
waives any and all rights (if any) that such Partner may have to maintain any
action for partition of any of the Partnership's property.
Section 15.11 REMEDIES. The failure of any party to seek redress for
violation of, or to insist upon the strict performance of, any provision of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation. The
rights and remedies provided by this Agreement are cumulative and the use of any
one right or remedy by any party shall not preclude or waive its right to use
any or all other remedies. Said rights and remedies are given in addition to any
other rights the parties may have by law, statute, ordinance or otherwise.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above stated.
GENERAL PARTNER:
AT&T CAPITAL CORPORATION
a Delaware corporation
By: _____________________________________
Name:
Title:
INITIAL LIMITED PARTNER:
JEFFERY F. NASH, an individual
By: _____________________________________
Name:
Title:
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ANNEX A
FORM OF PARTNERSHIP PREFERRED SECURITY CERTIFICATE
[IF THE PARTNERSHIP PREFERRED SECURITY IS TO BE A GLOBAL
CERTIFICATE INSERT: This Partnership Preferred Security is a Global Certificate
within the meaning of the Partnership Agreement hereinafter referred to and is
registered in the name of The Depository Trust Company (the "Depositary") or a
nominee of the Depositary. This Partnership Preferred Security is exchangeable
for Partnership Preferred Securities registered in the name of a person other
than the Depositary or its nominee only in the limited circumstances described
in the Partnership Agreement and no transfer of this Partnership Preferred
Security (other than a transfer of this Partnership Preferred Security as a
whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Partnership Preferred Security is presented by an
authorized representative of The Depository Partnership Company (55 Water
Street, New York, New York) to the Partnership or its agent for registration of
transfer, exchange or payment, and any Partnership Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of the Depositary and any payment hereon is made to
Cede & Co. or such other name as requested by or authorized representations of
the Depositary, ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an
interest herein.]
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Certificate Number Number of Partnership Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Partnership Preferred Securities
of
CAPITA PREFERRED FUNDING L.P.
____% Partnership Preferred Securities
(liquidation amount $25 per Partnership Preferred Security)
CAPITA PREFERRED FUNDING L.P., a limited partnership formed under
the laws of the State of Delaware (the "Partnership"), hereby certifies that
______________ (the "Holder") is the registered owner of preferred securities of
the Partnership representing limited partnership interests in the assets of the
Partnership designated the _____% Partnership Preferred Securities (liquidation
amount $25 per Partnership Preferred Security) (the "Partnership Preferred
Securities"). The Partnership Preferred Securities are transferable on the books
and records of the Partnership, 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 Partnership Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Agreement of Limited Partnership dated as of October _, 1996, as the
same may be amended from time to time (the "Partnership Agreement"). Capitalized
terms used herein but not defined shall have the meaning given them in the
Partnership Agreement. The Holder is entitled to the benefits of the Partnership
Guarantee Agreement, dated October ___, 1996 by the Company (the "Partnership
Guarantee Agreement") to the extent provided therein. The Sponsor will provide a
copy of the Partnership Agreement, and the Partnership Guarantee Agreement to a
Holder without charge upon written request to the Partnership at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the
Partnership Agreement and is entitled to the benefits thereunder.
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IN WITNESS WHEREOF, the Partnership has executed this certificate
this ___ day of __, 199_.
CAPITA PREFERRED FUNDING L.P.
By: AT&T CAPITAL CORPORATION
as General Partner
By:__________________________
Name:
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[FORM OF REVERSE OF SECURITY]
Distributions payable on each Partnership Preferred Security will
be fixed at a rate per annum of ______% of the stated liquidation amount of $25
per Partnership Preferred Security. Distributions not paid on the scheduled
payment date will accumulate and compound quarterly (to the extent permitted by
applicable law) at the rate of ____ % per annum. The term "Distributions" as
used herein shall mean ordinary cumulative distributions in respect of each
Fiscal Period together with any Compounded Distributions. Distributions on the
Partnership Preferred Securities will be made to the extent that the Partnership
has funds available for the payment of such distributions. Amounts available to
the Partnership for distribution to the holders of the Partnership Preferred
Securities will be limited to payments received by the Partnership from the
Company and certain wholly owned subsidiaries on the Initial Debentures and
Affiliate Investment Instruments or from the Company on the Partnership
Guarantee or on the Eligible Debt Securities. Distributions on the Partnership
Preferred Securities will be paid only if, as and when declared in the sole
discretion of the Company, as the General Partner of the Partnership. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 90-day quarter.
Except as otherwise described below, distributions on the
Partnership Preferred Securities will be cumulative, will accrue from the date
of initial issuance and will be payable quarterly in arrears, on March 31, June
30, September 30 and December 31 of each year, commencing on December 31, 1996
if, as and when declared by the General Partner. As long as the Partnership
Preferred Securities remain in book-entry-only form, Distributions will be
payable to the Holders of record of Partnership Preferred Securities as they
appear on the books and records of the Partnership on the relevant record dates,
which will be one Business Day prior to the relevant payment dates. If the Trust
or the Property Trustee is the Holder of the Partnership Preferred Securities,
all distributions of cash shall be made by wire transfer of same day funds to
such Holder by 10:00 a.m., New York City time, on the applicable Distribution
Payment Date. Distributions payable on any Partnership Preferred Securities that
are not punctually paid on any Dis-
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tribution Payment Date will cease to be payable to the Person in whose name such
Partnership Preferred Securities are registered on the relevant record date, and
such Distribution will instead be payable to the Person in whose name such
Partnership Preferred Securities are registered on the special record date or
other specified date for payment of such defaulted or accrued Distribution. In
the event that the Partnership Preferred Securities do not remain in
book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of the Distribution
shall be made on the next succeeding day which 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 succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, with the same force and effect
as if made on such date. Payments of accrued Distributions will be payable to
Holders of record of Partnership Preferred Securities as they appear on the
books and records of the Partnership on the record date with respect to the
payment date for the Partnership Preferred Securities which corresponds to the
payment date with respect to the payment of cumulative distributions on the
Initial Debentures, Affiliate Investment Instruments and Eligible Debt
Securities. If distributions are not paid on the Initial Debentures, Affiliate
Investment Instruments and Eligible Debt Securities on any regularly scheduled
payment date, the Partnership will not pay Distributions on the Partnership
Preferred Securities until the Partnership has sufficient funds available for
such Distributions. If the Distributions are not paid on the Partnership
Preferred Securities, such unpaid Distributions will accumulate and will bear
interest compounded quarterly at the rate set out above.
The Partnership Preferred Securities shall be redeemable
as provided in the Partnership Agreement.
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Partnership
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
Partnership Preferred Security Certificate on the books of the Partnership. The
agent may substitute another to act for him or her.
Date:
-----------------------
Signature:
--------------------
(Sign exactly as your name appears on the other side of this Partnership
Preferred Security Certificate)
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
Capita Preferred Trust
Dated as of October __, 1996
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TABLE OF CONTENTS
Page
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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 Lists of Holders of Securities.......................... 6
SECTION 2.3 Reports by the Trust Preferred Guarantee
Trustee................................................. 7
SECTION 2.4 Periodic Reports to Trust Preferred Guarantee
Trustee................................................. 7
SECTION 2.5 Evidence of Compliance with Conditions
Precedent............................................... 7
SECTION 2.6 Events of Default; Waiver............................... 7
SECTION 2.7 Event of Default; Notice................................ 8
SECTION 2.8 Conflicting Interests................................... 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred
Guarantee Trustee....................................... 8
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee..... 10
SECTION 3.3. Not Responsible for Recitals or Issuance
of Trust Preferred Securities Guarantee................. 13
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility.......... 13
SECTION 4.2 Appointment, Removal and Resignation of
Trust Preferred Guarantee Trustee....................... 14
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................................... 15
SECTION 5.2 Waiver of Notice and Demand............................. 15
SECTION 5.3 Obligations Not Affected................................ 15
SECTION 5.4 Rights of Holders....................................... 16
SECTION 5.5 Guarantee of Payment.................................... 17
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Page
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SECTION 5.6 Subrogation............................................. 17
SECTION 5.7 Independent Obligations................................. 17
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.............................. 17
SECTION 6.2 Ranking................................................. 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................. 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................. 19
SECTION 8.2 Indemnification......................................... 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.................................. 20
SECTION 9.2 Amendments.............................................. 20
SECTION 9.3 Notices................................................. 20
SECTION 9.4 Benefit................................................. 21
SECTION 9.5 Governing Law........................................... 21
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TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Trust
Preferred Securities Guarantee"), dated as of October __, 1996, is executed and
delivered by AT&T Capital Corporation, a Delaware corporation (the "Guarantor"),
and The First National Bank of Chicago, N.A., a national banking association, as
trustee (the "Trust Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Trust Preferred Securities
(as defined herein) of Capita Preferred Trust, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of October __, 1996, among the trustees of the
Issuer named therein, AT&T Capital Corporation, as sponsor, and the holders from
time to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof [ ] trust originated preferred
securities, having an aggregate liquidation amount of $[ ], designated
the [ ]% Trust Originated Preferred Securities (the "Trust Preferred
Securities");
WHEREAS, as incentive for the Holders to purchase the Trust
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Trust Preferred Securities Guarantee, to
pay to the Holders of the Trust Preferred Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein and;
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "Trust Common Securities Guarantee") in substantially identical
terms to this Trust Preferred Securities Guarantee for the benefit of the
holders of the Trust Common Securities (as defined herein), except that if a
Trust Enforcement Event (as defined in the Declaration), has occurred and is
continuing, the rights of holders of the Trust Common Securities to receive
Guarantee Payments under the Trust Common Securities Guarantee are subordinated
to the rights of Holders of Trust Preferred Securities to receive Guarantee
Payments under this Trust Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Trust Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Trust Preferred
Securities Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Trust Preferred Securities
Guarantee but not defined in the preamble above have the
respective meanings assigned to them in this Section 1.1;
(b) Capitalized terms used in this Trust Preferred Securities
Guarantee but not otherwise defined herein shall have the
meanings assigned to them in the Declaration or the
Partnership Agreement, as the case may be.
(c) a term defined anywhere in this Trust Preferred Securities
Guarantee has the same meaning throughout;
(d) all references to "the Trust Preferred Securities Guarantee"
or "this Trust Preferred Securities Guarantee" are to this
Trust Preferred Securities Guarantee as modified, supplemented
or amended from time to time;
(e) all references in this Trust Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this
Trust Preferred Securities Guarantee, unless otherwise
specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Trust Preferred Securities Guarantee, unless
otherwise defined in this Trust Preferred Securities Guarantee
or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with, such specified person, provided, that, with respect to the
Guarantor, "Affiliate" shall be deemed to also include any entity of which at
least 20% of the capital stock is owned by a person that directly or indirectly
controls the Guarantor.
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"Affiliated Restricted Payments" means any payment (including,
without limitation, payments for the sale, purchase or lease of any assets or
properties or the rendering of any services) to any Affiliate of the Guarantor,
except for Permissible Affiliated Payments.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by any
applicable law to close.
"Corporate Trust Office" means the office of the Trust Preferred
Guarantee Trustee at which the corporate trust business of the Trust Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at 153 West
53rd Street, New York, New York 10019.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Trust Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accrued and unpaid Distributions
(as defined in the Declaration) that are required to be paid on such Trust
Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Trust Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Partnership Preferred Securities to the
Holders in exchange for Trust Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid Distributions on the Trust Preferred Securities to the date
of payment and (b) the amount of assets of the Issuer, after satisfaction of all
liabilities, remaining available for distribution to Holders in liquidation of
the Issuer (in either case, the "Liquidation Distribution").
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Trust Preferred Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder"
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shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Trust Preferred Guarantee Trustee,
any Affiliate of the Trust Preferred Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Trust Preferred Guarantee Trustee.
"Majority in liquidation amount of the Trust Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Trust 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 Trust
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 Trust 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.
"Partnership" means Capita Preferred Funding, L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of October __, 1996, among AT&T
Capital Corporation, a Delaware corporation, as general partner, Jeffery F.
Nash, an individual, as initial limited partner and such other persons who
become limited partners as provided therein.
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"Partnership Preferred Securities" means those securities
representing limited partnership interests in the Partnership.
"Permissible Affiliated Payments" means (i) payments by the Company
or its subsidiaries (other than the Partnership or the Trust) to Affiliates of
the Company for management or other advisory services not to exceed $10 million
per annum and (ii) transactions made in good faith the terms of which are fair
and reasonable to the Company or such majority owned subsidiary, as the case may
be, and are at least as favorable as terms which could be obtained by the
Company or such majority-owned subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with persons which are not Affiliates
of the Company; provided, that, with respect to a payment or a series of
payments not greater than $1 million, such payments shall be conclusively deemed
to be on terms which are fair and reasonable to the Company or any of its
majority-owned subsidiaries and on terms which are at least as favorable as the
terms which could be obtained on an arm's length basis with persons who are not
Affiliates if such payments are approved by a majority of the Company's
independent directors; and provided, further, that with respect to a payment or
a series of related payment or payments in excess of $1 million, the Company or
such subsidiary shall either (A) have received a written opinion of a nationally
recognized investment bank stating that the terms of such payment are fair to
the Company or such subsidiary, as the case may be, from a financial point of
view, or (B) have selected the Affiliate or Affiliates which are to receive such
payments based upon a competitive bid procedure in which the Company or such
subsidiary shall have received at least two independent bids, administered in
good faith and on commercially reasonable terms by the Company or such
subsidiary.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Trust Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the Trust
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 Trust 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.
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"Successor Trust Preferred Guarantee Trustee" means a successor
Trust Preferred Guarantee Trustee possessing the qualifications to act as Trust
Preferred Guarantee Trustee under Section 4.1.
"Trust Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Preferred Guarantee Trustee" means The First National Bank of
Chicago, N.A., a national banking association, until a Successor Trust Preferred
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Trust Preferred Securities Guarantee and thereafter means
each such Successor Trust Preferred Guarantee Trustee.
"Trust Securities" means the Trust Common Securities together with
the Trust Preferred Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this Trust
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this Trust Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Trust Preferred Guarantee
Trustee with a list, in such form as the Trust Preferred Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Trust
Preferred Securities ("List of Holders") as of such date, (i) within one (1)
Business Day after January 1 and June 30 of each year, and (ii) at any other
time within 30 days of receipt by the Guarantor of a written request for a List
of Holders as of a date no more than 14 days before such List of Holders is
given to the Trust Preferred Guarantee Trustee provided, that the Guarantor
shall not be obligated to provide such List of Holders at any time the List of
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Holders does not differ from the most recent List of Holders given to the Trust
Preferred Guarantee Trustee by the Guarantor. The Trust Preferred Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Trust Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Trust Preferred
Guarantee Trustee shall provide to the Holders of the Trust Preferred Securities
such reports as are required by Section 313 of the Trust Indenture Act, if any,
in the form and in the manner provided by Section 313 of the Trust Indenture
Act. The Trust Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Trust 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 Trust Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Trust Preferred Securities Guarantee that relate to any of the matters
set forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may be
given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Trust 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.
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SECTION 2.7 Event of Default; Notice
(a) The Trust 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 of the Trust Preferred Securities, notices of
all Events of Default actually known to a Responsible Officer of the Trust
Preferred Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided, that, the Trust Preferred Guarantee Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Trust Preferred Guarantee Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the Trust
Preferred Securities Trust Preferred Securities.
(b) The Trust Preferred Guarantee Trustee shall not be deemed to
have knowledge of any Event of Default unless the Trust Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible Officer of
the Trust Preferred Guarantee Trustee 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
Trust 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
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Guarantee Trustee
(a) This Trust Preferred Securities Guarantee shall be held by the
Trust Preferred Guarantee Trustee for the benefit of the Holders of the Trust
Preferred Securities, and the Trust Preferred Guarantee Trustee shall not
transfer this Trust Preferred Securities Guarantee to any Person except a Holder
of Trust Preferred Securities exercising his or her rights pursuant to Section
5.4(b) or to a Successor Trust Preferred Guarantee Trustee on acceptance by such
Successor Trust Preferred Guarantee Trustee of its appointment to act as
Successor Trust Preferred Guarantee Trustee. The right, title and interest of
the Trust Preferred Guarantee Trustee shall automatically vest in any Successor
Trust 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 Trust Preferred
Guarantee Trustee.
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(b) If an Event of Default actually known to a Responsible Officer
of the Trust Preferred Guarantee Trustee has occurred and is continuing, the
Trust Preferred Guarantee Trustee shall enforce this Trust Preferred Securities
Guarantee for the benefit of the Holders of the Trust Preferred Securities.
