As filed with the Securities and Exchange Commission on May __, 1997
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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INTERPOOL CAPITAL TRUST INTERPOOL, INC.
(Exact name of registrant is specified (Exact name of registrant is specified
in its charter) in its charter)
DELAWARE DELAWARE
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
6719 7359
6159
(Primary Standard Industrial (Primary Standard Industrial
Classification Code No.) Classification Code No.)
(I.R.S. Employer Identification Number) 13-3467669
(I.R.S. Employer Identification Number)
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211 COLLEGE ROAD EAST
PRINCETON, NEW JERSEY 08540
(609) 452-8900
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
MARTIN TUCHMAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
(609) 452-8900
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
JEFFREY S. LOWENTHAL, ESQ.
STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, N.Y. 10038
APPROXIMATE DATE OF COMMENCEMENT OF
PROPOSED SALE TO PUBLIC: As soon as practicable
after this Registration Statement becomes
effective.
If the only securities being registered on this form are being in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
TITLE OF EACH CLASS OF AMOUNT TO PROPOSED PROPOSED AMOUNT OF
SECURITIES TO BE BE MAXIMUM MAXIMUM REGISTRATION
REGISTERED REGISTERED AGGREGATE AGGREGATE FEE
PRICE PER OFFERING
UNIT (1) PRICE (1)
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<S> <C> <C> <C> <C>
Series B Capital Securities $75,000,000 100% $75,000,000 $22,727.25
of Interpool Capital Trust
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Series B Junior Subordinated
Deferrable Interest
Debentures of Interpool, Inc. (2)
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Interpool, Inc. Series B
Guarantee with respect to the
Series B Capital Securities (3)
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Total $75,000,000 100% $75,000,000(4) $22,727.25
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(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(f).
(2) No separate consideration will be received for the Series B Junior
Subordinated Debentures of Interpool, Inc. distributed upon any
liquidation of Interpool Capital Trust.
(3) This Registration Statement is deemed to cover rights of holders of
Junior Subordinated Debentures under the Indenture (as defined
herein), the rights of holders of Series B Capital Securities of
Interpool Capital Trust under an Amended and Restated Declaration of
Trust, the rights of holders of such Series B Capital Securities
under the Series B Guarantee and certain back-up undertakings as
described herein.
(4) Such amount represents the liquidation amount of the Interpool Capital
Trust Series B Capital Securities to be exchanged hereunder and the
principal amount of Junior Subordinated Debentures that may be
distributed to holders of such Capital Securities upon any liquidation
of Interpool Capital Trust. THE REGISTRANT HEREBY AMENDS THIS
</TABLE>
REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY
ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME
EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities 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 jurisdiction in which such offer, solicitation or sale would be unlawful
prior to the registration or qualification under the securities laws of any such
jurisdiction.
Subject to Completion, Dated May __, 1997
PROSPECTUS
INTERPOOL CAPITAL TRUST
Offer to Exchange
9 7/8% Series B Capital Securities
(Liquidation Amount $1,000 per Capital
Security) for any and all outstanding 9 7/8% Series A
Capital Securities
(Liquidation Amount $1,000 per Capital Security)
Unconditionally Guaranteed, as described herein, by Interpool,
Inc.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON [DAY],
[DATE], 1997, UNLESS EXTENDED BY INTERPOOL CAPITAL TRUST. As more fully
described herein under "The Exchange Offer--Expiration Date; Extensions;
Amendment," the time the Exchange Offer expires (including extensions, if any,
by the Trust) is referred to as the "Expiration Date."
Interpool Capital Trust, a trust formed under the laws of the state of
Delaware (the "Trust"), is hereby offering (the "Exchange Offer"), upon the
terms and subject to the conditions set forth in this prospectus (the
"Prospectus") and the accompanying letter of transmittal (the "Letter of
Transmittal"), to exchange $1,000 Liquidation Amount of its 9 7/8% Series B
Capital Securities (the "Exchange Capital Securities"), which exchange has been
registered under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to a registration statement of which this Prospectus is a part (the
"Registration Statement"), for each $1,000 liquidation amount of its outstanding
9 7/8% Series A Capital Securities (the "Private Capital Securities" and,
collectively with the Exchange Capital Securities, the "Capital Securities"), of
which $75,000,000 in aggregate principal amount was issued and sold on January
27, 1997 in a transaction exempt from registration under the Securities Act (the
"Private Offering") and is outstanding on the date hereof. Pursuant to the
Exchange Offer, Interpool, Inc., a Delaware corporation ("Interpool" or the
"Company"), is also offering to exchange (i) its guarantee of payments of cash
distributions and payments on liquidation of the Trust or redemption of the
Private Capital Securities (the "Private Guarantee"), for a like guarantee in
respect of the Exchange Capital Securities (the "Exchange Guarantee") and (ii)
all of its 9 7/8% Series B Junior Subordinated Deferrable Interest Debentures
(the "Exchange Junior Subordinated Debentures') for a like principal amount of
its 9 7/8% Series A Junior Subordinated Deferrable Interest Debentures (the
"Private Junior Subordinated Debentures"), which Exchange Guarantee and Exchange
Junior Subordinated Debentures also have been registered under the Securities
Act. The Private Capital Securities, the Private Guarantee and the Private
Junior Subordinated Debentures are collectively referred to herein as the
"Private Securities" and the Exchange Capital Securities, the Exchange Guarantee
and the Exchange Junior Subordinated Debentures are collectively referred to
herein as the "Exchange Securities."
The form and terms of the Exchange Securities are substantially identical
in all respects (including principal amount, interest rate, maturity and
ranking) to the form and terms of the Private Securities, except that (i) the
Exchange Capital Securities will have been registered under the Securities Act
and, therefore, will not bear legends restricting the transfer thereof, (ii) the
Exchange Capital Securities will not contain the $100,000 minimum liquidation
amount transfer restriction, (iii) the Exchange Capital Securities will not
provide for any increase in the Distribution Rate thereon, (iv) the Exchange
Junior Subordinated Debentures will not contain the $100,000 minimum liquidation
amount transfer restriction, (v) the Exchange Junior Subordinated Debentures
will not provide for any increase in the Distribution Rate thereon and (vi)
holders of the Exchange Capital Securities will not be entitled to certain
rights of holders of the Private Capital Securities under the Registration
Rights Agreement (as defined), which rights will terminate upon consummation of
the Exchange Offer. The Exchange Capital Securities will evidence the same
obligations as the Private Capital Securities and will be issued pursuant to,
and entitled to the benefits of, the Declaration and the Indenture (each as
defined) governing the Private Capital Securities. The Exchange Offer is being
made to satisfy the obligations of the Company under the Registration Rights
Agreement relating to the Private Capital Securities. See "The Exchange Offer"
and "Description of the Exchange Capital Securities." In the event that the
Exchange Offer is consummated, any Private Capital Securities which remain
outstanding after consummation of the Exchange Offer and the Exchange Capital
Securities will vote together as a single class for purposes of determining
whether holders of the requisite percentage in outstanding Liquidation Amount
thereof have taken certain actions or exercised certain rights under the Amended
and Restated Declaration of Trust.
Holders of the Exchange Capital Securities will be entitled to receive
cumulative cash distributions arising from the payment of interest on the
Exchange Junior Subordinated Debentures, accruing from February 15, 1997 and
payable semi-annually in arrears on February 15 and August 15 of each year,
commencing August 15, 1997, at the annual rate of 9.875% of the Liquidation
Amount of $1,000 per Exchange Capital Security ("Distributions"). So long as no
Debenture Event of Default (as defined herein) has occurred and is continuing,
the Company will have the right to defer payments of interest on the Exchange
Junior Subordinated Debentures at any time and from time to time for a period
not exceeding 10 consecutive semi-annual periods with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due, the Company may elect
to begin a new Extension Period, subject to the requirements set forth herein.
If and for so long as interest payments on the Exchange Junior Subordinated
Debentures are so deferred, Distributions on the Exchange Capital Securities
will also be deferred and the Company will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to the Company's capital stock (which includes common and preferred
stock) or to make any payment with respect to debt securities of the Company
that rank pari passu with or junior to the Exchange Junior Subordinated
Debentures. During an Extension Period, interest on the Exchange Junior
Subordinated Debentures will continue to accrue (and the amount of Distributions
to which holders of the Trust Securities are entitled will continue to
accumulate) at the rate of 9.875% per annum, compounded semi-annually, and
holders of Trust Securities will be required to accrue interest income for
United States federal income tax purposes even though such holders have not yet
received cash payments attributable to such interest income. See "Description of
Junior Subordinated Debentures-- Option to Extend Interest Payment Date" and
"Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount."
The Company will, through the Exchange Guarantee, the Common Guarantee, the
Declaration, the Exchange Junior Subordinated Debentures and the Indenture (each
as defined herein), taken together, fully, irrevocably and unconditionally
guarantee all of the Trust's obligations under the Trust Securities. See
"Relationship Among the Capital Securities, the Junior Subordinated Debentures
and the Guarantee--Full and Unconditional Guarantee." The Exchange Guarantee and
the Common Guarantee will guarantee payments of Distributions and payments on
liquidation or redemption of the Trust Securities, but in either case only to
the extent that the Trust holds funds on hand legally available therefor and has
failed to make such payments, as described herein. See "Description of Exchange
Guarantee." If the Company fails to make a required payment on the Exchange
Junior Subordinated Debentures, the Trust will not have sufficient funds to make
the related payments, including Distributions, on the Trust Securities. The
Exchange Guarantee and the Common Guarantee will not cover any payment when the
Trust does not have sufficient funds on hand legally available therefor. In such
event, a holder of Exchange Capital Securities may institute a legal proceeding
directly against the Company to enforce its rights in respect of such payment.
See "Description of Junior Subordinated Debentures--Enforcement of Certain
Rights by Holders of Capital Securities." The obligations of the Company under
the Exchange Guarantee, the Common Guarantee and the Exchange Junior
Subordinated Debentures will be unsecured and rank subordinate and junior in
right of payment to all Senior Indebtedness (as defined under "Description of
Junior Subordinated Debentures--Subordination"). At December 31, 1996, the
Company's Senior Indebtedness totaled $602.7 million.
The Trust Securities will be subject to mandatory redemption in a Like
Amount (as defined herein), (i) in whole but not in part, on the Stated Maturity
Date upon repayment of the Exchange Junior Subordinated Debentures at a
redemption price equal to the principal amount of, plus accrued and unpaid
interest on, the Exchange Junior Subordinated Debentures (the "Maturity
Redemption Price"), (ii) in whole but not in part, at any time prior to February
15, 2007, contemporaneously with the optional prepayment by the Company of the
Exchange Junior Subordinated Debentures, upon the occurrence and continuation of
a Special Event (as defined herein) at a redemption price equal to the Special
Event Prepayment Price (as defined herein) (the "Special Event Redemption
Price"), and (iii) in whole or in part, on or after February 15, 2007,
contemporaneously with the optional prepayment by the Company of the Exchange
Junior Subordinated Debentures, at a redemption price equal to the Optional
Prepayment Price (as defined herein) (the "Optional Redemption Price"). Any of
the Maturity Redemption Price, the Special Event Redemption Price and the
Optional Redemption Price may be referred to herein as the "Redemption Price."
See "Description of Exchange Capital Securities--Redemption."
The Exchange Junior Subordinated Debentures will be prepayable prior to the
Stated Maturity Date at the option of the Company (i) on or after February 15,
2007, in whole or in part, at a prepayment price (the "Optional Prepayment
Price") equal to 104.9375% of the principal amount thereof on February 15, 2007,
declining ratably on each February 15 thereafter to 100% on or after February
15, 2017, plus accrued interest thereon to the date of prepayment, or (ii) at
any time prior to February 15, 2007, in whole but not in part, upon the
occurrence and continuation of a Special Event, at a prepayment price (the
"Special Event Prepayment Price") equal to the greater of (a) 100% of the
principal amount thereof or (b) the sum, as determined by a Quotation Agent (as
defined herein), of the present values of the principal amount and premium
payable with respect to an optional redemption of the Exchange Junior
Subordinated Debentures on February 15, 2007, together with scheduled payments
of interest on the Exchange Junior Subordinated Debentures accruing from the
prepayment date to and including February 15, 2007, discounted to the prepayment
date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Adjusted Treasury Rate (as defined herein), plus, in either case
(a) or (b) above, accrued interest thereon to the date of prepayment. Either of
the Optional Prepayment Price or the Special Event Prepayment Price may be
referred to herein as the "Prepayment Price." See "Description of Exchange
Junior Subordinated Debentures--Optional Prepayment" and "--Special Event
Prepayment."
The Company will have the right at any time to terminate the Trust and
cause a Like Amount of the Exchange Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities in liquidation of the Trust,
subject to the Company having received an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Exchange Capital
Securities. Unless the Exchange Junior Subordinated Debentures are distributed
to the holders of the Trust Securities, in the event of a liquidation of the
Trust as described herein, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, the holders of the Exchange Capital
Securities generally will be entitled to receive a Liquidation Amount of $1,000
per Exchange Capital Security plus accumulated and unpaid Distributions thereon
to the date of payment. See "Description of Exchange Capital
Securities--Liquidation of the Trust and Distribution of Exchange Junior
Subordinated Debentures" and "Certain Federal Income Tax
Consequences--Distribution of Exchange Junior Subordinated Debentures to Holders
of Exchange Capital Securities."
The Private Capital Securities were originally issued and sold in the
Private Offering in reliance upon the exemption provided in Section 4(2) of the
Securities Act and Rule 144A of the Securities Act. Accordingly, the Private
Capital Securities may not be reoffered, resold or otherwise pledged,
hypothecated or transferred in the United States or to a U.S. person unless
registered under the Securities Act or unless an applicable exemption from the
registration requirements of the Securities Act is available. Based on an
interpretation by the staff of the Commission set forth in no-action letters
issued to third parties, the Trust and the Company believe that the Exchange
Capital Securities issued pursuant to the Exchange Offer in exchange for Private
Capital Securities may be offered for resale, resold and otherwise transferred
by a holder thereof (other than (i) an "affiliate" of the Trust or the Company
within the meaning of Rule 405 under the Securities Act, (ii) a broker-dealer
who acquired Private Capital Securities directly from the Trust or the Company
to resell pursuant to Rule 144A or any other available exemption under the
Securities Act or (iii) a broker-dealer who acquired Private Capital Securities
as a result of market making or other trading activities), without compliance
with the registration and prospectus delivery requirements of the Securities
Act; provided that the holder is acquiring Exchange Capital Securities in the
ordinary course of its business and is not participating, and has no arrangement
or understanding with any person to participate, in the distribution of the
Exchange Capital Securities. Holders of Private Capital Securities wishing to
accept the Exchange Offer must represent to the Trust and the Company, as
required by the Registration Rights Agreement, that such conditions have been
met. The Trust and the Company believe that none of the registered holders of
the Private Capital Securities is an affiliate (as such term is defined in Rule
405 under the Securities Act) of the Trust or the Company.
Each broker-dealer that receives Exchange Capital Securities for its own
account in exchange for Private Capital Securities must acknowledge that it will
deliver a prospectus in connection with any resale of such Exchange Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Capital Securities received
in exchange for Private Capital Securities, where such Private Capital
Securities were acquired by such broker-dealer as a result of market-making or
other trading activities. The Trust has agreed to make this Prospectus (as it
may be amended or supplemented) available to any broker-dealer, upon request,
for use in connection with any such resale, for a period of one year after the
Registration Statement is declared effective by the Commission or until such
earlier date on which all the Exchange Capital Securities are freely tradeable.
However, any broker-dealer who acquired the Private Capital Securities directly
from the Trust or the Company may not fulfill its prospectus delivery
requirements with this Prospectus, but must comply with the registration and
prospectus delivery requirements of the Securities Act. See "The Exchange
Offer--Resale of the Exchange Capital Securities" and "Plan of Distribution."
Neither the Trust nor the Company will receive any proceeds from, and both
have agreed to bear the expenses of, the Exchange Offer. No underwriter is being
used in connection with the Exchange Offer. See "The Exchange Offer-- Resale of
the Exchange Capital Securities."
Prior to the Exchange Offer, there has been no public market for the
Capital Securities. The Exchange Capital Securities will not be listed on any
securities exchange. There can be no assurance that an active market for the
Exchange Capital Securities will develop. To the extent that a market for the
Exchange Capital Securities does develop the market value of the Exchange
Capital Securities will depend on market conditions (such as yields on
alternative investments), general economic conditions, the Company's financial
condition and certain other factors. Such conditions might cause the Exchange
Capital Securities, to the extent they are traded, to trade at a significant
discount from face value. In addition, any Private Capital Securities not
tendered and accepted in the Exchange Offer will remain outstanding. To the
extent that the Private Capital Securities are tendered and accepted in the
Exchange Offer, a holder's ability to sell untendered, and tendered but
unaccepted, Private Capital Securities could be adversely affected. Following
consummation of the Exchange Offer, the holders of Private Capital Securities
will continue to be subject to the existing restrictions on transfer thereof and
neither the Trust nor the Company will have any further obligation to such
holders to provide for the registration under the Securities Act of the Private
Capital Securities except under certain limited circumstances. See "The Exchange
Offer--Termination of Certain Rights."
As used herein, (i) the "Indenture" means the Indenture, dated as of
January 27, 1997, as amended and supplemented from time to time, between the
Company and IBJ Schroder Bank & Trust Company, as trustee (the "Debenture
Trustee"), relating to the Private Junior Subordinated Debentures and the
Exchange Junior Subordinated Debentures, (ii) the "Declaration" means the
Amended and Restated Declaration of Trust relating to the Trust among the
Company, as Sponsor, IBJ Schroder Bank & Trust Company, as Property Trustee (the
"Property Trustee"), Delaware Trust Capital Management, Inc., as Delaware
Trustee (the "Delaware Trustee"), and the Regular Trustees named therein
(collectively, with the Property Trustee and Delaware Trustee, the "Issuer
Trustees"), (iii) the "Exchange Guarantee" means the Guarantee Agreement
relating to the Exchange Capital Securities between the Company and IBJ Schroder
Bank & Trust Company, as guarantee trustee (the "Guarantee Trustee") and (iv)
the "Common Guarantee" means the Guarantee Agreement relating to the Common
Securities between the Company and IBJ Schroder Bank & Trust Company, as
guarantee trustee. In addition, as the context may require, (i) "Capital
Securities" include the Private Capital Securities and the Exchange Capital
Securities, (ii) "Trust Securities" include the Capital Securities and the
Common Securities, (iii) "Junior Subordinated Debentures" includes the Private
Junior Subordinated Debentures and the Exchange Junior Subordinated Debentures,
and (iii) "Guarantee" includes the Private Guarantee and the Exchange Guarantee.
The Trust will accept for exchange any and all validly tendered Private
Capital Securities not withdrawn prior to 5:00 p.m., New York City time, on the
Expiration Date. Tenders of Private Capital Securities may be withdrawn at any
time prior to 5:00 p.m. on the Expiration Date. The Exchange Offer is not
conditioned on any minimum aggregate principal amount of Private Capital
Securities being tendered or accepted for exchange; provided, however, Private
Capital Securities may be tendered only in whole or in part having an aggregate
Liquidation Amount of not less than $100,000 (100 Private Capital Securities) or
any integral multiple of $1,000 Liquidation Amount (one Private Capital
Security) in excess thereof. The Exchange Offer is subject to certain customary
conditions. See "The Exchange Offer-- Conditions."
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.
The date of this Prospectus is ______________________, 1997
<PAGE>
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE TRUST OR THE COMPANY
ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF PRIVATE CAPITAL SECURITIES IN
ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT
BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
NO PERSON IS AUTHORIZED IN CONNECTION WITH THE EXCHANGE OFFER TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR
THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE TRUST OR THE COMPANY. THE INFORMATION CONTAINED HEREIN IS AS OF THE DATE
HEREOF AND SUBJECT TO CHANGE, COMPLETION OR AMENDMENT WITHOUT NOTICE. NEITHER
THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL AT ANY
TIME NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY DATE SUBSEQUENT TO THE DATE HEREOF.
IN MAKING AN INVESTMENT DECISION REGARDING THE SECURITIES OFFERED HEREBY,
PROSPECTIVE INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY, THE
TRUST AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS INVOLVED.
THE OFFERING IS BEING MADE ON THE BASIS OF THIS PROSPECTUS. ANY DECISION TO
EXCHANGE SECURITIES IN THE EXCHANGE OFFER MUST BE BASED ON THE INFORMATION
CONTAINED HEREIN.
Except as described herein, the Exchange Capital Securities will be
represented by global Exchange Capital Securities in fully registered form,
deposited with a custodian for and registered in the name of a nominee of The
Depository Trust Company ("DTC"). Beneficial interests in such Exchange Capital
Securities will be shown on, and transfers thereof will be effected through,
records maintained by DTC and its participants. Beneficial interests in such
Exchange Capital Securities will trade in DTC's Same-Day Funds Settlement System
and secondary market trading activity in such interests will therefore settle in
immediately available funds.
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TABLE OF CONTENTS
PAGE
Available Information....................................................1
Incorporation of Certain Documents by Reference..........................1
Forward Looking Statements...............................................3
Prospectus Summary.......................................................4
Risk Factors............................................................11
The Company.............................................................18
Use of Proceeds.........................................................19
Ratios of Earnings to Fixed Charges
and Earnings to Combined Fixed Charges................................20
Capitalization..........................................................21
Selected Financial Data.................................................22
Interpool Capital Trust.................................................25
The Exchange Offer......................................................26
Description of the Exchange Securities..................................35
Description of Private Securities.......................................56
Relationship Among the Exchange Capital Securities,
the Exchange Junior Subordinated Debentures and
the Exchange Guarantee................................................57
Certain Federal Income Tax Considerations...............................58
ERISA Considerations....................................................62
Plan of Distribution....................................................63
Legal Matters...........................................................64
Experts.................................................................64
Form of Letter to be Delivered by
Accredited Institutions..............................................A-1
<PAGE>
AVAILABLE INFORMATION
Interpool, Inc. ("Interpool" or the "Company") is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files reports, proxy
statements and other information with the Securities and Exchange Commission
(the "Commission"). Reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at Seven
World Trade Center, New York, New York 10048, and Suite 1400, Northwestern
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
materials can be obtained from the Public Reference Section of the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Such materials can also be inspected at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005. The Commission maintains an Internet web site
that contains reports, proxy and information statements and other information
regarding Issuers who file electronically with the Commission. The address of
that site is http://www.sec.gov.
No separate financial statements of the Trust have been included herein.
The Company and the Trust do not consider that such financial statements would
be material to holders of the Capital Securities because the Trust is a
newly-formed special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage in any
activities other than holding as trust assets the Junior Subordinated Debenture,
issuing the Trust Securities and engaging in incidental activities. See
"Interpool Capital Trust," "Description of Exchange Capital Securities,"
"Description of Exchange Junior Subordinated Debentures" and "Description of
Exchange Guarantee." In addition, the Company does not expect that the Trust
will file reports, proxy statements and other information under the Exchange Act
with the Commission.
The Company and the Trust have filed with the Commission a Registration
Statement on Form S-4 (together with all amendments, exhibits, annexes and
schedules thereto, the "Registration Statement") pursuant to the Securities Act,
and the rules and regulations promulgated thereunder, with respect to the
securities being offered hereby. This Prospectus 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. For
further information with respect to the Company, the Trust and the securities
offered hereby, reference is made to the Registration Statement, including the
exhibits filed as a part thereof and otherwise incorporated therein. Statements
made in this Prospectus as to the contents of any contract, agreement or other
document referred to are not necessarily complete; with respect to such
contract, agreement or other document filed as an exhibit to the Registration
Statement, reference is made to such exhibit for a more complete description of
the matter involved, and each such statement shall be deemed qualified in its
entirety by such reference. Copies of the Registration Statement and the
exhibits may be inspected, without charge, at the offices of the Commission, or
obtained at prescribed rates from the Public Reference Section of the Commission
at the address set forth above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the Company
pursuant to the Exchange Act are incorporated by reference in this Prospectus
and made a part hereof:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(b) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; and
(c) the Company's Proxy Statement dated April 17, 1997 for the Annual
Meeting of Stockholders in 1997.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the Offering shall be deemed to be incorporated by reference
herein 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 is also incorporated or deemed to be
incorporated by reference herein modifies, supersedes or replaces such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to any person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy of
any or all of the documents which have been incorporated by reference in this
Prospectus, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into the documents so incorporated. Any
such request should be directed to Interpool, Inc., 211 College Road East,
Princeton, New Jersey, 08540, Attention: Investor Relations. Telephone requests
may be directed to (609) 452-8900.
<PAGE>
FORWARD LOOKING STATEMENTS
This Prospectus, including certain information incorporated by reference
herein, contains certain forward-looking statements within the meaning of the
Private Capital Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties that could cause actual
results to differ materially from those contemplated in such forward-looking
statements, including in particular the risks and uncertainties described under
"Risk Factors." See also "The Company," "Summary Financial Data" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" (incorporated by reference). Prospective investors are cautioned not
to place undue reliance on these forward-looking statements, which speak only as
of the date hereof. The Company undertakes no obligation to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere or incorporated by reference in this Prospectus. Unless the context
otherwise requires, all references herein to the "Trust" are to Interpool
Capital Trust and all references herein to the "Company" or "Interpool" include
Interpool, Inc. and its subsidiaries.
THE COMPANY
Interpool is one of the world's leading lessors of intermodal dry freight
standard containers and is the second largest lessor of intermodal container
chassis in the United States. At December 31, 1996, the Company's container
fleet totaled approximately 301,000 twenty-foot equivalent units ("TEUs"), the
industry standard measure of dimension for containers used in international
trade, and its chassis fleet totaled approximately 57,000 chassis. The Company
leases its containers and chassis to over 200 customers, including nearly all of
the world's 20 largest international container shipping lines.
The Company focuses on leasing dry freight standard containers and
container chassis on a long-term basis in order to achieve high utilization of
its equipment and stable and predictable earnings. From 1991 through 1994, the
combined utilization rate of the Company's container and chassis fleets averaged
at least 90%. At the end of 1995 and 1996, the combined utilization rate of the
Company's container and chassis fleets was approximately 97%. Substantially all
of the Company's newly acquired equipment is leased on a long-term basis, and
approximately 91% of its total equipment fleet is currently leased on this
basis. The remainder of the Company's equipment is leased under short-term
agreements to satisfy customers' peak or seasonal requirements, generally at
higher rates than under long-term leases. The Company concentrates on standard
dry cargo containers and chassis because such equipment may be more readily
remarketed upon expiration of a lease than specialized equipment. In financing
its equipment acquisitions, the Company generally seeks to meet debt service
requirements from the leasing revenue generated by its equipment.
The Company conducts its container and chassis leasing business through two
subsidiaries, Interpool Limited and Trac Lease, Inc. ("Trac Lease"). Certain
other United States equipment leasing activities are conducted through Interpool
itself. The Company and its predecessors have been involved in the leasing of
containers and chassis since 1968. The Company leases containers throughout the
world, with particular emphasis on the Pacific Rim. The Company leases chassis
to customers for use in the United States. The Company maintains contact with
its customers through a worldwide network of offices, agents and sales
representatives. The Company believes one of the key factors in its ability to
compete effectively has been the long-standing relationships management has
established with most of the world's large shipping lines. In addition,
Interpool relies on its strong credit rating and low financing costs to maintain
its competitive position.
INTERPOOL CAPITAL TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) a declaration of trust executed by the Company, as Sponsor, Delaware
Trust Capital Management, Inc., as Delaware Trustee, and the three individual
Regular Trustees named therein, and (ii) the filing of a certificate of trust
with the Delaware Secretary of State on November 25, 1996. The Trust's business
and affairs will be conducted pursuant to an amended and restated declaration of
trust by the Issuer Trustees: IBJ Schroder Bank & Trust Company, as Property
Trustee, Delaware Trust Capital Management, Inc., as Delaware Trustee, and the
three individual Regular Trustees, who are employees or officers of the Company.
The Trust exists for the exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust Securities to
acquire the Junior Subordinated Debentures issued by the Company, (iii) making
Distributions to holders of the Trust Securities and (iv) engaging in only those
other activities necessary, advisable or incidental thereto. Under no
circumstances may the Trust undertake or engage in any business activities. The
Junior Subordinated Debentures will be the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the sole revenues of
the Trust. All of the Common Securities will be owned by the Company.
<PAGE>
THE EXCHANGE OFFER
The Exchange Offer.................. The Trust and the Company are hereby
offering to exchange $1,000 principal
amount of Exchange Capital Securities for
each $1,000 liquidation amount of Private
Capital Securities that are properly
tendered and accepted. Private Capital
Securities may be tendered for exchange in
whole of in part in a Liquidation Amount
of $100,000 (100 Capital Securities) or
any integral multiple of $1,000 (one
Capital Securities) in excess thereof. The
Trust and the Company will issue Exchange
Capital Securities on or promptly after
Expiration Date. As of the date hereof,
$75,000,000 aggregate principal
amount of Private Capital Securities are
outstanding. See "The Exchange Offer--
Purpose of the Exchange Offer."
Based on an interpretation by the staff of
the Commission set forth in no-action
letters issued to third parties, the Trust
and the Company believe that the Exchange
Capital Securities issued pursuant to the
Exchange Offer in exchange for Private
Capital Securities may be offered for
resale, resold and otherwise transferred
by a holder thereof (other than (i) an
"affiliate" of the Trust or the Company
within the meaning of Rule 405 under the
Securities Act, (ii) a broker-dealer who
acquired Private Capital Securities
directly from the Trust or the Company to
resell pursuant to Rule 144A or any other
available exemption under the Securities
Act or (iii) a broker-dealer who acquired
Private Capital Securities as a result of
market making or other trading
activities), without compliance with the
registration and prospectus delivery
requirements of the Securities Act;
provided that the holder is acquiring
Exchange Capital Securities in the
ordinary course of its business and is not
participating, and has no arrangement or
understanding with any person to
participate, in the distribution of the
Exchange Capital Securities. Holders of
Private Capital Securities wishing to
accept the Exchange Offer must represent
to the Trust and the Company, as required
by the Registration Rights Agreement, that
such conditions have been met. The Trust
and the Company believe that none of the
registered holders of the Private Capital
Securities is an affiliate (as such term
is defined in Rule 405 under the
Securities Act) of the Trust or the
Company.
Each broker-dealer that receives Exchange
Capital Securities for its own account in
exchange for Private Capital Securities
must acknowledge that it will deliver a
prospectus in connection with any resale
of such Exchange Capital Securities. The
Letter of Transmittal states that by so
acknowledging and by delivering a
prospectus, a broker-dealer will not be
deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it may
be amended or supplemented from time to
time, may be used by a broker- dealer in
connection with resales of Exchange
Capital Securities received in exchange
for Private Capital Securities, where such
Private Capital Securities were acquired
by such broker-dealer as a result of
market-making or other trading activities.
The Trust and the Company have agreed to
make this Prospectus (as it may be amended
or supplemented) available to any
broker-dealer, upon request, for use in
connection with any such resale, for a
period of one year after the Registration
Statement is declared effective by the
Commission or until such earlier date on
which all the Exchange Capital Securities
are freely tradeable. However, any
broker-dealer who acquired the Private
Capital Securities directly from the Trust
or the Company other than as a result of
market-making activities or ordinary
trading activities may not fulfill its
prospectus delivery requirements with this
Prospectus, but must comply with the
registration and prospectus delivery
requirements of the Securities Act. See
"The Exchange Offer--Resale of the
Exchange Capital Securities."
Registration Rights Agreement....... The Private Capital Securities were sold
by the Trust on January 27, 1997 to
Merrill Lynch & Co. Inc., Oppenheimer &
Co., Inc. and Smith Barney Inc. (the
"Initial Purchasers") pursuant to a
Purchase Agreement, dated January 22,
1997, by and between the Trust and the
Initial Purchasers (the "Purchase
Agreement") at a purchase price of $1,000
per Capital Security. Pursuant to the
Purchase Agreement, the Trust, the Company
and the Initial Purchasers entered into a
Registration Rights Agreement, dated as of
January 27, 1997 (the "Registration Rights
Agreement"), which grants the holders of
the Private Capital Securities certain
exchange and registration rights. The
Exchange Offer is intended to satisfy such
rights, which will terminate upon the
consummation of the Exchange Offer except
under certain limited circumstances. See
"The Exchange Offer--Termination of
Certain Rights."
Holders of Private Capital Securities who
do not tender their Private Capital
Securities in the Exchange Offer will
continue to hold such Private Capital
Securities and will be entitled to all the
rights and limitations applicable thereto
under the Declaration. All untendered, and
tendered but not unaccepted Private
Capital Securities will continue to be
subject to the restrictions on transfer
provided for in the Private Capital
Securities and the Declaration. To the
extent that Private Capital Securities are
tendered and accepted in the Exchange
Offer, the trading market, if any, for the
Private Capital Securities could be
adversely affected.
Expiration Date..................... The Exchange Offer will expire at 5:00
p.m., New York City time, on ____________
, 1997, unless the Exchange Offer is
extended by the Trust and the Company, in
their sole discretion, in which case the
term "Expiration Date" shall mean the
latest date and time to which the Exchange
Offer is extended. See "The Exchange
Offer--Expiration Date; Extensions;
Amendments."
Conditions to the Exchange
Offer............................... The Exchange Offer is subject to certain
customary conditions that may be waived by
the Company and the Trust. The Exchange
Offer is not conditioned upon any minimum
Liquidation Amount of Private Capital
Securities being tendered for exchange.
See "The Exchange Offer--Conditions."
Procedures for Tendering Private
Capital Securities.................. Each Holder of Private
Capital Securities wishing to
accept the Exchange Offer must complete,
sign and date the Letter of Transmittal,
or a facsimile thereof, in accordance with
the instructions contained herein and
therein, and mail or otherwise deliver
such Letter of Transmittal, or such
facsimile, together with such Private
Capital Securities and any other required
documentation to IBJ Schroder Bank & Trust
Company, as exchange agent (the "Exchange
Agent") at its address set forth herein.
By executing the Letter of Transmittal,
the holder will represent to and agree
with the Trust and the Company that, among
other things, (i) the Exchange Capital
Securities to be acquired by such holder
of Private Capital Securities in
connection with the Exchange Offer are
being acquired by such holder in the
ordinary course of its business, (ii) such
holder is not currently participating and
has no arrangement or understanding with
any person to participate in a
distribution of the Exchange Capital
Securities, (iii) if such holder is a
broker-dealer registered under the
Exchange Act or is participating in the
Exchange Offer for the purposes of
distributing the Exchange Capital
Securities, such holder will comply with
the registration and prospectus delivery
requirements of the Securities Act in
connection with a secondary resale
transaction of the Exchange Capital
Securities acquired by such person and
cannot rely on the position of the staff
of the Commission set forth in no-action
letters (see "The Exchange Offer--Resale
of Exchange Capital Securities"), (iv)
such holder understands that a secondary
resale transaction described in clause
(iii) above and any resales of Exchange
Capital Securities obtained by such holder
in exchange for Private Capital Securities
acquired by such holder directly from the
Trust or the Company should be covered by
an effective registration statement
containing the selling securityholder
information required by Item 507 or Item
508, as applicable, of Regulation S-K of
the Commission and (v) such holder is not
an "affiliate," as defined in Rule 405
under the Securities Act, of the Trust or
the Company. If the holder is a
broker-dealer that will receive Exchange
Capital Securities for its own account in
exchange for Private Capital Securities
that were acquired as a result of
market-making activities or other trading
activities, such holder will be required
to acknowledge in the Letter of
Transmittal that such holder will deliver
a prospectus in connection with any resale
of such Exchange Capital Securities;
however, by so acknowledging and by
delivering a prospectus, such holder will
not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. See "The Exchange
Offer--Procedures for Tendering."
Special Procedures for
Beneficial Owners................... Any beneficial owner whose Private Capital
Securities are registered in the name of a
broker, commercial bank, trust company or
other nominee and who wishes to tender
such Private Capital Securities in the
Exchange Offer should contact such
registered holder promptly and instruct
such registered holder to tender on such
beneficial owner's behalf. If such
beneficial owner wishes to tender on such
owner's own behalf, such owner must, prior
to completing and executing the Letter of
Transmittal and delivering such owner's
Private Capital Securities, either make
appropriate arrangements to register
ownership of the Private Capital
Securities in such owner's name or obtain
a properly completed bond power from the
registered holder. The transfer of
registered ownership may take considerable
time and may not be able to be completed
prior to the Expiration Date. See "The
Exchange Offer--Procedures for Tendering."
Guaranteed Delivery
Procedures.......................... Holders of Private Capital Securities who
wish to tender their Private Capital
Securities and whose Private Capital
Securities are not immediately available
or who cannot deliver their Private
Capital Securities, the Letter of
Transmittal or any other documentation
required by the Letter of Transmittal to
the Exchange Agent prior to the Expiration
Date must tender their Private Capital
Securities according to the guaranteed
delivery procedures set forth under "The
Exchange Offer--Guaranteed Delivery
Procedures."
Acceptance of the Private
Securities and Delivery of the
Exchange Capital Securities......... Subject to the satisfaction or waiver of
the conditions to the Exchange Offer, the
Trust and the Company will accept for
exchange any and all Private Capital
Securities that are properly tendered in
the Exchange Offer prior to the Expiration
Date. The Exchange Capital Securities
issued pursuant to the Exchange Offer will
be delivered on the earliest practicable
date following the Expiration Date. See
"The Exchange Offer--Terms of the Exchange
Offer."
Withdrawal Rights................... Tenders of Private Capital Securities may
be withdrawn at any time prior to the
Expiration Date. See "The Exchange
Offer--Withdrawal of Tenders."
Certain Federal Income Tax
Considerations...................... For a discussion of certain material
federal income tax considerations relating
to the exchange of the Exchange Capital
Securities for the Private Capital
Securities, see "Certain Federal Income
Tax Considerations."
Exchange Agent...................... IBJ Schroder Bank & Trust Company is
serving as the Exchange Agent in
connection with the Exchange Offer.
Use of Proceeds..................... Neither the Trust not the Company will
receive any cash proceeds from the
issuance of the Exchange Capital
Securities offered hereby. See "Use of
Proceeds."
<PAGE>
TERMS OF THE EXCHANGE CAPITAL SECURITIES
The Exchange Offer applies to $75,000,000 aggregate principal amount of the
Private Capital Securities. The form and terms of the Exchange Capital
Securities are substantially identical in all respects (including principal
amount, interest rate, maturity and ranking) to the form and terms of the
Private Capital Securities, except that (i) the Exchange Capital Securities will
have been registered under the Securities Act and, therefore, will not bear
legends restricting the transfer thereof (ii) the Exchange Capital Securities
will not contain the $100,000 minimum liquidation amount transfer restriction,
(iii) the Exchange Capital Securities will not provide for any increase in the
Distribution Rate thereon, (iv) the Exchange Junior Subordinated Debentures will
not contain the $100,000 minimum liquidation amount transfer restriction, (v)
the Exchange Junior Subordinated Debentures will not provide for any increase in
the Distribution Rate thereon and (vi) holders of the Exchange Capital
Securities will not be entitled to certain rights of holders of the Private
Capital Securities under the Registration Rights Agreement, which rights will
terminate upon consummation of the Exchange Offer. The Exchange Capital
Securities will evidence the same obligations as the Private Capital Securities
and will be issued pursuant to, and entitled to the benefits of, the Declaration
and the Indenture governing the Private Capital Securities. The Exchange Offer
is being made to satisfy the obligations of the Trust and the Company under the
Registration Rights Agreement relating to the Private Capital Securities. For
further information and for definitions of certain capitalized terms used below,
see "The Exchange Offer" and "Description of the Exchange Capital Securities."
Securities Offered................. 75,000 9 7/8% Exchange Capital Securities
(Liquidation Amount $1,000 per Capital
Security).
Distribution Dates.................. February 15 and August 15 of each year,
commencing August 15, 1997.
Extension Periods................... Distributions on Exchange Capital
Securities will be deferred for the
duration of any Extension Period elected
by the Company with respect to the payment
of interest on the Junior Subordinated
Debentures. No Extension Period will
exceed 10 consecutive semi-annual periods
or extend beyond the Stated Maturity
Date. See "Description of Exchange Junior
Subordinated Debentures-- Option to Extend
Interest Payment Date" and "Certain
Federal Income Tax Consequences--Interest
Income and Original Issue Discount."
Ranking............................. The Exchange Capital Securities will rank
pari passu, and payments thereon will be
made pro rata, with the Common Securities
except as described under "Description of
Exchange Capital Securities--Subordination
of Common Securities." The Junior
Subordinated Debentures will rank pari
passu with all other junior subordinated
debentures that may be issued by the
Company ("Other Debentures"), which will
be issued and sold (if at all) to other
trusts that may be established by the
Company (if any), in each case similar to
the Trust ("Other Trusts"), and will
constitute unsecured obligations of the
Company and will rank subordinate and
junior in right of payment to all Senior
Indebtedness to the extent and in the
manner set forth in the Indenture. See
"Description of Exchange Junior
Subordinated Debentures." The Exchange
Guarantee will rank pari passu with all
other guarantees (if any) that may be
issued by the Company with respect to
capital securities or preferred securities
(if any) issued by Other Trusts ("Other
Guarantees") and will constitute an
unsecured obligation of the Company and
will rank subordinate and junior in right
of payment to all Senior Indebtedness to
the extent and in the manner set forth in
the Exchange Guarantee. See "Description
of Exchange Guarantee." At December 31,
1996, the Company's Senior Indebtedness
totaled $602.7 million.
Redemption.......................... The Trust Securities will be subject to
mandatory redemption in a Like Amount,
(i) in whole but not in part, on the
Stated Maturity Date upon repayment of the
Junior Subordinated Debentures, (ii) in
whole but not in part, at any time prior
to February 15, 2007, contemporaneously
with the optional prepayment of the
Junior Subordinated Debentures by the
Company upon the occurrence and
continuation of a Special Event and
(iii) in whole or in part, on or after
February 15, 2007, contemporaneously with
the optional prepayment by the Company of
the Junior Subordinated Debentures, in
each case at the applicable Redemption
Price. See "Description of Capital
Securities--Redemption."
Ratings............................. The Capital Securities will be rated "BBB"
by Fitch Investors Service, L.P., "BBB-"
by Duff & Phelps Ratings Corporation,
"BB+" by Standard & Poor's Ratings
Services and "ba3" by Moody's Investors
Service, Inc.
Absence of Market for the
Exchange Capital Securities....... There is currently no market for the
Exchange Capital Securities. Although the
Initial Purchasers have informed the Trust
and the Company that they each currently
intend to make a market in the Exchange
Capital Securities, the Initial Purchasers
are not obligated to do so, and any such
market making may be discontinued at any
time without notice. Accordingly, there
can be no assurance as to the development
or liquidity of any market for the
Exchange Capital Securities. The Trust
and the Company have not yet determined
whether they will apply to list the
Capital Securities on the New York Stock
Exchange. See "Plan of Distribution."
<PAGE>
RISK FACTORS
Prospective investors should carefully review the information contained
elsewhere in this Prospectus and should particularly consider the following
matters in connection with the Exchange Offer and the Exchange Capital
Securities offered hereby.
RISK FACTORS RELATING TO THE EXCHANGE CAPITAL SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE EXCHANGE GUARANTEE AND THE
EXCHANGE JUNIOR SUBORDINATED DEBENTURES
The obligations of the Company under the Exchange Guarantee issued by
it for the benefit of holders of Exchange Capital Securities, as well as under
the Junior Subordinated Debentures, will be unsecured, will rank subordinate and
junior in right of payment to all present and future Senior Indebtedness of the
Company and will rank pari passu with obligations to or rights of the Company's
other general unsecured creditors, except that, in the case of a bankruptcy or
insolvency proceeding, the Company's obligations under the Guarantee will rank
subordinate and junior in right of payment to all liabilities (other than Other
Guarantees) of the Company. As of December 31, 1996, Senior Indebtedness of the
Company aggregated $602.7 million. The Company's operations are largely
conducted by its subsidiaries. The right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Capital
Securities to benefit indirectly from such distribution) is subject to the prior
claims of creditors of that subsidiary, except to the extent that the Company
may itself be recognized as a creditor of that subsidiary. At December 31, 1996,
such subsidiaries had total indebtedness to third parties of $431.6 million
(over 95% of which was included in Senior Indebtedness of the Company at that
date). Accordingly, the Junior Subordinated Debentures, as well as the Company's
obligations under the Guarantee, will be effectively subordinated to all
existing and future liabilities of the Company's subsidiaries. There are no
terms in the Capital Securities, the Junior Subordinated Debentures or the
Guarantee that limit the Company's ability to incur additional indebtedness,
including indebtedness that ranks senior to or pari passu with the Junior
Subordinated Debentures and the Guarantee, or the ability of its subsidiaries to
incur additional indebtedness. See "Description of Exchange
Securities--Description of the Guarantee--Status of the Guarantee" and
"--Description of Exchange Junior Subordinated Debentures--Subordination."
The Trust's ability to make Distributions and other payments on the
Capital Securities is solely dependent upon the Company making interest and
other payments on the Junior Subordinated Debentures as and when required.
Accordingly, if the Company were not to make distributions or other payments on
the Junior Subordinated Debentures for any reason, including as a result of a
default or as a result of the Company's election to defer the payment of
interest on the Junior Subordinated Debentures by extending the interest period
on the Junior Subordinated Debentures, the Trust would lack available funds for
the payment of Distributions or amounts payable on redemption of the Capital
Securities or otherwise, and therefore would not make payments on the Trust
Securities.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSIDERATIONS
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to defer
payments of interest on the Junior Subordinated Debentures at any time or from
time to time for a period not exceeding 10 consecutive semi-annual periods with
respect to each Extension Period, provided that no Extension Period may extend
beyond the Stated Maturity Date. Upon any such deferral, semi-annual
Distributions on the Capital Securities by the Trust will be deferred (and the
amount of Distributions to which holders of the Capital Securities are entitled
will accumulate additional Distributions thereon at the rate of 9.875% per
annum, compounded semi-annually), from the relevant payment date for such
Distributions during any such Extension Period.
The Company may extend any existing Extension Period, provided that
such extension does not cause such Extension Period to exceed 10 consecutive
semi-annual periods or to extend beyond the Stated Maturity Date. Upon the
termination of any Extension Period and the payment of all interest then accrued
and unpaid on the Junior Subordinated Debentures (together with interest thereon
at the annual rate of 9.875%, compounded semi-annually, to the extent permitted
by applicable law), the Company may elect to begin a new Extension Period,
subject to the above requirements. There is no limitation on the number of times
that the Company may elect to begin an Extension Period. See "Description of
Capital Securities--Distributions" and "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date."
Should the Company exercise its right to defer payments of interest on
the Junior Subordinated Debentures, each holder of Trust Securities will be
required to accrue income (as original issue discount ("OID")) in respect of the
deferred stated interest allocable to its Trust Securities for United States
federal income tax purposes, which will be allocated but not distributed to
holders of Trust Securities. As a result, during an Extension Period, each
holder of Capital Securities will recognize income for United States federal
income tax purposes in advance of the receipt of cash and will not receive the
cash related to such income from the Trust if the holder disposes of the Capital
Securities prior to the record date for the payment of Distributions thereafter.
See "Certain Federal Income Tax Consequences--Interest Income and Original Issue
Discount" and "--Disposition of Capital Securities."
Should the Company elect to exercise its right to defer payments of
interest on the Junior Subordinated Debentures, the market price of the Capital
Securities is likely to be affected. A holder that disposes of its Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Capital
Securities. In addition, the mere existence of the Company's right to defer
payments of interest on the Junior Subordinated Debentures may cause the market
price of the Capital Securities to be more volatile than the market prices of
other securities that are not subject to such deferrals.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence and continuation of a Tax Event or an Investment
Company Act Event (each as defined herein and each, a "Special Event"), the
Company will have the right to prepay the Junior Subordinated Debentures in
whole (but not in part) prior to February 15, 2007 at the Special Event
Prepayment Price within 90 days following the occurrence of such Special Event
and therefore cause a mandatory redemption of the Capital Securities at the
Special Event Redemption Price. The Company also will have the right at any time
to terminate the Trust and, after satisfaction of claims of creditors as
provided by applicable law, to cause the Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities, subject to certain
conditions. See "Description of Exchange Securities--Description of Exchange
Capital Securities--Redemption" and "--Liquidation of the Trust and Distribution
of Exchange Junior Subordinated Debentures."
POSSIBLE TAX LAW CHANGES AFFECTING THE CAPITAL SECURITIES
President Clinton's fiscal 1998 budget proposal contained provisions which
if enacted would treat as equity for United States federal income tax purposes
instruments that have a maximum term of more than 15 years and that are not
shown as indebtedness on the balance sheet of the issuer. These provisions would
apply to instruments issued after the date of first committee action. Since the
exchange of Private Securities for the Exchange Securities should not be a
taxable event, it is not anticipated that the Junior Subordinated Debentures
would be treated as reissued and that such provisions, as currently proposed,
would apply to the Junior Subordinated Debentures. However, there can be no
assurance that any legislation implementing these provisions or that future
proposals or legislation will not adversely affect the ability of the Company to
deduct the interest payable on the Junior Subordinated Debentures. Such a change
in the tax law could give rise to a Tax Event (as defined under "Description of
Exchange Junior Subordinated Debentures--Special Event Prepayment"), which would
permit the Company to cause a redemption of the Trust Securities at the Special
Event Redemption Price by electing to prepay the Junior Subordinated Debentures
at the Special Event Prepayment Price. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Redemption,"
"--Description of Exchange Junior Subordinated Debentures--Special Event
Prepayment" and "Certain Federal Income Tax Consequences--Proposed Tax
Legislation."
POSSIBLE ADVERSE EFFECT ON MARKET PRICES
There can be no assurance as to the market prices for Capital
Securities or Junior Subordinated Debentures distributed to the holders of
Capital Securities if a termination of the Trust were to occur. Accordingly, the
Capital Securities or the Junior Subordinated Debentures may trade at a discount
from the price that an investor paid to purchase the Capital Securities offered
hereby. Because holders of Capital Securities may receive Junior Subordinated
Debentures in liquidation of the Trust and because Distributions are otherwise
limited to payments on the Junior Subordinated Debentures, prospective
purchasers of Capital Securities are also making an investment decision with
regard to the Junior Subordinated Debentures and should carefully review all the
information regarding the Junior Subordinated Debentures contained herein. See
"Description of Exchange Securities--Description of Exchange Junior Subordinated
Debentures."
RIGHTS UNDER THE GUARANTEE
IBJ Schroder Bank & Trust Company will act as Guarantee Trustee and
will hold the Guarantee for the benefit of the holders of the Capital
Securities. IBJ Schroder Bank & Trust Company will also act as Property Trustee
and as Debenture Trustee under the Indenture. Delaware Trust Capital Management,
Inc. will act as Delaware Trustee under the Declaration. The Guarantee will
guarantee to the holders of the Capital Securities the following payments, to
the extent not paid by the Trust: (i) any accumulated and unpaid Distributions
required to be paid on the Capital Securities, to the extent that the Trust has
funds on hand legally available therefor, (ii) the applicable Redemption Price
with respect to any Capital Securities called for redemption, to the extent that
the Trust has funds on hand legally available therefor, and (iii) upon a
voluntary or involuntary termination and liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Capital
Securities), the lesser of (a) the aggregate of the Liquidation Amount and all
accumulated and unpaid Distributions to the date of payment, to the extent that
the Trust has funds on hand legally available therefor on such date and (b) the
amount of assets of the Trust remaining available for distribution to holders of
the Capital Securities upon a termination and liquidation of the Trust on such
date. The holders of a majority in Liquidation Amount of the Capital Securities
will have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Guarantee Trustee in respect of the
Guarantee or to direct the exercise of any trust power conferred upon the
Guarantee Trustee. Any holder of the Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity. If the Company defaults on its
obligation to pay amounts payable under the Junior Subordinated Debentures, the
Trust will not have sufficient funds for the payment of Distributions or amounts
payable on redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities will not be able to rely upon the
Guarantee for payment of such amounts. Instead, in the event a Debenture Event
of Default shall have occurred and be continuing and such event is attributable
to the failure of the Company to pay principal of or premium, if any, or
interest on the Junior Subordinated Debentures on the payment date on which such
payment is due and payable, then a holder of Capital Securities may institute a
legal proceeding directly against the Company for enforcement of payment to such
holder of the principal of or premium, if any, or interest on such Junior
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Capital Securities of such holder (a "Direct Action").
Notwithstanding any payments made to a holder of Capital Securities by the
Company in connection with a Direct Action, the Company shall remain obligated
to pay the principal of and premium, if any, and interest on the Junior
Subordinated Debentures, and the Company shall be subrogated to the rights of
the holder of such Capital Securities with respect to payments on the Capital
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. Except as described herein, holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the Junior Subordinated Debentures or to assert directly any other rights in
respect of the Junior Subordinated Debentures. See "Description of Exchange
Securities--Description of Exchange Junior Subordinated Debentures-- Enforcement
of Certain Rights by Holders of Exchange Capital Securities" and "--Debenture
Events of Default" and "-- Description of Exchange Guarantee." The Declaration
will provide that each holder of Capital Securities by acceptance thereof agrees
to the provisions of the Indenture.
LIMITED VOTING RIGHTS
Holders of Capital Securities generally will have limited voting
rights relating only to the modification of the terms of the Capital Securities,
the termination or liquidation of the Trust, and the exercise of the Trust's
rights as holder of the Junior Subordinated Debentures. Holders of Capital
Securities will not be entitled to vote to appoint, remove or replace, or to
increase or decrease the number of, the Issuer Trustees, which voting rights are
vested exclusively in the holder of the Common Securities, except as described
under "Description of Exchange Securities--Description of Exchange Capital
Securities--Removal of Issuer Trustees." See "Description of Exchange
Securities--Description of Exchange Capital Securities--Voting Rights; Amendment
of the Declaration."
CONSEQUENCES OF A FAILURE TO EXCHANGE PRIVATE CAPITAL SECURITIES
The Private Capital Securities have not been registered under the
Securities Act or any state securities laws and therefore may not be offered,
sold or otherwise transferred except in compliance with the registration
requirements of the Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not subject thereto, and
in each case in compliance with certain other conditions and restrictions.
Private Capital Securities which remain outstanding after consummation of the
Exchange Offer will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer, holders of
Private Capital Securities which remain outstanding will not be entitled to any
rights to have such Private Capital Securities registered under the Securities
Act or to any similar rights under the Registration Rights Agreement (subject to
certain limited exceptions). The Company and the Trust do not intend to register
under the Securities Act any Private Capital Securities which remain outstanding
after consummation of the Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Private Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Private
Capital Securities could be adversely affected.
The Exchange Capital Securities and any Private Capital Securities
which remain outstanding after consummation of the Exchange Offer will vote
together as a single class for purposes of determining whether holders of the
requisite percentage is outstanding Liquidation Amount thereof have taken
certain actions or exercised certain rights under the Declaration. See
"Description of Exchange Securities--Description of Exchange Capital
Securities-- Voting Rights; Amendment of the Declaration.
The Private Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by June
26, 1997 and declared effective by July 28, 1997, the Distribution rate borne by
the Private Capital Securities commencing on July 28, 1997 will increase by
0.25% per annum until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Private Capital Securities will not be entitled
to any increase in the Distribution rate thereon or any further registration
rights under the Registration Rights Agreement, except under limited
circumstances. See "Description of Private Capital Securities."
ABSENCE OF PUBLIC MARKET
The Private Capital Securities were issued to, and the Company
believes such securities are currently owned by, a relatively small number of
beneficial owners. The Private Capital Securities have not been registered under
the Securities Act and will be subject to restrictions on transferability if
they are not exchanged for the Exchange Capital Securities. Although the
Exchange Capital Securities may be resold or otherwise transferred by the
holders (who are not affiliates of the Company or the Trust) without compliance
with the registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading market. Private
Capital Securities may be transferred by the holders thereof only in blocks
having a Liquidation Amount of not less than $100,000 (100 Private Capital
Securities). Exchange Capital Securities may be transferred by the holders
thereof in blocks having a Liquidation Amount of $1,000 (one Exchange Capital
Security) or integral multiples thereof. The Company and the Trust have been
advised by the Initial Purchasers that the Initial Purchasers presently intend
to make a market in the Exchange Capital Securities. However, the Initial
Purchasers are not obligated to do so and any market-making activity with
respect to the Exchange Capital Securities may be discontinued at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Exchange Act and may be limited
during the Exchange Offer. Accordingly, no assurance can be given that an active
public or other market will develop for the Exchange Capital Securities or the
Private Capital Securities. If an active public market does not develop, the
market price and liquidity of the Exchange Capital Securities may be adversely
affected.
If a public trading market develops for the Exchange Capital
Securities, future trading prices will depend on many factors, including, among
other things, prevailing interest rates, the Company's results and the market
for similar securities. Depending on prevailing interest rates, the market for
similar securities and other factors, including the financial condition of the
Company, the Exchange Capital Securities may trade at a discount.
Notwithstanding the registration of the Exchange Capital Securities in
the Exchange Offer, holders who are "affiliates" (as defined under Rule 405 of
the Securities Act) of the Company or the Trust may publicly offer for sale or
resell the Exchange Capital Securities only in compliance with the provisions of
Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital Securities for its
own account in exchange for Private Capital Securities, where such Private
Capital Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities, must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Capital
Securities. See "Plan of Distribution."
EXCHANGE OFFER PROCEDURE
Issuance of the Exchange Capital Securities in exchange for Private
Capital Securities pursuant to the Exchange Offer will be made only after a
timely receipt by the Trust of such Private Capital Securities, a properly
completed and duly executed Letter of Transmittal and all other required
documents. Therefore, holders of the Private Capital Securities desiring to
tender such Private Capital Securities in exchange for Exchange Capital
Securities should allow sufficient time to ensure timely delivery. Neither the
Company nor the Trust is under any duty to give notification of defects or
irregularities with respect to the tenders of Private Capital Securities for
exchange.
RISK FACTORS RELATING TO THE COMPANY
CYCLICALITY OF WORLD TRADE
The demand for the Company's containers and chassis primarily depends
upon levels of world trade of finished goods and component parts. Recessionary
business cycles, as well as political conditions, the status of trade agreements
and international conflicts, can have an impact on the operating results of the
Company. The demand for leased chassis also depends upon domestic economic
conditions and import-export volumes. In addition, operating costs such as
storage and repair and maintenance costs increase as utilization decreases. When
the volume of world trade decreases, the Company's business of leasing
containers and chassis may be adversely affected as the demand for such
equipment is reduced. Suppliers of leased containers and chassis, such as the
Company, are dependent upon decisions by shipping lines and other transportation
companies to lease rather than buy their equipment. Most of these factors are
outside the control of the Company. A substantial decline in world trade may
also adversely affect the Company's customers, leading to possible defaults and
the return of equipment prior to the end of a lease term. The Company expects
that the maritime container industry would be adversely affected during an
economic downturn.
COMPETITION
The transportation equipment leasing industry is highly competitive.
The Company competes with numerous domestic and foreign leasing companies, some
of which are much larger than the Company, or are divisions of much larger
companies, and have larger equipment fleets and greater financial resources than
the Company. In addition, if the available supply of intermodal transportation
equipment were to increase significantly as a result of, among other factors,
new companies entering the business of leasing and selling such equipment, the
Company's competitive position could be adversely affected.
ELIGIBILITY FOR TAX BENEFITS UNDER U.S.-BARBADOS TAX TREATY
The Company currently receives certain tax benefits under an income
tax convention (the "Tax Convention") between the United States and Barbados,
the jurisdiction in which the Company's subsidiary Interpool Limited is
incorporated. There can be no assurance that at some future date the Tax
Convention will not be modified in a manner adverse to the Company or repealed
in its entirety, nor can there be any assurance that the Company will continue
to be eligible for such tax benefits.
RISK OF MANUFACTURING IN CHINA
China is currently the largest container producing nation in the world
and the Company currently purchases a substantial majority of its containers
from manufacturers in China. In the event that it were to become more expensive
for the Company to procure containers in China or to transport these containers
at a low cost from China to the locations where needed by customers, either
because of increased tariffs imposed by the United States or other governments
or for any other reason, the Company would have to seek alternative sources of
supply. Although the Company believes it has strong relationships with many
manufacturers throughout the world, there can be no assurance that upon the
occurrence of such an event the Company would be able to make alternative
arrangements quickly to meet its equipment needs, nor can there be any assurance
that such alternative arrangements would not increase the costs to the Company.
CONTROL OF THE COMPANY
Currently, approximately 67.6% of the Company's common stock is owned,
directly or indirectly, in the aggregate by Warren L. Serenbetz, Martin Tuchman,
Raoul J. Witteveen and Arthur L. Burns, each of whom is a director of and/or
either an executive officer of or a consultant to the Company, and certain
members of their immediate families. Such individuals, either directly or
indirectly, have the ability to elect all of the members of the Board of
Directors of the Company and to control the outcome of all matters submitted to
a vote of the Company's stockholders. Messrs. Serenbetz, Tuchman, Witteveen and
Burns, as well as certain family members and affiliated entities, are parties to
a Stockholders Agreement that imposes certain restrictions on their ability to
dispose of their shares of the Company's common stock and requires them to vote
for the re-election of Messrs. Serenbetz, Tuchman, Witteveen and Burns as
directors of the Company. In addition, the Company's Restated Certificate of
Incorporation and Restated Bylaws contain provisions that may discourage
acquisition bids for the Company.
DEPENDENCE UPON MANAGEMENT
The Company's growth and continued profitability are dependent upon,
among other things, the abilities, experience and continued service of certain
members of its senior management, particularly Martin Tuchman, its Chairman and
Chief Executive Officer, and Raoul J. Witteveen, its President, Chief Operating
Officer and Chief Financial Officer. Each of Messrs. Tuchman and Witteveen
holds, either directly or indirectly, a substantial equity interest in the
Company and also is a director of the Company. There can be no assurance,
however, that the Company will be able to retain the services of either of
Messrs. Tuchman or Witteveen. The loss of either such individual could adversely
affect the Company's business and prospects.
VOLATILITY OF RESIDUAL VALUE OF EQUIPMENT
Although the Company's operating results primarily depend upon
equipment leasing, the Company's profitability is also affected by the residual
values (either for sale or continued operation) of its containers and chassis
upon expiration of its leases. These values, which can vary substantially,
depend upon, among other factors, the maintenance standards observed by lessees,
the need for refurbishment, the ability of the Company to remarket equipment,
the cost of comparable new equipment, the availability of used equipment, rates
of inflation, market conditions, the costs of materials and labor and the
obsolescence of the equipment. Most of these factors are outside the control of
the Company.
<PAGE>
THE COMPANY
Interpool is one of the world's leading lessors of intermodal dry
freight standard containers and is the second largest lessor of intermodal
container chassis in the United States. At December 31, 1996, the Company's
container fleet totaled approximately 301,000 twenty-foot equivalent units
("TEUs"), the industry standard measure of dimension for containers used in
international trade, and its chassis fleet totaled approximately 57,000 chassis.
The Company leases its containers and chassis to over 200 customers, including
nearly all of the world's 20 largest international container shipping lines.
The efficiencies and cost savings inherent in intermodal
transportation of containerized cargo have facilitated the dramatic growth of
international trade. Intermodal transportation permits movement of cargo in a
standard steel container by means of a combination of ship, rail and truck
without unpacking and repacking of the contents during transit. The world's dry
freight standard container fleet has grown from fewer than .4 million TEUs in
1970 to approximately 8.7 million TEUs by mid-1996. During the twelve month
period ending in mid-1996 approximately 1.3 million TEUs were produced, of which
.4 million have been estimated as replacements of older containers. Concurrently
with this growth of the world's container fleet, the domestic chassis fleet has
grown to accommodate the increased container traffic. Leasing companies have
played a significant role in the growth of intermodal transportation, supplying
approximately half of the world's container and chassis requirements.
The Company focuses on leasing dry freight standard containers and
container chassis on a long-term basis in order to achieve high utilization of
its equipment and stable and predictable earnings. From 1991 through 1994, the
combined utilization rate of the Company's container and chassis fleets averaged
at least 90%. At the end of 1995 and 1996, the combined utilization rate of the
Company's container and chassis fleets was approximately 97%. Substantially all
of the Company's newly acquired equipment is leased on a long-term basis, and
approximately 91% of its total equipment fleet is currently leased on this
basis. The remainder of the Company's equipment is leased under short-term
agreements to satisfy customers' peak or seasonal requirements, generally at
higher rates than under long-term leases. The Company concentrates on standard
dry freight standard containers and container chassis because such equipment may
be more readily remarketed upon expiration of a lease than specialized
equipment. In financing its equipment acquisitions, the Company generally seeks
to meet debt service requirements from the leasing revenue generated by its
equipment.
The Company conducts its container and chassis leasing business
through two subsidiaries, Interpool Limited and Trac Lease. Certain other United
States equipment leasing activities are conducted through Interpool itself.
The Company and its predecessors have been involved in the leasing of
containers and chassis since 1968. The Company leases containers throughout the
world, with particular emphasis on the Pacific Rim. The Company leases chassis
to customers for use in the United States. The Company maintains contact with
its customers through a worldwide network of offices, agents and sales
representatives. The Company believes one of the key factors in its ability to
compete effectively has been the long-standing relationships management has
established with most of the world's large shipping lines. In addition,
Interpool relies on its strong credit rating and low financing costs to maintain
its competitive position.
From time to time the Company considers possible acquisitions of
complementary businesses and asset portfolios.
The Company is a Delaware corporation formed in February 1988 with its
principal executive offices located at 211 College Road East, Princeton, New
Jersey 08540. Its telephone number is (609) 452-8900.
<PAGE>
USE OF PROCEEDS
Neither the Corporation nor the Trust will receive any cash proceeds
from the issuance of the Exchange Capital Securities offered hereby. In
consideration for issuing the Exchange Capital Securities in exchange for
Private Capital Securities as described in this Prospectus, the Trust will
receive Private Capital Securities in like Liquidation Amount. The Private
Capital Securities surrendered in exchange for the Exchange Capital Securities
will be retired and canceled.
The proceeds to the Trust (without giving effect to expenses of the
offering payable by the Company) from the offering of the Private Capital
Securities was $75,000,000. All of the proceeds from the sale of Private Capital
Securities was invested by the Trust in the Private Junior Subordinated
Debentures. The Company used $52.9 million of the net proceeds from the sale of
the Private Junior Subordinated Debentures to redeem 509,964 shares of 5 3/4%
Preferred Stock having an aggregate Liquidation preference of $51.0 million. The
remaining net proceeds of $20.4 million were invested in interest bearing
accounts and were used to retire indebtedness.
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth the ratios of earnings to fixed charges
and earnings to combined fixed charges and preferred stock dividends for the
Company for the periods indicated.
<TABLE>
<CAPTION>
Three Months
Years Ended December 31, Ended March 31
---------------------------------------------------------------------------------------------------------
1992 1992 1993 1994 1995 1996 1996 1997 1997
(Actual) (Pro (Actual) (Actual) (Actual) (Actual) (Pro (Actual) (Pro
Forma)(1) Forma)(2) Forma)(2)
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings
to fixed charges(3) 1.8x 1.8x 2.4x 2.2x 1.9x 1.9x 1.7x 1.8x 1.7x
Ratio of earnings
to combined fixed
charges and preferred
stock dividends (4) 1.8x 1.8x 2.4x 2.2x 1.8x 1.8x 1.7x 1.7x 1.7x
(1) The 1992 pro forma ratios give effect to (a) the
recapitalization of Trac Lease (effected in July 1992), and
(b) the acquisition of Trac Lease and the minority interest in
Interpool Limited (effected in 1993), as if these transactions had been
consummated as of January 1, 1992.