(c) The Trust Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Trust Preferred Securities Guarantee, and no implied covenants
shall be read into this Trust Preferred Securities Guarantee against the Trust
Preferred Guarantee Trustee. In case an Event of Default has occurred (that has
not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Trust Preferred Guarantee Trustee, the Trust
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Trust 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 Trust Preferred Securities Guarantee shall
be construed to relieve the Trust 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 Trust Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Trust Preferred Securities Guarantee, and the
Trust Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Trust Preferred Securities Guarantee, and no implied
covenants or obligations shall be read into this Trust Preferred
Securities Guarantee against the Trust Preferred Guarantee Trustee;
and
(B) in the absence of bad faith on the part of the Trust
Preferred Guarantee Trustee, the Trust 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 Trust Preferred Guarantee Trustee and
conforming to the requirements of this Trust Preferred Securities
Guarantee; but in the case of any such certificates or opinions that
by any pro-
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vision hereof are specifically required to be furnished to the Trust
Preferred Guarantee Trustee, the Trust Preferred Guarantee Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Preferred
Securities Guarantee;
(ii) the Trust Preferred Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the
Trust Preferred Guarantee Trustee, unless it shall be proved that the
Trust Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trust 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 Trust Preferred Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trust Preferred Guarantee Trustee, or
exercising any trust or power conferred upon the Trust Preferred Guarantee
Trustee under this Trust Preferred Securities Guarantee; and
(iv) no provision of this Trust Preferred Securities Guarantee shall
require the Trust 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 Trust 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 Trust Preferred Securities Guarantee
or indemnity, reasonably satisfactory to the Trust Preferred Guarantee
Trustee, against such risk or liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust 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.
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(ii) Any direction or act of the Guarantor contemplated by this
Trust Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established before taking, suffering
or omitting any action hereunder, the Trust 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 Trust 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 Trust Preferred Guarantee Trustee may consult with counsel
of its selection, and the advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion. Such counsel may
be counsel to the Guarantor or any of its Affiliates and may include any
of its employees. The Trust Preferred Guarantee Trustee shall have the
right at any time to seek instructions concerning the administration of
this Trust Preferred Securities Guarantee from any court of competent
jurisdiction.
(vi) The Trust Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Trust Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Trust Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Trust Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Preferred
Guarantee Trustee's agents, nominees or custodians) and liabilities that
might be incurred by it in complying with such request or direction,
including such reasonable advances as may be requested by the Trust
Preferred Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Trust 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 Trust Preferred
Securities Guarantee.
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(vii) The Trust 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 Trust 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 Trust Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Trust
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 Trust Preferred Guarantee Trustee or
its agents hereunder shall bind the Holders of the Trust Preferred
Securities, and the signature of the Trust 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 Trust Preferred Guarantee Trustee to so act or as to its compliance
with any of the terms and provisions of this Trust Preferred Securities
Guarantee, both of which shall be conclusively evidenced by the Trust
Preferred Guarantee Trustee or its agent taking such action.
(x) Whenever in the administration of this Trust Preferred
Securities Guarantee the Trust 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 Trust Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Trust 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 Trust 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 Trust Preferred Securities
Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee shall
be deemed to impose any duty or obligation on the Trust Preferred Guarantee
Trustee to perform any act or acts or
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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 Trust 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
Trust Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee
The recitals contained in this Trust Preferred Securities Guarantee
shall be taken as the statements of the Guarantor, and the Trust Preferred
Guarantee Trustee does not assume any responsibility for their correctness. The
Trust Preferred Guarantee Trustee makes no representation as to the validity or
sufficiency of this Trust Preferred Securities Guarantee.
ARTICLE IV
TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Preferred Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Trust Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Trust Preferred Guarantee
Trustee shall immediately
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resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Trust Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Trust 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 Trust Preferred Guarantee
Trustee
(a) Subject to Section 4.2(b), the Trust Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Trust Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Trust Preferred Guarantee
Trustee has been appointed and has accepted such appointment by written
instrument executed by such Successor Trust Preferred Guarantee Trustee and
delivered to the Guarantor.
(c) The Trust Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Trust Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Trust Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing executed by the Trust Preferred Guarantee Trustee
and delivered to the Guarantor, which resignation shall not take effect until a
Successor Trust Preferred Guarantee Trustee has been appointed and has accepted
such appointment by instrument in writing executed by such Successor Trust
Preferred Guarantee Trustee and delivered to the Guarantor and the resigning
Trust Preferred Guarantee Trustee.
(d) If no Successor Trust Preferred Guarantee Trustee shall have
been appointed and accepted appointment as provided in this Section 4.2 within
60 days after delivery of an instrument of removal or resignation, the Trust
Preferred Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Trust Preferred Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Trust Preferred Guarantee Trustee.
(e) No Trust Preferred Guarantee Trustee shall be liable for the
acts or omissions to act of any Successor Trust Preferred Guarantee Trustee.
(f) Upon termination of this Trust Preferred Securities Guarantee or
removal or resignation of the Trust Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor
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shall pay to the Trust Preferred Guarantee Trustee all amounts accrued to the
date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), if, as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Trust Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Trust Preferred Securities to be
performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Trust Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Trust Preferred Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Partnership Preferred Securities or any extension
of the
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maturity date of the Partnership Preferred Securities permitted by the
Partnership Agreement);
(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 Trust Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Trust
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Trust Preferred
Guarantee Trustee in respect of this Trust Preferred Securities Guarantee or
exercising any trust or power conferred upon the Trust Preferred Guarantee
Trustee under this Trust Preferred Securities Guarantee.
(b) If the Trust Preferred Guarantee Trustee fails to enforce its
rights under the Trust Preferred Securities Guarantee after a Holder of Trust
Preferred Securities has made a written request, such Holder of Trust Preferred
Securities may institute a legal proceeding directly against the Guarantor to
enforce the Trust Preferred Guarantee Trustee's rights under this Trust
Preferred Securities Guarantee, without first instituting a legal proceeding
against the Issuer, the Trust Preferred Guarantee Trustee or any other person or
entity. Notwithstanding the
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foregoing, if the Guarantor has failed to make a guarantee payment, a Holder of
Trust Preferred Securities may directly institute a proceeding in such Holder's
own name against the Guarantor for enforcement of the Trust Preferred Securities
Guarantee for such payment. The Guarantor waives any right or remedy to require
that any action be brought first against the Issuer or any other person or
entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Trust Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Trust 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
Trust Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Trust Preferred Securities Guarantee. If
any amount shall be paid to the Guarantor in violation of the preceding
sentence, the Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Trust 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 Trust
Preferred Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding, if (a)
for any distribution period, full distributions on a cumulative basis on any
Trust Preferred Securities have not been paid or declared and set apart for
payment, (b) an Invest-
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ment Event of Default by any Investment Affiliate in respect of any Affiliate
Investment Instrument has occurred and is continuing, or (c) the Company is in
default of its obligations under the Trust Preferred Securities Guarantee, the
Trust Common Securities Guarantee, the Partnership Guarantee or any Investment
Guarantee, then, during such period the Company shall not, nor permit any
majority owned subsidiary to (i) declare or pay dividends on, make distributions
with respect to, or redeem, purchase or acquire, or make a liquidation payment
with respect to any of its capital stock or comparable equity interest (except
for dividends or distributions in shares of its capital stock, conversions or
exchanges of common stock of one class into common stock of another class and
dividends, distributions with respect to the Partnership or the Trust or
dividends and distributions on the common stock of wholly owned subsidiaries of
the Company), (ii) make, or permit the making of, any Affiliated Restricted
Payments except for Permissible Affiliated Payments, and (iii) make any
guarantee payments with respect to the foregoing.
SECTION 6.2 Ranking
This Trust Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any Preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock. Any similar
guarantee given hereafter by the Company with respect to Trust Preferred
Securities that is silent as to seniority will rank pari passu with this Trust
Preferred Securities Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Trust Preferred Securities, (ii)
upon the distribution of the Partnership Preferred Securities to the Holders of
all of the Trust Preferred Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Trust Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Trust Preferred Securities must restore payment of any sums
paid under the Trust Preferred Securities or under this Trust Preferred
Securities Guarantee.
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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 Trust
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 Trust 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 gross negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Trust 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 and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Preferred Securities Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust 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 Trust Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Trust Preferred Securities Guarantee may only be amended with the prior approval
of the Holders of at least a Majority in liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all the outstanding Trust Preferred Securities. The
provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Trust Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Trust Preferred Guarantee Trustee, at the Trust
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Trust Preferred Guarantee Trustee may give notice of to the
Holders of the Trust Preferred Securities):
The First National Bank of Chicago
153 West 53rd Street
New York, New York 10019
Attention: Mary R. Fonti
Telecopy: (212) 373-1383
(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 Trust Preferred Securities):
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07692
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Attention: General Counsel
Telecopy: (201) 397-4356
(c) If given to any Holder of Trust Preferred Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Trust Preferred Securities Guarantee is solely for the benefit
of the Holders of the Trust Preferred Securities and, subject to Section 3.1(a),
is not separately transferable from the Trust Preferred Securities.
SECTION 9.5 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
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THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
AT&T CAPITAL CORPORATION,
as Guarantor
By:________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trust Preferred Guarantee Trust-
ee
By:________________________________
Name:
Title:
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====================================
PARTNERSHIP GUARANTEE AGREEMENT
Capita Preferred Funding, L.P.
Dated as of October __, 1996
====================================
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TABLE OF CONTENTS
PAGE
----
ARTICLE I.................................................................... 2
SECTION 1.1. Definitions............................................... 2
ARTICLE II................................................................... 4
SECTION 2.1. Guarantee................................................. 4
SECTION 2.2. Waiver of Notice and Demand............................... 4
SECTION 2.3. Obligations Not Affected.................................. 4
SECTION 2.4. Rights of Holders......................................... 5
SECTION 2.5. Guarantee of Payment...................................... 6
SECTION 2.6. Subrogation............................................... 6
SECTION 2.7. Independent Obligations................................... 7
ARTICLE III.................................................................. 7
SECTION 3.1. Limitation of Transactions................................ 7
SECTION 3.2. Ranking................................................... 7
ARTICLE IV................................................................... 8
SECTION 4.1. Termination............................................... 8
ARTICLE V.................................................................... 8
SECTION 5.1. Successors and Assigns.................................... 8
SECTION 5.2. Amendments................................................ 9
SECTION 5.3. Notices................................................... 9
SECTION 5.4. Gender.................................................... 9
SECTION 5.5. Benefit................................................... 9
SECTION 5.6. Governing Law............................................. 9
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PARTNERSHIP GUARANTEE AGREEMENT
This PARTNERSHIP GUARANTEE AGREEMENT, dated as of ___________, 1996,
is executed and delivered by AT&T Capital Corporation, a Delaware corporation
(the "Company" or the "Guarantor"), for the benefit of the holders from time to
time of the Partnership Preferred Securities (as defined below).
WHEREAS, pursuant to an Amended and Restated Agreement of Limited
Partnership (the "Partnership Agreement"), dated as of the date hereof, of
Capita Preferred Funding, L.P., a Delaware limited partnership (the "Issuer"),
the Issuer may issue a single series of limited partner interests in the Issuer
(the "Partnership Preferred Securities");
WHEREAS, pursuant to the Partnership Agreement, the proceeds
received by the Issuer from the issuance and sale of the Partnership Preferred
Securities will be invested by the Issuer in the Affiliate Investment
Instruments and Eligible Debt Securities (each as defined in the Partnership
Agreement); and
WHEREAS, the Guarantor, as incentive for the Holders (as defined
herein) to purchase Partnership Preferred Securities, desires hereby irrevocably
and unconditionally to agree, to the extent set forth herein, to pay to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Partnership Preferred Securities, which purchase the Guarantor hereby agrees
shall directly or indirectly provide at least some material benefit to the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders.
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ARTICLE I
SECTION 1.1. Definitions
As used in this Partnership Guarantee Agreement, the terms set forth
below shall, unless the context otherwise requires, have the following meanings.
Capitalized terms used but not otherwise defined herein shall have the meanings
assigned to such terms in the Partnership Agreement.
"Affiliate" means, with respect to any specified person, any other
person that directly or indirectly controls or is controlled by, or is under
common control with, such specified person, provided, that, with respect to the
Guarantor, "Affiliate" shall be deemed to also include any entity of which at
least 20% of the capital stock is owned by a person that directly or indirectly
controls the Guarantor.
"Affiliated Restricted Payments" means any payment (including,
without limitation, payments for the sale, purchase or lease of any assets or
properties or the rendering of any services) to any Affiliate of the Guarantor,
except for Permissible Affiliated Payments.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Partnership Preferred
Securities, to the extent not paid or made by the Issuer: (i) any accrued and
unpaid distributions that have theretofore been declared on the Partnership
Preferred Securities out of funds legally available therefor, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), payable out of funds legally available
therefor, with respect to any Partnership Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer, the lesser of (a) the aggregate of the
liquidation preference and all accrued and unpaid distributions on the
Partnership Preferred Securities to the date of payment and (b) the amount of
assets of the Issuer after satisfaction of all liabilities remaining available
for distribution to Holders in liquidation of the Issuer (in either case, the
"Liquidation Distribution").
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"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Partnership Preferred Securities; provided,
however, that in determining whether the holders of the requisite percentage of
Partnership Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate of
the Guarantor.
"Permissible Affiliated Payments" means (i) payments by the Company
or its subsidiaries (other than the Partnership or the Trust) to Affiliates of
the Company for management or other advisory services not to exceed $10 million
per annum and (ii) transactions made in good faith the terms of which are fair
and reasonable to the Company or such majority-owned subsidiary, as the case may
be, and are at least as favorable as terms which could be obtained by the
Company or such majority-owned subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with persons which are not Affiliates
of the Company; provided, that with respect to a payment or a series of payments
not greater than $1 million, such payments shall be conclusively deemed to be on
terms which are fair and reasonable to the Company or any of its majority-owned
subsidiaries and on terms which are at least as favorable as the terms which
could be obtained on an arm's length basis with persons who are not Affiliates
if such payments are approved by a majority of the Company's independent
directors; and provided, further, that with respect to a payment or a series of
related payment or payments in excess of $1 million, the Company or such
subsidiary shall either (A) have received a written opinion of a nationally
recognized investment bank stating that the terms of such payment are fair to
the Company or such subsidiary, as the case may be, from a financial point of
view, or (B) have selected the Affiliate or Affiliates which are to receive such
payments based upon a competitive bid procedure in which the Company or such
subsidiary shall have received at least two independent bids, administered in
good faith and on commercially reasonable terms by the Company or such
subsidiary.
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ARTICLE II
SECTION 2.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments, as and when due (without duplication of
amounts theretofore paid by the Issuer), regardless of any defense, right of
set-off or counterclaim which the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.2. Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this Partnership
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 2.3. Obligations Not Affected.
The obligations, covenants, agreements and duties of the Guarantor
under this Partnership Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Partnership
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Partnership
Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the
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Partnership Preferred Securities; provided that nothing in this
Partnership Guarantee Agreement shall affect or impair any valid
extension;
(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 Partnership
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Partnership
Preferred Securities;
(f) the settlement or compromise of any obli- gation 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 2.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 2.4. Rights of Holders
The Guarantor expressly acknowledges that (i) this Partnership
Guarantee Agreement will be deposited with the General Partner to be held for
the benefit of the Holders; (ii) in the event of the appointment of a Special
Representative to, among other things, enforce this Partnership Guarantee
Agreement, the Special Representative may take possession of this Partnership
Guarantee Agreement for such purpose; (iii) if no Special
5
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<PAGE>
Representative has been appointed, the General Partner has the right to enforce
this Partnership Guarantee Agreement on behalf of the Holders; (iv) the Holders
of not less than a majority in aggregate liquidation preference of the
Partnership Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available in respect of this
Partnership Guarantee Agreement including the giving of directions to the
General Partner or the Special Representative, as the case may be; and (v) if
the General Partner or Special Representative fails to enforce this Partnership
Guarantee Agreement as above provided, any Holder may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Partnership Guarantee Agreement, without first instituting a legal proceeding
against the Issuer or any other person or entity. Notwithstanding the foregoing,
if the Guarantor has failed to make a guarantee payment, a Holder may directly
institute a proceeding against Guarantor to enforce such payment under this
Partnership Guarantee Agreement.
SECTION 2.5. Guarantee of Payment
This Partnership Guarantee Agreement will not be discharged except
by payment of the Guarantee Payments in full to the extent not paid by the
Issuer.
SECTION 2.6. Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Partnership Guarantee Agreement provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Partnership Guarantee Agreement, if, at the
time of any such payment, any amounts are due and unpaid under this Partnership
Guarantee Agreement. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor agrees to hold such amount in trust for
the Holders and to pay over such amount to the Holders.
6
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<PAGE>
SECTION 2.7. Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Partnership
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
Partnership Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (f), inclusive, of Section 2.3 hereof.