(2) The pro forma ratios for the three months ended March 31,
1997 give effect to the completion of the Private Offering
and give effect to the use by the Company of $52.9 million of the net
proceeds of the issuance of the Junior Subordinated
Debentures to retire 509,964 shares of 5 3/4% Preferred
Stock, as if the offering and retirement had occurred on
January 1, 1997; the remaining net proceeds of $20.4 million are
treated as if invested in interest bearing accounts
earning 5% per annum. The pro forma ratios for the year
ended December 31, 1996 give effect to the completion of
the Private Offering and give effect to the use by the Company of
$52.9 million of the net proceeds of the issuance of the Junior
Subordinated Debentures to retire 509,964 shares of 53/4%
Preferred Stock, as if the offering and retirement had
occurred on January 1, 1996; the remaining net proceeds of
$20.4 million are treated as if invested in interest bearing
accounts earning 5% per annum.
(3) For the purpose of calculating the ratio of earnings to
fixed charges, (i) earnings consist of income before
provision for income taxes, extraordinary items and fixed
charges and (ii) fixed charges consist of interest expense
and 75% of rental payments under operating leases (an
amount estimated by management to be the interest
component of such rentals).
(4) For the purpose of calculating the ratio of earnings to
combined fixed charges and preferred stock dividends,
(i) earnings consist of income before provision for income
taxes, extraordinary items and fixed charges and
(ii) fixed charges consist of interest expense and 75% of rental
payments under operating leases (an amount estimated by
management to be the interest component of such rentals).
No preferred stock dividends were paid prior to 1995.
</TABLE>
<PAGE>
CAPITALIZATION
The following table sets forth the unaudited consolidated capitalization of
the Company at March 31, 1997, which reflects the consummation of the offering
of the Private Capital Securities and the application of $52.9 million of the
net proceeds to the Company to redeem 509,964 shares of the Company's 5 3/4%
Preferred Stock. The remaining net proceeds of $20.4 million were invested in
interest bearing accounts and were used to retire certain indebtedness. See "Use
of Proceeds." The table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included in the documents
incorporated by reference herein. See "Incorporation of Certain Documents by
Reference."
AT MARCH 31, 1997
ACTUAL
(Dollars in thousands)
Short-term debt (including current portion of
long-term debt and capital lease obligations) $ 73,084
Long-term debt:
Senior debt and capital lease obligations (less
current portion) 524,688
Total debt and capital lease obligations $597,772
Company-obligated mandatory redeemable preferred securities in grantor trusts
(75,000 shares 9 7/8% Capital Securities outstanding, as adjusted,
liquidation preference $75,000)(1) 75,000
Stockholders' equity:
Preferred stock, par value $0.001 per share,
1,000,000 shares authorized; none issued
--
Common stock, par value $0.001 per share, 100,000,000
shares authorized;
27,551,728 shares issued and outstanding 28
Additional paid-in capital 124,046
Retained earnings 109,860
Net unrealized gain on marketable securities 465
--------
Total stockholders' equity 234,399
Total capitalization $907,171
==========
(1) As described herein, the sole asset of the Trust is the Junior
Subordinated Debentures issued by the Company.
<PAGE>
SELECTED FINANCIAL DATA
The following table sets forth selected historical and pro forma
consolidated financial data for the Company, for the periods and at the dates
indicated. The historical financial data for each of the five years in the
period ended December 31, 1996, and at December 31, 1992, 1993, 1994, 1995 and
1996, have been derived from and are qualified by reference to the historical
consolidated financial statements that have been audited and reported upon by
Arthur Andersen LLP, independent public accountants. The historical financial
data for the three months ended March 31, 1996 and 1997 have been derived from
the unaudited financial statements of the Company. The historical financial
information for the three months ended March 31, 1996 and 1997 reflects, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the results for the interim period.
This information should be read in conjunction with the historical consolidated
financial statements of the Company and the notes thereto. The historical
financial information for the three months ended March 31, 1997 is not
necessarily indicative of results for the full year ending December 31, 1997.
<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
1992 1992 1993 1994 1995(2) 1996(3) 1996 1997
---- ---- ---- ---- ------- ------- ---- ----
PRO
ACTUAL FORMA(1)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT
DATA:
Revenues $41,117 $74,538 $79,526 $92,272 $127,925 $147,148 $35,179 $38,176
Earnings before
interest and taxes 0,406 31,569 35,116 46,170 70,752 81,481 17,179 21,631
Income before
extraordinary items(4) $ 10,115 $13,946 $20,004 $24,102 $ 29,545 $ 34,196 $ 6,056 $ 9,094
Income per share
before extra-
ordinary items and
premium paid on
redemption of
preferred stock in
1997(4)(9)(10):
Primary $0.57 $0.77 $0.86 $0.93 $1.08 $1.21 $0.28 $0.30
Fully diluted N/A N/A N/A $0.87 $1.01 $1.15 $0.27 N/A
Weighted average shares outstanding:
Primary 17,777 18,191 23,180 25,953 26,193 26,726 26,342 27,491
Fully diluted N/A N/A N/A 30,326 30,834 31,820 30,884 N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended Three Months Ended
December 31, 1996 March 31, 1997
----------------- --------------
(In thousands, except per share amounts)
<S> <C> <C>
Pro Forma Data:(5)
Income before extraprdomary items $30,396 $ 8,846
Income per share before extraordinary
items and premium paid on $ 1.16 $ 0.31
redemption of preferred stock in 1997(6)(7)
Weighted average shares outstanding 28,322 28,714
(6)(7)
At December 31, At March 31,
1992 1992 1993 1994 1995 1996 1997
Actual Pro
Forma(1)
(In thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET
DATA:
Cash, short-term invest-
ments and marketable securities $ 33,585 $ 29,906 $124,574 $107,398 $ 70,661 $ 70,055 $ 63,724
Total assets 203,509 277,554 435,984 664,792 851,600 939,418 942,974
Debt and capital lease 149,846 202,737 278,397 482,323 571,102 602,704 597,772
obligations(8)
Stockholders' equity 34,555 46,850 133,454 156,147 246,690 280,546 234,399
- -----------------
(1) The 1992 pro forma financial data give effect to (a) the
recapitalization of Trac Lease (effected in July 1992), and (b) the
acquisition of Trac Lease and the minority interest in Interpool
Limited (effected in 1993), as if these transactions had been
consummated as of January 1, 1992.
(2) The 1995 income statement data exclude the extraordinary gain of $2,422
net of taxes ($0.09 per share on a primary basis or $0.08 per share on
a fully diluted basis) resulting from the exchange of $67,436 of 5 1/4%
Convertible Exchangeable Subordinated Securities due 2018 into shares
of new 5 3/4% Preferred Stock.
(3) The 1996 income statement data include a non-cash and
non-recurring charge of $2,392 representing cumulative
unpaid dividends of the Company's subsidiary Trac Lease
which resulted from the acquisition of the outstanding
preferred stock of Trac Lease through the issuance of
shares of the Company's 5 3/4% Preferred Stock. Such
charge had no impact on income per share because the effect
of the unpaid dividends was included in the computation of
income per share in prior periods.
(4) In connection with its initial public offering in May 1993,
the Company ceased to be a Subchapter "S" corporation for
federal income tax purposes and thereafter became subject
to federal income taxes. The Company's financial
statements for the years ended December 31, 1991 through
1993 include a pro forma provision for taxes as if the
Company had been subject to federal income taxes for such
periods.
(5) The pro forma information for the three months ended March
31, 1997 gives effect to the completion of the Private
Offering and gives effect to the use by the Company of $52,871 of
the net proceeds of the issuance of the Junior
Subordinated Debentures to retire 509,964 shares of 53/4%
Preferred Stock, as if the offering and such retirement
had occurred on January 1, 1997; the remaining net proceeds
of $20,429 are treated as if invested in interest bearing
accounts earning 5% per annum. The pro forma information
for the year ended December 31, 1996 gives effect to the
completion of the Private Offering and gives effect to the use by
the Company of $52,871 of the net proceeds of the issuance
of the Junior Subordinated Debentures to retire 509,964
shares of 53/4% Preferred Stock, as if the offering and
such retirement had occurred on January 1, 1996; the
remaining net proceeds of $20,429 are treated as if
invested in interest bearing accounts earning 5% per annum.
(6) Pro forma income per share before extraordinary items and
premium paid on redemption of preferred stock does not
reflect a one-time charge of approximately $0.24 per share
which resulted from the excess of the redemption price of
509,964 shares of 53/4% Preferred Stock over the carrying
amount. This charge has been reflected as a reduction in
retained earnings.
(7) Pro forma income per share before extraordinary items and premium paid
on preferred stock has been determined using the weighted average
shares outstanding on a primary basis. The impact of full dilution on
income per share would not be material.
(8) Debt at December 31, 1993 and 1994 included $60,000 and $67,600,
respectively, of the Company's 5 1/4% Convertible Exchangeable
Subordinated Securities due 2018.
(9) Income per share before extraordinary items and premium paid on
redemption of preferred stock for the three months ended March 31, 1997
excludes an extraordinary (loss) of ($0.01) per share primary and
premium paid on redemption of preferred stock of ($0.24) per share
primary.
(10) Restated to give effect to the three-for-two stock split effective
March 27, 1997.
</TABLE>
<PAGE>
INTERPOOL CAPITAL TRUST
The Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of November 25, 1996, executed
by the Company, as Sponsor, the Delaware Trustee and the Regular Trustees named
therein (the "Initial Declaration"), and (ii) the filing of a certificate of
trust with the Secretary of State of the State of Delaware on November 25, 1996.
The Initial Declaration was replaced by an amended and restated declaration of
trust executed on January 27, 1997 by the Company, as Sponsor, and the Issuer
Trustees (as defined herein) (the "Declaration"). The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust Securities, which
represent beneficial interests in the assets of the Trust, (ii) using the
proceeds of the sale of the Trust Securities to acquire the Junior Subordinated
Debentures, (iii) making Distributions to holders of the Trust Securities and
(iv) engaging in only those other activities necessary, advisable or incidental
thereto. Under no circumstances may the Trust undertake or engage in any
business activities. The Junior Subordinated Debentures will be the sole assets
of the Trust and payments under the Junior Subordinated Debentures will be the
sole revenues of the Trust. All of the Common Securities will be owned directly
or indirectly by the Company. The Common Securities will rank pari passu, and
payments will be made thereon pro rata, with the Capital Securities, except that
upon the occurrence and during the continuance of an Event of Default under the
Declaration, the rights of the Company as holder of the Common Securities to
payments in respect of Distributions and payments upon liquidation, redemption
or otherwise will be subordinated and rank junior to the rights of the holders
of the Capital Securities. See "Description of Capital Securities--Subordination
of Common Securities." The Company acquired Common Securities in a Liquidation
Amount equal to 3% of the total capital of the Trust. The Trust has a term of 31
years but may terminate earlier as provided in the Declaration. The Trust's
business and affairs will be conducted by its trustees, each appointed by the
Company as holder of the Common Securities. The trustees of the Trust will be
IBJ Schroder Bank & Trust Company, as the Property Trustee, Delaware Trust
Capital Management, Inc., as the Delaware Trustee, and three Regular Trustees
who are employees or officers of the Company. IBJ Schroder Bank & Trust Company,
as Property Trustee, will act as sole indenture trustee under the Declaration.
IBJ Schroder Bank & Trust Company will also act as Debenture Trustee under the
Indenture and Guarantee Trustee under the Guarantee. See "Description of
Guarantee" and "Description of Junior Subordinated Debentures." The holder of
the Common Securities of the Trust or, if an Event of Default under the
Declaration has occurred and is continuing, the holders of a majority in
Liquidation Amount of the Capital Securities, will be entitled to appoint,
remove or replace the Property Trustee and/or the Delaware Trustee. In no event
will the holders of the Capital Securities have the right to vote to appoint,
remove or replace the Regular Trustees; such voting rights will be vested
exclusively in the holder of the Common Securities. The duties and obligations
of each Issuer Trustee are governed by the Declaration. The Company will pay,
directly or indirectly, all fees, expenses, debts and obligations related to the
Trust and the offering of the Capital Securities, including all ongoing costs,
expenses and liabilities of the Trust (other than the Trust's obligations to the
holders of the Trust Securities). The principal executive office of the Trust is
c/o Interpool, Inc., 211 College Road East, Princeton, New Jersey 08540.
<PAGE>
THE EXCHANGE OFFER
PURPOSE OF THE EXCHANGE OFFER
The Private Capital Securities were sold by the Company on January 27, 1997
(the "Issue Date") to the Initial Purchasers pursuant to the Purchase Agreement.
The Initial Purchasers subsequently sold the Private Capital Securities to (i)
"qualified institutional buyers" ("QIBs"), as defined in Rule 144A under the
Securities Act ("Rule 144A"), in reliance on Rule 144A and (ii) to institutional
"accredited investor" within the meaning of subparagraph (a)(1), (2) (3) or (7)
of Rule 501 under the Securities Act. As a condition to the sale of the Private
Capital Securities, the Trust, the Company and the Initial Purchasers entered
into the Registration Rights Agreement on January 27, 1997. Pursuant to the
Registration Rights Agreement, the Trust and the Company agreed that, unless the
Exchange Offer is not permitted by applicable law or Commission policy, it would
(i) file with the Commission a Registration Statement under the Securities Act
with respect to the Exchange Capital Securities within 150 days after the Issue
Date, (ii) use its best efforts to cause such Registration Statement to become
effective under the Securities Act within 180 days after the Issue Date and
(iii) use its best efforts to consummate the Exchange Offer within 30 business
days after the Registration Statement has become effective. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement. The Registration Statement is intended to satisfy certain of the
Trust's and the Company's obligations under the Registration Rights Agreement
and the Purchase Agreement.
RESALE OF THE EXCHANGE CAPITAL SECURITIES
With respect to the Exchange Capital Securities, based upon an
interpretation by the staff of the Commission set forth in certain no-action
letters issued to third parties, the Trust and the Company believe that a holder
(other than (i) a broker-dealer who purchased such Exchange Capital Securities
directly from the Trust or the Company to resell pursuant to Rule 144A or any
other available exemption under the Securities Act, (ii) any such holder that is
an "affiliate" of the Trust or the Company within the meaning of Rule 405 under
the Securities Act or (iii) a broker-dealer who acquired Private Capital
Securities as a result of market making or other trading activities) who
exchanges Private Capital Securities for Exchange Capital Securities in the
ordinary course of business and who is not participating, does not intend to
participate, and has no arrangement with any person to participate, in a
distribution of the Exchange Capital Securities, will be allowed to resell
Exchange Capital Securities to the public without further registration under the
Securities Act and without delivering to the purchasers of the Exchange Capital
Securities a prospectus that satisfies the requirements of Section 10 of the
Securities Act. However, if any holder acquires Exchange Capital Securities in
the Exchange Offer for the purpose of distributing or participating in the
distribution of the Exchange Capital Securities or is a broker-dealer, such
holder cannot rely on the position of the staff of the Commission enumerated in
certain no-action letters issued to third parties and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Each broker-dealer that receives Exchange Capital
Securities for its own account in exchange for Private Capital Securities, where
such Private Capital Securities were acquired by such broker-dealer as a result
of market-making activities or other trading activities, must acknowledge that
it will deliver a prospectus in connection with any resale of such Exchange
Capital Securities. The Letter of Transmittal states that by so acknowledging
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "underwriter" within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Capital Securities
received in exchange for Private Capital Securities where such Private Capital
Securities were acquired by such broker-dealer as a result of market-making or
other trading activities. Pursuant to the Registration Rights Agreement, the
Trust and the Company have agreed to make this Prospectus, as it may be amended
or supplemented from time to time, available to broker-dealers for use in
connection with any resale for a period of one year after the Registration
Statement is declared effective or until such earlier date on which the Exchange
Capital Securities are freely tradable. See "Plan of Distribution."
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Trust and the Company will
accept any and all Private Capital Securities validly tendered and not withdrawn
prior to the Expiration Date. The Trust will issue $1,000 Liquidation Amount of
Exchange Capital Securities in exchange for each $1,000 Liquidation Amount of
outstanding Private Capital Securities surrendered pursuant to the Exchange
Offer. Private Securities may be tendered in whole or in part in a Liquidation
Amount of not less than $100,000 (100 Private Capital Securities) or any
integral multiple of $1,000 Liquidation Amount (one Private Security) in excess
thereof.
The form and terms of the Exchange Capital Securities are the same as
the form and terms of the Private Capital Securities except that (i) the
exchange will be registered under the Securities Act and, therefore, the
Exchange Capital Securities will not bear legends restricting the transfer
thereof (ii) the Exchange Capital Securities will not contain the $100,000
minimum liquidation amount transfer restriction, (iii) the Exchange Capital
Securities will not provide for any increase in the Distribution Rate thereon,
(iv) the Exchange Junior Subordinated Debentures will not contain the $100,000
minimum liquidation amount transfer restriction, (v) the Exchange Junior
Subordinated Debentures will not provide for any increase in the Distribution
Rate thereon and (vi) holders of the Exchange Capital Securities will not be
entitled to any of the rights of holders of Private Capital Securities under the
Registration Rights Agreement, which rights will terminate upon the consummation
of the Exchange Offer except under certain limited circumstances. See
"--Termination of Certain Rights." The Exchange Capital Securities will evidence
the same obligations as the Private Capital Securities (which they replace) and
will be issued under, and be entitled to the benefits of, the Declaration and
the Indenture, which also authorized the issuance of the Private Capital
Securities, such that both series of Securities will be treated as a single
class of securities under the Declaration and the Indenture.
As of the date of this Prospectus, $75,000,000 in aggregate
Liquidation Amount of the Private Capital Securities are outstanding,
$74,900,000 aggregate Liquidation Amount of which are registered in the name of
Cede & Co., as nominee for DTC, and $100,000 aggregate Liquidation Amount of
which are registered in the name of Merrill Lynch & Co. Inc. Merrill Lynch,
Pierce, Fenner & Smith Incorporated. Only a registered holder of the Private
Capital Securities (or such holder's legal representative or attorney-in-fact)
as reflected on the records of the Property Trustee under the Declaration may
participate in the Exchange Offer. There will be no fixed record date for
determining registered holders of the Private Capital Securities entitled to
participate in the Exchange Offer.
Holders of the Private Capital Securities do not have any appraisal or
dissenters' rights under the Declaration in connection with the Exchange Offer.
The Trust and the Company intend to conduct the Exchange Offer in accordance
with the provisions of the Registration Rights Agreement and the applicable
requirements of the Securities Act, the Exchange Act and the rules and
regulations of the Commission thereunder.
The Trust and the Company shall be deemed to have accepted validly
tendered Private Capital Securities when, as and if the Trust and the Company
have given oral or written notice thereof to the Exchange Agent. The Exchange
Agent will act as agent for the tendering holders of Private Capital Securities
for the purposes of receiving the Exchange Capital Securities from the Trust and
the Company.
Holders who tender Private Capital Securities in the Exchange Offer will
not be required to pay brokerage commissions or fees or, subject to the
instructions in the Letter of Transmittal, transfer taxes with respect to the
exchange of Private Capital Securities pursuant to the Exchange Offer. The Trust
and the Company will pay all charges and expenses, other than certain applicable
taxes described below, in connection with the Exchange Offer. See "--Fees and
Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time on
________________, 1997, unless the Trust and the Company, in their sole
discretion, extends the Exchange Offer, in which case the term "Expiration Date"
shall mean the latest date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Trust and the Company will
(i) notify the Exchange Agent of any extension by oral or written notice, (ii)
mail to the registered holders an announcement thereof and (iii) issue a press
release or other public announcement, which shall include disclosure of the
approximate number of Private Capital Securities deposited to date, each prior
to 9:00 a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Without limiting the manner in which the Trust and
the Company may choose to make a public announcement of any delay, extension,
amendment or termination of the Exchange Offer, the Trust and the Company shall
have no obligation to publish, advertise, or otherwise communicate any such
public announcement, other than by making a timely release to an appropriate
news agency.
The Trust and the Company reserve the right, in their reasonable
discretion, (i) to delay accepting any Private Capital Securities, (ii) to
extend the Exchange Offer or (iii) if any conditions set forth below under
"--Conditions" shall not have been satisfied, to terminate the Exchange Offer by
giving oral or written notice of such delay, extension or termination to the
Exchange Agent. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by oral or written notice
thereof to the registered holders. If the Exchange Offer is amended in a manner
determined by the Trust and the Company to constitute a material change, the
Trust and the Company will promptly disclose such amendment by means of a
prospectus supplement that will be distributed to the registered holders, and
the Trust and the Company will extend the Exchange Offer for a period of five to
ten business days, depending upon the significance of the amendment and the
manner of disclosure to the registered holders, if the Exchange Offer would
otherwise expire during such five to ten business day period.
DISTRIBUTIONS ON EXCHANGE CAPITAL SECURITIES
Holders of Private Capital Securities whose Private Capital Securities
are accepted for exchange will not receive Distributions on such Private Capital
Securities and will be deemed to have waived the right to receive any
Distributions on such Private Capital Securities accumulated from and after
February 15, 1997. Accordingly, holders of Exchange Capital Securities as of the
record date for payment of distributions on August 15, 1997 will be entitled to
receive Distributions accumulated from and after February 15, 1997.
PROCEDURES FOR TENDERING
Only a registered holder of Private Capital Securities may tender such
Private Capital Securities in the Exchange Offer. To tender in the Exchange
Offer, a holder of Private Capital Securities must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
guaranteed if required by the Letter of Transmittal, and mail or otherwise
deliver such Letter of Transmittal or such facsimile to the Exchange Agent at
the address set forth below under "--Exchange Agent" for receipt prior to the
Expiration Date. In addition, either (i) certificates for such Private Capital
Securities must be received by the Exchange Agent along with the Letter of
Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry
Confirmation") of such Private Capital Securities, if such procedure is
available, into the Exchange Agent's account at the Depositary pursuant to the
procedure for book-entry transfer described below, must be received by the
Exchange Agent prior to the Expiration Date or (iii) the holder must comply with
the guaranteed delivery procedures described below.
The tender by a holder that is not withdrawn prior to the Expiration
Date will constitute an agreement between such holder, the Trust and the Company
in accordance with the terms and subject to the conditions set forth herein and
in the Letter of Transmittal.
THE METHOD OF DELIVERY OF PRIVATE CAPITAL SECURITIES AND THE LETTER OF
TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE
ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED
THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE, PROPERLY INSURED. IN ALL
CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE
AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR PRIVATE CAPITAL
SECURITIES SHOULD BE SENT TO THE TRUST OR THE COMPANY. HOLDERS MAY REQUEST THEIR
RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO
EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
Any beneficial owner(s) of the Private Capital Securities whose
Private Capital Securities are registered in the name of a broker, dealer,
commercial bank, trust company or other nominee and who wishes to tender should
contact the registered holder promptly and instruct such registered holder to
tender on such beneficial owner's behalf. If such beneficial owner wishes to
tender on such owner's own behalf, such owner must, prior to completing and
executing the Letter of Transmittal and delivering such owner's Private Capital
Securities, either make appropriate arrangements to register ownership of the
Private Capital Securities in such owner's name or obtain a properly completed
bond power from the registered holder. The transfer of registered ownership may
take considerable time.
Signatures on a Letter of Transmittal or a notice of withdrawal
described below (see "--Withdrawal of Tenders"), as the case may be, must be
guaranteed by an Eligible Institution (as defined) unless the Private Capital
Securities tendered pursuant thereto are tendered (i) by a registered holder who
has not completed the box titled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. In the event
that signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, are required to be guaranteed, such guarantee must be made by a
member firm of a registered national securities exchange or of the National
Association of Securities Dealers, Inc., a commercial bank or trust company
having an office or correspondent in the United States or an "eligible guarantor
institution" within the meaning of Rule 17Ad-15 under the Exchange Act which is
a member of one of the recognized signature guarantee programs identified in the
Letter of Transmittal (an "Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Private Capital Securities listed therein, such Private
Capital Securities must be endorsed or accompanied by a properly completed bond
power, signed by such registered holder as such registered holder's name appears
on such Private Capital Securities.
If the Letter of Transmittal or any Private Capital Securities or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and
unless waived by the Trust and the Company, evidence satisfactory to the Trust
and the Company of their authority to so act must be submitted with the Letter
of Transmittal.
The Exchange Agent and the Depositary have confirmed that any
financial institution that is a participant in the Depositary's system may
utilize the Depositary's Automated Tender Offer Program to tender Private
Capital Securities.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Private Capital Securities will
be determined by the Trust and the Company in their reasonable discretion, which
determination will be final and binding. The Trust and the Company reserve the
absolute right to reject any and all Private Capital Securities not properly
tendered or any Private Capital Securities the Trust's or the Company's
acceptance of which would, in the opinion of counsel for the Trust and the
Company, be unlawful. The Trust and the Company also reserve the right to waive
any defects, irregularities or conditions of tender as to particular Private
Capital Securities. The Trust's and the Company's interpretation of the terms
and conditions of the Exchange Offer (including the instructions in the Letter
of Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Private Capital
Securities must be cured within such time as the Trust and the Company shall
determine. Although the Trust and the Company intends to notify holders of
defects or irregularities with respect to tenders of Private Capital Securities,
neither the Trust, the Company, the Exchange Agent nor any other person shall
incur any liability for failure to give such notification. Tenders of Private
Capital Securities will not be deemed to have been made until such defects or
irregularities have been cured or waived.
While the Trust and the Company have no present plan to acquire any
Private Capital Securities that are not tendered in the Exchange Offer or to
file a registration statement to permit resales of any Private Capital
Securities that are not tendered pursuant to the Exchange Offer, the Trust and
the Company reserves the right in its sole discretion to purchase or make offers
for any Private Capital Securities that remain outstanding subsequent to the
Expiration Date or, as set forth below under "--Conditions," to terminate the
Exchange Offer and, to the extent permitted by applicable law, purchase Private
Capital Securities in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
By tendering, each holder of Private Capital Securities will represent
to the Trust and the Company that, among other things, (i) Exchange Capital
Securities to be acquired by such holder of Private Capital Securities in
connection with the Exchange Offer are being acquired by such holder in the
ordinary course of business of such holder, (ii) such holder has no arrangement
or understanding with any person to participate in the distribution of the
Exchange Capital Securities, (iii) such holder acknowledges and agrees that any
person who is a broker-dealer registered under the Exchange Act or is
participating in the Exchange Offer for the purposes of distributing the
Exchange Capital Securities must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction of the Exchange Capital Securities, acquired by such person
and cannot rely on the position of the staff of the Commission set forth in
certain no-action letters, (iv) such holder understands that a secondary resale
transaction described in clause (iii) above and any resales of Exchange Capital
Securities obtained by such holder in exchange for Private Capital Securities
acquired by such holder directly from the Trust or the Company should be covered
by an effective registration statement containing the selling securityholder
information required by Item 507 or Item 508, as applicable, of Regulation S-K
of the Commission and (v) such holder is not an "affiliate," as defined in Rule
405 under the Securities Act, of the Trust or the Company. If the holder is a
broker-dealer that will receive Exchange Capital Securities for such holder's
own account in exchange for Private Capital Securities that were acquired as a
result of market-making activities or other trading activities, such holder will
be required to acknowledge in the Letter of Transmittal that such holder will
deliver a copy of this Prospectus (as it may be supplemented or amended) in
connection with any resale of such Exchange Capital Securities; however, by so
acknowledging and by delivering a prospectus, such holder will not be deemed to
admit that it is an "underwriter" within the meaning of the Securities Act.
RETURN OF PRIVATE CAPITAL SECURITIES
If any tendered Private Capital Securities are not accepted for any
reason set forth in the terms and conditions of the Exchange Offer or if Private
Capital Securities are withdrawn or are submitted for a greater principal amount
than the holders desire to exchange, such unaccepted, withdrawn or non-exchanged
Private Capital Securities will be returned without expense to the tendering
holder thereof (or, in the case of Private Capital Securities tendered by
book-entry transfer into the Exchange Agent's account at the Depositary pursuant
to the book-entry transfer procedures described below, such Private Capital
Securities will be credited to an account maintained with the Depositary) as
promptly as practicable.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with
respect to the Private Capital Securities at DTC for purposes of the Exchange
Offer within two business days after the date of this Prospectus, and any
financial institution that is a participant in the Depositary's systems may make
book-entry delivery of Private Capital Securities by causing DTC to transfer
such Private Capital Securities into the Exchange Agent's account at DTC in
accordance with DTC's procedures for transfer. However, although delivery of
Private Capital Securities may be effected through book-entry transfer at DTC,
the Letter of Transmittal or facsimile thereof, with any required signature
guarantees and any other required documents, must, in any case, be transmitted
to and received by the Exchange Agent at the address set forth below under
"--Exchange Agent" on or prior to the Expiration Date or pursuant to the
guaranteed delivery procedures described below.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Private Capital Securities and (i)
whose Private Capital Securities are not immediately available or (ii) who
cannot deliver their Private Capital Securities, the Letter of Transmittal or
any other required documents to the Exchange Agent prior to the Expiration Date,
may effect a tender if:
(a) The tender is made through an Eligible Institution;
(b) Prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Trust and the
Company (by facsimile transmission, mail or hand delivery) setting forth the
name and address of the holder, the certificate number(s) of such Private
Capital Securities and the principal amount of Private Capital Securities
tendered, stating that the tender is being made thereby and guaranteeing that,
within five New York Stock Exchange trading days after the Expiration Date, the
Letter of Transmittal (or a facsimile thereof), together with the certificate(s)
representing the Private Capital Securities in proper form for transfer or a
Book-Entry Confirmation, as the case may be, and any other documents required by
the Letter of Transmittal, will be deposited by the Eligible Institution with
the Exchange Agent; and
(c) Such properly executed Letter of Transmittal (or facsimile
thereof), as well as the certificate(s) representing all tendered Private
Capital Securities in proper form for transfer and all other documents required
by the Letter of Transmittal are received by the Exchange Agent within five New
York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery
will be sent to holders who wish to tender their Private Capital Securities
according to the guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Private Capital
Securities may be withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Private Capital Securities in the Exchange
Offer, a written or facsimile transmission notice of withdrawal must be received
by the Exchange Agent at its address set forth herein prior to the Expiration
Date. Any such notice of withdrawal must (i) specify the name of the person
having deposited the Private Capital Securities to be withdrawn (the
"Depositor"), (ii) identify the Private Capital Securities to be withdrawn
(including the certificate number or numbers and principal amount of such
Private Capital Securities) and (iii) be signed by the holder in the same manner
as the original signature on the Letter of Transmittal by which such Private
Capital Securities were tendered (including any required signature guarantees).
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Trust and the Company, in
their sole discretion, whose determination shall be final and binding on all
parties. Any Private Capital Securities so withdrawn will be deemed not to have
been validly tendered for purposes of the Exchange Offer and no Exchange Capital
Securities will be issued with respect thereto unless the Private Capital
Securities so withdrawn are validly retendered. Properly withdrawn Private
Capital Securities may be retendered by following one of the procedures
described above under "The Exchange Offer--Procedures for Tendering" at any time
prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Trust and
the Company shall not be required to accept for exchange, or exchange the
Exchange Capital Securities for, any Private Capital Securities, and may
terminate the Exchange Offer as provided herein before the acceptance of such
Private Capital Securities, if the Exchange Offer violates applicable law, rules
or regulations or an applicable interpretation of the staff of the Commission.
If the Trust and the Company determine in their reasonable discretion
that any of these conditions are not satisfied, the Trust and the Company may
(i) refuse to accept any Private Capital Securities and return all tendered
Private Capital Securities to the tendering holders, (ii) extend the Exchange
Offer and retain all Private Capital Securities tendered prior to the expiration
of the Exchange Offer, subject, however, to the rights of holders to withdraw
such Private Capital Securities (see "--Withdrawal of Tenders") or (iii) waive
such unsatisfied conditions with respect to the Exchange Offer and accept all
properly tendered Private Capital Securities that have not been withdrawn. If
such waiver constitutes a material change to the Exchange Offer, the Trust and
the Company will promptly disclose such waiver by means of a prospectus
supplement that will be distributed to the registered holders of the Private
Capital Securities, and the Trust and the Company will extend the Exchange Offer
for a period of five to ten business days, depending upon the significance of
the waiver and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such five to ten business day
period.
TERMINATION OF CERTAIN RIGHTS
All rights under the Registration Rights Agreement (including
registration rights) of holders of the Private Capital Securities eligible to
participate in the Exchange Offer will terminate upon consummation of the
Exchange Offer except with respect to the Trust's and the Company's continuing
obligations (i) to indemnify such holders (including any broker-dealers) and
certain parties related to such holders against certain liabilities (including
liabilities under the Securities Act), (ii) to provide, upon the request of any
holder of a transfer-restricted Private Security, the information required by
Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Private Capital Securities pursuant to Rule 144A, (iii) to use its best efforts
to keep the Registration Statement effective to the extent necessary to ensure
that it is available for resales of Exchange Capital Securities by
broker-dealers for a period of up to one year from the date the Registration
Statement is declared effective or until such earlier date on which the Exchange
Capital Securities are freely tradeable and to provide copies of the latest
version of the Prospectus to such broker-dealers upon their request during such
period and (iv) to file a shelf registration statement as required by the
Registration Rights Agreement if any holder of transfer-restricted Securities
notifies the Trust and the Company within 20 business days of the consummation
of the Exchange Offer that (A) such holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) such holder
may not resell the Exchange Capital Securities acquired by it in the Exchange
Offer to the public without delivering a prospectus and that this Prospectus is
not appropriate or available for such resales by such holder, or (C) that such
holder is a broker-dealer and holds Private Capital Securities acquired directly
from the Trust and the Company as one of its affiliate (see "--Liquidated
Damages").
LIQUIDATED DAMAGES
The Registration Rights Agreement provides that (i) the Trust and the
Company will file the Registration Statement with the Commission on or prior to
150 days after the Issue Date, (ii) the Trust and the Company will use its best
efforts to have the Registration Statement declared effective by the Commission
on or prior to 180 days after the Issue Date, (iii) unless the Exchange Offer
would not be permitted by applicable law or Commission policy, the Trust and the
Company will commence the Exchange Offer and use its best efforts to issue, on
or prior to 30 business days after the date on which the Registration Statement
is declared effective by the Commission, Exchange Capital Securities in exchange
for all Private Capital Securities tendered prior thereto in the Exchange Offer
and (iv) if obligated to file a shelf registration statement pursuant to the
terms of the Registration Rights Agreement (the "Shelf Registration Statement"
and, collectively with the Registration Statement, the "Registration
Statements"), the Trust and the Company will use their best efforts to file such
Shelf Registration Statement with the Commission.
If the Company or the Trust fails to comply with the Registration
Rights Agreement or if the Exchange Offer Registration Statement or the Shelf
Registration Statement fails to become effective, then an additional amount
("Liquidated Damages") shall become payable in respect of the Junior
Subordinated Debentures, and corresponding Additional Distributions (the
"Additional Distributions") shall become payable on the Trust Securities as
provided in the Registration Rights Agreement.
Holders of Securities will be required to make certain representations
to the Company (as described in the Registration Rights Agreement) in order to
participate in the Exchange Offer and will be required to deliver information to
be used in connection with the Shelf Registration Statement and to provide
comments on the Shelf Registration Statement within the time periods set forth
in the Registration Rights Agreement in order to have their Securities included
in the Shelf Registration Statement and benefit from the provisions regarding
Liquidated Damages set forth above.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Trust and the
Company. The principal solicitation is being made by mail; however, additional
solicitation may be made by telegraph, telephone or in person by officers and
regular employees of the Trust, the Company and their affiliates.
The Company has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Trust and the Company,
however, will pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer
will be paid by the Trust and the Company and are estimated in the aggregate to
be approximately $_____________. Such expenses include registration fees, fees
and expenses of the Exchange Agent and the Property Trustee, accounting and
legal fees and printing costs, among others.
The Trust and the Company will pay all transfer taxes, if any, applicable
to the exchange of Private Capital Securities pursuant to the Exchange Offer.
If, however, a transfer tax is imposed for any reason other than the exchange of
the Private Capital Securities pursuant to the Exchange Offer, then the amount
of any such transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If satisfactory evidence
of payment of such taxes or exemption therefrom is not submitted with the Letter
of Transmittal, the amount of such transfer taxes will be billed directly to
such tendering holder.
CONSEQUENCE OF FAILURE TO EXCHANGE
Participation in the Exchange Offer is voluntary. Holders of the
Private Capital Securities are urged to consult their financial and tax advisors
in making their own decisions on what action to take.
The Private Capital Securities that are not exchanged for the Exchange
Capital Securities pursuant to the Exchange Offer will remain restricted
securities. Accordingly, such Private Capital Securities may be resold only (i)
to a person whom the seller reasonably believes is a QIB in a transaction
meeting the requirements of Rule 144A, (ii) in a transaction meeting the
requirements of Rule 144 under the Securities Act, (iii) outside the United
States to a foreign person in a transaction meeting the requirements of Rule 904
under the Securities Act, (iv) in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), (v) to the Trust or the Company or (vi)
pursuant to an effective registration statement and, in each case, in accordance
with any applicable securities laws of any state of the United States or any
other applicable jurisdiction.
ACCOUNTING TREATMENT
For accounting purposes, the Company will recognize no gain or loss as
a result of the Exchange Offer. The expenses of the Exchange Offer will be
amortized over the term of the Exchange Capital Securities.
EXCHANGE AGENT
IBJ Schroder Bank & Trust Company has been appointed Exchange Agent
for the Exchange Offer. Delivery of the Letters of Transmittal and any other
required documents, questions, requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL: BY HAND OR OVERNIGHT DELIVERY:
IBJ Schroder Bank & Trust Company IBJ Schroder Bank & Trust Company
P.O. Box 84 One State Street
Bowling Green Station New York, New York 10004
New York, New York 10274-0084 Attn: Securities Transfer
Attn: Reorganization Operations Dept. Window, Subcellar One
CONFIRM BY TELEPHONE:
(212) 858-2103
FACSIMILE TRANSMISSIONS:
(ELIGIBLE INSTITUTIONS ONLY)
IBJ Schroder Bank & Trust Company
Attn: Reorganization Operations Dept.
(212) 858-2611
Delivery to other than the above addresses or facsimile number will
not constitute a valid delivery.
DESCRIPTION OF EXCHANGE SECURITIES
DESCRIPTION OF EXCHANGE CAPITAL SECURITIES
The Exchange Capital Securities will represent preferred beneficial
interests in the Trust and the holders thereof will be entitled to a preference
over the Common Securities in certain circumstances with respect to
Distributions and amounts payable on redemption of the Trust Securities or
liquidation of the Trust. See "--Subordination of Common Securities." The
Declaration has been qualified under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act"). The following description of certain provisions of
the Exchange Capital Securities, the Common Securities and the Declaration does
not purport to be complete and is subject to, and is qualified in its entirety
by reference to, the Declaration and the Trust Indenture Act. Certain
capitalized terms used herein are defined in the Declaration.
GENERAL
The Capital Securities (including the Private Capital Securities and
the Exchange Capital Securities) will be limited to $75,000,000 aggregate
Liquidation Amount at any one time outstanding. The Capital Securities will rank
pari passu, and payments will be made thereon pro rata, with the Common
Securities except as described under "--Subordination of Common Securities"
below. Legal title to the Junior Subordinated Debentures will be held by the
Property Trustee in trust for the benefit of the holders of the Capital
Securities and the Common Securities. The Exchange Guarantee will not guarantee
payment of Distributions or amounts payable on redemption of the Exchange
Capital Securities or liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of
Exchange Guarantee."
DISTRIBUTIONS
Distributions on the Exchange Capital Securities will be cumulative,
will accumulate from February, 15, 1997 and will be payable semi-annually in
arrears on February 15 and August 15 of each year, commencing August 15, 1997,
at the annual rate of 9.875% of the Liquidation Amount to the holders of the
Exchange Capital Securities on the February 1 or August 1 immediately preceding
such dates. The amount of Distributions payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months. In the event that any
date on which Distributions are payable on the Exchange Capital Securities is
not a Business Day (as defined herein), payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect to any such delay), in each
case with the same force and effect as if made on such date (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a Saturday or a Sunday,
or a day on which banking institutions in New York, New York or Wilmington,
Delaware are authorized or required by law or executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to elect to
defer the payment of interest on the Exchange Junior Subordinated Debentures at
any time or from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity Date. Upon any such
election, semi-annual Distributions on the Exchange Capital Securities will be
deferred by the Trust during such Extension Period. Distributions to which
holders of the Exchange Capital Securities are entitled during any such
Extension Period will accumulate additional Distributions thereon at the rate
per annum of 9.875% thereof, compounded semi-annually from the relevant
Distribution Date. The term "Distributions," as used herein, shall include any
such additional Distributions.
During any such Extension Period, the Company may further extend such
Extension Period, provided that such extension does not cause such Extension
Period to exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Upon the termination of any such Extension Period and the
payment of all amounts then due, and subject to the foregoing limitations, the
Company may elect to begin a new Extension Period. The Company must give the
Property Trustee, the Regular Trustees and the Debenture Trustee notice of its
election of any Extension Period or any extension thereof at least five Business
Days prior to the earlier of (i) the date the Distributions on the Capital
Securities would have been payable except for the election to begin or extend
such Extension Period and (ii) the date the Trust is required to give notice to
any securities exchange or to holders of the Exchange Capital Securities of the
record date or the date such Distributions are payable, but in any event not
less than five Business Days prior to such record date. There is no limitation
on the number of times that the Company may elect to begin an Extension Period.
See "--Description of Exchange Junior Subordinated Debentures--Option to Extend
Interest Payment Date" and "Certain Federal Income Tax Consequences--Interest
Income and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) or (ii) make any payment of principal of or
premium, if any, or interest on or repay, repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Exchange Junior Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company (including Other
Guarantees) if such guarantee ranks pari passu with or junior in right of
payment to the Exchange Junior Subordinated Debentures (other than (a) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Exchange
Guarantee, (d) the purchase of fractional shares resulting from a
reclassification of the Company's capital stock, (e) the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (f) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (g) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans).
Although the Company may in the future exercise its option to defer
payments of interest on the Exchange Junior Subordinated Debentures, the Company
has no current intention to do so.
The revenue of the Trust available for distribution to holders of the
Exchange Capital Securities will be limited to payments under the Exchange
Junior Subordinated Debentures in which the Trust has invested the proceeds from
the issuance and sale of the Trust Securities. See "--Description of Exchange
Junior Subordinated Debentures--General." If the Company does not make interest
payments on the Exchange Junior Subordinated Debentures, the Property Trustee
will not have funds available to pay Distributions on the Exchange Capital
Securities. The payment of Distributions (if and to the extent the Trust has
funds on hand legally available for the payment of such Distributions) will be
guaranteed by the Company on a limited basis as set forth herein under
"Description of Exchange Guarantee."
REDEMPTION
Upon the repayment on the Stated Maturity Date or prepayment prior to
the Stated Maturity Date of the Exchange Junior Subordinated Debentures, the
proceeds from such repayment or prepayment shall be applied by the Property
Trustee to redeem a Like Amount (as defined below) of the Trust Securities, upon
not less than 30 nor more than 60 days' notice of a date of redemption (the
"Redemption Date"), at the applicable Redemption Price, which shall be equal to
(i) in the case of the repayment of the Exchange Junior Subordinated Debentures
on the Stated Maturity Date, the Maturity Redemption Price (equal to the
principal of and accrued interest on the Junior Subordinated Debentures), (ii)
in the case of the optional prepayment of the Exchange Junior Subordinated
Debentures prior to February 15, 2007 upon the occurrence and continuation of a
Special Event, the Special Event Redemption Price (equal to the Special Event
Prepayment Price in respect of the Exchange Junior Subordinated Debentures) and
(iii) in the case of the optional prepayment of the Exchange Junior Subordinated
Debentures on or after February 15, 2007, the Optional Redemption Price (equal
to the Optional Prepayment Price in respect of the Exchange Junior Subordinated
Debentures). See "--Description of Exchange Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount Exchange of Junior Subordinated Debentures to be paid in accordance with
their terms and (ii) with respect to a distribution of Exchange Junior
Subordinated Debentures upon the liquidation of the Trust, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holder to whom such Exchange Junior Subordinated
Debentures are distributed.
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF EXCHANGE JUNIOR
SUBORDINATED DEBENTURES
The Company will have the right at any time to terminate the Trust and
cause the Exchange Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. Such right is
subject to the Company having received an opinion of counsel to the effect that
such distribution will not be a taxable event to holders of Exchange Capital
Securities.
The Trust shall automatically terminate upon the first to occur of:
(i) certain events of bankruptcy, dissolution or liquidation of the Company;
(ii) the distribution of a Like Amount of the Exchange Junior Subordinated
Debentures to the holders of the Trust Securities, if the Company, as Sponsor,
has given written direction to the Property Trustee to terminate the Trust
(which direction is optional and, except as described above, wholly within the
discretion of the Company, as Sponsor); (iii) redemption of all of the Trust
Securities as described under "--Redemption" above; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution of the Trust by
a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v)
of the preceding paragraph, the Trust shall be liquidated by the Issuer Trustees
as expeditiously as the Issuer Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the holders of the Trust Securities a Like Amount
of the Exchange Junior Subordinated Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
holders will be entitled to receive out of the assets of the Trust legally
available for distribution to holders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Exchange Capital Securities and the Common Securities shall be paid
on a pro rata basis, except that if a Debenture Event of Default or a
Declaration Event of Default has occurred and is continuing, the Exchange
Capital Securities shall have a priority over the Common Securities. See
"--Subordination of Common Securities."
After the liquidation date is fixed for any distribution of Exchange
Junior Subordinated Debentures to holders of the Trust Securities, (i) the Trust
Securities will no longer be deemed to be outstanding, (ii) each registered
global certificate representing Trust Securities and held by DTC or its nominee
will receive a registered global certificate or certificates representing the
Exchange Junior Subordinated Debentures to be delivered upon such distribution
and (iii) any certificates representing Trust Securities not held by DTC or its
nominee will be deemed to represent Exchange Junior Subordinated Debentures
having a principal amount equal to the Liquidation Amount of such Trust
Securities and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Regular Trustees or their agent for
cancellation, whereupon the Company will issue to such holder, and the Debenture
Trustee will authenticate, a certificate representing such Exchange Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the Exchange
Capital Securities or the Exchange Junior Subordinated Debentures that may be
distributed in exchange for the Trust Securities if a dissolution and
liquidation of the Trust were to occur. Accordingly, the Exchange Capital
Securities that an investor may purchase, or the Exchange Junior Subordinated
Debentures that an investor may receive on dissolution and liquidation of the
Trust, may trade at a discount to the price that such investor paid to purchase
the Exchange Capital Securities offered hereby.
REDEMPTION PROCEDURES
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Exchange Junior Subordinated Debentures. Any redemption of
Trust Securities shall be made and the applicable Redemption Price shall be
payable on the Redemption Date only to the extent that the Trust has funds
legally available for the payment of such applicable Redemption Price.
If the Trust gives a notice of redemption in respect of the Exchange
Capital Securities, then, by 2:00 p.m., New York City time, on the Redemption
Date, to the extent funds are legally available, with respect to the Exchange
Capital Securities held by DTC or its nominees, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the applicable Redemption
Price. See "--Form, Denomination, Book-Entry Procedures and Transfer." With
respect to the Capital Securities held in certificated form, the Property
Trustee, to the extent funds are legally available, will irrevocably deposit
with the paying agent for the Exchange Capital Securities funds sufficient to
pay the applicable Redemption Price and will give such paying agent irrevocable
instructions and authority to pay the applicable Redemption Price to the holders
thereof upon surrender of their certificates evidencing the Exchange Capital
Securities. See "--Payment and Paying Agent." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to the
holders of such Capital Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
deposited as required, then upon the date of such deposit, all rights of the
holders of the Exchange Capital Securities will cease, except the right of the
holders of the Capital Securities to receive the applicable Redemption Price,
but without interest on such Redemption Price, and the Capital Securities will
cease to be outstanding. In the event that any Redemption Date of Exchange
Capital Securities is not a Business Day, then the applicable Redemption Price
payable on such date will be paid 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 the event that
payment of the applicable Redemption Price is improperly withheld or refused and
not paid either by the Trust or by the Company pursuant to the Exchange
Guarantee as described under "Description of the Exchange Guarantee,"
Distributions on Exchange Capital Securities called for redemption will continue
to accumulate at the then applicable rate, from the Redemption Date originally
established by the Trust to the date such applicable Redemption Price is
actually paid, and the actual payment date will be the Redemption Date for
purposes of calculating the applicable Redemption Price.
Subject to applicable law (including, without limitation, United
States federal securities law), the Company or its subsidiaries may at any time
and from time to time purchase outstanding Exchange Capital Securities by
tender, in the open market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days prior to the Redemption Date to each holder of Trust Securities at
its registered address. Unless the Company defaults in payment of the applicable
Prepayment Price on, or in the repayment of, the Exchange Junior Subordinated
Debentures, on and after the Redemption Date, Distributions will cease to accrue
on the Trust Securities called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Exchange
Capital Securities and the Common Securities, as applicable, shall be made pro
rata based on the Liquidation Amount of the Capital Securities and Common
Securities; provided, however, that if on any Distribution Date or Redemption
Date an Event of Default under the Declaration shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of the Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the outstanding Exchange Capital Securities for all Distribution
periods terminating on or prior thereto or, in the case of Exchange Capital
Securities called for redemption on a Redemption Date on or prior thereto, the
full amount of the Redemption Price therefor, shall have been made or provided
for, and all funds available to the Property Trustee shall first be applied to
the payment in full in cash of all Distributions on, or Redemption Price of, the
Exchange Capital Securities then due and payable.
In the case of any Event of Default under the Declaration, the Company
as holder of the Common Securities will be deemed to have waived any right to
act with respect to such Event of Default under the Declaration until the effect
of such Event of Default under the Declaration shall have been cured, waived or
otherwise eliminated. Until any such Event of Default under the Declaration has
been so cured, waived or otherwise eliminated, the Property Trustee shall act
solely on behalf of the holders of the Exchange Capital Securities and not on
behalf of the Company as holder of the Common Securities, and only the holders
of the Exchange Capital Securities will have the right to direct the Property
Trustee to act on their behalf.
EVENTS OF DEFAULT; NOTICE
The occurrence of a Debenture Event of Default (see "--Description of
Exchange Junior Subordinated Debentures--Debenture Events of Default")
constitutes an "Event of Default" under the Declaration.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Exchange Capital
Securities, the Regular Trustees and the Company, as Sponsor, unless such Event
of Default shall have been cured or waived. The Company, as Sponsor, and the
Regular Trustees are required to file annually with the Property Trustee a
certificate as to whether or not they are in compliance with all the conditions
and covenants applicable to them under the Declaration.
If a Debenture Event of Default has occurred and is continuing, the
Exchange Capital Securities shall have a preference over the Common Securities
as described under "--Liquidation of the Trust and Distribution of Exchange
Junior Subordinated Debentures" and "--Subordination of Common Securities"
above.
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the outstanding
Capital Securities. In no event will the holders of the Capital Securities have
the right to vote to appoint, remove or replace the Regular Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and no appointment of
a successor trustee shall be effective until the acceptance of appointment by
the successor Trustee in accordance with the provisions of the Declaration.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee
or any Regular Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which such Issuer Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of such Issuer Trustee, shall be the successor of such Issuer
Trustee under the Declaration, provided such corporation shall be otherwise
qualified and eligible in accordance with the applicable provisions of the
Declaration.
MERGER, CONVERSIONS, CONSOLIDATIONS, AMALGAMATIONS OR
REPLACEMENTS OF THE TRUST
The Trust may not merge or convert with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, any corporation or
other Person, except as described below. The Trust may, at the request of the
Company, as Sponsor, with the consent of a majority of the Regular Trustees but
without the consent of the Property Trustee, the Delaware Trustee or the holders
of the Capital Securities, merge or convert with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Junior Subordinated Debentures, (iii) the
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 Capital Securities are then listed, if any, (iv) such
merger, conversion, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical rating
organization, (v) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Capital Securities (including
any Successor Securities) in any material respect, (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such merger,
conversion, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Company has received an opinion from independent counsel to the Trust
experienced in such matters to the effect that (a) such merger, conversion,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the holders of the
Capital Securities (including any Successor Securities) in any material respect,
and (b) following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
(viii) the Company or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge or convert with or into, or replace it
if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the successor entity not
to be classified as a grantor trust for United States federal income tax
purposes. In addition, the Property Trustee will be required pursuant to the
Indenture to exchange, as a part of the Exchange Offer, the Junior Subordinated
Debentures for the Exchange Junior Subordinated Debentures, which will have
terms identical to the Junior Subordinated Debentures except that the Exchange
Junior Subordinated Debentures will not contain terms with respect to the
transfer restrictions under the Securities Act, the $100,000 minimum aggregate
principal amount transfer restrictions and the provision for an increase in the
interest rate thereon under certain circumstances. See "Exchange Offer;
Registration Rights."
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "--Removal of Issuer Trustees" and
"--Mergers, Conversions, Consolidations, Amalgamations or Replacements of the
Trust" above and "Description of Exchange Guarantee-- Amendments and Assignment"
and as otherwise required by law and the Declaration, the holders of the
Exchange Capital Securities will have no voting rights.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Regular Trustees, without the consent of the holders of
the Trust Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions arising
under the Declaration, which shall not be inconsistent with the other provisions
of the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Trust Securities are outstanding or to ensure that the
Trust will not be required to register as an "investment company" under the
Investment Company Act; provided, however, that such action shall not adversely
affect in any material respect the interests of the holders of the Trust
Securities, and any amendments of the Declaration shall become effective when
notice thereof is given to the holders of the Trust Securities. The Declaration
may be amended by the Issuer Trustees and the Company (i) with the consent of
holders representing a majority (based upon Liquidation Amount) of the
outstanding Trust Securities, and (ii) upon receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status as an "investment company"
under the Investment Company Act, provided that, without the consent of each
holder of Trust Securities, the Declaration may not be amended to (i) change the
amount or timing of any Distribution or other payment on the Trust Securities or
any redemption provisions or otherwise adversely affect the amount of any
Distribution or other payment required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on the Property Trustee with respect to
the Junior Subordinated Debentures, (ii) waive certain past defaults under the
Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in accordance
with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Company, the Issuer Trustees or any
affiliate of the Company or any Issuer Trustees shall, for purposes of such vote
or consent, be treated as if they were not outstanding.
FORM, DENOMINATION, BOOK-ENTRY PROCEDURES AND TRANSFER
The Exchange Capital Securities initially will be represented by one
or more Capital Securities in registered, global form (collectively, the "Global
Exchange Capital Securities"). The Global Exchange Capital Securities will be
deposited upon issuance with the Property Trustee as custodian for DTC in New
York, New York, and registered in the name of DTC or its nominee, in each case
for credit to an account of a direct or indirect participant in DTC as described
below.
Except as set forth below, the Global Exchange Capital Securities may
be transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee. Beneficial interests in the Global Exchange
Capital Securities may not be exchanged for Exchange Capital Securities in
certificated form except in the limited circumstances described under " --
Exchange of Book-Entry Exchange Capital Securities for Certificated Exchange
Capital Securities" below.
Other Exchange Capital Securities will be issued only in registered,
certificated (i.e., non-global) form. Other Exchange Capital Securities may not
be exchanged for beneficial interests in any Global Exchange Capital Securities
except in the limited circumstances described below. See "--Exchange of
Certificated Exchange Capital Securities for Book-Entry Exchange Capital
Securities."
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a
limited-purpose trust company created to hold securities for its participating
organizations (collectively, the "Participants") and to facilitate the clearance
and settlement of transactions in those securities between Participants through
electronic book-entry changes in accounts of its Participants. The Participants
include securities brokers and dealers (including the Initial Purchasers),
banks, trust companies, clearing corporations and certain other organizations.
Access to DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or maintain a custodial
relationship with a Participant, either directly or indirectly (collectively,
the "Indirect Participants"). Persons who are not Participants may beneficially
own securities held by or on behalf of DTC only through the Participants or the
Indirect Participants. The ownership interest and transfer of ownership interest
of each actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to
procedures established by it, (i) upon deposit of the Global Exchange Capital
Securities, DTC will credit the accounts of Participants designated by the
Initial Purchasers with portions of the Liquidation Amount of the Global
Exchange Capital Securities and (ii) ownership of such interests in the Global
Exchange Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Exchange Capital
Securities).
Investors in the Global Exchange Capital Securities may hold their
interests therein directly through DTC if they are Participants in such system
or indirectly through organizations which are Participants in such system. All
interests in a Global Exchange Capital Security will be subject to the
procedures and requirements of DTC. The laws of some states require that certain
persons take physical delivery in certificated form of securities that they own.
Consequently, the ability to transfer beneficial interests in a Global Exchange
Capital Security to such persons will be limited to that extent. Because DTC can
act only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Global Exchange Capital Security to pledge such interests to
persons or entities that do not participate in the DTC system, or otherwise take
actions in respect of such interests, may be affected by the lack of a physical
certificate evidencing such interests. For certain other restrictions on the
transferability of the Capital Securities, see "--Exchange of Book-Entry Capital
Securities for Certificated Capital Securities" and "--Exchange of Certificated
Capital Securities for Book-Entry Capital Securities" below.
Except as described below, owners of interests in the Global Exchange
Capital Securities will not have Capital Securities registered in their name,
will not receive physical delivery of Capital Securities in certificated form
and will not be considered the registered owners or holders thereof under the
Declaration for any purpose.
Payments in respect of the Global Exchange Capital Security registered
in the name of DTC or its nominee will be payable by the Property Trustee to DTC
in its capacity as the registered holder under the Declaration. Under the terms
of the Declaration, the Property Trustee will treat the persons in whose names
the Capital Securities, including the Global Exchange Capital Securities, are
registered as the owners thereof for the purpose of receiving such payments and
for any and all other purposes whatsoever. Consequently, neither the Property
Trustee nor any agent thereof has or will have any responsibility or liability
for (i) any aspect of DTC's records or any Participant's or Indirect
Participant's records relating to or payments made on account of beneficial
ownership interests in the Global Exchange Capital Securities, or for
maintaining, supervising or reviewing any of DTC's records or any Participant's
or Indirect Participant's records relating to the beneficial ownership interests
in the Global Exchange Capital Securities or (ii) any other matter relating to
the actions and practices of DTC or any of its Participants or Indirect
Participants. DTC has advised the Trust and the Company that its current
practice, upon receipt of any payment in respect of securities such as the
Capital Securities, is to credit the accounts of the relevant Participants with
the payment on the payment date, in amounts proportionate to their respective
holdings in Liquidation Amount of beneficial interests in the relevant security
as shown on the records of DTC unless DTC has reason to believe it will not
receive payment on such payment date. Payments by the Participants and the
Indirect Participants to the beneficial owners of Capital Securities will be
governed by standing instructions and customary practices and will be the
responsibility of the Participants or the Indirect Participants and will not be
the responsibility of DTC, the Property Trustee, the Trust or the Company.
Neither the Trust nor the Company or the Property Trustee will be liable for any
delay by DTC or any of its Participants in identifying the beneficial owners of
the Capital Securities, and the Trust or the Company and the Property Trustee
may conclusively rely on and will be protected in relying on instructions from
DTC or its nominee for all purposes.
Interests in the Global Exchange Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market trading activity in
such interests will therefore settle in immediately available funds, subject in
all cases to the rules and procedures of DTC and its Participants and Indirect
Participants. Transfers among Participants and Indirect Participants in DTC will
be effected in accordance with DTC's procedures, and will be settled in same-day
funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Capital Securities only at the direction of
one or more Participants to whose account with DTC interests in the Global
Exchange Capital Securities are credited and only in respect of such portion of
the Liquidation Amount of the Capital Securities as to which such Participant or
Participants has or have given such direction. However, if there is an Event of
Default under the Declaration, DTC reserves the right to exchange the Global
SExchange Capital Securities for legended Capital Securities in certificated
form and to distribute such Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Company believe to
be reliable, but neither the Trust nor the Company takes responsibility for the
accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interest in the Global Exchange Capital Securities among
Participants in DTC, it is under no obligation to perform or to continue to
perform such procedures, and such procedures may be discontinued at any time.
Neither the Trust nor the Company or the Property Trustee will have any
responsibility for the performance by DTC or its Participants or Indirect
Participants of their respective obligations under the rules and procedures
governing DTC's operations.
Exchange of Book-Entry Exchange Capital Securities for
Certificated Exchange Capital Securities
A Global Exchange Capital Security is exchangeable for Capital
Securities in registered certificated form if (i) DTC (x) notifies the Trust
that it is unwilling or unable to continue as Depositary for the Global Exchange
Capital Security and the Trust thereupon fails to appoint a successor Depositary
within 90 days or (y) has ceased to be a clearing agency registered under the
Exchange Act, (ii) the Company in its sole discretion elects to cause the
issuance of the Capital Securities in certificated form or (iii) there shall
have occurred and be continuing an Event of Default or any event which after
notice or lapse of time or both would be an Event of Default under the
Declaration. In addition, beneficial interests in a Global Exchange Capital
Security may be exchanged for certificated Capital Securities upon request but
only upon at least 20 days prior written notice given to the Property Trustee by
or on behalf of DTC in accordance with customary procedures. In all cases,
certificated Capital Securities delivered in exchange for any Global Exchange
Capital Security or beneficial interests therein will be registered in the
names, and issued in any approved denominations, requested by or on behalf of
the Depositary (in accordance with its customary procedures) and will bear the
legend referred to in "Notice to Investors," unless the Property Trustee
determines otherwise in compliance with applicable law.
Exchange of Certificated Exchange Capital Securities for
Book-Entry Capital Securities
Other Capital Securities, which will be issued in certificated form,
may not be exchanged for beneficial interests in any Global Exchange Capital
Security unless such exchange occurs in connection with a transfer of such Other
Capital Securities and the transferor first delivers to the Property Trustee a
written certificate (in the form provided in the Declaration) to the effect that
such transfer will comply with the appropriate transfer restrictions applicable
to such Capital Securities.
PAYMENT AND PAYING AGENT
Payments in respect of the Exchange Capital Securities held in global
form shall be made to the Depositary, which shall credit the relevant accounts
at the Depositary on the applicable Distribution Dates or in respect of the
Exchange Capital Securities that are not held by the Depositary, 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 (the "Paying Agent")
shall initially be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Regular Trustees and the Company. The
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Company. In the event that the Property
Trustee shall no longer be the Paying Agent, the Regular Trustees shall appoint
a successor (which shall be a bank or trust company acceptable to the Regular
Trustees and the Company) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust but upon payment of any tax
or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after such Event of Default under
the Declaration, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the 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 Securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no Event of Default
under the Declaration has occurred and is continuing and the Property Trustee is
required to decide between alternative causes of action, construe ambiguous
provisions in the Declaration or is unsure of the application of any provision
of the Declaration, and the matter is not one on which holders of the Capital
Securities or the Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed by the Company
and if not so directed, shall take such action as it deems advisable and in the
best interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
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
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes and so that the Junior
Subordinated Debentures will be treated as indebtedness of the Company for
United States federal income tax purposes. In this connection, the Company and
the Regular Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Trust or the Declaration, that
the Company and the Regular Trustees determine in their discretion to be
necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
DESCRIPTION OF EXCHANGE JUNIOR SUBORDINATED DEBENTURES
The Exchange Junior Subordinated Debentures were issued and the
Exchange Junior Subordinated Debentures will be issued as a separate series
under the Indenture, as supplemented from time to time (as so supplemented, the
"Indenture"), between the Company and IBJ Schroder Bank & Trust Company, as
trustee. The Indenture has been qualified under the Trust Indenture Act of 1939,
as amended. This summary of certain terms and provisions of the Exchange Junior
Subordinated Debentures and the Indenture does not purport to be complete and,
where reference is made to particular provisions of the Indenture, such
provisions, including the definitions of certain terms, some of which are not
otherwise defined herein, are qualified in their entirety by reference to all of
the provisions of the Indenture and those terms made a part of the Indenture by
the Trust Indenture Act.
GENERAL
Concurrently with the issuance of the Private Capital Securities, the
Trust invested the proceeds thereof, together with the consideration paid by the
Company for the Common Securities, in Private Junior Subordinated Debentures
issued by the Company. The Private Junior Subordinated Debentures bear interest
at the annual rate of 9.875% of the principal amount thereof, payable
semi-annually in arrears on February 15 and August 15 of each year (each, an
"Interest Payment Date"), commencing February 15, 1997, to the person in whose
name each Private Junior Subordinated Debenture is registered, subject to
certain exceptions, at the close of business on the February 1 or August 1
immediately preceding each Interest Payment Date. It is anticipated that, until
the liquidation, if any, of the Trust, each Junior Subordinated Debenture will
be held in the name of the Property Trustee in trust for the benefit of the
holders of the Trust Securities. The amount of interest payable for any period
will be computed on the basis of a 360-day year of twelve 30-day months. In the
event that any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of the interest payable on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay). Accrued interest
that is not paid on the applicable Interest Payment Date will bear interest on
the amount thereof (to the extent permitted by law) at the rate per annum of
9.875% thereof, compounded semi-annually. The term "interest," as used herein,
shall include semi-annual interest payments, interest on semi-annual interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined herein), as applicable.
The Private Junior Subordinated Debentures were issued and the
Exchange Junior Subordinated Debentures will be issued in denominations of
$1,000 and integral multiples thereof. The Junior Subordinated Debentures will
mature on February 15, 2027 (the "Stated Maturity Date").
The Exchange Junior Subordinated Debentures will rank pari passu with
all Other Debentures and will be unsecured and subordinate and rank junior in
right of payment, to the extent and in the manner set forth in the Indenture, to
all Senior Indebtedness. See "--Subordination."
The Company is a legal entity separate and distinct from its other
subsidiaries. The Company's subsidiaries include, among others, Interpool
Limited and Trac Lease. The right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of the
subsidiary, except to the extent the Company may itself be recognized as a
creditor of that subsidiary. Accordingly, the Exchange Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Indebtedness, or the incurrence of liabilities by the Company's
subsidiaries. See "--Subordination."
FORM, REGISTRATION AND TRANSFER
If the Exchange Junior Subordinated Debentures are distributed to the
holders of the Trust Securities, the Exchange Junior Subordinated Debentures may
be represented by one or more global certificates registered in the name of Cede
& Co. as the nominee of DTC. The depository arrangements for such Exchange
Junior Subordinated Debentures are expected to be substantially similar to those
in effect for the Exchange Capital Securities. For a description of DTC and the
terms of the depository arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "Description of the
Exchange Securities--Description of Exchange Capital Securities--Form,
Denomination, Book-Entry Procedures and Transfer."