ARTICLE III
SECTION 3.1. Limitation of Transactions
So long as any Partnership Preferred Securities remain outstanding,
if (a) for any distribution period, full distributions on a cumulative basis on
any Partnership Preferred Securities have not been paid or declared and set
apart for payment (b) there shall have occurred an Event of Default under the
Partnership Agreement or (c) the Guarantor shall be in default with respect to
its payment obligations under this Partnership Guarantee Agreement, the Trust
Preferred Securities Guarantee, the Trust Common Securities Guarantee or any
[Investment Guarantee] then, during such period the Company shall not, nor
permit any majority owned subsidiary to (i) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to any of its capital stock or comparable
equity interest (except for dividends or distributions in shares of its capital
stock, conversions or exchanges of common stock of one class into common stock
of another class and dividends, distributions with respect to the Partnership or
the Trust or dividends and distributions on the common stock of wholly owned
subsidiaries of the Company), (ii) make, or permit the making of, any Affiliated
Restricted Payments except for Permissible Affiliated Payments, and (iii) make
any guarantee payments with respect to the foregoing.
SECTION 3.2. Ranking
This Partnership Guarantee Agreement will constitute an unsecured
obligation of the Guarantor and
7
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will rank (i) subordinate and junior in right of payment to all other
liabilities of the Guarantor, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued 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 of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock. Any similar guarantee given hereafter by
the Company with respect to Partnership Preferred Securities that is silent as
to seniority will rank pari passu with this Partnership Guarantee Agreement.
ARTICLE IV
SECTION 4.1. Termination
This Partnership Guarantee Agreement shall terminate and be of no
further force and effect, as to the Partnership Preferred Securities, upon full
payment of the Redemption Price of all Partnership Preferred Securities, and
will terminate completely upon full payment of the amounts payable in accordance
with the Partnership Agreement upon liquidation of the Issuer. This Partnership
Guarantee Agreement will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder must, in accordance with Delaware Revised
Uniform Limited Partnership Act, restore payment of any sums paid under any
Partnership Preferred Securities or this Partnership Guarantee Agreement.
ARTICLE V
SECTION 5.1. Successors and Assigns
All guarantees and agreements contained in this Partnership
Guarantee Agreement shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Partnership Preferred Securities then outstanding.
8
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SECTION 5.2. Amendments
Except with respect to any changes which do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Partnership Guarantee Agreement may only be amended with the prior approval of
the Holders of not less than a majority in liquidation preference of all the
outstanding Partnership Preferred Securities.
SECTION 5.3. Notices
Any notice, request or other communication required or permitted to
be given hereunder to the Guarantor shall be given in writing by delivering the
same against receipt therefor by facsimile transmission (confirmed by mail),
addressed to the Guarantor, as follows (and if so given, shall be deemed given
when mailed):
AT&T Capital Corporation
44 Whippany Road
Morristown, NJ 07962
Attention: General Counsel
Facsimile No: (201) 397-4356
Any notice, request or other communication required or permitted to
be given hereunder to the Holders shall be given by the Guarantor in the same
manner as notices sent by the Issuer to the Holders.
SECTION 5.4. Gender
The masculine, feminine and neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 5.5. Benefit
This Partnership Guarantee Agreement is solely for the benefit of
the Holders and is not separately transferable from the Partnership Preferred
Securities.
SECTION 5.6. Governing Law
THIS PARTNERSHIP GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
9
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THIS PARTNERSHIP GUARANTEE AGREEMENT is executed as of the day and
year first above written.
AT&T CAPITAL CORPORATION
By: __________________________
Name:
Title:
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<PAGE>
AT&T CAPITAL CORPORATION,
Issuer,
AND
THE FIRST NATIONAL BANK OF CHICAGO, N.A., Trustee
______________________
INDENTURE
DATED AS OF OCTOBER __, 1996
________________________
__% SUBORDINATED DEBENTURES
DUE 2016
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<PAGE>
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
- --------------- ----------
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.
(i)
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<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
Definitions and other Provisions
of General Application......................... 1
SECTION 101. Definitions........................................... 1
SECTION 102. Compliance Certificates and Opinions.................. 10
SECTION 103. Form of Documents Delivered to Trustee................ 10
SECTION 104. Acts of Holders; Record Dates......................... 11
SECTION 105. Notices, Etc., to Trustee and the
Company.......................................... 12
SECTION 106. Notice to Holders; Waiver............................. 12
SECTION 107. Conflict with Trust Indenture Act..................... 13
SECTION 108. Effect of Headings and Table of
Contents......................................... 13
SECTION 109. Successors and Assigns................................ 13
SECTION 110. Separability Clause................................... 13
SECTION 111. Benefits of Indenture................................. 14
SECTION 112. GOVERNING LAW......................................... 14
SECTION 113. Legal Holidays........................................ 14
ARTICLE TWO
Security Forms............................. 14
SECTION 201. Forms Generally....................................... 14
SECTION 202. Form of Face of Security.............................. 15
SECTION 203. Form of Reverse of Security........................... 17
SECTION 204. Form of Trustee's Certificate of
Authentication................................... 20
ARTICLE THREE
The Securities............................. 20
SECTION 301. Title and Terms....................................... 20
SECTION 302. Denominations.................................... 22
SECTION 303. Execution, Authentication, Delivery and
Dating........................................... 22
SECTION 304. Temporary Securities.................................. 22
SECTION 305. Registration, Registration of Transfer
and Exchange.................................... 23
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities...................................... 24
SECTION 307. Payment of Interest; Interest Rights
Preserved....................................... 25
SECTION 308. Persons Deemed Owners................................. 26
SECTION 309. Cancellation.......................................... 26
SECTION 310. Computation of Interest............................... 27
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(i)
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Page
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ARTICLE FOUR
Satisfaction and Discharge....................... 27
SECTION 401. Satisfaction and Discharge of Indenture............... 27
SECTION 402. Application of Trust Money............................ 28
ARTICLE FIVE
Remedies................................ 28
SECTION 501. Events of Default..................................... 28
SECTION 502. Acceleration of Maturity; Rescission
and Annulment................................... 29
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee...................... 30
SECTION 504. Trustee May File Proofs of Claim...................... 31
SECTION 505. Trustee May Enforce Claims Without
Possession of Securities........................ 32
SECTION 506. Application of Money Collected........................ 32
SECTION 507. Limitation on Suits................................... 32
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest.................. 33
SECTION 509. Restoration of Rights and Remedies.................... 33
SECTION 510. Rights and Remedies Cumulative........................ 34
SECTION 511. Delay or Omission Not Waiver.......................... 34
SECTION 512. Control by Holders.................................... 34
SECTION 513. Waiver of Past Defaults............................... 34
SECTION 514. Undertaking for Costs................................. 35
ARTICLE SIX
The Trustee.............................. 35
SECTION 601. Certain Duties and Responsibilities................... 35
SECTION 602. Notice of Defaults.................................... 35
SECTION 603. Certain Rights of Trustee............................. 36
SECTION 604. Not Responsible for Recitals or
Issuance of Securities.......................... 37
SECTION 605. May Hold Securities................................... 37
SECTION 606. Money Held in Trust................................... 37
SECTION 607. Compensation and Reimbursement........................ 38
SECTION 608. Disqualification; Conflicting Interests............... 38
SECTION 609. Corporate Trustee Required; Eligibility............... 38
SECTION 610. Resignation and Removal; Appointment of
Successor....................................... 39
SECTION 611. Acceptance of Appointment by Successor................ 40
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.......................... 40
SECTION 613. Preferential Collection of Claims
Against Company................................. 41
ARTICLE SEVEN
Holders' Lists and Reports by Trustee................. 41
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(ii)
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Page
----
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders............................ 41
SECTION 702. Preservation of Information;
Communications to Holders....................... 41
SECTION 703. Reports by Trustee.................................... 42
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease.......... 42
SECTION 801. Company May Consolidate,
Etc., Only on Certain Terms..................... 42
SECTION 802. Successor Substituted................................. 43
ARTICLE NINE
Supplemental Indentures........................ 44
SECTION 901. Supplemental Indentures Without Consent
of Holders...................................... 44
SECTION 902. Supplemental Indentures with Consent of
Holders......................................... 44
SECTION 903. Execution of Supplemental Indentures.................. 45
SECTION 904. Effect of Supplemental Indentures..................... 45
SECTION 905. Conformity with Trust Indenture Act................... 46
ARTICLE TEN
Covenants; Representations and Warranties............... 46
SECTION 1001. Payment of Principal and Interest.................... 46
SECTION 1002. Maintenance of Office or Agency...................... 46
SECTION 1003. Money for Security Payments to Be Held
in Trust........................................ 46
SECTION 1004. Reports by the Company .............................. 47
SECTION 1005. Limitations on Incurrence of Secured
Debt............................................ 47
SECTION 1006. Limitations on Incurrence of Senior
Indebtedness.]................................... 50
SECTION 1007. Statement as to Compliance; Notice of
Certain Events of Default....................... 50
ARTICLE ELEVEN
Subordination of Securities.......................... 51
SECTION 1101. Securities Subordinate to Senior
Indebtedness.................................... 51
SECTION 1102. Payment Over of Proceeds upon
Dissolution, etc................................ 51
SECTION 1103. No Payment When Senior Indebtedness in
Default......................................... 53
SECTION 1104. Payment Permitted If No Default...................... 53
SECTION 1105. Subrogation to Rights of Holders of
Senior Indebtedness............................. 53
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(iii)
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Page
----
SECTION 1106. Provisions Solely to Define Relative
Rights........................................... 54
SECTION 1107. Trustee to Effectuate Subordination.................. 54
SECTION 1108. No Waiver of Subordination Provisions................ 55
Section 1109. Notice to Trustee.................................... 55
SECTION 1110. Reliance on Judicial Order or
Certificate of Liquidating Agent................. 56
SECTION 1111. Rights of Trustee as a Holder of
Senior Indebtedness; Preservation of
Trustee's Rights................................. 56
SECTION 1112. Article Applicable to Paying Agents.................. 57
SECTION 1101. Guarantee; Status of Guarantee....................... 57
SECTION 1102. Execution of Guarantee............................... 58
SECTION 1103. Form of Notation of Guarantee........................ 59
ARTICLE TWELVE
Redemption of Securities............................. 61
SECTION 1201. Optional Redemption.................................. 61
SECTION 1202. Applicability of Article............................. 61
SECTION 1203. Authorization for Redemption; Notice
to Trustee...................................... 61
SECTION 1204. Selection by Trustee of Securities to
Be Redeemed..................................... 62
SECTION 1205. Notice of Redemption................................. 62
SECTION 1206. Deposit of Redemption Price.......................... 63
SECTION 1207. Securities Payable on Redemption Date................ 63
SECTION 1208. Securities Redeemed in Part.......................... 63
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Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
(iv)
<PAGE>
<PAGE>
INDENTURE, dated as of October __, 1996, from AT&T Capital
Corporation, a corporation duly organized and validly existing under the laws of
the State of Delaware (the "Company"), to The First National Bank of Chicago,
N.A. (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its ___% Subordinated Debentures due
2016 (the "Securities") as herein provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with 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 covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
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:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Accounts Receivable" mean (i) any accounts receivable (whether or
not earned by performance), chattel paper, instruments, documents, general
intangibles, trade acceptances, any other rights to receive installment, rental
or other payments for, or relating to amounts due or to become due on account of
<PAGE>
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2
equipment or goods sold or leased or to be sold or leased or services rendered
or to be rendered or funds advanced or loaned or to be advanced or loaned and
other rights to payment of any kind, (ii) any proceeds of any of the foregoing
and (iii) any interest in any property or asset of any kind (whether of the
obligor under such Accounts Receivable or any other person) securing the payment
of any item listed in clause (i) hereof.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" means interest that shall accrue on any
interest on the Securities that is in arrears for more than one quarter or not
paid during an Extension Period, which in either case shall accrue at the rate
of __% per annum compounded quarterly.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
certification, and delivered to the Trustee.
"Business Day" means a day other than a day on which banking
institutions in the City of New York are authorized or required by law to close.
"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.
"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.
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3
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman, a Vice Chairman, its
President or a Vice President and delivered to the Trustee.
"Consolidated EBIT" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) to the extent deducted in
determining such Consolidated Net Income, the sum of Consolidated Interest
Expense and the provision for income tax for such period.
"Consolidated Interest Expense" means, for any period, the interest
expense of the Company and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
"Consolidated Net Income" means, for any period, the net income
(loss) (calculated (a) before preferred and common stock dividends and (b)
exclusive of the effect of any extraordinary or other materials non-recurring
gain or loss outside the ordinary course of business) of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis for such period.
"Consolidated Net Tangible Assets" means, at the date of any
determination, the total assets appearing on the consolidated balance sheet of
the Company and any Restricted Subsidiaries as at the end of the most recent
fiscal quarter of the Company for which such balance sheet is available,
prepared in accordance with generally accepted accounting principles, less (a)
all current liabilities (obligations whose liquidity is reasonably expected to
occur within twelve months), (b) investments in and advances to Subsidiaries
other than Restricted Subsidiaries or other entities accounted for on the equity
method of accounting, and (c) Intangible Assets. "Intangible Assets" means the
value (net of any applicable reserves), as shown on or reflected in the
Company's balance sheet, of: (i) all trade names, trademarks, licenses, patents,
copyrights and goodwill; (ii) organization and development costs; (iii) deferred
charges (other than prepaid items such as insurance, taxes, interest,
commissions, rents and similar items and tangible assets being amortized); and
(iv) unamortized debt discount and expense, less unamortized premium.
"Corporate Trust Office" means the principal office of the Trustee
in New York, New York, at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is 153
West 53rd Street, New York, New York 10019.
"Defaulted Interest" has the meaning specified in Section 307.
"Event of Default" has the meaning specified in Section 501.
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4
"Extension Period" has the meaning specified in Section 301.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of
the United States Code, as amended from time to time.
"General Partner" means the Company, in its capacity as general
partner of the Partnership.
"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", when used with respect to any installment
of interest on a Security, means the date specified in such Security as the
fixed date on which an installment of interest with respect to the Securities is
due and payable.
"Limited Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership, dated as of October __, 1996, of the
Partnership, as amended, modified or otherwise supplemented from time to time.
"Maturity", when used with respect to any Security, means the date
on which the original 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.
"Non-Recourse Debt" of the Company or any Restricted Subsidiary
means any indebtedness for borrowed money of the Company or such Restricted
Subsidiary, as the case may be, which is secured by any lien (as such term is
used in Section 1006) on, or payable solely from the income and proceeds of, any
property (including, without limiting the generality of such term, any
intangible assets), shares of stock, other equity interests or debt of the
Company or such Restricted Subsidiary, as the case may be, and which is not a
general obligation of the Company or such Restricted Subsidiary, as the case may
be.
"Officers' Certificate" means a certificate signed by (i) the
Chairman, a Vice Chairman, the President, a Vice President, or the Treasurer of
the Company and (ii) the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee; provided, however, that such certificate may be signed
by two of the officers or directors listed in clause (i) above in
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5
lieu of being signed by one of such officers or directors listed in such clause
(i) and one of the officers listed in clause (ii) above. One of the officers
signing an Officer's Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each 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.
"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 which have been paid pursuant to Section 401, 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.
"Partnership" means Capita Preferred Funding, L.P., a Delaware
limited partnership, and any successor thereto.
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6
"Partnership Investment Company Event" means that the General
Partner shall have requested and received an opinion of nationally recognized
independent legal counsel experienced in such matters to the effect that as a
result of the occurrence on or after the date hereof 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, the
Partnership is or will be considered an "investment company" which is required
to be registered under the Investment Company Act of 1940.
"Partnership Preferred Securities" means the __% limited partnership
interests, liquidation amount $25 per Partnership Preferred Security, issued
pursuant to the Limited Partnership Agreement.
"Partnership Special Event" means either a Partnership Investment
Company Event or a Partnership Tax Event.
"Partnership Tax Event" means that the Company, as the general
partner of the Partnership, shall have requested and received an opinion of
nationally recognized independent tax counsel experienced in such matters to the
effect that there has been a Tax Action which affects any of the events
described in (i) through (iii) below and that there is more than an
insubstantial risk that (i) the Partnership is, or will be subject to United
States federal income tax with respect to income accrued or received on the
Affiliate Investment Instruments or the Eligible Debt Securities (each as
defined in the Limited Partnership Agreement), (ii) the Partnership is, or will
be subject to more than a de minimis amount of other taxes, duties or other
governmental charges or (iii) interest payable by one or more of the obligors
with respect to the Affiliate Investment Instruments to the Partnership is not,
or will not be, deductible by the Company for United States federal income tax
purposes.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company which shall
initially be The First National Bank of Chicago, N.A.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, 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
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7
evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"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.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the Business Day next preceding such Interest Payment Date.
"Representative" means an indenture trustee or other trustee, agent
or representative for an issue of Senior Indebtedness.
"Responsible Officer", when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer 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 his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means each Subsidiary of the Company
organized under the laws of any State of the United States or the District of
Columbia, no substantial portion of the business of which is carried on outside
of the United States; provided that each Drop-Down Subsidiary (as defined in
Section 1005) shall be a Restricted Subsidiary.
"Securities" has the meaning specified in the Recitals to this
instrument.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Senior Indebtedness" means the principal of, premium, if any,
interest on and any other payment due pursuant to any of the following, whether
outstanding at the date hereof or hereafter incurred, created or assumed: (i)
all indebtedness of the Company (other than any obligations to trade creditors)
evidenced by notes, debentures, bonds or other securities sold by the Company
for money borrowed and capitalized lease obligations;
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8
(ii) all indebtedness of others of the kinds described in the preceding clause
(i) assumed or guaranteed in any manner by the Company or in effect guaranteed
by the Company; and (iii) all renewals, extensions or refundings of indebtedness
of the kinds described in either of the preceding clauses (i) or (ii), unless,
in the case of any particular indebtedness, capitalized lease obligation,
guarantee, renewal, extension or refunding, the instrument creating or
evidencing the same or the assumption or guarantee of the same expressly
provides that such indebtedness, renewal, extension or refunding is subordinated
to or is pari passu with the Securities.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"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 Additional Interest), of such Security or such installment
of interest is due and payable.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"Tax Action" means that there has been (a) an amendment to, change
in or announced proposed change in the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, (b) a judicial decision interpreting, applying, or clarifying such laws
or regulations, (c) an administrative pronouncement or action that represents an
official position (including a clarification of an official position) of the
governmental authority or regulatory body making such administrative
pronouncement or taking such action, or (d) a threatened challenge asserted in
connection with an audit of the Company or any of its Subsidiaries, the
Partnership, or the Trust, or a threatened challenge asserted in writing in
connection with any other taxpayer that has raised capital through the issuance
of securities that are substantially similar to the Securities, the Partnership
Preferred Securities, or the Trust Preferred Securities, which amendment or
change is adopted or which decision or pronouncement is announced or which
action, clarification or challenge occurs on or after the date of this
Indenture.
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9
"Trust" means Capita Preferred Trust, a Delaware business trust, and
any successor thereto.
"Trust Agreement" has the meaning specified in the first paragraph
of this instrument.
"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 in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Trust Preferred Securities" means the __% Trust Originated
Preferred Securities, liquidation amount $25 per Trust Preferred Security,
issued pursuant to the Trust Agreement.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
SECTION 102. Compliance Certificates and Opinions.
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. 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
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
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
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10
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 any 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 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 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 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 entitled to give or take any request, demand, authorization, direction,
notice, consent,
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11
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.
(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.
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,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at its Corporate Trust Office, Attention: Corporate
Trust Trustee Administration, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified below or
at any other address previously furnished in writing to the Trustee by the
Company.
If to the Company to:
AT&T Capital Corporation
44 Whippany Road
Morristown, NJ 07962-1963
Attention: Treasurer
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12
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
affected by such event, at his 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 a notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the 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.
SECTION 109. Successors and Assigns.
The Company will have the right at all times to assign any of its
rights or obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary, provided that, in the event of any such assignment, the Company will
remain liable for all such obligations. Subject to the foregoing, this Indenture
is binding upon and inures to the benefit of the parties hereto and their
respective successors and assigns. This Indenture may not otherwise be assigned
by the parties hereto.
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13
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.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal of the Securities shall 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 of interest or principal of the
Securities, as the case may be, shall be made on the immediately preceding
Business Day, in each case, with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Securities and the Trustee's certificates of authentication
shall be in substantially the forms set forth in this Article, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities.
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14
The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these or other methods, all as determined by
the officers executing such Securities, as evidenced by their execution of such
Securities.
SECTION 202. Form of Face of Security.
AT&T CAPITAL CORPORATION
__% Subordinated Debenture,
Due 2016
No. _____________ $________
AT&T CAPITAL CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ________________, or registered
assigns, the principal sum of ________ DOLLARS ($________) on ____________ __,
2016 and to pay interest on said principal sum from ___________ __, 1996 or from
the most recent interest payment date (each such date, an "Interest Payment
Date") to which interest has been paid or duly provided for, quarterly (subject
to deferral as set forth herein) in arrears on March 31, June 30, September 30
and December 31 of each year, commencing December 31, 1996, at the rate of __%
per annum plus Additional Interest, if any, until the principal hereof shall
have become due and payable, and on any overdue principal. The amount of
interest payable for any period will be computed on the basis of twelve 30-day
months and a 360-day year. In the event that any date on which interest is
payable on this Security is not a Business Day, then a payment of the 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 the date the payment was originally
payable. A "Business Day" shall mean any day other than a day on which banking
institutions in the City of New York are authorized or required by law to remain
closed. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name this Security (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
close of business on the Business Day next preceding such Interest Payment Date.
Any such interest installment not so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this security (or one or more
Predecessor
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15
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
The Company shall have the right at any time during the term of this
Security, from time to time, to extend the interest payment period of such
Security for up to six consecutive quarters (an "Extension Period"), during
which periods interest will compound quarterly and the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which Extension Period the Company shall pay all interest then
accrued and unpaid (together with Additional Interest thereon to the extent that
payment of such interest is permitted by applicable law). Prior to the
termination of any such Extension Period, the Company may further extend the
interest payment period, provided that such Extension Period together with all
such previous and further extensions thereof shall not exceed six consecutive
quarters or extend beyond the Maturity of this Security. Upon the termination of
any such Extension Period and upon the payment of all accrued and unpaid
interest and any Additional Interest then due, the Company may select a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period except at the end thereof. The
Company shall give the Holder of this Security and the Trustee notice of its
selection of an Extension Period at least one Business Day prior to the earlier
of (i) the Interest Payment Date or (ii) the date Capita Preferred Trust is
required to give notice to the New York Stock Exchange or other applicable
self-regulatory organization or to holders of the Trust Preferred Securities of
the record date or the date such distributions are payable, but in any event not
less than one Business Day prior to such record date.
Payment of the principal of and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in New
York, New York, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Security Register.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in
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16
right of payment to the prior payment in full of all Senior Indebtedness, and
this Security is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes. Each Holder hereof, by his acceptance hereof, waives
all notice of the acceptance of the subordination provisions contained herein
and in the Indenture of each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, AT&T Capital Corporation has caused this
instrument to be duly executed under its corporate seal.
Dated: ________, 1996
AT&T CAPITAL CORPORATION
By:_________________________________________
Name:
Title:
Attest:
______________________
SECTION 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of Securities of the
Company, designated as its __% Subordinated Debentures Due 2016 (herein called
the "Securities"), limited in aggregate principal amount to $_____________
issued under an Indenture, dated as of __________ __, 1996 (herein called the
"Indenture"), between the Company and The First National Bank of Chicago, N.A.,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference
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17
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.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
At any time on or after September 30, 2006, the Company shall have
the right, subject to the terms and conditions of Article Twelve of the
Indenture, to redeem this Security at the option of the Company, without premium
or penalty, in whole or in part, at a Redemption Price equal to 100% of the
principal amount to be redeemed plus accrued but unpaid interest, including any
Additional Interest, if any, to the Redemption Date. If a Partnership Special
Event shall occur and be continuing, the Company shall have the right, subject
to the terms and conditions of Article Twelve of the Indenture, to redeem this
Security, without premium or penalty, in whole but not in part, at a Redemption
Price equal to 100% of the principal amount thereof plus accrued but unpaid
interest, including any Additional Interest, if any, to the Redemption Date. Any
redemption pursuant to this paragraph will be made upon not less than 30 nor
more than 60 days' notice, at the Redemption Price. If the Securities are only
partially redeemed by the Company, the Securities will be redeemed pro rata, by
lot or in such other manner as the Trustee shall deem appropriate and fair in
its discretion and that may provide for the selection of a portion or portions
(equal to twenty-five U.S. dollars ($25) or any integral multiple thereof) of
the principal amount of any Security.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default with respect to the Securities shall occur
and be continuing, the principal of the Securities may be declared due and
payable in the manner, with the effect and subject to the conditions provided in
the Indenture.
The Indenture contains provisions for satisfaction and discharge at
any time of the entire indebtedness of this Security upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of Holders of not less than a majority in principal
amount of the Outstanding Securities, to modify the Indenture in a manner
affecting the rights of the Holders of the Securities; provided that no such
modification may, without the consent of the Holder of each
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18
Outstanding Security, (i) extend the fixed maturity of the Securities, or reduce
the principal amount thereof, or reduce the rate or extend the time of payment
of interest thereon, or reduce any premium payable upon the redemption thereof,
or (ii) reduce the percentage of principal amount of the Securities, the Holders
of which are required to consent to any such modification of the Indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all 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.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. 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 of their respective agents may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security shall be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Securities are issuable only in registered form without coupons
in denominations of $25 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of a different
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19
authorized denomination, as requested by the Holder surrendering
the same.
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 CONFLICTS
OF LAWS PRINCIPLES THEREOF.
SECTION 204. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the within-mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO, N.A.,
as Trustee
By:______________________________________
Authorized Signatory
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $___________,
except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other securities pursuant to Section 303,
304, 305, 306, 906 or 1208.
The Securities shall be known and designated as the "___%
Subordinated Debentures Due 2016" of the Company. Their Stated Maturity shall be
_________ __, 2016, and they shall bear interest at the rate of ___% per annum,
from _________ __, 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 herein), in arrears, on March 31,
June 30, September 30 and December 31 of each year, commencing December 31, 1996
until the principal thereof is paid or made available for payment. Interest will
compound quarterly and will accrue at the rate of ___% 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 below in this Section 301. In the event
that any date on which interest is payable on the Securities is not a Business
Day, then a payment of the interest payable on such date will be made on the
next succeeding day which is a Business Day (except that, if such Business Day
is in the next succeeding calendar year, such Interest Payment Date shall be the
immediately preceding Business Day) (and without any interest or other payment
in respect of any such delay).
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The Company shall have the right, at any time during the term of the
Securities, from time to time to extend the interest payment period for up to
six consecutive quarters (the "Extension Period") during which period interest
will compound quarterly and the Company shall have the right to make partial
payments of interest on any Interest Payment Date, and at the end of which
Extension Period the Company shall pay all interest then accrued and unpaid
thereon (together with Additional Interest at the rate specified for the
Securities to the extent permitted by applicable law). Prior to the termination
of any such Extension Period, the Company may further extend the interest
payment period, provided that such Extension Period together with all such
previous and further extensions thereof shall not exceed six consecutive
quarters or extend beyond the Maturity of the Securities. Upon the termination
of any Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, the Company may select a new Extension
Period, subject to the foregoing requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof. The Company shall
give Capita Preferred Trust, Capita Preferred Funding, L.P. and the Trustee
notice of its selection of such Extension Period subject to the above
requirements at least one Business Day prior to the earlier of (i) the Interest
Payment Date or (ii) the date Capita Preferred Trust is required to give notice
to the New York Stock Exchange or other applicable self-regulatory organization
or to holders of the Trust Preferred Securities of the record date or the date
such distributions are payable, but in any event not less than one Business Day
prior to such record date.
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 (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Security Register.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Eleven.
The Securities shall be redeemable as provided in Article Twelve.
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21
SECTION 302. Denominations.
The Securities shall be issuable only in registered form, without
coupons, and only in denominations of $25 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman, one of its Vice Chairman, its President 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 deliver such Securities as in
this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
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 printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
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22
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 deliver 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 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.
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.
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 deliver, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or excess 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
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23
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 1208 not involving any transfer.
If the Securities are to be redeemed in part, the Company will not
be required to issue, register the transfer of or exchange any Securities during
a period beginning at the opening of business 15 days before the day of mailing
of a notice of redemption of any such Securities that may be selected for
redemption and ending at the close of business on the day of such mailing,
except the unredeemed portion of any such Securities being redeemed in part.
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
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24
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.
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 the close of business on the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) the Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of money equal
to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date 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
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25
than 10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue (including in each such case Additional Interest),
which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of any of them shall 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 Interest) 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 them shall be affected by notice to the
contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange 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 a Company Order.
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26
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust,
as provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name, and
at the expense, of the Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds
in trust for the purpose and 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 Interest) to the date of such deposit (in the
case of Securities
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27
which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for 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 (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
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
(including 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. The Trustee shall
not invest money deposited with it pending distribution of such amounts.
ARTICLE FIVE
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 voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(1) failure for 90 days to pay any interest on the Securities,
including any Additional Interest in respect thereof, when due (subject to
the deferral of any due date in the case of an Extension Period); or
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(2) failure to pay any principal on the Securities when due whether
at Stated Maturity, upon redemption by declaration or otherwise; or
(3) failure to observe or perform in any material respect any other
covenant herein for 90 days after written notice of such failure
(specified as a "Notice of Default"), requiring the Company to remedy the
same shall have been given to the Company by the Trustee or the holders of
at least 25% in principal amount of the Outstanding Securities; or
(4) a court or governmental agency having jurisdiction in the
premises shall enter a decree or order for relief in respect of the
Company in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for all or
substantially all of its property or ordering the winding up or
liquidation of its affairs, and such decree or order shall remain unstayed
and in effect for a period of 90 consecutive days; or
(5) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or for all or substantially all of its
property or make any general assignment for the benefit of creditors; or
the Company shall admit in writing its inability to pay its debts
generally as they become due.
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 aggregate principal
amount of the Outstanding Securities shall have the right to declare the
principal of and the interest on all the Securities (including any Additional
Interest) 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 to enforce any and all other rights of Holders of Securities as
creditors with respect to the Securities. Upon any such declaration such
principal and all accrued interest 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 hereinafter provided in this Article, the Holders of a
majority in principal
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amount of the Outstanding Securities, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(A) all overdue interest (including any Additional Interest)
on all Securities,
(B) the principal of any Securities which have became due
otherwise than by such declaration of acceleration and interest
thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) 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
(1) default is made in the payment of any interest (including any
Additional Interest) on any Security when such interest becomes due and
payable and such default continues for a period of 90 days (subject to the
deferral of any due and payable interest in the case of an Extension
Period), or
(2) default is made in the payment of the principal of any Security
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Interest), 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.
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30
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
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company, its
property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the holders, to pay to the Trustee any
amount due it 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 Eleven, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal or interest (including any Additional Interest), 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;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Interest) on the
Securities in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities for principal
and interest (including any Additional Interest), respectively; and
THIRD: The balance, if any, to the Company.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
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32
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.
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 any Additional Interest) on such Security on the respective Stated
Maturities (subject to the deferral of any due date in the case of an Extension
Period) expressed in such Security (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
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.
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.
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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
(1) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Section 902, the Holders of not less than a majority in
principal amount of the Outstanding Securities may on behalf of the Holders of
all the Securities waive any past default hereunder and its consequences, except
a default
(1) in the payment of the principal of or interest (including any
Additional Interest) 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 have been deposited with the
Trustee); or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
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
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action taken, suffered or omitted by it as Trustee, a court may require any
party litigant in such court 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 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 any Additional Interest) on any
Security.
ARTICLE SIX
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 any financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section.
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 in the case of any default of the character specified in Section 501(3), no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
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;
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(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
written advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(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 or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine 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 and reasonably believed by it
to be authorized or within the discretion or rights or powers conferred
upon it by this Indenture.
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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 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. Money held
by the Trustee in trust hereunder shall not be invested by the Trustee pending
distribution thereof to the holders of the Securities.
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 in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree
in writing for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation
of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
any and all loss, damage, claim, liability
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or expense, including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The provisions of this Section shall survive the termination of this
Indenture.
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 and has its Corporate
Trust Office in New York, New York, 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.
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(d) If at any time:
(1) 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
(2) 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
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) 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 Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(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
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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 for more fully and certainly vesting in and confirming 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
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, 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).
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ARTICLE SEVEN
Holders' Lists and Reports by Trustee
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 the last day of June and December
in each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of all Holders as of a date not more than 15
days prior to the delivery thereof who were not Holders at the date of the
Company had previously provided such list (or, in the case of the initial
provision of such list, at the date of issuance of the Securities), 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.
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 any 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.
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SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant
thereto.
(b) 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, and with the Company. The Company will notify
the Trustee when the Securities are listed on any stock exchange.