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, and any interest on
Exchange Junior Subordinated Debentures will be made at the office of the
Debenture Trustee in New York, New York or at the office of such Paying Agent or
Paying Agents as the Company may designate from time to time, except that at the
option of the Company payment of any interest may be made, except in the case of
Exchange Junior Subordinated Debentures in global form, by check mailed to the
address of the Person entitled thereto as such address shall appear in the
register for Exchange Junior Subordinated Debentures. Payment of any interest on
any Exchange Junior Subordinated Debenture will be made to the Person in whose
name such Exchange Junior Subordinated Debenture is registered at the close of
business on the Record Date for such interest, except in the case of defaulted
interest. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent; however, the Company will at all
times be required to maintain a Paying Agent in each place of payment for the
Exchange Junior Subordinated Debentures.
Any monies deposited with the Debenture Trustee or any Paying Agent,
or then held by the Company in trust, for the payment of the principal of and
premium, if any, or interest on any Exchange Junior Subordinated Debenture and
remaining unclaimed for two years after such principal and premium, if any, or
interest has become due and payable shall, at the request of the Company, be
repaid to the Company and the holder of such Exchange Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
OPTION TO EXTEND INTEREST PAYMENT DATE
So long as no Debenture Event of Default has occurred and is
continuing, the Company will have the right under the Indenture at any time
during the term of the Exchange Junior Subordinated Debentures to defer the
payment of interest from time to time for a period not exceeding 10 consecutive
semi-annual periods with respect to each Extension Period, provided that no
Extension Period may extend beyond the Stated Maturity Date. At the end of an
Extension Period, the Company must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of 9.875%, compounded
semi-annually, to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Exchange Junior
Subordinated Debentures (and holders of the Trust Securities while Trust
Securities are outstanding) will be required to accrue interest income for
United States federal income tax purposes prior to the receipt of cash
attributable to such income. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Company may not (i) declare or
pay any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company (including any Other Debentures) that rank pari passu
with or junior in right of payment to the Exchange Junior Subordinated
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any subsidiary of the Company (including
any Other Guarantees) if such guarantee ranks pari passu with or junior in right
of payment to the Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Exchange
Guarantee, (d) the purchase of fractional shares resulting from a
reclassification of the Company's capital stock, (e) the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (f) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (g) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans).
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods or to
extend beyond the Stated Maturity Date. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period, subject to the
above requirements. No interest shall be due and payable during an Extension
Period, except at the end thereof. The Company must give the Property Trustee,
the Regular Trustees and the Debenture Trustee notice of its election of any
Extension Period (or an extension thereof) at least five Business Days prior to
the earlier of (i) the date the Distributions on the Trust Securities would have
been payable except for the election to begin or extend such Extension Period or
(ii) the date the Regular Trustees are required to give notice to any securities
exchange or to holders of Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than five Business Days
prior to such record date. The Debenture Trustee shall give notice to the
holders of the Capital Securities of the Company's election to begin or extend
an Extension Period. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.
OPTIONAL PREPAYMENT
The Exchange Junior Subordinated Debentures will be prepayable, in
whole or in part, at the option of the Company on or after February 15, 2007
(the "Initial Optional Prepayment Date"), at a prepayment price (the "Optional
Prepayment Price") equal to the percentage of the outstanding principal amount
of the Exchange Junior Subordinated Debentures specified below, plus, in each
case, accrued interest thereon to the date of prepayment if prepaid during the
12-month period beginning February 15 of the years indicated below:
YEAR PERCENTAGE
2007 104.9375%
2008 104.4438
2009 103.9500
2010 103.4563
2011 102.9625
2012 102.4688
2013 101.9750
2014 101.4813
2015 100.9875
2016 100.4938
2017 and thereafter 100.0000%
SPECIAL EVENT PREPAYMENT
If a Special Event occurs and is continuing, the Company may, at its
option, prepay the Exchange Junior Subordinated Debentures in whole (but not in
part) at any time prior to February 15, 2007 within 90 days of the occurrence of
such Special Event, at a prepayment price (the "Special Event Prepayment Price")
equal to the greater of (i) 100% of the principal amount of such Exchange Junior
Subordinated Debentures or (ii) the sum, as determined by a Quotation Agent, of
the present values of the principal amount and premium payable with respect to
an optional prepayment of Exchange Junior Subordinated Debentures on February
15, 2007, together with scheduled payments of interest on the Exchange Junior
Subordinated Debentures accruing from the prepayment date to and including the
Initial Optional Prepayment Date (the "Remaining Life"), discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case, accrued
interest on the Exchange Junior Subordinated Debentures to the date of
prepayment.
A "Special Event" means a Tax Event or an Investment Company Act
Event.
A "Tax Event" means the receipt by the Company and the Trust of an
opinion of counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws or any regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the Issue Date, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Junior Subordinated
Debentures, (ii) interest payable by the Company on the Exchange Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
An "Investment Company Act Event" means the receipt by the Company and
the Trust of an opinion of counsel experienced in practice under the Investment
Company Act of 1940, as amended (the "1940 Act"), to the effect that, as a
result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after the Issue Date.
"Adjusted Treasury Rate" means, with respect to any prepayment date,
(i) the rate per annum equal to the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15 (519)" or any successor
publication which is published weekly by the Federal Reserve Board and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the maturity corresponding to the Remaining Life, yields
for the two published maturities most closely corresponding to the Remaining
Life shall be determined and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such prepayment date, in each case calculated on
the third Business Day preceding the prepayment date plus in each case (a) 1.35%
if such prepayment date occurs on or prior to January 31, 1998 and (b) .50% in
all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Exchange Junior Subordinated Debentures that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life of the Junior Subordinated Debentures. If no United States
Treasury security has a maturity which is within a period from three months
before to three months after the Initial Optional Prepayment Date, the two most
closely corresponding United States Treasury securities shall be used as the
Comparable Treasury Issue, and the Adjusted Treasury Rate shall be interpolated
or extrapolated on a straight-line basis, rounding to the nearest month, using
such securities.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company. "Reference Treasury Dealer" means: (i) Merrill Lynch Government
Securities, Inc. and its respective successors; provided, however, that if the
foregoing shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer; and (ii) any other Primary Treasury Dealer
selected by the Company.
"Comparable Treasury Price" means, with respect to any prepayment
date, (i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on the
third Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of five Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Debenture Trustee obtains fewer than three such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such prepayment date.
"Additional Sums" means such additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities shall not be reduced as a
result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Special Event.
Notice of any prepayment will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Exchange Junior
Subordinated Debentures to be prepaid at its registered address. Unless the
Company defaults in payment of the prepayment price, on and after the prepayment
date interest ceases to accrue on such Exchange Junior Subordinated Debentures
called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Special Event, the Company will pay as
additional amounts on the Exchange Junior Subordinated Debentures the Additional
Sums.
CERTAIN COVENANTS OF THE COMPANY
The Company will also covenant that it will not, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem any debt
securities of the Company (including Other Debentures) that rank pari passu with
or junior in right of payment to the Exchange Junior Subordinated Debentures or
(iii) make any guarantee payments with respect to any guarantee by the Company
of the debt securities of any subsidiary of the Company (including under Other
Guarantees) if such guarantee ranks pari passu or junior in right of payment to
the Exchange Junior Subordinated Debentures (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, common stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Exchange
Guarantee, (d) the purchase of fractional shares resulting from a
reclassification of the Company's capital stock, (e) the exchange or conversion
of one class or series of the Company's capital stock for another class or
series of the Company's capital stock, (f) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged
and (g) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans) if at such time
(1) there shall have occurred any event of which the Company has actual
knowledge that (a) is, or with the giving of notice or the lapse of time, or
both, would be, a Debenture Event of Default and (b) in respect of any
nonpayment default, which the Company shall not have taken reasonable steps to
cure, and in respect of any payment default, which has not been cured, (2) if
such Exchange Junior Subordinated Debentures are held by the Trust, the Company
shall be in default with respect to its payment of any obligations under the
Exchange Guarantee or (3) the Company shall have given notice of its election of
an Extension Period, or any extension thereof, as provided in the Indenture and
shall not have rescinded such notice, and such Extension Period, or any
extension thereof, shall have commenced.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Exchange Junior Subordinated Debentures constitutes a
"Debenture Event of Default" (whatever the reason for such Debenture 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):
(i) failure for 30 days to pay any interest on the Exchange
Junior Subordinated Debentures or any Other Debentures, when due
(subject to the deferral of any due date in the case of an Extension
Period); or
(ii) failure to pay any principal or premium, if any, on the
Exchange Junior Subordinated Debentures or any Other Debentures when
due whether at maturity, upon redemption, by declaration of
acceleration of maturity or otherwise; or
(iii) failure to observe or perform in any material respect
certain other covenants contained in the Indenture for 90 days after
written notice to the Company from the Debenture Trustee or the holders
of at least 25% in aggregate outstanding principal amount of Exchange
Junior Subordinated Debentures; or
(iv) certain events of bankruptcy, insolvency or
reorganization of the Company or
(v) the dissolution, winding up or termination of the Trust,
other than upon redemption of all outstanding Trust Securities, under
the circumstances described under "--Description of Capital
Securities-- Liquidation of the Trust and Distribution of Exchange
Junior Subordinated Debentures" or upon a permitted merger, conversion,
consolidation or amalgamation of the Trust.
The holders of a majority in aggregate outstanding principal amount of
the Exchange Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Exchange Junior Subordinated
Debentures may declare the principal due and payable immediately upon a
Debenture Event of Default. The holders of a majority in aggregate outstanding
principal amount of the Junior Subordinated Debentures may annul such
declaration and waive the default if the default (other than the nonpayment of
the principal of the Exchange Junior Subordinated Debentures which has become
due solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of
the Exchange Junior Subordinated Debentures affected thereby may, on behalf of
the holders of all the Exchange Junior Subordinated Debentures, waive any past
default except a default in the payment of principal of or premium, if any, on
or interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest and premium, if any, and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Exchange Junior Subordinated Debenture.
The Indenture requires the annual filing by the Company with the
Debenture Trustee of a certificate as to the absence of certain defaults under
the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF EXCHANGE CAPITAL SECURITIES
If a Debenture Event of Default shall have occurred and be continuing
and shall be attributable to the failure of the Company to pay interest or
premium, if any, on principal of the Exchange Junior Subordinated Debentures on
the due date, a holder of Exchange Capital Securities may institute a Direct
Action. The Company may not amend the Indenture to remove the foregoing right to
bring a Direct Action without the prior written consent of the holders of all of
the Exchange Capital Securities. If the right to bring a Direct Action is
removed following the Exchange Offer, the Trust may become subject to the
reporting obligations under the Exchange Act. Notwithstanding any payments made
to a holder of Capital Securities by the Company in connection with a Direct
Action, the Company shall remain obligated to pay the principal of or premium,
if any, or interest on the Exchange Junior Subordinated Debentures, and the
Company shall be subrogated to the rights of the holder of such Capital
Securities with respect to payments on the Exchange Capital Securities to the
extent of any payments made by the Company to such holder in any Direct Action.
The holders of the Exchange Capital Securities will not be able to
exercise directly any remedies, other than those set forth in the preceding
paragraph, available to the holders of the Exchange Junior Subordinated
Debentures unless there shall have been an Event of Default under the
Declaration. See "--Description of Capital Securities-- Events of Default;
Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to any Person, and no
Person shall consolidate with or merge into the Company or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to the Company, unless: (i) in case the Company consolidates with or merges into
another Person or conveys or transfers its properties and assets substantially
as an entirety to any Person, the successor Person is organized under the laws
of the United States or any State or the District of Columbia, and such
successor Person expressly assumes the Company's obligations on the Exchange
Junior Subordinated Debentures; and (ii) immediately after giving effect
thereto, no Debenture Event of Default, and no event which, after notice or
lapse of time or both, would become a Debenture Event of Default, shall have
occurred and be continuing.
The general provisions of the Indenture do not afford holders of the
Exchange Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Exchange Junior Subordinated Debentures.
MODIFICATION OF THE INDENTURE
From time to time the Company and the Debenture Trustee may, without
the consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interests of the holders of Junior
Subordinated Debentures), making any other change that does not adversely affect
the rights of any holder of Junior Subordinated Debentures and qualifying, or
maintaining the qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Company and the Debenture
Trustee, with the consent of the holders of a majority in principal amount of
Junior Subordinated Debentures, to modify the Indenture in a manner affecting
the rights of the holders of Junior Subordinated Debentures; provided that no
such modification may, without the consent of the holders of each outstanding
Junior Subordinated Debenture so affected, (i) change the Stated Maturity or
reduce the principal amount of the Junior Subordinated Debentures or reduce the
rate or extend the time of payment of interest thereon or reduce any amount
payable upon redemption or prepayment thereof or change any date on which the
Junior Subordinated Debentures may be prepaid or (ii) reduce the percentage of
principal amount of Junior Subordinated Debentures, the holders of which are
required to consent to any such modification of the Indenture.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Exchange
Junior Subordinated Debentures not previously delivered to the Debenture Trustee
for cancellation (i) have become due and payable or (ii) will become due and
payable at maturity within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount sufficient to pay and discharge the entire indebtedness on the Exchange
Junior Subordinated Debentures not previously delivered to the Debenture Trustee
for cancellation, for the principal and premium, if any, and interest to the
date of the deposit or to the Stated Maturity Date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
SUBORDINATION
The Indenture provides that the Exchange Junior Subordinated
Debentures issued thereunder will be subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided in the Indenture. No payments
on account of principal or premium, if any, or interest, if any, in respect of
the Exchange Junior Subordinated Debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior Indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Indebtedness will
first be entitled to receive payment in full before the holders of Exchange
Junior Subordinated Debentures will be entitled to receive or retain any payment
in respect thereof.
In the event of the acceleration of the maturity of Exchange Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
before the holders of Exchange Junior Subordinated Debentures will be entitled
to receive or retain any payment in respect of the Exchange Junior Subordinated
Debentures.
The term "Senior Indebtedness" means (i) the principal, premium, if
any, and interest in respect of (A) indebtedness of the Company for money
borrowed, whether outstanding on the date of the Indenture or thereafter
created, and (B) indebtedness evidenced by securities, debentures, bonds or
other similar instruments issued by the Company, (ii) all capital lease
obligations of the Company, (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transactions, (v) all obligations of the Company
arising from off-balance sheet guarantees by the Company and direct credit
substitutes and obligations of the Company associated with derivative products
such as interest and foreign exchange rate contracts, commodity contracts, swap
agreements (including interest rate and foreign exchange swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange rate agreements, options, commodity futures contracts and
commodity option contracts; (vi) all obligations of the types referred to in
clauses (i) through (v) above of other persons for the payment of which the
Company is responsible or liable as obligor, guarantor or otherwise and (vii)
all obligations of the types referred to in clauses (i) through (vi) above of
other persons secured by any lien on any property or asset of the Company
(whether or not such obligation is assumed by the Company), except for (1) any
such indebtedness that is by its terms subordinated to or ranks pari passu with
the Exchange Junior Subordinated Debentures and (2) any indebtedness between or
among the Company or its affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (a) the Trust or (b)
any other trust, or a trustee of such trust, partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"financing entity") in connection with the issuance by such financing entity of
preferred securities or other securities that rank pari passu with, or junior
to, the Exchange Capital Securities. Such Senior Indebtedness shall continue to
be Senior Indebtedness and be entitled to the benefits of the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
The right of the Company to participate in any distribution of assets
of any subsidiary upon such subsidiary's liquidation or reorganization or
otherwise, is subject to the prior claims of creditors of the subsidiary, except
to the extent the Company may itself be recognized as a creditor of that
subsidiary. Accordingly, the Exchange Junior Subordinated Debentures will be
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries.
At December 31, 1996, Senior Indebtedness of the Company totaled
$602.7 million. The Company expects from time to time to incur additional
indebtedness constituting Senior Indebtedness. The Indenture places no
limitation on the amount of additional Senior Indebtedness that may be incurred
by the Company or the amount of liabilities which the Company's subsidiaries may
incur.
GOVERNING LAW
The Indenture and the Exchange Junior Subordinated Debentures will be
governed by and construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee is subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder Exchange of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF THE EXCHANGE GUARANTEE
The Private Guarantee was executed and delivered by the Company
concurrently with the issuance by the Trust of the Private Capital Securities
for the benefit of the holders from time to time of the Capital Securities. As
soon as practicable after the date hereof, the Private Guarantee will be
exchanged by the Company for the Exchange Guarantee for the benefit of holders
from time to time of the Exchange Securities. IBJ Schroder Bank & Trust Company
will act as Guarantee Trustee under the Guarantee. The Exchange Guarantee has
been qualified under the Trust Indenture Act. This summary of certain provisions
of the Exchange Guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the Exchange
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The Exchange Guarantee Trustee will hold the Exchange Guarantee
for the benefit of the holders of the Exchange Capital Securities.
GENERAL
The Company will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined below)
to the holders of the Exchange Capital Securities, as and when due, regardless
of any defense, right of set-off or counterclaim that the Trust may have or
assert other than the defense of payment. The following payments with respect to
the Exchange Capital Securities to the extent not paid by or on behalf of the
Trust (the "Guarantee Payments"), will be subject to the Exchange Guarantee: (i)
any accumulated and unpaid Distributions required to be paid on the Exchange
Capital Securities, to the extent the Trust has funds on hand legally available
therefor, (ii) the Redemption Price with respect to any Exchange Capital
Securities called for redemption, to the extent that the Trust has funds on hand
legally available therefor, or (iii) upon a voluntary or involuntary termination
and liquidation of the Trust (unless the Exchange Junior Subordinated Debentures
are distributed to holders of the Exchange Capital Securities), the lesser of
(a) the Liquidation Distribution and (b) the amount of assets of the Trust
remaining available for distribution to holders of Exchange Capital Securities.
The Company's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Company to the holders of the Exchange
Capital Securities or by causing the Trust to pay such amounts to such holders.
The Exchange Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness to the extent provided therein. See "--Status
of the Exchange Guarantee." In addition, the right of the Company to participate
in any distribution of assets of any subsidiary upon such subsidiary's
liquidation or reorganization or otherwise is subject to the prior claims of
creditors of that subsidiary, except to the extent the Company may itself be
recognized as a creditor of that subsidiary. Accordingly, the Company's
obligations under the Exchange Guarantee will be effectively subordinated to all
existing and future liabilities of the Company's subsidiaries. See
"--Description of Exchange Junior Subordinated Debentures--General." The
Exchange Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Indebtedness, whether under the
Indenture, any other indenture that the Company may enter into in the future or
otherwise.
The Company will, through the Exchange Guarantee, the Declaration, the
Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guarantee all of the Trust's obligations
under the Exchange Capital Securities. See "Relationship Among the Exchange
Capital Securities, the Exchange Junior Subordinated Debentures and the
Guarantee."
STATUS OF THE EXCHANGE GUARANTEE
The Exchange Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior in right of payment to all Senior
Indebtedness in the same manner as Exchange Junior Subordinated Debentures,
except in the case of a bankruptcy or insolvency proceeding in respect of the
Company, in which case the Exchange Guarantee will rank subordinate and junior
in right of payment to all liabilities (other than Other Guarantees) of the
Company.
The Exchange Guarantee will rank pari passu with all Other Guarantees
issued by the Company. The Exchange Guarantee will constitute a guarantee of
payment and not of collection (i.e., the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against any other person
or entity). The Exchange Guarantee will be held for the benefit of the holders
of the Exchange Capital Securities. The Exchange Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by the Trust or upon distribution to the holders of the Capital Securities
of the Exchange Junior Subordinated Debentures.
The Exchange Guarantee does not place a limitation on the amount of
additional Senior Indebtedness that may be incurred by the Company or the amount
of liabilities which the Company's subsidiaries may incur. The Company expects
from time to time to incur additional indebtedness constituting Senior
Indebtedness.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the Capital Securities (in which case no vote
will be required), the Exchange Guarantee may not be amended without the prior
approval of the holders of a majority of the Liquidation Amount of such
outstanding Exchange Capital Securities. The manner of obtaining any such
approval will be as set forth under "--Description of Exchange Capital
Securities--Voting Rights; Amendment of the Declaration." All guarantees and
agreements contained in the Exchange Guarantee Agreement shall bind the
successors, assigns, receivers, trustees and representatives of the Company and
shall inure to the benefit of the holders of the Exchange Capital Securities
then outstanding.
EVENTS OF DEFAULT
An event of default under the Exchange 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 Exchange
Capital Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Exchange Guarantee
Trustee in respect of the Exchange Guarantee or to direct the exercise of any
trust or power conferred upon the Exchange Guarantee Trustee under the Exchange
Guarantee.
Any holder of the Exchange Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against the Trust, the
Exchange Guarantee Trustee or any other person or entity.
The Company, as guarantor, will be required to file annually with the
Exchange Guarantee Trustee a certificate as to whether or not the Company is in
compliance with all the conditions and covenants applicable to it under the
Exchange Guarantee.
TERMINATION OF THE EXCHANGE GUARANTEE
The Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of the Capital Securities,
upon full payment of the Liquidation Amount payable upon liquidation of the
Trust or upon distribution of Exchange Junior Subordinated Debentures to the
holders of the Exchange Capital Securities. The Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the Exchange Capital Securities must restore payment of any sums paid under
the Exchange Capital Securities or the Guarantee.
INFORMATION CONCERNING THE EXCHANGE GUARANTEE TRUSTEE
The Exchange Guarantee Trustee, other than during the continuance of a
default by the Company in performance of its obligations under the Exchange
Guarantee, will undertake to perform only such duties as are specifically set
forth in the Exchange Guarantee and, after default, must 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 Exchange Guarantee Trustee will
be under no obligation to exercise any of the powers vested in it by the
Exchange Guarantee at the request of any holder of Exchange Capital Securities,
unless offered reasonable indemnity against the costs, expenses and liabilities
which might be incurred thereby. The Exchange Guarantee Trustee is not required
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of its duties if it reasonably believes that repayment or
adequate indemnity is not reasonably assured to it.
GOVERNING LAW
The Exchange Guarantee will be governed by, and construed in
accordance with, the laws of the State of New York.
DESCRIPTION OF PRIVATE SECURITIES
The terms of the Private Securities are identical in all material
respects to the Exchange Securities, except that (i) the Private Securities have
not been registered under the Securities Act, are subject to certain
restrictions on transfer and are entitled to certain rights under the applicable
Registration Rights Agreement (which rights will terminate upon consummation of
the Exchange Offer, except under limited circumstances), (ii) the Exchange
Capital Securities will not contain the $100,000 minimum Liquidation Amount
transfer restriction and certain other restrictions on transfer applicable to
Private Capital Securities, (iii) the Exchange Capital Securities will not
provide for any increase in the Distribution rate thereon, (iv) the Exchange
Junior Subordinated Debentures will not contain the $100,000 minimum principal
amount transfer restriction and (v) the Exchange Junior Subordinated Debentures
will not provide for any increase in the interest rate thereon. The Private
Securities provide that, in the event that a registration statement relating to
the Exchange Offer has not been filed by June 26, 1997 and been declared
effective by July 28, 1997 or, in certain limited circumstances, in the event of
a shelf registration statement (the "Shelf Registration Statement") with respect
to the resale of the Private Capital Securities is not declared effective by
June 26, 1997, then interest will accrue (in addition to the stated interest
rate on the Private Junior Subordinated Debentures) at the rate of 0.25% per
annum on the principal amount of the Private Junior Subordinated Debentures and
Distributions will accrue (in addition to the stated Distribution rate on the
Private Capital Securities) at the rate of 0.25% per annum on the Liquidation
Amount of the Private Capital Securities, for the period from the occurrence of
such event until such time as such required Exchange Offer is consummated or any
required Shelf Registration Statement is effective. The Exchange Securities are
not, and upon consummation of the Exchange Offer the Private Securities will not
be, entitled to any such additional interest or Distributions. Accordingly,
holders of Private Capital Securities should review the information set forth
under "Risk Factors--Certain Consequences of a Failure to Exchange Private
Capital Securities" and "Description of Exchange Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES, THE EXCHANGE
JUNIOR SUBORDINATED DEBENTURES AND THE EXCHANGE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Exchange
Capital Securities (to the extent the Trust has funds on hand legally available
for the payment of such Distributions) will be irrevocably guaranteed by the
Company as and to the extent set forth under "Description of Exchange
Guarantee." Taken together, the Company's obligations under the Exchange Junior
Subordinated Debentures, the Indenture, the Declaration and the Exchange
Guarantee will provide, in the aggregate, a full, irrevocable and unconditional
guarantee of payments of Distributions and other amounts due on the Exchange
Junior Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Exchange Capital Securities. If and to the extent
that the Company does not make the required payments on the Exchange Junior
Subordinated Debentures, the Trust will not have sufficient funds to make the
related payments, including Distributions, on the Exchange Capital Securities.
The Exchange Guarantee will not cover any such payment when the Trust does not
have sufficient funds on hand legally available therefor. In such event, the
remedy of a holder of Exchange Capital Securities is to institute a Direct
Action. The obligations of the Company under the Exchange Guarantee will be
subordinate and junior in right of payment to all Senior Indebtedness.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due
on the Exchange Junior Subordinated Debentures, such payments will be sufficient
to cover Distributions and other payments due on the Exchange Capital
Securities, primarily because: (i) the aggregate principal amount or Prepayment
Price of the Exchange Junior Subordinated Debentures will be equal to the sum of
the Liquidation Amount or Redemption Price, as applicable, of the Exchange
Capital Securities and Common Securities; (ii) the interest rate and interest
and other payment dates on the Exchange Junior Subordinated Debentures will
match the Distribution rate and Distribution and other payment dates for the
Trust Securities; (iii) the Company shall pay for all and any costs, expenses
and liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Declaration will provide
that the Trust is not authorized to engage in any activity that is not
consistent with the limited purposes thereof.
ENFORCEMENT OF RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any Exchange Capital Security may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against the Exchange
Guarantee Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness, the
subordination provisions of the Indenture will provide that no payments may be
made in respect of the Exchange Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Exchange Junior
Subordinated Debentures would constitute an Event of Default under the
Declaration.
LIMITED PURPOSE OF THE TRUST
The Exchange Capital Securities will represent preferred beneficial
interests in the Trust, and the Trust exists for the sole purpose of issuing and
selling the Trust Securities, using the proceeds from the sale of the Trust
Securities to acquire the Exchange Junior Subordinated Debentures, making
Distributions to holders of the Trust Securities and engaging in only those
other activities necessary, advisable or incidental thereto.
RIGHTS UPON TERMINATION
Unless the Exchange Junior Subordinated Debentures are distributed to
holders of the Trust Securities, upon any voluntary or involuntary termination
and liquidation of the Trust, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Exchange Securities--Description of
Exchange Capital Securities--Liquidation of the Trust and Distribution of
Exchange Junior Subordinated Debentures." Upon any voluntary or involuntary
liquidation or bankruptcy of the Company, the Property Trustee, as holder of the
Exchange Junior Subordinated Debentures, would be a subordinated creditor of the
Company, subordinated in right of payment to all Senior Indebtedness as set
forth in the Indenture, but entitled to receive payment in full of principal
(and premium, if any) and interest, before any stockholders of the Company
receive payments or distributions. Since the Company will be the guarantor under
the Exchange Guarantee and will agree to pay for all costs, expenses and
liabilities of the Trust (other than the Trust's obligations to the holders of
its Trust Securities), the positions of a holder of Exchange Capital Securities
and a holder of Exchange Junior Subordinated Debentures relative to other
creditors and to stockholders of the Company in the event of liquidation or
bankruptcy of the Company are expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
In the opinion of Stroock & Stroock & Lavan LLP, counsel to the
Company and the Trust, the following is a summary of certain of the material
United States federal income tax consequences of the purchase, ownership and
disposition of Capital Securities. Unless otherwise stated, this summary deals
only with Capital Securities held as capital assets by holders who purchased the
Private Capital Securities upon original issuance at the original offering
price. It does not deal with special classes of holders such as banks, thrifts,
real estate investment trusts, regulated investment companies, insurance
companies, dealers in securities or currencies, tax-exempt investors, foreign
persons engaged in a trade or business within the United States or persons that
will hold the Capital Securities as a position in a "straddle," as part of a
"synthetic security" or "hedge," or as part of a "conversion transaction" or
other integrated investment. This summary also does not address the tax
consequences to persons that have a functional currency other than the U.S.
Dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of Capital Securities. Further, it 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 Capital
Securities. This summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), Treasury regulations thereunder and administrative and
judicial interpretations thereof, as of the date hereof, all of which are
subject to change possibly on a retroactive basis. No rulings will be obtained
from the Internal Revenue Service (the "IRS") with respect to any of the federal
income tax consequences described herein. Thus, there can be no assurances that
the IRS will not take a position contrary to the views or opinions expressed
herein and that such position might not ultimately be sustained by the courts.
EXCHANGE OF CAPITAL SECURITIES
The exchange of the Private Capital Securities for Exchange Capital
Securities should not be a taxable event to holders of Capital Securities for
United States federal income tax purposes. The exchange of Private Capital
Securities for Exchange Capital Securities pursuant to the Exchange Offer should
not be treated as an "exchange" for United States federal income tax purposes
because the Exchange Capital Securities should not be considered to differ
materially in kind or extent from the Private Capital Securities and because the
exchange will occur by operation of the terms of the Private Capital Securities.
If, however, the exchange of the Private Capital Securities for the Exchange
Capital Securities were treated as an exchange for United States federal income
tax purposes, such exchange should constitute a non-taxable recapitalization for
United States federal income tax purposes. Accordingly, the Exchange Capital
Securities should have the same issue price as the Private Capital Securities,
and a holder should have the same adjusted tax basis and holding period in the
Exchange Capital Securities as the holder had in the Private Capital Securities
immediately before the exchange.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
Based on the advice of Stroock & Stroock & Lavan, the Company intends
to take the position that the Junior Subordinated Debentures will be classified
for United States federal income tax purposes as indebtedness of the Company
under current law. The remainder of this discussion assumes that the Junior
Subordinated Debentures will be classified as indebtedness of the Company for
United States federal income tax purposes.
CLASSIFICATION OF THE TRUST
In connection with the issuance of the Private Capital Securities,
Stroock & Stroock & Lavan LLP rendered its opinion generally to the effect that,
under then current law and assuming full compliance with the terms of the
Declaration and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, the Trust will be
classified for United States federal income tax purposes as a grantor trust and
not as an association taxable as a corporation. Accordingly, for United States
federal income tax purposes, each holder of Capital Securities generally should
be considered the owner of an undivided interest in the Junior Subordinated
Debentures, and each holder should be required to include in its gross income
any interest (or accrued original issue discount ("OID"), if any) with respect
to its allocable share of those Junior Subordinated Debentures.
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Holders (including cash basis holders) of debt instruments issued with
OID must generally include such OID in income as it accrues on a constant yield
method even if there is not a corresponding receipt of cash attributable to such
income. A debt instrument such as a Junior Subordinated Debenture will generally
be treated as issued with OID if the stated interest on the instrument does not
constitute "qualified stated interest." Qualified stated interest is generally
any one of a series of stated interest payments on an instrument that are
unconditionally payable at least annually at a single fixed rate. In determining
whether stated interest on an instrument is unconditionally payable and thus
constitutes qualified stated interest, remote contingencies as to the timely
payment of stated interest are ignored. In the case of the Junior Subordinated
Debentures, the Company has concluded that the likelihood of its exercising its
option to defer payments of interest by extending the interest payment period is
remote because the exercise of such option would prevent the Company from, among
other things, declaring dividends on any class of its stock. Accordingly, the
Company intends to treat the Junior Subordinated Debentures as having been
issued without OID and, therefore, holders of Capital Securities will accrue
interest income under their particular methods of accounting (e.g., cash or
accrual) rather than accruing OID on a constant yield method.
If the option to defer the payment of interest was determined not to
be "remote" or if the Company exercised such option, the Junior Subordinated
Debentures would be treated as issued with OID at the time of issuance or at the
time of such exercise, as the case may be, and all stated interest on the Junior
Subordinated Debentures would thereafter be treated as OID as long as the Junior
Subordinated Debentures remained outstanding. In such event, all of a holder's
taxable interest income in respect of the Junior Subordinated Debentures would
constitute OID that would have to be included in income on a constant yield
method before the receipt of cash attributable to such income, regardless of
such person's method of tax accounting, and actual distributions of stated
interest would not be reported as taxable income. Consequently, a holder of
Capital Securities would be required to include such OID in gross income even
though the Company would not make any actual cash payments during an Extension
Period.
The above conclusions are based on recently promulgated Treasury
regulations, which have not been interpreted by any court decisions or addressed
in any ruling or other pronouncements of the IRS, and it is possible that the
IRS could take a position contrary to the conclusions herein.
Corporate holders of the Capital Securities will not be entitled to a
dividends received deduction with respect to any income recognized with respect
to the Capital Securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF
CAPITAL SECURITIES
Under current law, a distribution by the Trust of the Junior
Subordinated Debentures, as described under the caption "Description of Capital
Securities--Liquidation of the Trust and Distribution of Junior Subordinated
Debentures," would be treated as a nontaxable event to each holder, and would
result in each holder of Capital Securities receiving directly such holder's pro
rata share of the Junior Subordinated Debentures previously held indirectly
through the Trust. In such event, each holder would receive an aggregate tax
basis in the Junior Subordinated Debentures equal to such holder's aggregate tax
basis in its Capital Securities, and such holder's holding period in the Junior
Subordinated Debentures would include the period during which the Capital
Securities were held by such holder. A holder will accrue interest in respect of
the Junior Subordinated Debentures in the manner described above under "--
Interest Income and Original Issue Discount."