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company covenants that it will not merge or consolidate with any
other corporation or sell or convey all or substantially all of its assets to
any person (other than such a sale or conveyance to a Subsidiary or any
successor thereto (such a sale or conveyance being called an "Asset
Drop-Down")), unless (i) either the Company shall be the continuing corporation
or the successor corporation or the person which acquires by sale or conveyance
substantially all the assets of the Company (if other than the Company shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of, premium, if any, and interest, if any, on all the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed or
observed by the Company, by supplemental indenture in form satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation, and (ii) the
Company or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale or conveyance, be
in default in the performance of any such covenant or condition. In the event of
any Asset Drop-Down after the date of this Indenture, any subsequent sale or
conveyance of assets by a Subsidiary to which assets were transferred in such
Asset Drop-Down (a "Drop-Down Subsidiary") will be deemed to be a sale or
conveyance of assets by the Company for purposes of this Section 801.
SECTION 802. Successor Substituted.
In case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had
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been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Company prior to such
succession any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee; and,
upon the order of such successor corporation instead of the Company and subject
to all the terms, conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the Company to the
Trustee for authentication, and any Securities which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
released and discharged from all obligations and covenants under this Indenture.
ARTICLE NINE
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:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein or in the Securities
conferred upon the Company;
(3) to cure any ambiguity or to correct any provision herein which
may be defective or inconsistent with any other provision herein;
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(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 905 or otherwise;
(5) to evidence and provide the acceptance of the appointment of a
successor Trustee hereunder; or
(6) to make any other change that does not adversely affect the
rights of any Holder.
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,
(1) change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of interest
thereon, 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 modify the provisions of this Indenture with respect
to the subordination of the Securities in a manner adverse to the Holders,
(2) 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 in 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
(3) 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 Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed
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supplemental indenture, but it shall be sufficient if such Act shall approve the
substance thereof.
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 stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
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.
ARTICLE TEN
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 in accordance with the terms of the Securities and
this Indenture.
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. 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
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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 at the option of the Company 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.
Whenever the Company shall have one or more Paying Agents, it will,
on or 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.
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
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 such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease.
SECTION 1004. Reports by the Company.
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents
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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 Securities
Exchange Act of 1934 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).
SECTION 1005. Limitations on Incurrence of Secured Debt.
The Company will not, nor will it permit any Restricted Subsidiary
to, incur, issue, assume or guarantee any indebtedness for money borrowed
("debt") secured by any pledge, mortgage, security interest or lien ("lien") on
any property or assets of the Company or any Restricted Subsidiary, or on any
shares of stock or debt of any Restricted subsidiary, without effectively
providing that the principal of, premium, if any, and interest, if any, on the
Securities (together with, if the Company so determines, any other debt of the
Company or such Restricted Subsidiary, which is not subordinated to the
Securities) shall be secured equally and ratably with (or prior to) such debt,
so long as any such debt shall be so secured, unless, after giving effect
thereto, the aggregate amount of all such secured debt of the Company and its
Restricted Subsidiaries would not exceed 10% of Consolidated Net Tangible Assets
of the Company and its Restricted Subsidiaries; provided, however, that (i) any
recourse provided by the Company or any Restricted Subsidiary in connection with
any sale, transfer or other disposition by the Company or any Restricted
Subsidiary of Accounts Receivable or of any Restricted Subsidiary substantially
all the assets of which are Accounts Receivable which constitutes a "sale" under
generally accepted accounting principles (as in effect at the time of such sale,
transfer or other disposition) shall not, in any event, constitute debt and (ii)
no Asset Drop Down shall, in any event, constitute a lien; and provided,
further, that the satisfaction and discharge of any debt pursuant to Section 401
or pursuant to any similar provision in any other indenture or instrument
governing any debt shall be deemed the incurrence, issue, assumption or
guarantee of debt secured by a lien for purposes of this Section 1005.
Notwithstanding the foregoing, this Section shall neither limit nor be deemed or
construed as limiting the right of the Company or any Restricted Subsidiary to
incur, issue, assume or guarantee any debt secured by any one or more of the
following: (1) liens on property of, or on any shares of stock or debt of, any
corporation existing at the time such corporation becomes a Restricted
Subsidiary; (2) liens on property, shares of stock, other equity interests, or
debt
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existing at the time of acquisition or repossession thereof by the Company or
any Restricted Subsidiary; (3) liens on physical property (or any Accounts
Receivable arising in connection with the lease thereof), shares of stock, other
equity interests, or debt acquired (or, in the case of physical property,
constructed) after the date of this Indenture by the Company or any Restricted
Subsidiary, which liens are created prior to, at the time of, or within one year
after such acquisition (or, in the case of physical property, the completion of
such construction or commencement of commercial operation of such property,
whichever is later) to secure any debt issued, incurred, assumed or guaranteed
prior to, at the time of, or within one year after such acquisition (or such
completion or commencement, whichever is later) or to secure any other debt
issued, incurred, assumed or guaranteed at any time thereafter for the purpose
of refinancing all or any part of such debt; (4) liens on Accounts Receivable of
the Company or any Restricted Subsidiary arising from or in connection with
transactions entered into by the Company or such Restricted Subsidiary after the
date of this Indenture or on Accounts Receivable acquired by the Company or such
Restricted Subsidiary after such date from others which liens are created prior
to, at the time of, or within one year after such Accounts Receivable arise or
are acquired or, if later, the completion of the delivery or installation of the
equipment or goods or the rendering of the services or the advancement or
loaning of funds relating thereto (x) as a result of any guarantee, repurchase
or other contingent (direct or indirect) or recourse obligation of the Company
or such Restricted Subsidiary in connection with the discounting, sale,
assignment, transfer or other disposition of such Accounts Receivable or any
interest therein, or (y) to secure or provide for the payment of all or any part
of the investment of the Company or such Restricted Subsidiary in any such
Accounts Receivable (whether or not such Accounts Receivable are the Accounts
Receivable on which such liens are created) or the purchase price thereof or to
secure any debt (including, without limitation, Non-Recourse Debt) issued,
incurred, assumed or guaranteed for the purpose of financing or refinancing all
or any part of such investment or purchase price; (5) liens in favor of the
Company or any Restricted Subsidiary; (6) liens in favor of the United States of
America or any State thereof or the District of Columbia, or any agency,
department or other instrumentality thereof, to secure progress, advance or
other payments pursuant to any contract or provision of any statute; (7) liens
securing the performance of letters of credit, bids, tenders, sales contracts,
purchase agreements, leases, surety and performance bonds, and other similar
obligations not incurred in connection with the borrowing of money; (8) liens to
secure Non-Recourse Debt in connection with the Company or any Restricted
Subsidiary engaging in any leveraged or single-investor or other lease
transactions, whether (in the case of liens on or relating to leases or groups
of leases or the particular properties subject thereto) such liens be on the
particular properties subject to any leases involved in any of such transactions
and/or the rental
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48
or other payments or rights under such leases or, in the case of any group of
related or unrelated leases, on the properties subject to tho leases comprising
such group and/or on the rental or other payments or rights under such leases,
or on any direct or indirect interest therein, and whether (in any case) (x)
such liens be created prior to, at the time of, or at any time after the
entering into of such lease transactions and/or (y) such leases be in existence
prior to, or be entered into by the Company or such Restricted Subsidiary at the
time of or at any time after, the purchase or other acquisition by the Company
or such Restricted Subsidiary of the properties subject to such leases; and (9)
any extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any of the foregoing; provided, however,
that any such extension, renewal or replacement shall be limited to all or a
part of the property or assets which secured the lien so extended, renewed or
replaced (plus improvements on such property).
SECTION 1006. Limitations on Incurrence of Senior Indebtedness.
The Company shall not incur any additional Senior Indebtedness
unless at the date of incurrence the ratio of Consolidated EBIT to Consolidated
Interest Expense for the four immediately preceding consecutive fiscal quarters,
shall be at least 1.25 to 1; provided, that if, at any date of determination,
the Company's long-term unsecured senior indebtedness is rated by at least one
nationally recognized statistical rating organization in one of its generic
rating categories which signifies investment grade, then the foregoing
limitation shall not be applicable at such date; provided, further, that the
Company and its Subsidiaries shall in any event be entitled to incur each and
all of the following: (i) existing indebtedness outstanding under, or available
to be borrowed by the Company under, one or more commercial bank credit
facilities (including the Company's Credit Agreements, each dated as of
September 16, 1996, among the Company, the banks listed therein and Morgan
Guaranty Trust Company of New York, as agent) not in excess of $1,800,000,000;
(ii) additional indebtedness in an aggregate principal amount not to exceed $100
million at any one time outstanding; and (iii) any indebtedness of the Company
or any Subsidiary issued in exchange for, or the net proceeds of which are used
to refinance or refund, then outstanding indebtedness permitted hereunder in an
amount not to exceed the amount so refinanced or refunded.
SECTION 1007. Statement as to Compliance; Notice of Certain Events of Default.
The Company will, within 120 days after the close of each fiscal
year, commencing with the first fiscal year following the issuance of Securities
under this Indenture, file with the Trustee a certificate of the principal
executive officer, the principal financial officer or the principal accounting
officer
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49
of the Company covering the period from the date of issuance of such Securities
to the end of the fiscal year in which such Securities were issued, in the case
of the first such certificate, and covering the preceding fiscal year in the
case of each subsequent certificate, and stating whether or not, to the
knowledge of the signer, the Company has complied with all conditions and
covenants on its part contained in this Indenture, and, if the signer has
obtained knowledge of any default by the Company in the performance, observance
or fulfillment of any such condition or covenant, specifying each such default
and the nature thereof. For the purpose of this Section 1007, compliance shall
be determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
ARTICLE ELEVEN
Subordination of Securities
SECTION 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, notwithstanding
anything to the contrary contained herein, to the extent and in the manner
hereinafter set forth in this Article, the indebtedness represented by the
Securities and the payment of the principal of and premium, if any, and interest
on each and all of the Securities are hereby expressly made subordinate and
subject in right of payment to the prior payment in full in cash or cash
equivalents of all Senior Indebtedness (including any interest accruing after
the occurrence of an Event of Default under Section 501(4) or (5)).
SECTION 1102. Payment Over of Proceeds upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshalling of assets and liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or cash equivalents of all amounts due or to
become due on or in respect of all Senior Indebtedness, or provision shall
be made for such payment in cash or cash equivalents, before the Holders
of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities; and
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50
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, by set-off or
otherwise, to which the Holders or the Trustee would be entitled but for
the provisions of this Article Eleven, including any such payment or
distribution which may be payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment
of the Securities (except for any such payment or distribution of
securities which (i) are unsecured, (ii) have an average life and final
maturity no shorter than the average life and final maturity of the
Securities and (iii) are subordinated, to at least the same extent as the
Securities, to the payment of all Senior Indebtedness then outstanding),
shall be paid by the liquidating trustee or agent or other person making
such payment or distribution, whether a trustee in bankruptcy, a receiver
or liquidating trustee or otherwise, directly to the holders of Senior
Indebtedness or their Representative or Representatives or to the trustee
or trustees under any indenture under which any instruments evidencing any
of such Senior Indebtedness may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the principal of, and
premium, if any, and interest on, and other amounts due on or in
connection with, the Senior Indebtedness to the extent necessary to make
payment in full in cash or cash equivalents of all Senior Indebtedness
remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have
received any such payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason
of the payment of any other indebtedness of the Company being subordinated
to the payment of the Securities, before all Senior Indebtedness is paid
in full or payment thereof provided for, then and in such event such
payment or distribution shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee,
agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in
full in cash or cash equivalents, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance, transfer or lease of its properties and assets
substantially as an entirety
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51
to another corporation upon the terms and conditions set forth in Article Eight
shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshalling of assets and liabilities
of the Company for the purposes of this Section if the corporation formed by
such consolidation or into which the Company is merged or the corporation which
acquires by conveyance, transfer or lease such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer or lease, comply with the conditions
set forth in Article Eight.
SECTION 1103. No Payment When Senior Indebtedness in Default.
No payment of principal (including redemption payments), premium, if
any, or interest on the Securities may be made (i) if any Senior Indebtedness is
not paid when due, (ii) if any applicable grace period with respect to such
payment default on Senior Indebtedness has ended and such default has not been
cured or waived or ceased to exist, or (iii) if the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be received and held in trust for the holders of Senior Indebtedness and shall
be paid over or delivered to the Representative of Senior Indebtedness then
outstanding to the extent necessary to pay in full in cash or cash equivalents
all Senior Indebtedness.
The provisions of this Section shall not apply to any payment with
respect to which Section 1102 would be applicable.
SECTION 1104. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent the Company, at any time except during
the pendency of any case, proceeding, dissolution, liquidation or other winding
up, assignment for the benefit of creditors or other marshalling of assets and
liabilities of the Company referred to in Section 1102 or under the conditions
described in Section 1103, from making payments at any time of principal of (and
premium, if any) or interest on the Securities.
SECTION 1105. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to Senior
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52
Indebtedness of the Company to the same extent as the Securities are
subordinated and which is entitled to like rights of subrogation) to the rights
of the holders of such Senior Indebtedness to receive payments and distributions
of cash, property and securities applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of 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, and no payments over pursuant to the provisions of
this Article to the holders of Senior Indebtedness by Holders of the Securities
or the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
SECTION 1106. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other than
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 premium, if any) and interest on the
Securities as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the express limitations set forth in Article
Five and to the rights, if any, under this Article of the holders of Senior
Indebtedness (1) in any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshalling of
assets and liabilities of the Company referred to in Section 1102, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 1103, to prevent any payment prohibited by such
Section.
SECTION 1107. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the
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53
subordination provided in this Article and appoints the Trustee his
attorney-in-fact for any and all such purposes.
SECTION 1108. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (a) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
Section 1109. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payments to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee from the Company or a holder of Senior
Indebtedness or from any trustee, fiduciary or agent therefor; and, prior to the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 602, 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 1109 at least three Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Security), then, anything herein contained to
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54
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within three Business Days prior to such date. Nothing in this
Section 1109 shall limit the right of the holders of Senior Indebtedness to
recover payments as contemplated by Section 1102 and 1103.
Subject to the provisions of Section 602, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor). In
the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
SECTION 1110. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 602, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
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55
SECTION 1111. Rights of Trustee as a Holder of Senior Indebtedness;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 607.
SECTION 1112. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that (i) Section 1111 shall not apply to the Company or any Affiliate
of the Company if it or such Affiliate acts as Paying Agent and (ii) any notice
required by this Article Eleven to be given by the holders of, or a
Representative for, Senior Indebtedness need only be given to the Trustee and
not to any Paying Agent.]
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Optional Redemption.
(a) At any time on or after September 30, 2006, the Company shall
have the right to redeem the Securities, in whole or in part, from time to time,
at a Redemption Price equal to 100% of the principal amount of Securities to be
redeemed plus accrued but unpaid interest, including any Additional Interest, if
any, to the Redemption Date.
(b) If, at any time, a Partnership Tax Event or a Partnership
Investment Company Event (each a "Partnership Special Event") shall occur and be
continuing, the Company may, within 90 days following the occurrence of such
Partnership Special Event, elect to redeem the Securities in whole (but not in
part), upon not less than 30 or more than 60 days' notice at the Redemption
Price, provided that, if at the time there is available to the Company or the
Partnership the opportunity to eliminate, within such 90-day period, the
Partnership Special Event by taking some ministerial action, such as filing a
form or making an election,
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56
or pursuing some other similar reasonable such measure that in the sole judgment
of the Company has or will cause no adverse effect on the Partnership, the Trust
or the Company, the Company will pursue such measure in lieu of redemption.
SECTION 1202. Applicability of Article.
Redemption of Securities, at the election of the Company as
permitted by Section 1201, shall be made in accordance with such provision and
this Article.
SECTION 1203. Authorization for Redemption; Notice to Trustee.
The election of the Company to redeem Securities pursuant to Section
1201 shall be evidenced by a Board Resolution. In case of any redemption, the
Company shall, at least 30 days and no more than 60 days prior to the Redemption
Date fixed by the Company, notify the Trustee 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
1204.
SECTION 1204. Selection by Trustee of Securities to Be Redeemed.
If less then all the Securities are to be redeemed (unless such
redemption affects only a single Security), the particular Securities to be
redeemed shall be selected not more than 60 days prior to the Redemption Date by
the Trustee, from the Outstanding Securities not previously called for
redemption, by such method (including pro rata or by lot) as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to $25 or any integral multiple thereof) of the principal
amount of the Securities.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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57
SECTION 1205. 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 his address appearing in
the Security Register.