DISPOSITION OF THE CAPITAL SECURITIES
Upon a sale, exchange or other disposition of the Capital Securities
(including a distribution of cash in redemption of a holder's Capital Securities
following the redemption or repayment of the underlying Junior Subordinated
Debentures, but excluding the distribution of Junior Subordinated Debentures), a
holder of Capital Securities will recognize gain or loss equal to the difference
between the amount realized (excluding amounts attributable to accrued and
unpaid interest which the holder has not yet included in income and which will
be treated separately as ordinary income) and the holder's adjusted tax basis in
the Capital Securities disposed of. A holder's adjusted tax basis in the Capital
Securities generally will be the holder's initial purchase price increased by
OID (if any) previously includible in such holder's gross income to the date of
the disposition and decreased by payments received on the Capital Securities
(other than payments attributable to "qualified stated interest" as discussed
above under "-- Interest Income and Original Issue Discount."). Gain or loss
recognized by a holder on Capital Securities held for more than one year will
generally be taxable as long-term capital gain or loss.
The Capital Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debentures. A holder of Capital Securities who disposes of
such holder's Capital Securities between record dates for payments of
Distributions thereon will nevertheless be required to include accrued but
unpaid interest (including OID, if any) on the Junior Subordinated Debentures
through the date of disposition in income as ordinary income, and to add such
amount to his adjusted tax basis in his pro rata share of the underlying Junior
Subordinated Debentures deemed disposed of. Accordingly, such a holder will
recognize a capital loss to the extent the selling price (which may not fully
reflect the value of accrued but unpaid interest) is less than the holder's
adjusted tax basis (which will include accrued but unpaid interest). Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or which is a
citizen or individual resident (or is treated as a citizen or individual
resident) of the United States for federal income tax purposes, a corporation or
partnership created or organized (or treated as created or organized for federal
income tax purposes) in or under the laws of the United States or any political
subdivision thereof, an estate the income of which is includible in its gross
income for federal income tax purposes without regard to its source or a trust
generally if (i) a court within the United States is able to exercise primary
supervision over the administration of the trust and (ii) one or more United
State trustees have the authority to control all substantial decisions of the
trust.
Under present United States federal income tax law: (i) payments by
the Trust or any of its paying agents to any holder of a Capital Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the Capital
Security does not actually or constructively own 10 percent or more of the total
combined voting power of all classes of stock of the Company entitled to vote,
(b) the beneficial owner of the Capital Security is not a controlled foreign
corporation that is related to the Company through stock ownership, and (c)
either (A) the beneficial owner of the Capital Security certifies to the Trust
or its agent, under penalties of perjury, that it is not a U.S. Holder and
provides its name and address or (B) a securities clearing organization, bank or
other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "Financial Institution"), and holds the
Capital Security in such capacity, certifies to the Trust or its agent, under
penalties of perjury, that such statement has been received from the beneficial
owner by it or by a Financial Institution between it and the beneficial owner
and furnishes the Trust or its agent with a copy thereof; and (ii) a United
States Alien Holder of a Capital Security will not be subject to United States
federal withholding tax on any gain realized upon the sale or other disposition
of a Capital Security.
On April 22, 1996, the IRS proposed regulations (the "Proposed
Regulations") which, if adopted in their current form, could affect the
procedures to be followed by a United States Alien Holder in establishing such
United States Alien Holder's status as a United States Alien Holder for the
purposes of the withholding rules (including the backup withholding rules
referred to below). The Proposed Regulations, if adopted in their present form,
generally would be effective for payments made after December 31, 1997.
Prospective investors should contact their tax advisors concerning the potential
adoption of such Proposed Regulations and the potential effect on their
ownership of the Capital Securities.
PROPOSED TAX LEGISLATION
President Clinton's fiscal 1998 budget proposal contained provisions
which if enacted would treat as equity for United States federal income tax
purposes instruments that have a maximum term of more than 15 years and that are
not shown as indebtedness on the balance sheet of the issuer. These provisions
would apply to instruments issued after the date of first committee action.
Since the exchange of Private Securities for the Exchange Securities should not
be a taxable event, it is not anticipated that the Junior Subordinated
Debentures would be treated as reissued and that such provisions, as currently
proposed, would apply to the Junior Subordinated Debentures. However, there can
be no assurance that any legislation implementing these provisions or that
future proposals or legislation will not adversely affect the ability of the
Company to deduct interest on the Junior Subordinated Debentures. Such a change
in the tax law could give rise to a Tax Event and could result in the
distribution of the Junior Subordinated Debentures to holders of the Capital
Securities or, in certain circumstances, the redemption of such securities by
the Company and the distribution of the resulting cash in redemption of the
Preferred Securities. See "Description of Capital Securities--Redemption."
INFORMATION REPORTING TO HOLDERS
The Trust will report income on the Junior Subordinated Debentures,
and any gross proceeds received by the Trust from the retirement or redemption
of the Junior Subordinated Debentures, annually to the holders of record of the
Capital Securities and the Internal Revenue Service. The Trust currently intends
to deliver such reports to holders of record prior to January 31 following each
calendar year. It is anticipated that persons who hold Capital Securities as
nominees for beneficial holders will report the required tax information to
beneficial holders on Form 1099.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Capital
Securities may be subject to a "backup" withholding tax of 31 percent unless the
holder complies with certain identification requirements. Any withheld amounts
will generally be allowed as a credit against the holder's United States federal
income tax, provided the required information is timely filed with the Internal
Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS
INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A
HOLDER'S PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH
RESPECT TO THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL 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.
ERISA CONSIDERATIONS
The Company, the obligor with respect to the Junior Subordinated
Debentures held by the Trust, and its affiliates and the Property Trustee may
each be considered a "party in interest" (within the meaning of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) or a "disqualified
person" (within the meaning of Section 4975 of the Code) with respect to many
employee benefit plans ("Plans") that are subject to ERISA. Any purchaser
proposing to acquire Capital Securities with assets of any Plan should consult
with its counsel. The purchase and/or holding of Capital Securities by a Plan
that is subject to the fiduciary responsibility provisions of ERISA or the
prohibited transaction provisions of Section 4975 of the Code (including
individual retirement arrangements and other plans described in Section
4975(e)(1) of the Code) and with respect to which the Company, the Property
Trustee or any affiliate is a service provider (or otherwise is a party in
interest or a disqualified person) may constitute or result in a prohibited
transaction under ERISA or Section 4975 of the Code, unless such Capital
Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment funds), PTCE 90-1 (an exemption for certain
transactions involving insurance company pooled separate accounts), or PTCE
95-60 (an exemption for transactions involving certain insurance company general
accounts) or PTCE 95-23 (an exemption for certain transactions determined by an
in-house asset manager). In addition, a Plan fiduciary considering the purchase
of Capital Securities should be aware that the assets of the Trust may be
considered "plan assets" for ERISA purposes. Therefore, a Plan fiduciary should
consider whether the purchase of Capital Securities could result in a delegation
of fiduciary authority to the Property Trustee, and, if so, whether such a
delegation of authority is permissible under the Plan's governing instrument or
any investment management agreement with the Plan. In making such determination,
a Plan fiduciary should note that the Property Trustee is a U.S. bank qualified
to be an investment manager (within the meaning of section 3(38) of ERISA) to
which such a delegation of authority generally would be permissible under ERISA.
Further, prior to an Event of Default with respect to the Junior Subordinated
Debentures, the Property Trustee will have only limited custodial and
ministerial authority with respect to Trust assets.
PLAN OF DISTRIBUTION
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the
Exchange Capital Securities issued pursuant to the Exchange Offer in exchange
for Private Capital Securities may be offered for resale, resold and otherwise
transferred by a holder thereof (other than (i) an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act, (ii) a broker-dealer
who acquired Private Capital Securities directly from the Company to resell
pursuant to Rule 144A or any other available exemption under the Securities Act
or (iii) a broker-dealer who acquired Private Capital Securities as a result of
market making or other trading activities), without compliance with the
registration and prospectus delivery requirements of the Securities Act;
provided that the holder is acquiring Exchange Capital Securities in the
ordinary course of its business and is not participating, and has no arrangement
or understanding with any person to participate, in the distribution of the
Exchange Capital Securities. Holders of Private Capital Securities wishing to
accept the Exchange Offer must represent to the Company, as required by the
Registration Rights Agreement, that such conditions have been met. The Company
believes that none of the registered holders of the Private Capital Securities
is an affiliate (as such term is defined in Rule 405 under the Securities Act)
of the Company.
Each broker-dealer that receives Exchange Capital Securities for its
own account in exchange for Private Capital Securities must acknowledge that it
will deliver a prospectus in connection with any resale of such Exchange Capital
Securities. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of Exchange Capital Securities received
in exchange for Private Capital Securities, where such Private Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed to make this
Prospectus (as it may be amended or supplemented) available to any
broker-dealer, upon request, for use in connection with any such resale, for a
period of one year after the Registration Statement is declared effective by the
Commission or until such earlier date on which all the Exchange Capital
Securities are freely tradeable. However, any broker-dealer who acquired the
Securities directly from the Company may not fulfill its prospectus delivery
requirements with this Prospectus, but must comply with the registration and
prospectus delivery requirements of the Securities Act.
The Company will not receive any proceeds from any sale of the
Exchange Capital Securities by broker-dealers or any other persons. Exchange
Capital Securities received by broker-dealers for their own accounts pursuant to
the Exchange Offer may be sold for time to time in one or more transactions in
the over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of such resale, at prices
related to such prevailing market prices or at negotiated prices. Any such
resale may be made directly to purchasers or to or through brokers or dealers
who may receive compensation in the form of commissions or concessions from any
such broker-dealer and/or purchasers of any such Exchange Capital Securities.
Any broker-dealer that resells Exchange Capital Securities that were received by
it for its own account pursuant to the Exchange Offer and any broker or dealer
that participates in the distribution of such Exchange Capital Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Capital Securities pursuant to the Exchange Offer agrees that, upon
receipt of notice from the Company of the happening of any event which makes any
statement in the Prospectus untrue in any material respect or which requires the
making of any changes in the Prospectus in order to make the statements therein
not misleading (which notice the Company agrees to deliver promptly to such
broker-dealer), such broker-dealer will suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission and has furnished copies of the amended or supplemented Prospectus
to such broker-dealer. If the Company shall give any such notice to suspend the
use of the Prospectus, it shall extend the one-year period referred to above by
the number of days during the period from and including the date of the giving
of such notice to and including the date when the broker-dealers shall have
received copies of the supplemented or amended Prospectus necessary to permit
resales of the Exchange Capital Securities.
The Company has agreed to pay all expenses incident to the Company's
performance of, or compliance with, the Registration Rights Agreement and will
indemnify the holders (including any broker-dealers) and certain parties related
to the holders against certain liabilities, including liabilities under the
Securities Act.
LEGAL MATTERS
Certain legal matters relating to the Capital Securities offered
hereby will be passed upon on behalf of the Company by Stroock & Stroock & Lavan
LLP, New York, New York. Stroock & Stroock & Lavan LLP will also pass upon
certain matters relating to United States federal income taxation
considerations. Certain matters of Delaware law relating to the validity of the
Capital Securities will be passed upon on behalf of the Trust by Potter Anderson
& Corroon, special Delaware counsel to the Trust.
EXPERTS
The consolidated financial statements of the Company included in the
Company's Annual Report on Form 10-K incorporated by reference into this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated herein by reference in reliance upon the authority of said firm as
experts in giving said reports.
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware (the "DGCL")
provides, in summary, that directors and officers of Delaware corporations are
entitled, under certain circumstances, to be indemnified against all expenses
and liabilities (including attorneys' fees) incurred by them as a result of
suits brought against them in their capacity as a director or officer, if they
acted in good faith and in a manner they reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful; provided, that no indemnification may be made against expenses in
respect of any claim, issue or matter as to which they shall have been adjudged
to be liable to the corporation, unless and only to the extent that 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, they are fairly and reasonably entitled to indemnity for such expenses
which such court shall deem proper. Any such indemnification may be made by the
corporation only as authorized in each specific case upon a determination by the
stockholders or disinterested directors that indemnification is proper because
the indemnitee has met the applicable standard of conduct. Article Ninth of the
Company's Certificate of Incorporation entitles officers, directors and
controlling persons of the Company to indemnification to the full extent
permitted by Section 145 of the DGCL, as the same may be supplemented or amended
from time to time.
Article Ninth of the Company's Certificate of Incorporation provides that no
director shall have any personal liability to the Company or its stockholders
for any monetary damages for breach of fiduciary duty as a director, provided
that such provision does not limit or eliminate the liability of any director
(i) for breach of such director's duty or loyalty to the Company or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the DGCL (involving certain unlawful dividends or stock repurchases) or (iv) for
any transaction from which such director derived an improper personal benefit.
The provisions of such article do not limit or eliminate the liability of any
director for any act or omission occurring prior to the effective time of such
amendment.
Reference is made to Section 4 of the Registration Rights Agreement included in
Exhibit 4.8 hereto which provides certain indemnification rights to the
directors and officers of the Trust and the Company.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
EXHIBIT
NO. DESCRIPTION
+4.1 Indenture between Interpool and IBJ Schroder Bank & Trust Company, as
trustee, relating to the Junior Subordinated Debentures, dated
January 27, 1997
+4.2 First Supplemental Indenture between Interpool and IBJ Schroder Bank
& Trust Company, as trustee, relating to the Junior Subordinated
Debentures, dated January 27, 1997
+4.3 Form of Exchange Junior Subordinated Debenture
(included in Exhibit 4.2 hereto)
*4.4 Certificate of Trust of Interpool Capital Trust
*4.5 Amended and Restated Declaration of Trust of Interpool Capital Trust
*4.6 Form of Exchange Capital Security for Interpool Capital Trust
(included in Exhibit 4.5 hereto)
*4.7 Form of Exchange Capital Securities Guarantee of Interpool
relating to the Exchange Capital Securities
*4.8 Registration Rights Agreement between Interpool, Inc., Interpool
Capital Trust and Merrill Lynch & Co., Oppenheimer & Co., Inc. and
Smith Barney Inc., as initial purchasers dated January 27, 1997
**5.1 Opinion of Stroock & Stroock & Lavan LLP as to the legality of the
Exchange Junior Subordinated Debentures and the Exchange Guarantee to
be issued by Interpool, Inc.
**5.2 Opinion of Potter, Anderson & Corroon, special Delaware counsel to
Interpool Capital Trust, as to the legality of the Exchange Capital
Securities to be issued by Interpool Capital Trust
**8 Opinion of Stroock & Stroock & Lavan LLP, special tax counsel,
as to certain federal income tax matters
*23.1 Consent of Arthur Andersen LLP
**23.2 Consent of Stroock & Stroock & Lavan LLP (included in Exhibit 5.1)
**23.3 Consent of Potter, Anderson & Corroon (included in Exhibit 5.2)
*24 Power of Attorney of certain officers and directors of Interpool,
Inc. (Included on page II-5 of this Registration Statement)
*25.1 Form T-1 Statement of Eligibility of IBJ Schroder Bank &
Trust Company to act as trustee under the Indenture
*25.2 Form T-1 Statement of Eligibility of IBJ Schroder Bank & Trust
Company to act as trustee under the Amended and Restated Declaration
of Trust of Interpool Capital Trust
*25.3 Form T-1 Statement of Eligibility of IBJ Schroder Bank & Trust
Company to act as trustee under the Exchange Capital Securities
Guarantee for the benefit of the holders of Exchange Capital
Securities of Interpool Capital Trust
**99.1 Form of Letter of Transmittal
**99.2 Form of Notice of Guaranteed Delivery
**99.3 Form of Letter to Nominees
**99.4 Form of Letter to Clients
**99.5 Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9
**99.6 Form of Exchange Agent Agreement
- ------------------------
* Filed herewith.
** To be filed by amendment
+ Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996.
<PAGE>
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(b) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) The undersigned registrant hereby undertakes that insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this form, within one business day of receipt of such
request, and to send the incorporated documents by first class mail or other
equally prompt means. This includes information contained in documents filed
subsequent to the effective date of the registration statement through the date
of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Princeton, State of New
Jersey, on May 27, 1997.
INTERPOOL, INC.
By /s/ Martin Tuchman
Martin Tuchman
Chairman and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Martin Tuchman, Raoul J. Witteveen and Richard W.
Gross, and each of them, his true and lawful attorneys- in-fact and agents with
full power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) of and supplements to this Registration Statement and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto such
attorneys-in-fact and agents and each of them full power and authority to do and
perform each and every act and thing requisite and necessary to be done in and
about the premises, to all intents and purposes and as fully as they might or
could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or their substitutes, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
SIGNATURE TITLE DATE
/s/ Martin Tuchman
Martin Tuchman Chairman of the Board and
Chief Executive Officer May 27, 1997
/s/ Raoul J. Witteveen
Raoul J. Witteveen President, Chief Operating
Officer, Chief Financial
Officer and Director May 27, 1997
(Principal Financial Officer)
/s/ Arthur L. Burns
Arthur L. Burns Vice President, Secretary May 27, 1997
and General Counsel
/s/ William Geoghan
William Geoghan Controller (Principal May 27, 1997
Accounting Officer)
/s/ Warren L. Serenbetz
Warren L. Serenbetz Director May 27, 1997
/s/ John M. Bucher
John M. Bucher Director May 27, 1997
- ------------------------
Peter D. Halstead Director
/s/ Joseph J. Whalen
Joseph J. Whalen Director May 27, 1997
<PAGE>
Pursuant to the requirements of the Securities Act, Interpool Capital
Trust has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Princeton, State of
New Jersey, on May 27, 1997.
INTERPOOL CAPITAL TRUST
By /s/ Martin Tuchman
Martin Tuchman
Regular Trustee
By /s/ Raoul J. Witteveen
Raoul J. Witteveen
Regular Trustee
By /s/ Richard W. Gross
Richard W. Gross
Regular Trustee
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NO. DESCRIPTION NO.
+4.1 Indenture between Interpool and IBJ Schroder Bank & Trust Company, as
trustee, relating to the Junior Subordinated Debentures, dated January
27, 1997
+4.2 First Supplemental Indenture between Interpool and IBJ Schroder Bank &
Trust Company, as trustee, relating to the Junior Subordinated
Debentures, dated January 27, 1997
+4.3 Form of Exchange Junior Subordinated Debenture
(included in Exhibit 4.2 hereto)
*4.4 Certificate of Trust of Interpool Capital Trust
*4.5 Amended and Restated Declaration of Trust of Interpool Capital
Trust
*4.6 Form of Exchange Capital Security for Interpool Capital Trust
(included in Exhibit 4.5 hereto)
*4.7 Form of Exchange Capital Securities Guarantee of Interpool
relating to the Exchange Capital Securities
*4.8 Registration Rights Agreement between Interpool, Inc., Interpool
Capital Trust and Merrill Lynch & Co., Oppenheimer & Co., Inc. and
Smith Barney Inc., as initial purchasers dated January 27, 1997
**5.1 Opinion of Stroock & Stroock & Lavan LLP as to the legality of the
Exchange Junior Subordinated Debentures and the Exchange Guarantee
to be issued by Interpool, Inc.
**5.2 Opinion of Potter, Anderson & Corroon, special Delaware counsel to
Interpool Capital Trust, as to the legality of the Exchange Capital
Securities to be issued by Interpool Capital Trust
**8 Opinion of Stroock & Stroock & Lavan LLP, special tax counsel, as to
certain federal income tax matters
*23.1 Consent of Arthur Andersen LLP
**23.2 Consent of Stroock & Stroock & Lavan LLP (included in Exhibit
5.1)
**23.3 Consent of Potter, Anderson & Corroon (included in Exhibit 5.2)
*24 Power of Attorney of certain officers and directors of Interpool,
Inc. (Included on page II-5 of this Registration Statement)
*25.1 Form T-1 Statement of Eligibility of IBJ Schroder Bank & Trust
Company to act as trustee under the Indenture
*25.2 Form T-1 Statement of Eligibility of IBJ Schroder Bank & Trust
Company to act as trustee under the Amended and Restated
Declaration of Trust of Interpool Capital Trust
*25.3 Form T-1 Statement of Eligibility of IBJ Schroder Bank & Trust Company
to act as trustee under the Exchange Capital Securities Guarantee for
the benefit of the holders of Exchange Capital Securities of Interpool
Capital Trust
**99.1 Form of Letter of Transmittal
**99.2 Form of Notice of Guaranteed Delivery
**99.3 Form of Letter to Nominees
**99.4 Form of Letter to Clients
**99.5 Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
**99.6 Form of Exchange Agent Agreement
- ------------------------
* Filed herewith.
** To be filed by amendment.
+ Incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1996.
Ex-4.4
CERTIFICATE OF TRUST
The undersigned, the trustees of Interpool Capital Trust, desiring to form
a business trust pursuant to Delaware Business Trust Act, 12 DEL. C. ss.3810,
hereby certify as follows:
(a) The name of the business trust being formed hereby
(the "Trust") is "Interpool Capital Trust."
(b) The name and business address of the trustee of the
Trust which has its principal place of business in
the State of Delaware is as follows:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 198091
(c) This Certificate of Trust shall be effective as of
the date of filing.
Dated: November 25, 1996
/S/ MARTIN TUCHMAN
Name: Martin Tuchman
Title: Trustee
/S/ RAOUL J. WITTEVEEN
Name: Raoul J. Witteveen
Title: Trustee
/S/ RICHARD GROSS
Name: Richard Gross
Title: Trustee
DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in
its individual capacity but solely
as Delaware Trustee
By: /S/ RICHARD N. SMITH
Name: Richard N. Smith
Title: Vice President
- ------------------------------------------------------------------------------
AMENDED AND RESTATED
DECLARATION OF TRUST
INTERPOOL CAPITAL TRUST
Dated as of January 27, 1997
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions...................................................2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..............................9
SECTION 2.2 Lists of Holders of Securities................................9
SECTION 2.3 Reports by the Property Trustee..............................10
SECTION 2.4 Periodic Reports to Property Trustee.........................10
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............10
SECTION 2.6 Events of Default; Waiver....................................11
SECTION 2.7 Event of Default; Notice.....................................13
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.........................................................14
SECTION 3.2 Office.......................................................14
SECTION 3.3 Purpose......................................................14
SECTION 3.4 Authority....................................................14
SECTION 3.5 Title to Property of the Trust...............................15
SECTION 3.6 Powers and Duties of the Regular Trustees....................15
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.........18
SECTION 3.8 Powers and Duties of the Property Trustee....................19
SECTION 3.9 Certain Duties and Responsibilities of the
Property Trustee............................................21
SECTION 3.10 Certain Rights of Property Trustee..........................23
SECTION 3.11 Delaware Trustee............................................26
SECTION 3.12 Execution of Documents......................................26
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities......26
SECTION 3.14 Duration of Trust...........................................26
SECTION 3.15 Mergers.....................................................27
SECTION 3.16 Expenses....................................................28
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities......................29
SECTION 4.2 Responsibilities of the Sponsor..............................29
SECTION 4.3 Right to Proceed.............................................30
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee...............30
SECTION 5.2 Delaware Trustee.............................................31
SECTION 5.3 Property Trustee; Eligibility................................32
SECTION 5.4 Certain Qualifications of Regular Trustees...................33
SECTION 5.5 Regular Trustees.............................................33
SECTION 5.6 Delaware Trustee.............................................33
SECTION 5.7 Appointment, Removal and Resignation of Trustees.............33
SECTION 5.8 Vacancies among Trustees.....................................35
SECTION 5.9 Effect of Vacancies..........................................35
SECTION 5.10 Meetings....................................................36
SECTION 5.11 Delegation of Power.........................................36
SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business................................................36
SECTION 5.13 Compensation................................................37
ARTICLE VI
DISTRIBUTIONS/REDEMPTIONS
SECTION 6.1 Distributions................................................37
SECTION 6.2 Redemptions..................................................37
ARTICLE VII
DISTRIBUTIONS/REDEMPTIONS
SECTION 7.1 General Provisions Regarding Securities......................38
SECTION 7.2 Execution and Authentication.................................38
SECTION 7.3 Form and Dating..............................................39
SECTION 7.4 Registrar, Paying Agent and Transfer Agent...................41
SECTION 7.5 Paying Agent to Hold Money in Trust..........................42
SECTION 7.6 Replacement Securities.......................................42
SECTION 7.7 Outstanding Capital Securities...............................42
SECTION 7.8 Capital Securities in Treasury...............................43
SECTION 7.9 Temporary Securities.........................................43
SECTION 7.10 Cancellation................................................44
SECTION 7.11 CUSIP Numbers...............................................44
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.........................................45
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.......................................46
SECTION 9.2 Transfer Procedures and Restrictions.........................47
SECTION 9.3 Deemed Security Holders......................................55
SECTION 9.4 Book Entry Interests.........................................55
SECTION 9.5 Notices to Clearing Agency...................................56
SECTION 9.6 Appointment of Successor Clearing Agency.....................56
ARTICLE X
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR
OTHERS
SECTION 10.1 Liability...................................................56
SECTION 10.2 Exculpation.................................................57
SECTION 10.3 Fiduciary Duty..............................................57
SECTION 10.4 Indemnification.............................................58
SECTION 10.5 Outside Businesses..........................................61
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.................................................62
SECTION 11.2 Certain Accounting Matters..................................62
SECTION 11.3 Banking.....................................................63
SECTION 11.4 Withholding.................................................63
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments..................................................63
SECTION 12.2 Meetings of the Holders; Action by Written Consent..........65
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Property Trustee..........67
SECTION 13.2 Representations and Warranties of Delaware Trustee..........68
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Liquidated Damages...........69
ARTICLE XV
MISCELLANEOUS
SECTION 15.1 Notices.....................................................69
SECTION 15.2 Governing Law...............................................70
SECTION 15.3 Intention of the Parties....................................71
SECTION 15.4 Headings....................................................71
SECTION 15.5 Successors and Assigns......................................71
SECTION 15.6 Partial Enforceability......................................71
SECTION 15.7 Counterparts................................................71
SECTION 15.8 Trustees' Acknowledgment of Appointment.....................71
- -------------
ANNEX I DESIGNATION OF TERMS OF 9-7/8% SERIES A/SERIES B
CAPITAL SECURITIES AND 9-7/8% COMMON SECURITIES
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
310(a)......................................................... 5.3(a)
310(b)......................................................... 5.3(c)
310(c)......................................................... Inapplicable
311(b)......................................................... 2.2(b)
311(c)......................................................... 2.2(b)
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(e)......................................................... 2.5
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)
317(c)......................................................... 3.8(h)
- -------------------
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of
any of its terms or provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
INTERPOOL CAPITAL TRUST
January 27, 1997
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of January 27, 1997, by the Trustees (as defined herein),
the Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Regular Trustees, the Delaware Trustee and the
Sponsor established Interpool Capital Trust (the "Trust," a trust formed under
the Delaware Business Trust Act pursuant to a Declaration of Trust dated as of
November 25, 1996 (the "Original Declaration"), and a Certificate of Trust filed
with the Secretary of State of the State of Delaware on November 25, 1996, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust, making Distributions
and investing the proceeds thereof in certain Debentures of the Debenture Issuer
(each as hereinafter defined);
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a statutory business trust under the Business Trust Act
(as hereinafter defined) and that this Declaration constitute the governing
instrument of such business trust, the Property Trustee and the Regular Trustees
declare that all assets contributed to the Trust will be held in trust for the
benefit of the holders, from time to time, of the securities representing
undivided beneficial interests in the assets of the Trust issued hereunder,
subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but
not defined in the preamble above have the respective
meanings assigned to them in this Section 1.1;
(b) a term defined anywhere in this Declaration has
the same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified,
supplemented or amended from time to time;
(d) all references in this Declaration to Articles
and Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Declaration
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Transfer
Agent.
"Authorized Officer" of a Person means any other Person that
is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global
Capital Security registered in the name of a Clearing Agency or its nominee,
ownership and transfers of which shall be maintained and made through book
entries by a Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions in the City of New York or Wilmington,
Delaware are authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Security Beneficial Owner" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of a
Person maintaining an account with such Clearing Agency (directly as a Clearing
Agency Participant or as an indirect participant, in each case in accordance
with the rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital
Securities and the Series B Capital Securities, which shall be of the same class
of securities for all purposes of this Declaration.
"Capital Securities Guarantee" means, collectively, the Series
A Capital Securities Guarantee and the Series B Capital Securities Guarantee.
"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 Capital Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Capital Security and
which shall undertake to effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means the "Closing Time" under the
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration such Commission is not existing and performing the duties
now assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement
dated as of January 27, 1997 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"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 One State Street, New York, New York
10004.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or
agent of (i) the Trust or (ii) the Trust's Affiliates; and (b)
any Holder of Securities.
"Debenture Issuer" means Interpool, Inc., a Delaware
corporation, or any successor entity resulting from any consolidation,
amalgamation, merger or other business combination, in its capacity as issuer of
the Debentures under the Indenture.
"Debenture Trustee" means IBJ Schroder Bank & Trust Company, a
New York banking corporation, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A
Debentures and the Series B Debentures.
"Default" means an event, act or condition that with notice of
lapse of time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the
meaning set forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direct Action" shall have the meaning set forth in
Section 3.8(e).
"Distribution" means a distribution payable to
Holders in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means an Event
of Default (as defined in the Indenture) that has occurred and is continuing in
respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Exchange Offer" means the offer that may be made pursuant to
the Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and the Series B Capital
Securities Guarantee for the Series A Capital Securities Guarantee.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b)
"Global Capital Security" has the meaning set forth
in Section 7.3(a)
"Holder" means a Person in whose name a Security is
registered, such Person being a beneficial owner within the meaning of the
Business Trust Act.
"Indemnified Person" means a Company Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of January 27, 1997,
among the Debenture Issuer and the Debenture Trustee, as supplemented by the
First Supplemental Indenture, dated as of January 27, 1997, as amended from time
to time.
"Investment Company" means an investment company as
defined in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section
3.6(g).
"Liquidation Amount" means an amount with respect to the
assets of the Trust equal to $1,000 per Security.
"Majority in Liquidation Amount" means, with respect to the
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of more than 50% of the aggregate Liquidation
Amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Maturity Date" means February 15, 2027.
"Offering Memorandum" has the meaning set forth in
Section 3.6(b)(i).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the
Certificate has read the covenant or condition and the
definitions relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in
rendering the Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Paying Agent" has the meaning specified in Section
7.4.
"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.
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth
in Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement dated
January 27, 1997 among the Debenture Issuer, the Trust and the initial
purchasers named therein for the initial offering and sale of Series A Capital
Securities.
"QIBs" means "qualified institutional buyers" as
defined in Rule 144A.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of January 27, 1997, by and among the Trust, the Debenture
Issuer and the initial purchasers named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Regular Trustee" has the meaning set forth in
Section 5.1.
"Related Party" means, with respect to the Sponsor, any direct
or indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, l00% 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,
any senior trust officer, any trust officer or any 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 and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the
meaning set forth in Section 7.3(c).
"Restricted Capital Security" means a Capital Security
required by Section 9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set
forth in Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
"Securities" or "Trust Securities" means the Common
Securities and the Capital Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Securities Guarantees" means the Common Securities
Guarantee and the Capital Securities Guarantee.
"Series A Capital Securities" has the meaning
specified in Section 7.1(a).
"Series B Capital Securities" has the meaning
specified in Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee
agreement dated as of January 27, 1997, by the Sponsor in respect of the Series
A Capital Securities.
"Series B Capital Securities Guarantee" means the guarantee
agreement to be entered into in connection with the Exchange Offer by the
Sponsor in respect of the Series B Capital Securities.
"Series A Debentures" means the Series A 9-7/8% Junior
Subordinated Deferrable Interest Debentures due February 15, 2027 of the
Debenture Issuer issued pursuant to the Indenture.
"Series B Debentures" means the Series B 9-7/8% Junior
Subordinated Deferrable Interest Debentures due February 15, 2027 of the
Debenture Issuer to be issued pursuant to the Indenture in connection with the
Exchange Offer.
"Sponsor" means Interpool, Inc., a Delaware corporation, or
any successor entity resulting from any merger, consolidation, amalgamation or
other business combination, in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"10% in liquidation amount" means, with respect to the
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of l0% or more of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Transfer Agent" has the meaning set forth in Section
7.4.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the
meaning set forth in Section 9.2(b).
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(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 ss.ss. 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee, unless the Property Trustee is
also Registrar for the Securities, (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Regular Trustees on behalf of the Trust shall be obligated to provide such List
of Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and the Regular
Trustees on behalf of the Trust, and (ii) at any other time, within 30 days of
receipt by the Trust of a written request for a List of Holders as of a date no
more than 14 days before such List of Holders is given to the Property Trustee.
The Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in 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 ss.ss. 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after December 15 of each year, commencing
December 15, 1997, the Property Trustee shall provide to the Holders of the
Capital Securities such reports as are required by ss.ss. 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by ss. 313 of the
Trust Indenture Act. The Property Trustee shall also comply with the
requirements of ss. 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 are required by ss. 314 of the Trust Indenture Act (if any) and
the compliance certificate required by ss. 314 of the Trust Indenture Act in the
form, in the manner and at the times required by ss. 314(a) (4) of the Trust
Indenture Act, such compliance certificate to be delivered annually on or before
120 days after the end of each fiscal year of the Sponsor.
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 provided for in this Declaration that relate to any of the
matters set forth in ss. 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to ss. 314(c) (1) of the
Trust Indenture Act shall be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of Capital
Securities may, by vote, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
(i) is not waivable under the Indenture, the Event
of Default under the Declaration shall also not
be waivable; or
(ii) requires the consent or vote of greater than a
majority in aggregate principal amount of the
holders of the Debentures (a "Super Majority")
to be waived under the Indenture, the Event of
Default under the Declaration may only be
waived by the vote of the Holders of at least
the proportion in aggregate Liquidation Amount
of the Capital Securities that the relevant
Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss. 316(a)
(1) (B) of the Trust Indenture Act and such ss. 316(a) (1) (B) of the Trust
Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
The Holders of a Majority in Liquidation Amount of the Capital
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as holder of the Debentures; provided, however, that (subject to
the provisions of Section 3.9) the Property Trustee shall have the right to
decline to follow any such direction if the Property Trustee shall determine
that the action so directed would be unjustly prejudicial to the Holders not
taking part in such direction or if the Property Trustee, being advised by
counsel, determines that the action or proceeding so directed may not lawfully
be taken or if the Property Trustee, in good faith, by its board of directors or
trustees, executive committee, or a trust committee of directors or trustees
and/or Responsible Officers, shall determine that the action or proceedings so
directed would involve the Property Trustee in personal liability. The
provisions in this paragraph of Section 2.6(a) shall be in lieu of ss.
316(a)(1)(A) of the Trust Indenture Act which is hereby expressly excluded from
this Declaration and the Securities as permitted by the Trust Indenture Act.
(b) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority
to be waived, except where the Holders of the
Common Securities are deemed to have waived
such Event of Default under the Declaration as
provided below in this Section 2.6(b), the
Event of Default under the Declaration may only
be waived by the vote of the Holders of at
least the proportion in aggregate liquidation
amount of the Common Securities that the
relevant Super Majority represents of the
aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Capital Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the Holders
of the Capital Securities and only the Holders of the Capital Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu
of ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
ss.ss. 316(a)(l)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, but no such waiver shall
extend to any subsequent or other default or Event of Default with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Debenture Trustee, at the direction of the Holders of the Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
ss. 316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a) (1) (B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) Within five Business Days after the occurrence of any
Event of Default actually known to a Responsible Officer of the Property
Trustee, the Property Trustee shall transmit to the Holders of the Capital
Securities (by mail, first-class postage prepaid), and to the Regular Trustees
and the Sponsor, notice of such Event of Default and all other defaults with
respect to the 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(a) being hereby
defined to be an Event of Default as defined in the Indenture, not including any
periods of grace provided for therein and irrespective of the giving of any
notice provided therein); provided that, except for a default in the payment of
principal of (or premium, if any) or interest on any of the Debentures, 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.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.01(a) and 5.01(b) of
the Indenture; provided, however, that the
Property Trustee shall not be deemed to have
knowledge of any default under Sections 5.01(a)
or 5.01(b) of the Indenture where any Paying
Agent under the Indenture (other than the
Trustee) has been appointed by the Company,
and such Paying Agent has failed to give
written notice to a Responsible Officer of the
Debenture Trustee of such default under the
Indenture; or
(ii) any default as to which a Responsible Officer of the
Property Trustee charged with the administration of
the Declaration shall have received written notice or
of which a Responsible Officer of the Property
Trustee charged with the administration of the
Declaration shall have actual knowledge.
(c) The Sponsor and the Regular Trustees shall file annually
with the Property Trustee an Officers' Certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under
this Declaration.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust shall continue to be named "Interpool Capital Trust"
as such name may be modified from time to time by the Regular Trustees following
written notice to the Property Trustee and the Holders of Securities. The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Regular Trustees.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o
Interpool, Inc., 211 College Road East, Princeton, New Jersey 08540. On at least
ten (10) Business Days written notice to the Property Trustee and the Holders of
Securities, the Regular Trustees may designate another principal office.
SECTION 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities, (b) to use the proceeds from the sale of the
Securities to acquire the Debentures, (c) to make Distributions to Holders of
the Securities and (d) except as otherwise limited herein, to engage in only
those other activities necessary, advisable or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived from
investments, mortgage or pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
(a) Subject to the limitations provided in this Declaration
and to the specific duties of the 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
Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
SECTION 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that, except as contemplated by Section 7.1(a),
the Trust may issue no more than one series of Capital Securities and no more
than one series of Common Securities; and, provided further, that there shall be
no interests in the Trust other than the Securities, and, except as contemplated
by Section 7.1(a), the issuance of Securities shall be limited to a simultaneous
issuance of both Capital Securities and Common Securities at the Closing Time,
(b) in connection with the issue and sale of the
Capital Securities and the consummation of the Exchange Offer,
at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, an offering
memorandum (the "Offering Memorandum") in
preliminary and final form prepared by the
Sponsor, in relation to the offering and sale
of Capital Securities to qualified
institutional buyers in reliance on Rule 144A
under the Securities Act and to institutional
"accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities
Act), and to execute and file with the
Commission, at such time as determined by the
Sponsor, any Registration Statement, including
any amendments thereto, as contemplated by the
Registration Rights Agreement;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts determined by the Sponsor
to be necessary in order to qualify or register all
or part of the Capital Securities in any State in
which the Sponsor has determined to qualify or
register such Capital Securities for sale or resale;
(iii) at the direction of the Sponsor, execute and file an
application, prepared by the Sponsor, to the New York
Stock Exchange or any other national stock exchange
or the Nasdaq Stock Market's National Market for
listing or quotation of the Capital Securities;
(iv) execute and deliver letters, documents, or
instruments with DTC and other Clearing
Agencies relating to the Capital Securities;
(v) if required, 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 Capital Securities under
Section 12(b) of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement
and the Registration Rights Agreement;
(c) to acquire the Series A Debentures with the proceeds of
the sale of the Series A Capital Securities and the Common Securities and to
exchange the Series A Debentures for a like principal amount of Series B
Debentures, pursuant to the Exchange Offer; provided, however, that the Regular
Trustees shall cause legal title to the Debentures to be held of record in the
name of the Property Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event (as
defined in Annex I hereto);
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date to be established, including and
with respect to, for the purposes of
ss. 316(c) of the Trust Indenture Act, Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to the Holders of
Capital Securities and Holders of Common Securities as to such actions and
applicable record dates;
(f) to take all actions and perform such duties as
may be required of the Regular Trustees pursuant to the terms
of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors, advisors
and consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a) (4)
of the Trust Indenture Act to the Property Trustee, which
certificate may be executed by any Regular Trustee;
(k) to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
and Transfer Agent for the Securities or to appoint a Paying Agent for the
Securities as provided in Section 7.4 except for such time as such power to
appoint a Paying Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and
to Holders of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(n) to execute and deliver 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 Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered
under the Investment Company Act;
(ii) causing the Trust to be classified for United
States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of the
Debenture Issuer for United States federal income tax
purposes;
(q) to take all action necessary to consummate the Exchange
Offer or otherwise cause the Capital Securities to be registered pursuant to an
effective registration statement in accordance with the provisions of the
Registration Rights Agreement; and
(r) 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.
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 not, engage in any activity other
than as required or authorized by this Declaration. The Trust
shall not:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such
available proceeds to Holders pursuant to the terms
of this Declaration and of the Securities (excluding
Additional Sums, if any);
(ii) acquire any assets other than as expressly
provided herein;
(iii) possess Trust property for other than a
Trust purpose;
(iv) make any loans or incur any indebtedness other
than loans represented by the Debentures;
(v) possess any power or otherwise act in such a way
as to vary the Trust assets or the terms of the
Securities in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest
in, the Trust other than the Securities;
(vii) other than as provided in this Declaration
or Annex I hereto, (A) direct the time, method
and place of conducting any proceeding with
respect to any remedy available to the
Debenture Trustee, or exercising any trust or
power conferred upon the Debenture Trustee with
respect to the Debentures, (B) waive any past
default that is waivable under the Indenture,
or (C) exercise any right to rescind or annul
any declaration that the principal of all the
Debentures shall be due and payable; or
(viii) consent to any amendment, modification or
termination of the Indenture or the Debentures
where such consent shall be required unless the
Trust shall have received an opinion of tax
counsel experienced in such matters to the
effect that such amendment, modification or
termination will not cause more than an
insubstantial risk that for United States
federal income tax purposes the Trust will not
be classified as a grantor trust.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive
control of the Property Trustee on behalf of the
Holders and, upon the receipt of payments of funds
made in respect of the Debentures held by the
Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the
Holders of the Capital Securities and Holders of the
Common Securities from the Property Trustee Account
in accordance with Section 6.1. Funds in the Property
Trustee Account shall be held uninvested until
disbursed in accordance with this Declaration. The
Property Trustee Account shall be an account that is
maintained with the banking institution that serves
as Property Trustee or any other banking institution
the rating on whose long-term unsecured indebtedness
is at least equal to the rating assigned to the
Capital Securities by a "nationally recognized
statistical rating organization," as that term is
defined for purposes of Rule 436(g) (2) under the
Securities Act;
(ii) engage in such ministerial activities as shall
be necessary or appropriate to effect the
redemption of the Common Securities to the
extent the Debentures are redeemed or mature;
and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of the
Securities, engage in such ministerial activities as
shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of
Securities upon the occurrence of certain events.
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take
any Legal Action which arises out of or in connection with an Event of Default
of which a Responsible Officer of the Property Trustee has actual knowledge or
the Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act and if such Property Trustee shall have failed to take such
Legal Action, the Holders of the Capital Securities may take such Legal Action,
to the same extent as if such Holders of Capital Securities held an aggregate
principal amount of Debentures equal to the aggregate liquidation amount of such
Capital Securities, without first proceeding against the Property Trustee or the
Trust; provided, however, that if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay the principal of or premium, if any, or interest on the Debentures on the
date such principal, premium, if any, or interest is otherwise payable (or in
the case of redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of Capital Securities in such Direct
Action. Except as provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Property Trustee shall not resign as a
Trustee unless either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the
Holders pursuant to the terms of the Securities;
or
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in
accordance with Section 5.7 (a "Successor
Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of Debentures
under the Indenture and, if an Event of Default actually known to a Responsible
Officer of the Property Trustee occurs and is continuing, the Property Trustee
shall, for the benefit of Holders, enforce its rights as holder of the
Debentures subject to the rights of the Holders pursuant to the terms of such
Securities and the Declaration.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in ss. 317(a) of the Trust
Indenture Act.
(i) For such time as the Property Trustee is also the Paying
Agent, the Property Trustee may authorize one or more Persons to act as
additional Paying Agents and to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all Securities and
any such Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act.
Any such additional Paying Agent may be removed by the Property Trustee at any
time the Property Trustee remains as Paying Agent and a successor Paying Agent
or additional Paying Agents may be (but are not required to be) appointed at any
time by the Property Trustee while the Property Trustee is so acting as Paying
Agent.
(j) 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.
(k) The Property Trustee shall have the right to
employ a Quotation Agent (as defined in the Indenture).
(l) The Property Trustee shall, upon the written instructions
of the Sponsor, take such actions as are necessary to exchange an aggregate
principal amount of Series A
Debentures for Series B Debentures in connection with the Exchange Offer
corresponding to the aggregate Liquidation Amount of Series A Capital Securities
exchanged for Series B Capital Securities (as each term is defined in the
Indenture).
Notwithstanding anything expressed or implied to the contrary
in this Declaration, or any Annex or Exhibit hereto, (i) the Property Trustee
must exercise the powers set forth in this Section 3.8 in a manner that is
consistent with the purposes and functions of the Trust set out in Section 3.3,
and (ii) 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 Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only
such duties as are specifically set forth in this Declaration and in the
Securities and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) of which a Responsible Officer 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 an Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Declaration and in the Securities and the Property
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration or the
Securities against the Property Trustee; and
(B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Property Trustee and conforming to the
requirements of this Declaration; provided, however, that in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Declaration;
(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) 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 Capital
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 Debentures and the Property
Trustee Account shall be to deal with such
property in a similar manner as the Property
Trustee deals with similar property for its own
account, subject to the protections and
limitations on liability afforded to the
Property Trustee under this Declaration and the
Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the
payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable
for any interest on any money received by it
except as it may otherwise agree in writing with
the Sponsor. Money held by the Property
Trustee need not be segregated from other funds
held by it except in relation to the Property
Trustee Account maintained by the Property
Trustee pursuant to Section 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, the Delaware Trustee 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, the Delaware Trustee
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 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 reregistration thereof;
(v) the Property Trustee may consult with counsel or
other experts of its selection and the advice
or opinion of such counsel and experts with
respect to legal matters or advice within the
scope of such experts' area of expertise shall
be full and complete authorization and
protection in respect of any action taken,
suffered or omitted by it hereunder in good
faith and in accordance with such advice or
opinion. Such counsel may be counsel to the
Sponsor or any of its Affiliates, and may
include any of its employees. The Property
Trustee shall have the right at any time to seek
instructions concerning the administration of
this Declaration from any court of competent
jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or
powers vested in it by this Declaration at the
request or direction of any Holder, unless such
Holder shall have provided to the Property
Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against
the costs, expenses (including reasonable
attorneys' fees and expenses and the expenses
of the Property Trustee's agents, nominees or
custodians) and liabilities that might be
incurred by it in complying with such request
or direction, including such reasonable advances
as may be requested by the Property Trustee;
provided, however, that nothing contained in
this Section 3.10(a)(vi) shall be taken to
relieve the Property Trustee, upon a
Responsible Officer's actual knowledge of the
occurrence of an Event of Default, of its
obligation to exercise the rights and powers
vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, direction, consent, order, 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 Property Trustee or its
agents hereunder shall bind the Trust and the
Holders of the Securities, and the signature of
the Property Trustee or its agents alone shall
be sufficient and effective to perform any such
action and no third party shall be required to
inquire as to the authority of the Property
Trustee to so act or as to its compliance with
any of the terms and provisions of this
Declaration, both of which shall be
conclusively evidenced by the Property Trustee's
or its agent's taking such action;
(x) whenever in the administration of this
Declaration the Property Trustee shall deem it
desirable to receive instructions with respect
to enforcing any remedy or right or taking any
other action hereunder, the Property Trustee
(i) may request instructions from the Holders
which instructions may only be given by the
Holders of the same proportion in liquidation
amount of the Securities as would be entitled
to direct the Property Trustee under the terms
of the Securities in respect of such remedy,
right or action, (ii) may refrain from
enforcing such remedy or right or taking such
other action until such instructions are
received, and (iii) shall be protected in
conclusively relying on or acting in or
accordance with such instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is
discretionary under the provisions of this
Declaration; and
(xii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it
in good faith, without negligence, and reasonably
believed by it to be authorized or within the
discretion or rights or powers conferred upon it by
this Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 5.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
ss. 3807 of the Business Trust Act. The Delaware Trustee shall not be
responsible for monitoring the compliance by the Property Trustee, the Regular
Trustee or the Sponsor with their respective duties under this Declaration, nor
shall the Delaware Trustee be liable for any default or misconduct of the
Regular Trustees, the Property Trustee or the Sponsor.
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 execute pursuant to Section 3.6;
provided, however, that the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by a majority of
the Regular Trustees.
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of
Article VIII hereof, shall have existence up to November 25, 2027.
SECTION 3.15 Mergers.
(a) The Trust may not merge or convert with or into,
consolidate, amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to, any
corporation or other Person, except as described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the
consent of a majority of the Regular Trustees and without the consent of the
Holders, the Delaware Trustee or the Property Trustee, merge or convert with or
into, consolidate, amalgamate, or be replaced by, or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, a
trust organized as such under the laws of any State; provided that:
(i) if the Trust is not the survivor, the applicable
successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) if the Trust is not the survivor, the Sponsor
expressly appoints a trustee of the Successor Entity
that possesses the same powers and duties as the
Property Trustee as the Holder of the Debentures;
(iii) the Capital 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 Capital Securities are then listed or
quoted;
(iv) such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally
recognized statistical rating organization;
(v) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights,
preferences and privileges of the Holders of the
Capital Securities (including any Successor
Securities) in any material respect (other than
with respect to any dilution of such Holders'
interests in the new or successor entity);
(vi) if the Trust is not the survivor, the Successor
Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, the Sponsor has received an opinion of counsel
to the Trust experienced in such matters to the
effect that:
(A) such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease does
not adversely affect the rights, preferences and privileges of
the Holders of the Capital Securities (including any Successor
Securities) in any material respect (other than with respect
to any dilution of the Holders' interest in the new or
successor entity); and
(B) following such merger, conversion, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company; and
(viii) if the Trust is not the survivor, the
Sponsor or any permitted successor or assignee
of the Sponsor owns all of the common securities
of the Successor Entity and guarantees the
obligations of such Successor Entity under the
Successor Securities at least to the extent
provided by the Capital Securities Guarantee
and the Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge or convert with or into, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, any other entity or permit any
other entity to consolidate, amalgamate, merge or convert with or into, or
replace it if such consolidation, amalgamation, merger, conversion, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States federal income tax
purposes.
SECTION 3.16 Expenses.
In connection with the offering, sale and issuance of the
Debentures to the Property Trustee and in connection with the sale of the Trust
Securities by the Trust, the Company, in its capacity as borrower with respect
to the Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale
and issuance of the Debentures, including compensation of the Trustee under the
Indenture in accordance with the provisions of Section 6.06 of the Indenture;
(b) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization, maintenance and
dissolution of the Trust, the offering, sale and issuance of the Trust
Securities (including compensation to the Purchasers in connection therewith),
the fees and expenses of the Property Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets, other than the Trust's obligations to the holders
of Capital Securities);
(c) be primarily and fully liable for any
indemnification obligations arising with respect to the
Declaration;
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust; and
(e) pay all other fees, expenses, debts and
obligations (other than the Trust Securities) related to the
Trust.
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the
Common Securities then issued by the Trust, in an amount at least equal to 3% of
the capital of the Trust, at the same time as the Series A Capital Securities
are issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Offering Memorandum in preliminary and
final form and to prepare for filing by the Trust with the Commission any
Registration Statement, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital 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) if deemed necessary or advisable by the Sponsor, 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 or
quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the Commission any
required registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) of the Exchange Act, including any
amendments thereto;
(e) to prepare for execution by the Trust of
documents or instruments to be delivered to any Clearing
Agency; and
(f) to negotiate the terms of the Purchase Agreement providing
for the sale of the Series A Capital Securities and the Registration Rights
Agreement, which the Sponsor directs one or more of the Regular Trustees to
execute and deliver on behalf of the Trust.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital
Securities, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the
Company to pay interest or principal on the Debentures, to institute a
proceeding directly against the Debenture Issuer for enforcement of its payment
obligations on the Debentures.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any
Securities, the Sponsor may, by written instrument, increase
or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided, further, that (1) one Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware and
otherwise meets the requirements of Section 5.2 or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at least one Trustee who
is an employee or officer of, or is affiliated with, the Sponsor (a "Regular
Trustee"); and (3) one Trustee shall be the Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust Indenture
Act, and such Trustee may also serve as successor to the initial Delaware
Trustee set forth in Section 5.6 if it meets the applicable requirements.
Notwithstanding the above, unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the legal
requirements of the Trust Indenture Act or of any jurisdiction in which any part
of the Trust's property may at the time be located, the Holders of a Majority in
liquidation amount of the Common Securities acting as a class at a meeting of
the Holders of the Common Securities, and the Regular Trustees shall have power
to appoint one or more persons either to act as a co-trustee, jointly with the
Property Trustee, of all or any part of the Trust's property, or to act as
separate trustee of any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such person or persons
in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of this Declaration. In case an Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make any such appointment of a co-trustee.
SECTION 5.2 Delaware Trustee.
As 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 initial Delaware Trustee set forth in Section 5.6 is no
longer serving in such capacity and the Property Trustee has its principal place
of business in the State of Delaware and otherwise meets the requirements of
Section 3807 of the Business Trust Act, then the Property Trustee, in such case,
shall also be the Delaware Trustee, in which event Section 3.11 shall have no
application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
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 5.3(a) (ii), the
combined capital and surplus of such corporation
shall be deemed to be its combined capital and
surplus as set forth in its most recent report
of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting Interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Property Trustee and the Holder of the Common Securities (as if it were
the obligor referred to in ss. 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of ss. 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
IBJ Schroder Bank & Trust Company
One State Street
New York, NY 10004
Attention: Corporate Trust Department
SECTION 5.4 Certain Qualifications of Regular Trustees.
Each Regular Trustee shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 Regular Trustees.
The initial Regular Trustees shall be:
Martin Tuchman
Raoul J. Witteveen
Richard Gross
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6, provided, however, that, the registration
statement referred to in Section 3.6, including any amendments thereto, shall be
signed by a majority of the Regular Trustees.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
Delaware Trust Capital Management, Inc.
900 Market Street
Wilmington, Delaware 19801
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) of this Declaration
and to Section 6(b) of Annex I hereto, Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor;
(ii) after the issuance of any Securities, unless an Event
of Default shall have occurred and be continuing, by
vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class;
and
(iii) after the issuance of any Securities, if an
Event of Default shall have occurred and be
continuing, (x) with respect to the Property
Trustee or the Delaware Trustee, by vote of
Holders of a Majority in liquidation amount of
the Capital Securities voting as a class at a
meeting of Holders of the Capital Securities or
(y) with respect to the Regular Trustees, by
vote of the Holders of a Majority in
liquidation amount of the Common Securities
voting as a class.
(b) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section
5.7(a) until 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, the Sponsor and the
removed Property Trustee; and
(ii) the Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section
5.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under
Sections 5.2 (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 such Trustee's death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor, the Property Trustee and the Trust, which resignation
shall take effect upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) No such resignation of the Trustee that acts as
the Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Property Trustee and delivered to
the Trust, the Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware
Trustee.
(d) The Holders of the 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 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper and
prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee,
as the case may be.
(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.
SECTION 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a
vacancy in the number of Regular Trustees shall occur, until such vacancy is
filled by the appointment of a Regular Trustee in accordance with Section 5.7,
the Regular Trustees in office, regardless of their number, shall have all the
powers granted to the Regular Trustees and shall discharge all the duties
imposed upon the Regular Trustees by this Declaration.
SECTION 5.10 Meetings.
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand-delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before such meeting. Notice of any telephonic meetings of the
Regular Trustees or any committee thereof shall be hand-delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 24 hours before a meeting. Notices shall contain a brief
statement of the time, place and anticipated purposes of the meeting. The
presence (whether in person or by telephone) of a Regular Trustee at a meeting
shall constitute a waiver of notice of such meeting except where a Regular
Trustee attends a meeting for the express purpose of objecting to the
transaction of any activity on the ground that the meeting has not been lawfully
called or convened. Unless provided otherwise in this Declaration, any action of
the Regular Trustees may be taken at a meeting by vote of a majority of the
Regular Trustees present (whether in person or by telephone) and eligible to
vote with respect to such matter, provided that a Quorum is present, or without
a meeting by the unanimous written consent of the Regular Trustees. In the event
there is only one Regular Trustee, any and all action of such Regular Trustee
shall be evidenced by a written consent of such Regular Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
3.6, 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 (who may also
be officers of the Sponsor) the doing of such things and the execution of such
instruments, either in the name of the Trust or the names of the Regular
Trustees or otherwise, as the Regular Trustees may deem expedient, to the extent
such delegation is not prohibited by applicable law or contrary to the
provisions of the Trust, as set forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession
to Business.
Any corporation into which the Property Trustee or the
Delaware Trustee, as the case may be, 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 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.
SECTION 5.13 Compensation.
The Trustees shall be paid reasonable compensation for their
services hereunder, in accordance with any written agreement between such
Trustee and the Sponsor. To the fullest
extent permitted by applicable law, it is the intent of the parties hereto that
(a) the provisions of Section 3561 of Title 12 of the Delaware Code not apply to
the Trust, and (b) that no amount payable pursuant to this Section 5.13 be
subject to review by any Court, whether pursuant to Section 3560 of Title 12 of
the Delaware Code or otherwise.
ARTICLE VI
DISTRIBUTIONS/REDEMPTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions at the times provided in,
and in accordance with the applicable terms of, the relevant Holder's
Securities. If and to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest but excluding Additional Sums (each as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Property Trustee or Liquidated Damages (as defined in the Registration
Rights Agreement) or any other payments pursuant to the Registration Rights
Agreement with respect to the Debentures held by the Property Trustee (the
amount of any such payment being a "Payment Amount"), the Property Trustee
shall, and is directed, to the extent funds are available for that purpose, to,
make a distribution (a "Distribution") of the Payment Amount to Holders.
SECTION 6.2 Redemptions.
Any provisions pertaining to the redemption of the Securities
will be set out in Annex I hereto.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue
one class of capital securities representing undivided beneficial interests in
the assets of the Trust having such terms as are set forth in Annex I to be
represented by no more than two series, one series of which will be issued by
the Trust as of the date hereof (the "Series A Capital Securities"), and one
class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Regular Trustees shall on behalf of the Trust issue another
series of capital securities representing undivided beneficial interests in the
Trust having such terms as set forth in Annex I (the "Series B Capital
Securities") in exchange for Series A Capital Securities accepted for exchange
in the Exchange Offer, which Series B Capital Securities shall not bear the
legends required by Section 9.2(i) unless the Holder of such Series A Capital
Securities is either (A) a broker-dealer who purchased such Series A Capital
Securities directly from the Trust for resale pursuant to Rule 144A or any other
available exemption under the Securities Act, (B) a Person participating in the
distribution of the Series B Capital Securities or (C) a Person who is an
affiliate (as defined in Rule 144A) of the Trust. The Trust shall issue no
securities or other interests in the assets of the Trust other than the
Securities.
(b) The consideration received by the Trust for the issuance
of the Securities shall constitute a contribution to the capital of the Trust
and shall not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust.
(d) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration.
SECTION 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Securities so signed shall be delivered by the Trust, such Securities
nevertheless may be delivered as though the person who signed such Securities
had not ceased to be such Regular Trustee; and any Securities may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Capital
Securities for the Trust by manual or facsimile signature.
A Capital Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Capital Securities for original issue.
The aggregate number of Capital Securities outstanding at any time shall not
exceed the number set forth in the Terms in Annex I hereto except as provided in
Section 7.6.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Capital Securities. An authenticating
agent may authenticate Capital 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, with
respect to authenticating Capital Securities.
(c) One Regular Trustee shall sign the Common
Securities for the Trust by manual or facsimile signature.
A Common Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Common Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Common Securities for
original issue. The aggregate number of Common Securities outstanding at any
time shall not exceed the number set forth in the Terms in Annex I hereto.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate Common Securities. An authenticating
agent may authenticate Common 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, with
respect to authenticating Common Securities.
SECTION 7.3 Form and Dating.
The Capital Securities and the Property Trustee's certificate
of authentication shall be substantially in the form of Exhibit A-1 and the
Common Securities shall be substantially in the form of Exhibit A-2, each of
which is hereby incorporated in and expressly made a part of this Declaration.
Certificates representing the Securities may be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof. The Securities
may have letters, CUSIP or other numbers, notations or other marks of
identification or designation and such legends or endorsements required by law,
stock exchange rule, agreements to which the Trust is subject, if any, or usage
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Regular Trustees shall furnish
any such legend not contained in Exhibit A-1 to the Property Trustee in writing.
Each Capital Security shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee and the Sponsor,
by their execution and delivery of this Declaration, expressly agree to such
terms and provisions and to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in reliance on
Rule 144A, as provided in the Purchase Agreement, shall be issued in the form of
one or more, permanent global Securities in definitive, fully registered form
without distribution coupons and with the global legend and Restricted
Securities Legend set forth in Exhibit A-1 hereto (a "Global Capital Security"),
which shall be deposited on behalf of the purchasers of the Capital Securities
represented thereby with the Property Trustee, at its New York office, as
custodian for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by a Regular Trustee
on behalf of the Trust and authenticated by the Property Trustee as hereinafter
provided. The number of Capital Securities represented by the Global Capital
Security may from time to time be increased or decreased by adjustments made on
the records of the Property Trustee and the Clearing Agency or its nominee as
hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the
Global Capital Security and such other Capital Securities in global form as may
be authorized by the Regular Trustees on behalf of the Trust to be deposited
with or on behalf of the Clearing Agency.
A Regular Trustee on behalf of the Trust shall execute and the
Property Trustee shall, in accordance with this Section 7.3, authenticate and
make available for delivery initially one or more Global Capital Securities that
(i) shall be registered in the name of Cede & Co. or other nominee of such
Clearing Agency and (ii) shall be delivered by the Property Trustee to such
Clearing Agency or pursuant to such Clearing Agency's written instructions or
held by the Property Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Declaration with respect to any
Global Capital Security held on their behalf by the Clearing Agency or by the
Property Trustee as the custodian of the Clearing Agency or under such Global
Capital Security, and the Clearing Agency may be treated by the Regular
Trustees, the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for all purposes
whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Regular
Trustees, the Property Trustee or any agent of the Trust or the Property Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Global Capital Security.
(c) Definitive Capital Securities. Except as provided in
Section 7.9, the owners of beneficial interests in a Global Capital Security
will not be entitled to receive physical delivery of certificated Capital
Securities ("Definitive Capital Securities"). Purchasers of Securities who are
"accredited investors" (as defined in Rule 501(a) (1) , (2) , (3) or (7) under
the Securities Act) will receive Capital Securities in the form of individual
certificates in definitive, fully registered form without distribution coupons
and with the Restricted Securities Legend set forth in Exhibit A-1 hereto
("Restricted Definitive Capital Securities"); provided, however, that upon
transfer of such Restricted Definitive Capital Securities to a QIB, such
Restricted Definitive Capital Securities will, unless the Global Capital
Security has previously been exchanged, be exchanged for an interest in a Global
Capital Security pursuant to the provisions of Section 9.2. Restricted
Definitive Capital Securities will bear the Restricted Securities Legend set
forth on Exhibit A-1 unless removed in accordance with this Section 7.3 or
Section 9.2.
(d) Authorized Denominations. The Capital
Securities are issuable only in denominations of $1,000 and
any integral multiple thereof.
SECTION 7.4 Registrar, Paying Agent and Transfer Agent.
The Trust shall maintain in the Borough of Manhattan, The City
of New York, (i) an office or agency where Capital Securities may be presented
for registration of transfer ("Registrar"), (ii) an office or agency where
Capital Securities may be presented for payment ("Paying Agent") and (iii) an
office or agency where Securities may be presented for exchange
("Transfer Agent"). The Registrar shall keep a register of the Capital
Securities and of their transfer. The Regular Trustees on behalf of the Trust
may appoint the Registrar, the Paying Agent and the Transfer Agent and may
appoint one or more co-registrars, one or more additional paying agents and one
or more additional exchange agents in such other locations as it shall
determine. The term "Registrar" includes any additional registrar, "Paying
Agent" includes any additional paying agent and the term "Transfer Agent"
includes any additional exchange agent. The Regular Trustees on behalf of the
Trust may change any Paying Agent, Registrar, co-registrar or Transfer Agent
without prior notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the Regular Trustees. The
Regular Trustees shall promptly notify the Property Trustee of the name and
address of any Agent not a party to this Declaration. If the Regular Trustees on
behalf of the Trust fail to appoint or maintain another entity as Registrar,
Paying Agent or Transfer Agent, the Property Trustee shall act as such. The
Trust, the Sponsor or any of its Affiliates may act as Paying Agent, Registrar,
or Transfer Agent. The Trust shall act as Paying Agent, Registrar, co-registrar,
and Transfer Agent for the Common Securities.
The Regular Trustees on behalf of the Trust initially appoint
the Property Trustee as Registrar, Paying Agent, and Transfer Agent for the
Capital Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
Each Paying Agent other than the Property Trustee shall be
required to agree in writing that the Paying Agent will hold in trust for the
benefit of Holders or the Property Trustee all money held by the Paying Agent
for the payment of liquidation amounts or Distributions on the Securities, and
will immediately notify the Property Trustee if there are insufficient funds for
such purpose. While any such insufficiency continues, the Property Trustee may
require a Paying Agent to pay all money held by it to the Property Trustee. The
Trust at any time may require a Paying Agent to pay all money held by it to the
Property Trustee and to account for any money disbursed by it. Upon payment over
to the Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the money. If the
Trust or the Sponsor or an Affiliate of the Trust or the Sponsor acts as Paying
Agent, it shall segregate and hold in a separate trust fund for the benefit of
the Holders all money held by it as Paying Agent.
SECTION 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been lost,
destroyed or wrongfully taken or if such Security is mutilated and is
surrendered to the Trust or in the case of the Capital Securities to the
Property Trustee, one of the Regular Trustees shall execute on behalf of the
Trust, and the Property Trustee shall authenticate, a replacement Security if
the Property Trustee's and the Trust's requirements, as the case may be, are
met. An indemnity bond must be provided by the Holder which, in the judgment of
the Property Trustee, is sufficient to protect the Trustees, the Sponsor or any
authenticating agent from any loss which any of them may suffer if a Security is
replaced. The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security represents a beneficial interest in
the Trust substituted for the security being replaced.
SECTION 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all the
Capital Securities authenticated by the Property Trustee except for those
canceled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Capital Security is purchased or replaced pursuant to
Section 7.6 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, redeemed or purchased
Capital Security is held by a bona fide purchaser.
If Capital Securities are considered redeemed in accordance
with the terms of this Declaration, they cease to be outstanding and
Distributions on them shall cease to accumulate.
A Capital Security does not cease to be outstanding because
one of the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Capital
Securities owned by the Trust, the Sponsor or an Affiliate of the Sponsor, as
the case may be, shall be disregarded and deemed not to be outstanding, except
that for the purposes of determining whether the Property Trustee shall be fully
protected in relying on any such direction, waiver or consent, only Securities
which the Property Trustee actually knows are so owned shall be so disregarded.
SECTION 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for
delivery, one of the Regular Trustees may execute on behalf of
the Trust and the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Trust considers
appropriate for temporary Securities. Without unreasonable delay, the Regular
Trustees shall execute on behalf of the Trust, and the Property Trustee shall
authenticate Definitive Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the
Clearing Agency or with the Property Trustee as custodian for
the Clearing Agency pursuant to Section 7.3 shall be transferred to the
beneficial owners thereof in the form of certificated Capital Securities only if
such transfer complies with Section 9.2 and (i) the Clearing Agency notifies the
Company that it is unwilling or unable to continue as Clearing Agency for such
Global Capital Security or if at any time such Clearing Agency ceases to be a
"clearing Agency" registered under the Exchange Act and a clearing agency is not
appointed by the Sponsor within 90 days of such notice, (ii) a Default or an
Event of Default has occurred and is continuing or (iii) the Regular Trustees at
their sole discretion elect to cause the issuance of certificated Capital
Securities.