All notices of redemption shall identify the Securities to be
redeemed and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(4) the place or places where such securities are to be surrendered
for payment of the Redemption Price.
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 1206. Deposit of Redemption Price.
Prior to any 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, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
SECTION 1207. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such at the close of business on the
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58
relevant Record Dates according to their 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 1209. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. The Company may not redeem fewer than all the Outstanding
Securities unless all accrued and unpaid interest (including Additional
Interest) has been paid on such Securities.
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59
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.
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.
AT&T CAPITAL CORPORATION, as Issuer
By:____________________________
Name:
Title:
Attest:
___________________________
THE FIRST NATIONAL BANK OF CHICAGO,
N.A., as Trustee
By:____________________________
Name:
Title:
Attest:
____________________________
<PAGE>
<PAGE>
STATE OF NEW YORK )
ss.:
COUNTY OF ________ )
On the ____ day of ________, 1996, before me personally came
________, to me known, who, being by me duly sworn, did depose and say that
he/she is the ________ of [Name of Issuer] [the Guarantor], one of the
corporations described in and which executed the foregoing instrument; and that
he/she signed his/her name thereto by authority of the Board of Directors of
such corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
------------------------------
[SEAL]
<PAGE>
<PAGE>
================================================================================
AFFILIATE DEBENTURE GUARANTEE AGREEMENT
AT&T Capital Corporation
Dated as of October __, 1996
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION.................................. 1
SECTION 1.1 Definitions and Interpretation......................... 1
ARTICLE II
TRUST INDENTURE ACT............................................. 4
SECTION 2.1 Trust Indenture Act; Application....................... 4
SECTION 2.2 Lists of Holders of Securities......................... 4
SECTION 2.3 Reports by the Trust Preferred Guarantee
Trustee......................................... 5
SECTION 2.4 Periodic Reverts to Trust Preferred
Guarantee Trustee............................... 5
SECTION 2.5 Evidence of Compliance with Conditions
Precedent....................................... 5
SECTION 2.6 Events of Default; Waiver.............................. 5
SECTION 2.7 Event of Default; Notice............................... 6
SECTION 2.8 Conflicting Interests.................................. 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
INVESTMENT GUARANTEE TRUSTEE.................................... 6
SECTION 3.1 Powers and Duties of the Investment
Guarantee Trustee............................... 6
SECTION 3.2 Certain Rights of Trust Preferred
Guarantee Trustee............................... 8
SECTION 3.3 Not Responsible for Recitals or Issuance
of Investment Guarantee......................... 10
ARTICLE IV
INVESTMENT GUARANTEE TRUSTEE.................................... 11
SECTION 4.1 Investment Guarantee Trustee;
Eligibility..................................... 11
SECTION 4.2 Appointment, Removal and Resignation of
Investment Guarantee Trustee.................... 11
ARTICLE V
GUARANTEE....................................................... 12
SECTION 5.1 Guarantee.............................................. 12
SECTION 5.2 Waiver of Notice and Demand............................ 13
SECTION 5.3 Obligations Not Affected............................... 13
SECTION 5.4 Rights of Holders...................................... 14
SECTION 5.5 Guarantee of Payment................................... 14
SECTION 5.6 Subrogation............................................ 14
SECTION 5.7 Independent Obligations................................ 15
ARTICLE VI
SUBORDINATION................................................... 15
SECTION 6.1 Ranking................................................ 15
ARTICLE VII
TERMINATION..................................................... 15
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SECTION 7.1 Termination............................................ 15
ARTICLE VIII
INDEMNIFICATION................................................. 15
SECTION 8.1 Exculpation............................................ 15
SECTION 8.2 Indemnification........................................ 16
ARTICLE IX
MISCELLANEOUS................................................... 16
SECTION 9.1 Successors and Assigns................................. 16
SECTION 9.2 Amendments............................................. 16
SECTION 9.3 Notices................................................ 17
SECTION 9.4 Benefit................................................ 17
SECTION 9.5 Governing Law.......................................... 17
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AFFILIATE DEBENTURE GUARANTEE AGREEMENT (this "Investment
Guarantee"), dated as of October __, 1996, is executed and delivered by AT&T
Capital Corporation, a Delaware corporation (the "Guarantor"), and The First
National Bank of Chicago, N.A., a national banking association, as trustee (the
"Investment Guarantee Trustee"), for the benefit of the Holder (as defined
herein) of the Affiliate Debenture (as defined herein) of [Name of Issuer], a
[_________] corporation (the "Issuer").
WHEREAS, pursuant to an Indenture (the "Affiliate Indenture"), dated
as of October __, 1996, between the Issuer and The First National Bank of
Chicago, N.A., as indenture trustee (in such capacity, the "Indenture Trustee"),
the Issuer is issuing to the Holder on the date hereof its __% Debenture Due
2016 (the "Affiliate Debenture");
WHEREAS, as incentive for the Holder to purchase the Affiliate
Debenture, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Investment Guarantee, to make Guarantee Payments
(as defined herein) to the Holder of the Affiliate Debenture on the terms and
conditions set forth herein and;
NOW, THEREFORE, in consideration of the purchase by the Holder of
the Affiliate Debenture, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Investment
Guarantee for the benefit of the Holder.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Investment Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Investment Guarantee but not
defined in the Preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Capitalized terms used in this Investment Guarantee but not
otherwise defined herein shall have the meanings assigned to
them in the Affiliate Indenture.
(c) a term defined anywhere in this Investment Guarantee has
the same meaning throughout;
(d) all references to "the Investment Guarantee" or "this
Investment Guarantee" are to this Investment
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2
Guarantee as modified, supplemented or amended from time to
time;
(e) all references in this Investment Guarantee to Articles and
Sections are to Articles and Sections of this Investment
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Investment Guarantee, unless otherwise
defined in this Investment Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural and vice
versa.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Business Day" means a day other than a day on which banking
institutions in the City of New York are authorized or required by law to close.
"Corporate Trust Office" means the office of the Investment
Guarantee Trustee at which the corporate trust business of the Investment
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at 153 West
53rd Street. Mew York, New York 10019.
"Covered Person" means the Holder or any beneficial owner of the
Affiliate Debenture.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Investment Guarantee.
"Guarantee Payments" means, with respect to the Affiliate Debenture,
to the extent not paid or made by the Issuer, the due and punctual payment of
the principal of, premium, if any, and interest on the Affiliate Debenture, when
and as the same shall become due and payable, whether at maturity or upon
declaration of acceleration or otherwise, according to the terms of the
Affiliate Debenture and of the Affiliate Indenture.
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3
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of the Affiliate Debenture. The initial Holder of the
Affiliate Debenture is the Partnership.
"Indemnified Person" means the Investment Guarantee Trustee, any
Affiliate of the Investment Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Investment Guarantee Trustee.
"Majority in liquidation amount of the Affiliate Debenture" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of the
Affiliate Debenture, voting separately as a class, of more than 50% of the
outstanding principal amount of the Affiliate Debenture plus accrued and unpaid
interest to the date upon which the voting percentages are determined.
"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 Investment 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 of covenant has been complied with.
"Partnership" means Capita Preferred Funding, L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of October __, 1996, among AT&T
Capital Corporation, a Delaware corporation, as general partner, Jeffery F.
Nash, an individual, as initial limited partner and such other persons who
become limited partners as provided therein.
"Partnership Preferred Securities" means those securities
representing limited partnership interests in the Partnership.
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4
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Investment
Guarantee Trustee, any officer within the Corporate Trust Office of the
Investment 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 Investment 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 Investment Guarantee Trustee" means a successor
Investment Guarantee Trustee possessing the qualifications to act as Investment
Guarantee Trustee under
Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
"Investment Guarantee Trustee" means The First National Bank of
Chicago, N.A., a national banking association, until a Successor Investment
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Investment Guarantee and thereafter means each such
Successor Investment Guarantee Trustee.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Investment Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Investment Guarantee
and shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Investment
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Investment Guarantee Trustee
with a list, in such form as the Investment
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5
Guarantee Trustee may reasonably require, of the names and addresses of the
Holder(s) of the Affiliate Debenture ("List of Holders") as of such date, (i)
within one (1) Business Day after January 1 and June 30 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a written
request for a List of Holders as of a date no more than 14 days before such List
of Holders is given to the Investment Guarantee Trustee provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Investment Guarantee Trustee by the Guarantor. The Investment Guarantee
Trustee may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Investment Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Investment Guarantee
Trustee shall provide to the Holders of the Affiliate Debenture 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 Investment
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 Periodic Reverts to Trust Preferred Guarantee Trustee
The Guarantor shall provide to the Investment 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 Investment Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Investment Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers, Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of the Affiliate
Debenture may, by vote, on behalf of the Holders of the
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6
Affiliate Debenture, 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 Investment 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 Investment Guarantee 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 Affiliate Debenture, notices of all Events of
Default actually known to a Responsible Officer of the Investment Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Investment Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Investment Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Affiliate Debenture.
(b) The Investment Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Investment Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the
Investment Guarantee Trustee charged with the administration of the Affiliate
Debenture shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Affiliate Debenture shall be deemed to be specifically described
in this Investment 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
INVESTMENT GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Investment Guarantee Trustee
(a) This Investment Guarantee shall be held by the Investment
Guarantee Trustee for the benefit of the Holders of the Affiliate Debenture, and
the Investment Guarantee Trustee shall not transfer this Investment Guarantee to
any Person except a Holder of the Affiliate Debenture exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Investment Guarantee Trustee
on acceptance by such Successor Investment Guarantee Trustee of its appointment
to act as Successor Investment Guarantee Trustee. The right, title and interest
of the Investment Guarantee Trustee shall automatically vest in any
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7
Successor Investment 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 Investment Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible officer
of the Investment Guarantee Trustee has occurred and is continuing, the
Investment Guarantee Trustee shall enforce this Investment Guarantee for the
benefit of the Holders of the Affiliate Debenture.
(c) The Investment Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Investment Guarantee, and no implied covenants shall be read into
this Investment Guarantee against the Investment Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 2.6) and is actually known to a Responsible Officer of the Investment
Guarantee Trustee, the Investment Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Investment 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 Investment Guarantee shall be construed to
relieve the Investment 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 Investment Guarantee
Trustee shall be determined solely by the express provisions of this
Investment Guarantee, and the Investment Guarantee Trustee shall not
be liable except for the performance of such duties and obligations
as are specifically set forth in this Investment Guarantee, and no
implied covenants or obligations shall be read into this Investment
Guarantee against the Investment Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Investment
Guarantee Trustee, the Investment 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 Investment Guarantee Trustee and conforming to the
requirements of this Investment Guarantee; but in the case of any
such,certificates or opinions that by any provision hereof are
specifically
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8
required to be furnished to the Investment Guarantee Trustee, the
Investment Guarantee Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of
this Investment Guarantee;
(ii) the Investment Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible officer of the
Investment Guarantee Trustee, unless it shall be proved that the
Investment Guarantee Trustee was negligent in ascertaining the pertinent
facts upon which such judgment was made;
(iii) the Investment 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 Affiliate Debenture
relating to the time, method and place of conducting any proceeding for
any remedy available to the Investment Guarantee Trustee, or exercising
any trust or power conferred upon the Investment Guarantee Trustee under
this Investment Guarantee; and
(iv) no provision of this Investment Guarantee shall require the
Investment 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 Investment
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 Investment Guarantee or indemnity, reasonably
satisfactory to the Investment Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Trust Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Investment 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
Investment Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Investment
Guarantee, the Investment Guarantee Trustee shall
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9
deem it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Investment 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 Investment 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 Investment Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Investment Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Investment Guarantee from any court of competent jurisdiction.
(vi) The Investment Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Investment Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Investment Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Investment
Guarantee Trustee, against the costs, expenses (including attorneys' fees
and expenses and the expenses of the Preferred Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Investment Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Investment Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Investment Guarantee.
(vii) The Investment 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 Investment Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
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10
(viii) The Investment Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Investment 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 Investment Guarantee Trustee or its
agents hereunder shall bind the Holders of the Affiliate Debenture, and
the signature of the Investment 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 Investment
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Investment Guarantee, both of which shall be
conclusively evidenced by the Investment Guarantee Trustee or its agent
taking such action.
(x) whenever in the administration of this Investment Guarantee
the Investment Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Investment Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
Affiliate Debenture, (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 Investment 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 Investment Guarantee.
(b) No provision of this Investment Guarantee shall be deemed to
impose any duty or obligation on the Investment Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Investment 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 Investment Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Investment
Guarantee
The recitals contained in this Investment Guarantee shall be taken
as the statements of the Guarantor, and the
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11
Investment Guarantee Trustee does not assume any responsibility for their
correctness. The Investment Guarantee Trustee makes no representation as to the
validity or sufficiency of this Investment Guarantee.
ARTICLE IV
INVESTMENT GUARANTEE TRUSTEE
SECTION 4.1 Investment Guarantee Trustee; Eligibility
(a) There shall at all times be a Investment Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee
under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Investment Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Investment Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Investment Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Investment 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 Investment
Guarantee Trustee
(a) Subject to Section 4.2(b), the Investment Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor except during
an Event of Default.
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12
(b) The Investment Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Investment Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Investment Guarantee Trustee and delivered to the
Guarantor.
(c) The Investment Guarantee Trustee appointed to office shall hold
office until a Successor Investment Guarantee Trustee shall have been appointed
or until its removal or resignation. The Investment Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Investment Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Investment
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Investment Guarantee Trustee
and delivered to the Guarantor and the resigning Investment Guarantee Trustee.
(d) If no Successor Investment Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of removal or resignation, the Investment
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Investment Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Investment Guarantee Trustee.
(e) No Investment Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Investment Guarantee Trustee.
(f) Upon termination of this Investment Guarantee or removal or
resignation of the Investment Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Investment Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), if, as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
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SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Investment
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Investment Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Affiliate Debenture to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the interest, principal or premiums, if any, or any other sums
payable under the terms of the Affiliate Debenture or the extension of time for
the performance of any other obligation under, arising out of, or in connection
with, the Affiliate Debenture (other than an extension of time for payment of
interest during an Extension Period (as defined in the Affiliate 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 Affiliate Debenture, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Affiliate
Debenture;
(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
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14
a guarantor, it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the Affiliate
Debenture have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Investment Guarantee Trustee in
respect of this Investment Guarantee or exercising any trust or power conferred
upon the Investment Guarantee Trustee under this Investment Guarantee.
(b) If the Investment Guarantee Trustee fails to enforce its rights
under the Investment Guarantee after a Holder of the Affiliate Debenture has
made a written request, such Holder of the Affiliate Debenture may institute a
legal proceeding directly against the Guarantor to enforce the Investment
Guarantee Trustee's rights under this Investment Guarantee, without first
instituting a legal proceeding against the Issuer, the Investment Guarantee
Trustee or any other Person. Notwithstanding the foregoing, if the Guarantor has
failed to make a Guarantee Payment, a Holder of the Affiliate Debenture may
directly institute a proceeding in such Holder's own name against the Guarantor
for enforcement of the Investment Guarantee for such payment. The Guarantor
waives any right or remedy to require that any action be brought first against
the Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Investment Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Affiliate Debenture against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Investment 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 Investment Guarantee,
if, at the time of any such payment, any amounts are due and unpaid under this
Investment Guarantee. If any amount shall be paid to the Guarantor in violation
of the preceding sentence, the Guarantor
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<PAGE>
15
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Affiliate
Debenture, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Investment
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
This Investment Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
Preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Investment Guarantee shall terminate upon the repayment in full
(whether at maturity, upon redemption or otherwise) of all of the principal of,
interest on (including all accrued and unpaid interest thereon) and any other
amounts payable in respect of the Affiliate Debenture. Notwithstanding the
foregoing, this Investment Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of the Affiliate
Debenture must restore payment of any sums paid under the Affiliate Debenture or
under this Investment 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
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16
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 Investment 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 Investment 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 gross negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which principal, interest or other payments to Holders of
the Affiliate Debenture 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 and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Investment Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Investment Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Affiliate
Debenture then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent
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<PAGE>
17
of Holders will be required), this Investment Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in liquidation amount
of the Affiliate Debenture.
SECTION 9.3 Notices
All notices provided for in this Investment Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Investment Guarantee Trustee, at the Investment
Guarantee Trustee's mailing address set forth below (or such other address as
the Investment Guarantee Trustee may give notice of to the Holders of the
Affiliate Debenture):
The First National Bank of Chicago
153 West 53rd Street
New York, New York 10019
Attention: Mary R. Fonti
Telecopy: (212) 373-1383
(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 Affiliate Debenture):
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07692
Attention: Robert J. Ingato
Telecopy: (201) 397-4356
(c) If given to any Holder of Affiliate Debenture, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Investment Guarantee is solely for the benefit of the Holders
of the Affiliate Debenture and, subject to Section 3.1(a), is not separately
transferable from the Affiliate Debenture.
SECTION 9.5 Governing Law
<PAGE>
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18
THIS INVESTMENT GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
<PAGE>
<PAGE>
19
This Investment Guarantee is executed as of the day and year first
above written.
AT&T CAPITAL CORPORATION, as
Guarantor
By:________________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
N.A., as Investment Guarantee
Trustee
By:________________________________
Name:
Title:
<PAGE>
<PAGE>
EXHIBIT 5.1
[LETTERHEAD OF SIMPSON THACHER & BARTLETT]
October 18, 1996
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Capita Preferred Funding L.P.
c/o AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Capita Preferred Trust
c/o AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Ladies and Gentlemen:
We have acted as counsel to AT&T Capital Corporation, a Delaware
corporation (the "Company"), Capita Preferred Funding L.P., a Delaware limited
partnership (the "Partnership") and Capita Preferred Trust, a Delaware business
trust (the "Trust") in connection with the preparation and filing by the
Company, the Partnership and the Trust with the Securities and Exchange
Commission (the "Commission") of a Registration Statement on Form S-3
(Registration No. 333-11243) (the "Registration Statement") under the Securities
Act of 1933, as amended, with respect to (i) the Trust Preferred Securities
Guarantee (the "Trust Guarantee") to be issued by the Company to
<PAGE>
<PAGE>
AT&T Capital Corporation -2- October 18, 1996
Capita Preferred Funding L.P.
Capita Preferred Trust
The First National Bank of Chicago, N.A. (the "Bank"), as trustee for the
benefit of the holders of the Trust's Trust Originated Preferred Securities (the
"Trust Preferred Securities"), (ii) the Partnership Guarantee (the "Partnership
Guarantee") to be issued by the Company for the benefit of the holders of the
Partnership's Partnership Preferred Securities (the "Partnership Preferred
Securities"), (iii) the guarantees (the "Investment Guarantees") to be issued by
the Company for the benefit of the holders of debentures (the "Subsidiary
Debentures") of two of the Company's wholly owned domestic subsidiaries and (iv)
a debenture (the "Company Debenture") of the Company to be issued to the
Partnership under an indenture (the "Company Indenture") between the Company and
the Bank, as trustee (in such capacity, the "Company Debenture Trustee"), each
in the form filed as exhibits to the Registration Statement. The Trust
Guarantee, the Partnership Guarantee and the Investment Guarantees are referred
to herein collectively as the "Guarantees."
We have reviewed the corporate action of the Company in connection
with the giving of the Guarantees and the issuance and sale of the Company
Debenture by the Company and have examined, and have relied as to matters of
fact upon, originals or copies certified or otherwise identified to our
satisfaction, of such corporate records, agreements, documents and other
instruments and such certificates or comparable documents of public officials
and of officers and representatives of the Company, and have made such other and
further investigations as we have deemed relevant and necessary as a basis for
the opinions hereinafter set forth.
<PAGE>
<PAGE>
AT&T Capital Corporation -3- October 18, 1996
Capita Preferred Funding L.P.
Capita Preferred Trust
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Trust Guarantee has been duly authorized by the Company and
when executed and delivered by the Company, and upon the issuance and
sale of the Trust Preferred Securities to the holders of the Trust
Preferred Securities in accordance with the Registration Statement, will
constitute a valid and legally binding obligation of the Company
enforceable against the Company in accordance with its terms.
2. The Partnership Guarantee has been duly authorized by the
Company and when executed and delivered by the Company, and upon the
issuance and sale of the Partnership Preferred Securities to the holders
of the Partnership Preferred Securities in accordance with the
Registration Statement, will constitute a valid and legally binding
obligation of the Company enforceable against the Company in accordance
with its terms.
3. The Investment Guarantees have been duly authorized by the
Company and when executed and delivered by the Company, and upon the
issuance and sale of the Subsidiary Debentures to the Partnership in
accordance with the Registration Statement, will constitute a valid and
legally binding obligation of the Company enforceable against the Company
in accordance with its terms.
4. The Company Debenture has been duly authorized by the Company
and when executed and issued by the Company and upon due execution and
delivery of the Indenture by the Company and the issuance and sale of the
Company Debenture to the Partnership in accordance with the Registration
Statement, assuming due authorization, execution and delivery of the
Indenture by the Company Debenture Trustee and due authentication of the
Company Debenture by the Company Debenture Trustee, will constitute a
valid and legally binding
<PAGE>
<PAGE>
AT&T Capital Corporation -4- October 18, 1996
Capita Preferred Funding L.P.
Capita Preferred Trust
obligation of the Company enforceable against the Company in accordance
with its terms.
Our opinions set forth in paragraphs 1, 2, 3 and 4 above are
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
We are members of the bar of the State of New York and do not
express any opinion herein as to matters governed by any law other than the laws
of the State of New York and the Delaware General Corporation Law.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and as an exhibit to the Rule 462(b) Registration
Statement and to the reference to this firm under the caption "Legal Matters" in
the Registration Statement.
This opinion is rendered to you in connection with the
above-described transactions. This opinion may not be relied upon by you for any
other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
<PAGE>
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
October 18, 1996
Capita Preferred Funding L.P.
Capita Preferred Trust
c/o AT&T Capital Corporation
44 Whippany Road
Morristown, NJ 07962
Re: Capita Preferred Funding L.P.
and Capita Preferred Trust
_____________________________
Ladies and Gentlemen:
We have acted as special Delaware counsel for AT&T Capital
Corporation, a Delaware corporation (the "Company"), Capita Preferred Funding
L.P., a Delaware limited partnership (the "Partnership"), and Capita Preferred
Trust, a Delaware business trust (the "Trust"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Limited Partnership of the Partnership,
dated as of August 29, 1996, as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on August 29, 1996;
(b) The Amended and Restated Certificate of Limited Partnership
of the Partnership, dated as of October 2, 1996, as filed in the office of the
Secretary of State on October 3, 1996 (the "Partnership Certificate");
(c) The Agreement of Limited Partnership of the Partnership,
dated as of August 29, 1996, as amended as of October 2, 1996;
<PAGE>
<PAGE>
Capita Preferred Funding L.P.
Capita Preferred Trust
October 18, 1996
Page 2
(d) A form of Amended and Restated Agreement of Limited
Partnership of the Partnership (including Annex A thereto) (the "Partnership
Agreement"), to be entered into among the Company, as general partner, Jeffery
F. Nash, as initial limited partner, and such other Persons who become limited
partners of the Partnership, attached as an exhibit to the Registration
Statement (as defined below);
(e) The Certificate of Trust of the Trust, dated August 28, 1996
(the "Trust Certificate"), as filed in the office of the Secretary of State on
August 29, 1996;
(f) The Declaration of Trust of the Trust, dated as of August 28,
1996, among Antigua Acquisition Corporation ("Antigua"), as sponsor, and the
trustees of the Trust named therein;
(g) A form of Amended and Restated Declaration of Trust of the
Trust (including Annex I and Exhibits A-1 and A-2 thereto) (the "Declaration of
Trust"), to be entered into among the Company, the successor by merger to
Antigua, as sponsor, the trustees of the Trust named therein, and the holders,
from time to time, of undivided beneficial interests in the assets of the Trust,
attached as an exhibit to the Registration Statement;
(h) Amendment No. 3 to the Registration Statement (the
"Registration Statement") on Form S-3, including a related preliminary
prospectus (the "Prospectus"), relating to the ___% Trust Originated Preferred
Securities of the Trust representing preferred undivided beneficial interests in
the assets of the Trust (each, a "Trust Preferred Security" and collectively,
the "Trust Preferred Securities"), and the Partnership Preferred Securities of
the Partnership representing limited partner interests in the Partnership (each,
a "Partnership Preferred Security" and collectively, the "Partnership Preferred
Securities"), as proposed to be filed by the Company, the Partnership and the
Trust with the Securities and Exchange Commission on or about October 18, 1996;
(i) A Certificate of Good Standing for the Partnership, dated
October 18, 1996, obtained from the Secretary of State; and
(j) A Certificate of Good Standing for the Trust, dated October
18, 1996, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined
are used as defined in the Partnership Agreement.
<PAGE>
<PAGE>
Capita Preferred Funding L.P.
Capita Preferred Trust
October 18, 1996
Page 3
For purposes of this opinion, we have not reviewed any documents
other than the documents listed in paragraphs (a) through (j) above. In
particular, we have not reviewed any document (other than the documents listed
in paragraphs (a) through (j) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed that there exists
no provision in any document that we have not reviewed that is inconsistent with
the opinions stated herein. We have conducted no independent factual
investigation of our own, but rather have relied solely upon the foregoing
documents, the statements and information set forth therein and the additional
matters recited or assumed herein, all of which we have assumed to be true,
complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i)
the authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Partnership Agreement constitutes the entire agreement among the parties thereto
with respect to the subject matter thereof, including with respect to the
admission of partners to, and the creation, operation and termination of, the
Partnership, and that the Partnership Agreement and the Partnership Certificate
are in full force and effect and have not been amended, (ii) that the
Declaration of Trust constitutes the entire agreement among the parties thereto
with respect to the subject matter thereof, including with respect to the
creation, operation and termination of the Trust, and that the Declaration of
Trust and the Trust Certificate are in full force and effect and have not been
amended, (iii) except to the extent provided in paragraphs 1 and 5 below, the
due creation or the due organization or due formation, as the case may be, and
valid existence in good standing of each party to the documents examined by us
under the laws of the jurisdiction governing its creation or organization or
formation, (iv) the legal capacity of natural persons who are signatories to the
documents examined by us, (v) that each of the parties to the documents examined
by us has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (vi) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vii) the
receipt by each Person to whom a Partnership Preferred Security is to be issued
by the Partnership (collectively, the "Partnership Preferred Security Holders")
of an L.P. Certificate and the payment for the Partnership Preferred Security
acquired by it, in accordance with the Partnership Agreement and the
Registration Statement, (viii) the receipt by each Person to whom a Trust
Preferred Security is to be issued by the Trust (collectively, the "Trust
Preferred Security Holders") of a Trust Preferred Security Certificate (as
defined in the Trust Agreement) and the payment for the Trust Preferred Security
acquired by it, in accordance
<PAGE>
<PAGE>
Capita Preferred Funding L.P.
Capita Preferred Trust
October 18, 1996
Page 4
with the Declaration of Trust and the Registration Statement, (ix) that the
books and records of the Partnership set forth all information required by the
Partnership Agreement and the Delaware Revised Uniform Limited Partnership Act
(6 Del. C. 'ss' 17-101, et seq.) (the "Partnership Act"), including all
information with respect to all Persons to be admitted as Partners and their
contributions to the Partnership, (x) that the Partnership Preferred Securities
are issued and sold to the Partnership Preferred Security Holders in accordance
with the Registration Statement and the Partnership Agreement, and (xi) that the
Trust Preferred Securities are issued and sold to the Trust Preferred Security
Holders in accordance with the Registration Statement and the Declaration of
Trust. We have not participated in the preparation of the Registration Statement
and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Partnership has been duly formed and is validly existing
in good standing as a limited partnership under the Partnership Act.
2. The Partnership Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable limited partner interests in the Partnership.
3. Assuming that the Partnership Preferred Security Holders, as
limited partners of the Partnership, do not participate in the control of the
business of the Partnership, the Partnership Preferred Security Holders, as
limited partners of the Partnership, will have no liability in excess of their
obligations to make payments provided for in the Partnership Agreement and their
share of the Partnership's assets and undistributed profits (subject to the
obligation of a Partnership Preferred Security Holder to repay any funds
wrongfully distributed to it).
4. There are no provisions in the Partnership Agreement the
inclusion of which, subject to the terms and conditions therein, or, assuming
that the Partnership Preferred
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<PAGE>
Capita Preferred Funding L.P.
Capita Preferred Trust
October 18, 1996
Page 5
Security Holders, as limited partners of the Partnership, take no action other
than actions permitted by the Partnership Agreement, the exercise of which, in
accordance with the terms and conditions therein, would cause the Partnership
Preferred Security Holders, as limited partners of the Partnership, to be deemed
to be participating in the control of the business of the Partnership.
5. The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act (12 Del.
C. 'ss' 3801, et seq.).
6. The Trust Preferred Securities will represent valid and,
subject to the qualifications set forth in paragraph 7 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
7. The Trust Preferred Security Holders, as beneficial owners of
the Trust, will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware. We note that the Trust
Preferred Security Holders may be obligated to make payments as set forth in the
Declaration of Trust.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We also consent
to Simpson Thacher & Bartlett's relying as to matters of Delaware law upon this
opinion in connection with an opinion to be rendered by it in connection with
the Registration Statement. In addition, we hereby consent to the use of our
name under the heading "Legal Matters" in the Prospectus. In giving the
foregoing consents, we do not thereby admit that we come within the category of
Persons whose consent is required under Section 7 of the Securities
<PAGE>
<PAGE>
Capita Preferred Funding L.P.
Capita Preferred Trust
October 18, 1996
Page 6
Act of 1933, as amended, or the rules and regulations of the Securities and
Exchange Commission thereunder. Except as stated above, without our prior
written consent, this opinion may not be furnished or quoted to, or relied upon
by, any other Person for any purpose.
Very truly yours,
<PAGE>
<PAGE>
EXHIBIT 8.1
[LETTERHEAD OF SIMPSON THACHER & BARTLETT]
October 18, 1996
AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Capita Preferred Trust
c/o AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Capita Preferred Funding L.P.
c/o AT&T Capital Corporation
44 Whippany Road
Morristown, New Jersey 07962
Re: Capita Preferred Trust's
issuance and sale of Trust
Originated Preferred Securities
Ladies and Gentlemen:
We have acted as special tax counsel ("Tax Counsel") to AT&T
Capital Corporation, a Delaware corporation (the "Company"), the Capita
Preferred Trust, a statutory business trust organized under the Business Trust
Act of the State of Delaware (the "Trust") and Capita Preferred Funding L.P., a
limited partnership formed under the Delaware Revised Uniform Limited
Partnership Act (the "Partnership"), in connection with the preparation and
filing by the Company, the Partnership and the Trust with the Securities and
Exchange Commission (the "Commission") of a Registration Statement on Form S-3
(Registration No. 333-11243) (as amended, the "Registration Statement") under
<PAGE>
<PAGE>
-2- October 18, 1996
the Securities Act of 1933, as amended, and with respect to: (i) the issuance
and sale of a subordinated debenture due 2016 (the "Company Subordinated
Debenture") by the Company pursuant to a form of Indenture (the "Company
Indenture"), between the Company and The First National Bank of Chicago, N.A., a
national banking association organized under the laws of the United States, as
trustee (the "Indenture Trustee") in the form filed as an exhibit to the
Registration Statement; (ii) the issuance and sale of two debentures each due
2016 (each a "Guaranteed Investment Affiliate Debenture", collectively the
"Investment Affiliate Debentures") by each of two wholly-owned United States
subsidiaries of the Company (each an "Investment Affiliate"), pursuant to forms
of Indenture (each an "Investment Affiliate Indenture"), from each such
Investment Affiliate and the Company to the Indenture Trustee (the Company
Subordinated Debenture and the Guaranteed Investment Affiliate Debentures are
collectively referred to hereinafter as the "Debentures" and the forms of the
Company Indenture and the Investment Affiliate Indentures are collectively
referred to hereinafter as the "Indentures"), each of which are guaranteed by
the Company pursuant to a form of Affiliate Debenture Guarantee Agreement in the
form filed as an exhibit to the Registration Statement; (iii) the issuance and
sale of the Partnership Preferred Securities by the Partnership to the Trust
pursuant to the Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement") in the form filed as an exhibit to the Registration
Statement; (iv) the issuance and sale of Trust Preferred Securities and Trust
Common Securities (collectively, the "Trust Securities") pursuant to the Trust's
Amended and Restated
<PAGE>
<PAGE>
-3- October 18, 1996
Declaration of Trust, to be dated as of October 22, 1996 (the "Declaration") in
the form filed as an exhibit to the Registration Statement. The Trust Preferred
Securities will be offered for sale to investors pursuant to the Registration
Statement.
All capitalized terms used in this opinion letter and not otherwise
defined herein shall have the meaning ascribed to such terms in the Registration
Statement.
In delivering this opinion letter, we have reviewed and relied
upon: (i) the Registration Statement, (ii) forms of the Indentures; (iii) forms
of the Debentures; (iv) the form of the Partnership Agreement; (v) the form of
the Declaration; (vi) the forms of (A) the Partnership Guarantee Agreement, (B)
the Trust Preferred Securities Guarantee Agreement, (C) the Trust Common
Securities Guarantee Agreement and (D) the Affiliate Debenture Guarantee
Agreement, each filed as exhibits to the Registration Statement; and (vii) the
forms of (A) the Partnership Preferred Securities and (B) the Trust Securities,
each filed as exhibits to the Registration Statement. In addition, we have
examined, and relied as to matters of fact upon, certain certificates and
comparable documents of the Company and certain wholly owned United States
subsidiaries of the Company, from which the Company will select the Investment
Affiliates. Further, we have relied upon certain other statements and
representations made by officers of the Company. We also have examined and
relied upon original or copies, certified or otherwise identified to our
satisfaction, of such records of the Company, the Partnership and the Trust and
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
<PAGE>
<PAGE>
-4- October 18, 1996
In our examination of such material, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity to original documents of all copies of documents
submitted to us. In addition, we also have assumed that (i) the transactions
related to the issuance of the Debentures, the Partnership Preferred Securities
and Trust Securities will be consummated in accordance with the terms of the
documents and forms of documents described herein and (ii) on the closing date,
an Independent Financial Advisor will deliver the opinion required under Section
7.1(b) of the Partnership Agreement.
On the basis of the foregoing and assuming that the Partnership and
the Trust were formed and will be maintained in compliance with the terms of the
Partnership Agreement and the Declaration, respectively, we hereby confirm (i)
our opinions set forth in the Registration Statement under the caption "Certain
Federal Income Tax Considerations" and (ii) that, subject to the qualifications
set forth therein, the discussion set forth in the Registration Statement under
such caption is an accurate summary of the United States federal income tax
matters described therein.
We express no opinion with respect to the transactions referred to
herein or in the Registration Statement other than as expressly set forth
herein. Moreover, we note that there is no authority directly on point dealing
with securities such as the Trust Preferred Securities or transactions of the
type described herein and that our opinions are not binding on the Internal
Revenue Service ("IRS") or the courts, either of which could take a contrary
position. Nevertheless, we believe that if challenged, the opinions we
<PAGE>
<PAGE>
-5- October 18, 1996
express herein would be sustained by a court with jurisdiction in a properly
presented case.
Our opinions are based upon the Code, the Treasury regulations
promulgated thereunder and other relevant authorities and law, all as in effect
on the date hereof. Consequently, future changes in the law may cause the tax
treatment of the transactions referred to herein to be materially different from
that described above.
We are admitted to practice law only in the State of New York and
the opinions we express herein are limited solely to matters governed by the
federal law of the United States.
We hereby consent to the use of this opinion for filing as Exhibit
8.1 to the Registration Statement and the use of our name in the Registration
Statement under the captions "Certain Federal Income Tax Considerations" and
"Legal Matters".
Very truly yours,
Simpson Thacher & Bartlett
<PAGE>
<PAGE>
EXHIBIT 12.1
AT&T Capital Corporation
September 30, 1996
Conslidated EBIT to interest expense for any four
consecutive fiscal quarters will not be less than 1.25 to 1.
Consolidated earnings before interest and taxes
9 months ended 9/30/96
Earnings before taxes 182,496
Interest Expense 350,359
-------
Earnings as adjusted 532,855
less:
YTD YTD
12/31/95 9/30/95
-------- -------
3 months ended 12/31/95
Earnings before taxes 64,963 208,239 143,276
Interest Expense 110,149 411,040 300,891
------- ------- -------
Earnings as adjusted 175,112 619,279 444,167
Consolidated Earnings:
12 months ended 9/30/96 707,967
Consolidated Interest Expense:
9 months ended 9/30/96 305,359
3 months ended 12/31/95 110,149
-------
12 months ended 9/30/96 460,508
EBIT ratio 1.54
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
______________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
______________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
______________
Capital Preferred Trust
(Exact name of obligor as specified in its charter)
Delaware 22-3467159
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
44 Whippany Road
Morristown, New Jersey 07962
(Address of principal executive offices) (Zip Code)
Trust Originated Preferred Securities
(Title of Indenture Securities)
<PAGE>
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE>
<PAGE>
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 16th day of October, 1996.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE>
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust, as amended and
restated, of Capital Preferred Trust, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
4
<PAGE>
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-1
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
<TABLE>
<CAPTION>
Schedule RC--Balance Sheet
C400 <-
Dollar Amounts in ---- ----
Thousands RCFD BIL MIL THOU
----------------- ---- -------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1). 0081 3,572,641 1.a.
b. Interest-bearing balances(2).......................... 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold.................................... 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell....... 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C).................................................... RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses............. RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).................. 2125 18,745,928 4.d.
5. Assets held in trading accounts.......................... 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases). 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M)... 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)........................... 2130 57,280 8.
9. Customers' liability to this bank on acceptances outstanding 2155 632,259 9.
10. Intangible assets (from Schedule RC-M)................... 2143 156,715 10.
11. Other assets (from Schedule RC-F)........................ 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11)................. 2170 49,335,206 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-2
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................ RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1)................................. RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing....................................... RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......... RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing.................................... RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing........................ RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased.................................... RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 104,546 15.a.
b. Trading Liabilities........................................ RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.. RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year.............. RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases........................................................ RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 632,259 18.
19. Subordinated notes and debentures............................. RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G)........................ RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20). RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus.............. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.. RCFD 3838 0 23.
24. Common stock.................................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves...................... RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities.......................... RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28).................... RCFD 3300 49,335,206 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external
<TABLE>
<CAPTION>
Number comprehensive level
---------- -------------------
<S> <C> <C>
auditors as of any date during 1995 .........RCFD 6724 ...... N/A M.I.
---------- ___________________
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
______________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
______________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
______________
AT&T Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 22-3211453
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
44 Whippany Road
Morristown, New Jersey 07962
(Address of principal executive offices) (Zip Code)
Guarantee of Trust Originated Preferred Securities of Capita Preferred Trust
(Title of Indenture Securities)
<PAGE>
<PAGE>
Item 1. General Information. Furnish the following
information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a
part of this Statement of Eligibility.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
2
<PAGE>
<PAGE>
7. A copy of the latest report of condition of the
trustee published pursuant to law or the
requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national
banking association organized and existing under the laws of the United
States of America, has duly caused this Statement of Eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in
the City of Chicago and State of Illinois, on the 16th day of October,
1996.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE>
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the guarantee of the Trust Originated
Preferred Securities of Capita Preferred Trust by AT&T Capital Corporation, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
4
<PAGE>
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-1
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
C400 <-
Dollar Amounts in ---- ------
Thousands RCFD BIL MIL THOU
----------------- ---- ------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1)........... 0081 3,572,641 1.a.
b. Interest-bearing balances(2).................................... 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)....... 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)... 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold.............................................. 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell................. 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C).............................................................. RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses....................... RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve..................... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c)............................ 2125 18,745,928 4.d.
5. Assets held in trading accounts.................................... 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases)........... 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M)............. 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)..................................... 2130 57,280 8.
9. Customers' liability to this bank on acceptances outstanding....... 2155 632,259 9.
10. Intangible assets (from Schedule RC-M)............................. 2143 156,715 10.
11. Other assets (from Schedule RC-F).................................. 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11)........................... 2170 49,335,206 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-2
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
<S> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)........................... RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1)............................ RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing.................................. RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......... RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing............................... RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing.................................. RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
a. Federal funds purchased............................... RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to repurchase........ RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury.... RCON 2840 104,546 15.a.
b. Trading Liabilities.................................. . RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less............ RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year......... RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases................................................... RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding.. RCFD 2920 632,259 18.
19. Subordinated notes and debentures........................ RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G)................... RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20)........... RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus......... RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............ RCFD 3838 0 23.
24. Common stock............................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock). RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves................. RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities......................... RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation adjustments...... RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27)........ RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28).................... RCFD 3300 49,335,206 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for
the bank by independent external
<TABLE>
<CAPTION>
Number comprehensive level
-------------- ---------------------
<S> <C> <C>
auditors as of any date during 1995 ...RCFD 6724 .... N/A M.1.
-------------- --------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated holding
company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with
generally accepted auditing standards by a certified public accounting
firm (may be required by state chartering authority)
4. = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
______________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
______________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
______________
AT&T Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 22-3211453
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
44 Whippany Road
Morristown, New Jersey 07962
(Address of principal executive offices) (Zip Code)
Subordinated Debentures Due 2016
(Title of Indenture Securities)
<PAGE>
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE>
<PAGE>
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 16th day of October, 1996.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE>
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the Subordinated Debentures due 2016 of
AT&T Capital Corporation, the undersigned, in accordance with Section 321(b) of
the Trust Indenture Act of 1939, as amended, hereby consents that the reports of
examinations of the undersigned, made by Federal or State authorities authorized
to make such examinations, may be furnished by such authorities to the
Securities and Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
4
<PAGE>
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-1
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
<TABLE>
<CAPTION>
Schedule RC--Balance Sheet
C400 <-
Dollar Amounts in ---- ----
Thousands RCFD BIL MIL THOU
----------------- ---- -------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1). 0081 3,572,641 1.a.
b. Interest-bearing balances(2).......................... 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold.................................... 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell....... 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C).................................................... RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses............. RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).................. 2125 18,745,928 4.d.
5. Assets held in trading accounts.......................... 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases). 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M)... 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)........................... 2130 57,280 8.
9. Customers' liability to this bank on acceptances outstanding 2155 632,259 9.
10. Intangible assets (from Schedule RC-M)................... 2143 156,715 10.
11. Other assets (from Schedule RC-F)........................ 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11)................. 2170 49,335,206 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-2
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................ RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1)................................. RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing....................................... RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......... RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing.................................... RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing........................ RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased.................................... RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 104,546 15.a.
b. Trading Liabilities........................................ RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.. RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year.............. RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases........................................................ RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 632,259 18.
19. Subordinated notes and debentures............................. RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G)........................ RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20). RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus.............. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.. RCFD 3838 0 23.
24. Common stock.................................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves...................... RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities.......................... RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28).................... RCFD 3300 49,335,206 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external
<TABLE>
<CAPTION>
Number comprehensive level
---------- -------------------
<S> <C> <C>
auditors as of any date during 1995 .........RCFD 6724 ...... N/A M.I.
---------- -------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
______________
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
______________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
______________
AT&T Capital Corporation
(Exact name of obligor as specified in its charter)
Delaware 22-3211453
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
44 Whippany Road
Morristown, New Jersey 07962
(Address of principal executive offices) (Zip Code)
Guarantee of Debentures Due 2016 of Wholly Owned Subsidiaries
of AT&T Capital Corporation
(Title of Indenture Securities)
<PAGE>
<PAGE>
Item 1. General Information. Furnish the following information as to the
trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of Currency, Washington, D.C., Federal Deposit Insurance
Corporation, Washington, D.C., The Board of Governors of the Federal
Reserve System, Washington D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With the Obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of exhibits. List below all exhibits filed as a part of this
Statement of Eligibility.
1. A copy of the articles of association of the trustee now in effect.*
2. A copy of the certificates of authority of the trustee to commence
business.*
3. A copy of the authorization of the trustee to exercise corporate
trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of the Act.
2
<PAGE>
<PAGE>
7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the
trustee, The First National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of America, has duly
caused this Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Chicago and State of
Illinois, on the 16th day of October, 1996.
The First National Bank of Chicago,
Trustee
By /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
* Exhibit 1, 2, 3 and 4 are herein incorporated by reference to Exhibits bearing
identical numbers in Item 12 of the Form T-1 of The First National Bank of
Chicago, filed as Exhibit 26 to the Registration Statement on Form S-3 of ITT
Corporation, filed with the Securities and Exchange Commission on October 15,
1996 (Registration No. 333-07221).
3
<PAGE>
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
October 16, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of the guarantees of AT&T Capital
Corporation of two Debentures due 2016 issued by certain wholly owned
subsidiaries of AT&T Capital Corporation to be designated, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as amended,
hereby consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission upon its
request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ Steven M. Wagner
--------------------
Steven M. Wagner
Vice President
4
<PAGE>
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-1
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1996
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
<TABLE>
<CAPTION>
Schedule RC--Balance Sheet
C400 <-
Dollar Amounts in ---- ----
Thousands RCFD BIL MIL THOU
----------------- ---- -------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A):
a. Noninterest-bearing balances and currency and coin(1). 0081 3,572,641 1.a.
b. Interest-bearing balances(2).......................... 0071 6,958,367 1.b.
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 1,448,974 2.b.
3. Federal funds sold and securities purchased under agreements to
resell in domestic offices of the bank and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold.................................... 0276 5,020,878 3.a.
b. Securities purchased under agreements to resell....... 0277 918,688 3.b.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C).................................................... RCFD 2122 19,125,160 4.a.
b. LESS: Allowance for loan and lease losses............. RCFD 3123 379,232 4.b.
c. LESS: Allocated transfer risk reserve........... RCFD 3128 0 4.c.
d. Loans and leases, net of unearned income, allowance, and
reserve (item 4.a minus 4.b and 4.c).................. 2125 18,745,928 4.d.
5. Assets held in trading accounts.......................... 3545 9,599,172 5.
6. Premises and fixed assets (including capitalized leases). 2145 623,289 6.
7. Other real estate owned (from Schedule RC-M)... 2150 8,927 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)........................... 2130 57,280 8.
9. Customers' liability to this bank on acceptances outstanding 2155 632,259 9.
10. Intangible assets (from Schedule RC-M)................... 2143 156,715 10.
11. Other assets (from Schedule RC-F)........................ 2160 1,592,088 11.
12. Total assets (sum of items 1 through 11)................. 2170 49,335,206 12.
</TABLE>
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
5
<PAGE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 06/30/96
Address: One First National Plaza, Ste 0460 ST-BK: 17-1630
City, State Zip: Chicago, IL 60670 FFIEC 031
FDIC Certificate No.: 0/3/6/1/8 Page RC-2
<TABLE>
<CAPTION>
Schedule RC-Continued Dollar Amounts in
Thousands Bil Mil Thou
--------- ------------
<S> <C> <C> <C> <C>
13. Deposits:
a. In domestic offices (sum of totals of columns A and C
from Schedule RC-E, part 1)................................ RCON 2200 16,878,870 13.a.
(1) Noninterest-bearing(1)................................. RCON 6631 7,855,880 13.a.(1)
(2) Interest-bearing....................................... RCON 6636 9,022,990 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and
IBFs (from Schedule RC-E, part II).......... RCFN 2200 12,677,057 13.b.
(1) Noninterest bearing.................................... RCFN 6631 766,936 13.b.(1)
(2) Interest-bearing........................ RCFN 6636 11,910,121 13.b.(2)
14. Federal funds purchased and securities sold under agreements
to repurchase in domestic offices of the bank and of its Edge
and Agreement subsidiaries, and in IBFs:
a. Federal funds purchased.................................... RCFD 0278 1,318,968 14.a.
b. Securities sold under agreements to repurchase RCFD 0279 1,197,589 14.b.
15. a. Demand notes issued to the U.S. Treasury RCON 2840 104,546 15.a.
b. Trading Liabilities........................................ RCFD 3548 6,431,784 15.b.
16. Other borrowed money:
a. With original maturity of one year or less.. RCFD 2332 4,437,636 16.a.
b. With original maturity of more than one year.............. RCFD 2333 75,308 16.b.
17. Mortgage indebtedness and obligations under capitalized
leases........................................................ RCFD 2910 283,041 17.
18. Bank's liability on acceptance executed and outstanding RCFD 2920 632,259 18.
19. Subordinated notes and debentures............................. RCFD 3200 1,275,000 19.
20. Other liabilities (from Schedule RC-G)........................ RCFD 2930 892,947 20.
21. Total liabilities (sum of items 13 through 20). RCFD 2948 46,205,005 21.
22. Limited-Life preferred stock and related surplus.............. RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.. RCFD 3838 0 23.
24. Common stock.................................................. RCFD 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) RCFD 3839 2,349,164 25.
26. a. Undivided profits and capital reserves...................... RCFD 3632 584,878 26.a.
b. Net unrealized holding gains (losses) on
available-for-sale securities.......................... RCFD 8434 (3,951) 26.b.
27. Cumulative foreign currency translation adjustments RCFD 3284 (748) 27.
28. Total equity capital (sum of items 23 through 27) RCFD 3210 3,130,201 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28).................... RCFD 3300 49,335,206 29.
</TABLE>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed
for the bank by independent external
<TABLE>
<CAPTION>
Number comprehensive level
---------- -------------------
<S> <C> <C>
auditors as of any date during 1995 .........RCFD 6724 ...... N/A M.I.
---------- ------------
</TABLE>
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors (may
be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
6
<PAGE>