(c) Any Global Capital Security that is transferable to the
beneficial owners thereof in the form of certificated Capital Securities
pursuant to this Section 7.9 shall be surrendered by the Clearing Agency to the
Property Trustee located in the Borough of Manhattan, The City of New York, to
be so transferred, in whole or from time to time in part, without charge, and
the Property Trustee shall authenticate and make available for delivery, upon
such transfer of each portion of such Global Capital Security, an equal
aggregate liquidation amount of Securities of authorized denominations in the
form of certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered in such names
as the Clearing Agency shall direct. Any Capital Security in the form of
certificated Capital Securities delivered in exchange for an interest in the
Restricted Global Capital Security shall, except as otherwise provided by
Sections 7.3 and 9.1, bear the Restricted Securities Legend set forth in Exhibit
A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Capital Security may grant proxies and otherwise authorize any person,
including Participants and persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(e) In the event of the occurrence of any of the events
specified in Section 7.9(b), the Regular Trustees on behalf of the Trust will
promptly make available to the Property Trustee a reasonable supply of
certificated Capital Securities in fully registered form without distribution
coupons.
SECTION 7.10 Cancellation.
The Regular Trustees on behalf of the Trust at any time may
deliver Capital Securities to the Property Trustee for cancellation. The
Registrar, Paying Agent and Transfer Agent shall promptly forward to the
Property Trustee any Capital Securities surrendered to them for registration of
transfer, redemption, exchange or payment. The Property Trustee shall promptly
cancel all Capital Securities, surrendered for registration of transfer,
redemption, exchange, payment, replacement or cancellation and shall dispose of
canceled Capital Securities as is the Property Trustee's customary practice or
as the Regular Trustees direct, provided that the Property Trustee shall not be
obligated to destroy Capital Securities. The Trust may not issue new Capital
Securities to replace Capital Securities that it has redeemed or that have been
delivered to the Property Trustee for cancellation or that any Holder has
exchanged.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Capital Securities or as contained in any notice of a redemption and that
reliance may be placed only on the other identification numbers printed on the
Capital Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Sponsor will promptly notify the Property
Trustee of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the
Sponsor; or the revocation of the Sponsor's
certificate of incorporation and the expiration of 90
days after the date of revocation without a
reinstatement thereof;
(iii) following the distribution of all of the
Debentures to the Holders, provided that, the
Property Trustee has received written notice
from the Sponsor directing the Property Trustee
to terminate the Trust (which direction is
optional, and except as otherwise expressly
provided below, within the discretion of the
Sponsor) and provided, further, that such
direction and such distribution is conditioned
on (i) the Regular Trustees' receipt of an
opinion of an independent tax counsel
experienced in such matters, which opinion may
rely on published rulings of the Internal
Revenue Service, to the effect that the Holders
will not recognize any gain or loss for United
States federal income tax purposes as a result
of the dissolution of the Trust and the
distribution of Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of
competent jurisdiction;
(v) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption
thereof shall have been paid to the Holders in
accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at such
time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), the Regular Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X
shall survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part,
in accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) The Sponsor and any Related Party may not transfer the
Common Securities except to a Related Party of the Sponsor or to the Sponsor;
provided, however, that any such transfer shall be subject to the condition
precedent that the transferor obtain the written opinion of counsel experienced
in such matters that such transfer would not cause more than an insubstantial
risk that (x) the Trust would not be classified for United States federal income
tax purposes as a grantor trust; and (y) the Trust would be an Investment
Company or the transferee would become an Investment Company.
(c) The Regular Trustees shall provide for the registration of
Capital Securities and of the transfer of Capital Securities, which will be
effected without charge but only upon payment (with such indemnity as the
Regular Trustees may require) in respect of any tax or other governmental
charges that may be imposed in relation to it. Upon surrender for registration
of transfer of any Capital Securities, the Regular Trustees shall cause one or
more new Capital Securities to be issued in the name of the designated
transferee or transferees. Every Capital Security surrendered for registration
of transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees and the Registrar duly executed by the
Holder or such Holder's attorney duly authorized in writing. Each Capital
Security surrendered for registration of transfer shall be canceled by the
Property Trustee. A transferee of a Capital Security shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Capital Security. By acceptance of a Security, each
transferee shall be deemed to have agreed to be bound by this Declaration.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section 9.2(b),
if Capital Securities are issued upon the transfer, exchange or replacement of
Capital Securities bearing the Restricted Securities Legend set forth in Exhibit
A-1 hereto, or if a request is made to remove such Restricted Securities Legend
on Capital Securities, the Capital Securities so issued shall bear the
Restricted Securities Legend, or the Restricted Securities Legend shall not be
removed, as the case may be, unless there is delivered to the Trust and the
Property Trustee such satisfactory evidence, which shall include an Opinion of
Counsel licensed to practice law in the State of New
York, as may be reasonably required by the Sponsor and the Property Trustee,
that neither the Restricted Securities Legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof are made
pursuant to an exemption from the registration requirements of the Securities
Act or, with respect to Restricted Securities, that such Securities are not
"restricted" within the meaning of Rule 144. Upon provision of such satisfactory
evidence, the Property Trustee, at the written direction of the Regular
Trustees, shall authenticate and deliver Capital Securities that do not bear the
Restricted Securities Legend.
(b) Transfers After Effectiveness of a Registration Statement.
After the effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply (other than as provided by Section 7.1(a)), and beneficial
interests in a Capital Security in global form without legends will be available
to transferees of such Capital Securities, upon exchange of the transferring
Holder's Restricted Definitive Capital Security or directions to transfer such
Holder's beneficial interest in the Global Capital Security. No such transfer or
exchange of a Restricted Definitive Capital Security or of an interest in the
Global Capital Security shall be effective unless the transferor delivers to the
Trust a certificate in a form substantially similar to that attached hereto as
the "Form of Assignment" in Exhibit A-1. Except as otherwise provided in Section
9.2(m), after the effectiveness of a Registration Statement, the Trust shall
issue and the Property Trustee, upon a written order of the Trust signed by one
Regular Trustee, shall authenticate a Capital Security in global form without
the Restricted Securities Legend (the "Unrestricted Global Capital Security")
to deposit with the Clearing Agency to evidence transfers of beneficial
interests from the (i) Global Capital Security and (ii) Restricted Definitive
Capital Securities.
(c) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented
to the Registrar
(x) to register the transfer of such Definitive
Capital Securities; or
(y) to exchange such Definitive Capital Securities
for an equal number of Definitive Capital Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Capital Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably
satisfactory to the Regular Trustees and the
Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in
writing; and
(ii) in the case of Definitive Capital Securities
that are Restricted Definitive Capital
Securities:
(A) if such Restricted Capital Securities are being
delivered to the Registrar by a Holder for registration in the
name of such Holder, without transfer, a certification from
such Holder to that effect; or
(B) if such Restricted Capital Securities are being
transferred: (i) a certification from the transferor in a form
substantially similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1, and (ii) if the Trust or Registrar
so requests, evidence reasonably satisfactory to them as to
the compliance with the restrictions set forth in the
Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security
for a Beneficial Interest in a Global Capital Security. A Definitive Capital
Security may not be exchanged for a beneficial interest in a Global Capital
Security except upon satisfaction of the requirements set forth below. Upon
receipt by the Property Trustee of a Definitive Capital Security, duly endorsed
or accompanied by appropriate instruments of transfer, in form satisfactory to
the Property Trustee and the Regular Trustees, together with:
(i) if such Definitive Capital Security is a Restricted
Capital Security, certification (in a form
substantially similar to that attached hereto as the
"Form of Assignment" in Exhibit A-1); and
(ii) whether or not such Definitive Capital
Security is a Restricted Capital Security,
written instructions directing the Property
Trustee to make, or to direct the Clearing
Agency to make, an adjustment on its books and
records with respect to the appropriate Global
Capital Security to reflect an increase in the
number of the Capital Securities represented by
such Global Capital Security, then the Property
Trustee shall cancel such Definitive Capital
Security and cause, or direct the Clearing
Agency to cause, the aggregate number of
Capital Securities represented by the
appropriate Global Capital Security to be
increased accordingly. If no Global Capital
Securities are then outstanding, the Trust shall
issue and the Property Trustee shall
authenticate, upon written order of any Regular
Trustee, an appropriate number of Capital
Securities in global form.
(e) Transfer and Exchange of Global Capital Securities.
Subject to Section 9.02(f), the transfer and exchange of Global Capital
Securities or beneficial interests therein shall be effected through the
Clearing Agency, in accordance with this Declaration (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global
Capital Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a
Global Capital Security may upon request, but
only upon 20 days' prior notice to the Property
Trustee, and if accompanied by the information
specified below, exchange such beneficial
interest for a Definitive Capital Security
representing the same number of Capital
Securities. Upon receipt by the Property
Trustee from the Clearing Agency or its nominee
on behalf of any Person having a beneficial
interest in a Global Capital Security of written
instructions or such other form of instructions
as is customary for the Clearing Agency or the
Person designated by the Clearing Agency as
having such a beneficial interest in a
Restricted Capital Security and a certification
from the transferor (in a form substantially
similar to that attached hereto as the "Form of
Assignment" in Exhibit A-1), which may be
submitted by facsimile, then the Property
Trustee will cause the aggregate number of
Capital Securities represented by Global Capital
Securities to be reduced on its books and
records and, following such reduction, the
Regular Trustees on behalf of the Trust will
execute and the Property Trustee will
authenticate and make available for delivery to
the transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in exchange
for a beneficial interest in a Global Capital
Security pursuant to this Section 9.2(f) shall
be registered in such names and in such
authorized denominations as the Clearing
Agency, pursuant to instructions from its
Participants or indirect participants or
otherwise, shall instruct the Property Trustee
in writing. The Property Trustee shall deliver
such Capital Securities to the persons in whose
names such Capital Securities are so registered
in accordance with such instructions of the
Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (h) of this Section 9.2), a Global
Capital Security may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the Clearing Agency or
by the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(v) All Capital Securities issued upon any transfer or
exchange pursuant to the terms of this Declaration
shall evidence the same security and shall be
entitled to the same benefits under this Declaration
as the Capital Securities surrendered upon such
transfer or exchange.
(l) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial
owner of a Global Capital Security, a
Participant in the Clearing Agency or other
Person with respect to the accuracy of the
records of the Clearing Agency or its nominee
or of any Participant thereof, with respect to
any ownership interest in the Capital Securities
or with respect to the delivery to any
Participant, beneficial owner or other Person
(other than the Clearing Agency) of any notice
(including any notice of redemption) or the
payment of any amount, under or with respect to
such Capital Securities. All notices and
communications to be given to the Holders and
all payments to be made to Holders under the
Capital Securities shall be given or made only
to or upon the order of the registered Holders
(which shall be the Clearing Agency or its
nominee in the case of a Global Capital
Security). The rights of beneficial owners in
any Global Capital Security shall be exercised
only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing
Agency. The Property Trustee may conclusively
rely and shall be fully protected in relying
upon information furnished by the Clearing
Agency or any agent thereof with respect to its
Participants and any beneficial owners.
(ii) The Property Trustee and Registrar shall have no
obligation or duty to monitor, determine or
inquire as to compliance with any restrictions
on transfer imposed under this Declaration or
under applicable law with respect to any
transfer of any interest in any Capital Security
(including any transfers between or among
Clearing Agency Participants or beneficial
owners in any Global Capital Security) other
than to require delivery of such certificates
and other documentation or evidence as are
expressly required by, and to do so if and when
expressly required by the terms of this
Declaration, and to examine the same to
determine substantial compliance as to form
with the express requirements hereof.
(m) Exchange of Series A Capital Securities for
Series B Capital Securities. The Series A Capital Securities
may be exchanged for Series B Capital Securities pursuant to
the terms of the Exchange Offer. The Property Trustee shall
make the exchange as follows:
The Sponsor shall present the Property Trustee with an
Officers' Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities,
the transactions contemplated by the Exchange Offer will have
been consummated; and
(B) the number of Series A Capital Securities
properly tendered in the Exchange Offer that are represented
by a Global Capital Security and the number of Series A
Capital Securities properly tendered in the Exchange Offer
that are represented by Definitive Capital Securities, the
name of each Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly tendered in
the Exchange Offer by each such Holder and the name and
address to which Definitive Capital Securities for Series B
Capital Securities shall be registered and sent for each such
Holder.
The Property Trustee, upon receipt of (i) such Officers'
Certificate, (ii) an Opinion of Counsel (x) to the effect that the Series B
Capital Securities have been registered under Section 5 of the Securities Act
and the Indenture has been qualified under the Trust Indenture Act and (y) with
respect to the matters set forth in Section 3(p) of the Registration Rights
Agreement and (iii) a Company Order, shall authenticate (A) a Global Capital
Security for Series B Capital Securities in aggregate liquidation amount equal
to the aggregate liquidation amount of Series A Capital Securities represented
by a Global Capital Security indicated in such Officers' Certificate as having
been properly tendered and (B) Definitive Capital Securities representing Series
B Capital Securities registered in the names and in the liquidation amounts
indicated in such Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all the
outstanding Series A Capital Securities shall have been properly tendered and
not withdrawn, the Property Trustee shall make an endorsement on the Global
Capital Security for Series A Capital Securities indicating the reduction in the
number and aggregate liquidation amount represented thereby as a result of the
Exchange Offer.
A Regular Trustee shall deliver such Definitive Capital
Securities for Series B Capital Securities to the Holders thereof as indicated
in such Officers' Certificate.
(n) Minimum Transfers. Series A Capital Securities may only be
transferred in minimum blocks of $100,000 aggregate liquidation amount until
such Series A Capital Securities are registered pursuant to an effective
registration statement filed under the Securities Act.
SECTION 9.3 Deemed Security Holders.
The Property Trustee and the Regular Trustees may treat the
Person in whose name any Security shall be registered on the books and records
of the Trust as the sole owner of such Security 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
Security on the part of any Person, whether or not the Trust shall have actual
or other notice thereof.
SECTION 9.4 Book Entry Interests.
Global Capital Securities shall initially be registered on the
books and records of the Trust in the name of Cede & Co., the nominee of the
Clearing Agency, and no Capital Security Beneficial Owner will receive a
definitive Capital Security Certificate representing such Capital Security
Beneficial Owner's interests in such Global Capital Securities, except as
provided in Section 9.2 and Section 7.9. Unless and until definitive, fully
registered Capital Securities certificates have been issued to the Capital
Security Beneficial Owners pursuant to Section 9.2 or Section 7.9:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Property Trustee and the Regular Trustees shall be
entitled to deal with the Clearing Agency for all purposes of this
Declaration (including the payment of
Distributions on the Global Capital Securities and receiving
approvals, votes or consents hereunder) as the Holder of the Capital
Securities and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Capital Security Beneficial Owners shall
be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Capital Security
Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions
on the Global Certificates to such Clearing Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Declaration, the Property Trustee and
the Regular Trustees shall give all such notices and communications specified
herein to be given to the Holders of Global Capital Securities to the Clearing
Agency, and shall have no notice obligations to the Capital Security Beneficial
Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Capital Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency with
respect to such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
(a) Except as expressly set forth in this
Declaration, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of
the Holders of the Securities, which shall be made
solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of
Securities any deficit upon dissolution of the
Trust or otherwise.
(b) The Sponsor shall be liable for all of the debts and
obligations of the Trust (other than the Trust's obligations to the holders of
the Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that (i) an Indemnified Person shall be liable for any such loss, damage
or claim incurred by reason of such Indemnified Person's gross negligence (or
negligence in the case of the Property Trustee) or willful misconduct with
respect to such acts or omissions and (ii) the limitations on liability of the
Property Trustee shall be as more specifically set forth in Section 3.9(b)
hereof which shall govern in the event of any conflict.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid; provided,
however, that the limitations on liability of the Property Trustee shall be as
more specifically set forth in Section 3.9(b) hereof which shall govern in the
event of any conflict.
SECTION 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person (including, to the extent not inconsistent with Section 3.9, the Property
Trustee) 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 any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified
Person is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it desires,
including its own interests, and shall have no duty
or obligation to give any consideration to any
interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act
under such express standard and shall not be
subject to any other or different standard
imposed by this Declaration or by applicable
law; provided, however, that the Property
Trustee's actions shall be subject to any
different standard required by the Trust
Indenture Act after this Declaration has been
qualified thereunder pursuant to Section 2.1
hereof.
SECTION 10.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full
extent permitted by law, any Company
Indemnified Person who was or is a party or is
threatened to be made a party to any
threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is
or was a Company Indemnified Person against expenses
(including attorneys' fees and expenses), judgments,
fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or
not opposed to the best interests of the Trust, and,
with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did
not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the
best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent
permitted by law, any Company Indemnified
Person who was or is a party or is threatened to
be made a party to any threatened, pending or
completed action or suit by or in the right of
the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company
Indemnified Person against expenses (including
attorneys' fees and expenses) 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 10.4(a), or in defense of any claim,
issue or matter therein, he shall be
indemnified, to the full extent permitted by
law, against expenses (including attorneys'
fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by
a court) shall be made by the Sponsor only as
authorized in the specific case upon a
determination that indemnification of the
Company Indemnified Person is proper in the
circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i)
and (ii). Such determination shall be made (1)
by the Regular Trustees by a majority vote of a
quorum consisting of such Regular Trustees who
were not parties to such action, suit or
proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum
of disinterested Regular Trustees so directs,
by independent legal counsel in a written
opinion, or (3) by the Common Security Holder
of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified
Person in defending a civil, criminal,
administrative or investigative action, suit or
proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by
the Sponsor in advance of the final disposition
of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such
Company Indemnified Person to repay such amount
if it shall ultimately be determined that he is
not entitled to be indemnified by the Sponsor
as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall
be made by the Sponsor if a determination is
reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a
quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent
legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that,
based upon the facts known to the Regular
Trustees, counsel or the Common Security Holder
at the time such determination is made, such
Company Indemnified Person acted in bad faith or
in a manner that such person did not believe to
be in or not opposed to the best interests of
the Trust, or, with respect to any criminal
proceeding, that such Company Indemnified
Person believed or had reasonable cause to
believe his conduct was unlawful. In no event
shall any advance be made in instances where
the Regular Trustees, independent legal counsel
or Common Security Holder reasonably determine
that such person deliberately breached his duty
to the Trust or its Common or Capital Security
Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be
deemed exclusive of any other rights to which
those seeking indemnification and advancement
of expenses may be entitled under any
agreement, vote of stockholders or disinterested
directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to
action in his official capacity and as to
action in another capacity while holding such
office. All rights to indemnification under this
Section 10.4(a) shall be deemed to be provided
by a contract between the Sponsor and each
Company Indemnified Person who serves in such
capacity at any time while this Section 10.4(a)
is in effect. Any repeal or modification of
this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and
maintain insurance on behalf of any person who
is or was a Company Indemnified Person against
any liability asserted against him and incurred
by him in any such capacity, or arising out of
his status as such, whether or not the Sponsor
would have the power to indemnify him against
such liability under the provisions of this
Section 10.4(a)
(viii) For purposes of this Section 10.4(a),
references to "the Trust" shall include, in
addition to the resulting or surviving entity,
any constituent entity (including any
constituent of a constituent) absorbed in a
consolidation or merger, so that any person who
is or was a director, trustee, officer or
employee of such constituent entity, or is or
was serving at the request of such constituent
entity as a director, trustee, officer,
employee or agent of another entity, shall stand
in the same position under the provisions of
this Section 10.4(a) with respect to the
resulting or surviving entity as he would have
with respect to such constituent entity if its
separate existence had continued.
(ix) The indemnification and advancement of expenses
provided by, or granted pursuant to, this
Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a
person who has ceased to be a Company
Indemnified Person and shall inure to the
benefit of the heirs, executors and
administrators of such a person.
(b) The Sponsor agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the
Delaware Trustee, and (iv) any officers, directors, shareholders, members,
partners, employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense (including legal fees and expenses), including taxes
(other than taxes based on the income of such Fiduciary Indemnified Person),
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 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, ind1ependently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or the
Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Property Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depositary for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books 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 Regular Trustees shall cause to be prepared and
delivered to each of the Holders, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Regular Trustees shall endeavor to deliver
all such information statements within 30 days after the end of each Fiscal Year
of the Trust.
(d) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Regular Trustees on behalf of the Trust with any state or local
taxing authority.
SECTION 11.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Trustee
Account.
SECTION 11.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Regular Trustees to assist it in determining the extent of, and
in fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by a
written instrument approved by the Trustees and the Sponsor 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 any of the Regular
Trustees and the Sponsor and an Opinion of Counsel
that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of
the Securities); and
(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 Securities),
provided, however, that the Property Trustee shall not be
required to sign any such amendment, and
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue to be
classified for purposes of United States federal
income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in contravention of
the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(c) At such time after the Trust has issued any Securities
that remain outstanding, any amendment that would adversely affect the rights,
privileges or preferences of any Holder of Securities may be effected only with
such additional requirements as may be set forth in the terms of such
Securities;
(d) Section 10.1(c), Section 3.15(c) and this
Section 12.1 shall not be amended without the consent of all
of the Holders of the Securities;
(e) Article IV shall not be amended without the
consent of the Holders of a Majority in liquidation amount of
the Common Securities and;
(f) The rights of the holders of the Common Securities under
Article V to increase or decrease the number of Trustees and to appoint and
remove Trustees shall not be amended without the consent of the Holders of a
Majority in liquidation amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this
Declaration may be amended without the consent of the Holders
of the Securities to:
(i) cure any ambiguity, correct or supplement any
provision in this Declaration that may be
inconsistent with any other provision of this
Declaration or to make any other provisions with
respect to matters or questions arising under this
Declaration which shall not be inconsistent
with the other provisions of the Declaration;
and
(ii) to modify, eliminate or add to any provisions of
the Declaration to such extent as shall be
necessary to ensure that the Trust will be
classified for United States federal income tax
purposes as a grantor trust at all times that
any Securities are outstanding or to ensure that
the Trust will not be required to register as
an Investment Company under the Investment
Company Act.
provided, however, that such action shall not adversely affect in any material
respect the interests of the Holders, and any amendments of this Declaration
shall become effective when notice thereof is given to the Holders.
SECTION 12.2 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Regular Trustees shall call a
meeting of the Holders of such class if directed to do so by the Holders of at
least 10% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more notices in
writing stating that the signing Holders of Securities wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply
to meetings of Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to
vote thereat at least seven days and not more
than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the
Holders is permitted or required under this
Declaration or the rules of any stock exchange
on which the Capital Securities are listed or
admitted for trading, such vote, consent or
approval may be given at a meeting of the
Holders. Any action that may be taken at a
meeting of the Holders of Securities may be
taken without a meeting if a consent in writing
setting forth the action so taken is signed by
the Holders of Securities owning not less than
the minimum amount of Securities in liquidation
amount that would be necessary to authorize or
take such action at a meeting at which all
Holders 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 entitled to vote who have
not consented in writing. The Regular
Trustees may specify that any written ballot
submitted to the Security Holder for the
purpose of taking any action without a meeting
shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder may authorize any Person to act for
it by proxy on all matters in which a Holder is
entitled to participate, including waiving
notice of any meeting, or voting or
participating at a meeting. No proxy shall be
valid after the expiration of 11 months from
the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities
executing it. Except as otherwise provided
herein, all matters relating to the giving,
voting or validity of proxies shall be governed
by the General Corporation Law of the State of
Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust
were a Delaware corporation and the Holders were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Regular Trustees or by such
other Person that the Regular Trustees may
designate; and
(iv) unless the Business Trust Act, this Declaration,
the terms of the Securities, the Trust
Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are
then listed or trading, otherwise provides, the
Regular Trustees, in their sole discretion,
shall establish all other provisions relating
to meetings of Holders, including notice of the
time, place or purpose of any meeting at which
any matter is to be voted on by any Holders of
Securities, waiver of any such notice, action by
consent without a meeting, the establishment of
a record date, quorum requirements, voting in
person or by proxy or any other matter with
respect to the exercise of any such right to
vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 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 New York banking corporation
with trust powers and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Property
Trustee of the Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. The Declaration has been duly
executed and delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration; and
(d) The Delaware Trustee is either (x) a natural person who is
a resident of the State of Delaware or (y) an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
REGISTRATION RIGHTS
SECTION 14.1 Registration Rights Agreement; Liquidated Damages.
The Holders of the Capital Securities, the Debentures and the
Capital Securities Guarantee (collectively, the "Registrable Securities") are
entitled to the benefits of the Registration Rights Agreement including, without
limitation, the payment of Liquidated Damages (as defined therein) in the
circumstances set forth therein.
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 first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders):
Interpool Capital Trust
c/o Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Attention: Martin Tuchman, Raoul J.
Witteveen and Richard Gross, Regular
Trustees
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware
Trustee may give notice of to the Holders):
Delaware Trust Capital Management, Inc.
900 Market Street
5-4-84-12
Wilmington, Delaware 19801
Attention: Richard N. Smith, Vice
President
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address as the Property
Trustee may give notice of to the Holders):
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Department
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Attention: Chief Executive Officer
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, 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 interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws; provided, however, that there shall
not be applicable to the Trust, the Trustees or this Declaration any provisions
of law (whether statutory or common) of the State of Delaware pertaining to
trusts (other than the Business Trust Act) that relate to or regulate in a
manner inconsistent with the terms hereof (a) the filing with any court or
governmental body or agent of trustee accounts or schedules of trustee fees and
charges, (b) affirmative requirements to post bonds for trustees, officers,
agents or employees of a trust, (c) the acquisition, holding or disposition of
any property, (d) the allocation of receipts and expenditures between income and
principal, (e) restrictions or limitations on the permissible nature, amount or
concentration of trust investments or requirements relating to the titling,
storage or other manner of holding or investing trust assets, or (f) the
establishment of fiduciary or other standards of responsibility or limitations
on the acts or powers of trustees that are inconsistent (whether more or less
restrictive) with the provisions of this Declaration. In addition to any other
provision of Title 12 of the Delaware Code excluded in this Declaration, Section
3540 of Title 12 of the Delaware Code shall not apply to the Trust.
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.
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 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.
SECTION 15.8 Trustees' Acknowledgment of Appointment.
Each Trustee, by its execution of a counterpart of this
Declaration, acknowledges and accepts its appointment as Trustee.
<PAGE>
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
/s/ Martin Tuchman
Martin Tuchman, not in his
individual capacity
but solely in his capacity as
Regular Trustee
hereunder
/s/ Raoul J. Witteveen
Raoul J. Witteveen, not in his
individual capacity
but solely in his capacity as
Regular Trustee hereunder
/s/ Richard W. Gross
Richard Gross, not in his
individual capacity
but solely in his capacity as
Regular Trustee hereunder
DELAWARE TRUST CAPITAL
MANAGEMENT, INC., not in
its individual capacity but
solely in its capacity as
Delaware Trustee hereunder
By: /s/ Richard N. Smith
Name: Richard N. Smith
Title: Vice President
IBJ SCHRODER BANK & TRUST
COMPANY, not in its
individual capacity but
solely in its capacity as
Property Trustee hereunder
By: /s/ Thomas McCutcheon
Name: Thomas McCutcheon
Title: Assistant Vice President
INTERPOOL, INC.,
as Sponsor
By: /s/ Martin Tuchman
Name: Martin Tuchman
Title: Chairman and Chief
Executive Officer
<PAGE>
ANNEX I
INTERPOOL CAPITAL TRUST
DESIGNATION OF TERMS OF
9-7/8% SERIES A/SERIES B CAPITAL SECURITIES AND
9-7/8% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of January 27, 1997 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Securities are set out below
(each capitalized term used but not defined herein has the meaning set forth in
the Declaration).
l. DESIGNATION AND NUMBER.
(a) CAPITAL SECURITIES. 75,000 Series A Capital Securities of
the Trust and 75,000 Series B Capital Securities of the Trust, each series with
an aggregate liquidation amount with respect to the assets of the Trust of
Seventy-Five Million Dollars ($75,000,000), and with a liquidation amount with
respect to the assets of the Trust of $1,000 per Capital Security, are hereby
designated for the purposes of identification only as 9-7/8% Series A Capital
Securities" and "9-7/8% Series B Capital Securities", respectively
(collectively, the "Capital Securities"). The certificates evidencing the
Capital 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 Capital Securities are listed. The Series A
Capital Securities shall be issued by the Trust on the date of the Declaration
and the Series B Capital Securities shall be issued in exchange for the Series A
Capital Securities pursuant to the Exchange Offer. For all purposes of the
Declaration, the Series A Capital Securities and the Series B Capital Securities
shall be of the same class, and at no time may there be outstanding more than
75,000 Capital Securities in the aggregate comprised of one or both of such
series.
(b) COMMON SECURITIES. 2,320 Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
Two Million Three Hundred Twenty Thousand Dollars ($2,320,000) and a liquidation
amount with respect to the assets of the Trust of $1,000 per Common Security,
are hereby designated for the purposes of identification only as "9-7/8% Common
Securities" (the "Common Securities"). The certificates evidencing the Common
Securities shall be substantially in the form of Exhibit A-2 to the Declaration,
with such changes and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. DISTRIBUTIONS:
(a) In each case, subject to Sections 8 and 9 hereof,
distributions payable on each Security will be fixed at a rate per annum of
9-7/8% (the "Interest Rate") of the liquidation amount of $1,000 per Security
(the "Liquidation Amount"), such rate being equal to the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional distributions
thereon compounded semi-annually at the Interest Rate (to the extent permitted
by applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions," as used herein, includes distributions of
any such interest and Liquidated Damages payable unless otherwise stated;
PROVIDED, HOWEVER, that such term does not include Additional Sums as such term
is defined in the Indenture. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held
by the Property Trustee and to the extent the Trust has funds
on hand legally available therefor.
(b) In each case, subject to Sections 8 and 9 hereof,
distributions on the Securities will be cumulative, will accumulate from the
most recent date to which Distributions have been paid or, if no Distributions
have been paid, from January 27, 1997, and will be payable semi-annually in
arrears on February 15 and August 15 of each year, commencing on February 15,
1997 (each, a "Distribution Date"), except as otherwise described below.
Distributions will be computed on the basis of a 360-day year consisting of
twelve 30-day months. For periods less than a full month, Distributions payable
shall be computed on the basis of the actual number of elapsed days based on a
360-day year.
So long as no Event of Default has occurred and is continuing,
the Debenture Issuer has the right under the Indenture at any time and from time
to time to defer payments of interest by extending the interest payment period
on the Debentures for a period not exceeding 10 consecutive semi-annual periods,
including the first such semi-annual period during such period (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debentures, PROVIDED THAT no Extension Period shall extend beyond
the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions on the Securities will also be deferred for the same period.
Despite such deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Debentures)
at the Interest Rate, compounded semiannually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
PROVIDED THAT such Extension Period, together with all such previous and further
extensions of such Extension Period, may not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such Extension Period, or
extend beyond the Maturity Date of the Debentures. Payments of accumulated
Distributions at the conclusion of any Extension Period will be payable to
Holders as they appear on the books and records of the Trust on the record date
with respect to the first Distribution Date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due on any Distribution Date, the Debenture Issuer may elect to
commence a new Extension Period, subject to the above requirements.
(c) In each case, subject to Sections 8 and 9 hereof,
distributions on the Securities will be payable to the Holders thereof as they
appear on the books and records of the Trust on the first day of the month
(whether or not such day is a Business Day) in which the relevant Distribution
Date occurs, which Distribution Dates correspond to the interest payment dates
on the Debentures. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities held in global from shall be made to the Depositary, which shall
credit the relevant accounts of the Depositary on the applicable Distribution
Dates. Payments in respect of Capital Securities held in certificated form will
be made by check mailed to the Holder entitled thereto. The relevant record
dates for the Common Securities shall be the same as the record dates for the
Capital Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), with the same force and
effect as if made on such date.
(d) In the event that there is any available money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders of
the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION.
In the event of any termination of the Trust or the Sponsor
otherwise gives notice of its election to liquidate the Trust pursuant to
Section 8.1(a) (iii) of the Declaration, the Trust shall be liquidated by the
Regular Trustees as expeditiously as the Regular Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust as provided by Section 3808(e) of the Business Trust Act, to the Holders a
Like Amount (as defined below) of the Debentures, in which event such Holders
will be entitled to receive out of the assets of the Trust legally available for
distribution to Holders, after satisfaction of liabilities to creditors of the
Trust as provided by Section 3808(e) of the Business Trust Act, amount equal to
the aggregate of the liquidation amount of $1,000 per Security plus accumulated
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the
Securities, Securities having a Liquidation Amount equal to the principal amount
of Debentures to be paid in accordance with their terms and (ii) with respect to
a distribution of Debentures upon the liquidation of the Trust, Debentures
having a principal amount equal to the Liquidation Amount of the Securities of
the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets on hand
legally available to pay in full the aggregate Liquidation Distribution, then
the amounts payable directly by the Trust on the Securities shall be paid on a
Pro Rata basis (as defined in Section 8 of this Annex I).
4. REDEMPTION AND DISTRIBUTION.
(a) Upon the repayment of the Debentures in whole or in part,
at maturity or upon early prepayment (either at the option of the Debenture
Issuer or pursuant to a Special Event, as described below), the proceeds from
such repayment shall be simultaneously applied by the Property Trustee to redeem
a Like Amount of the Securities at a redemption price equal to (i) in the case
of the repayment of the Debentures on the Maturity Date, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional prepayment of the
Debentures upon the occurrence and continuation of a Special Event, the Special
Event Redemption Price (as defined below) and (iii) in the case of the optional
prepayment of Debentures other than as a result of the occurrence and
continuance of a Special Event, the Optional Redemption Price (as defined
below). The Maturity Redemption Price, the Special Event Redemption Price and
the Optional Redemption Price are referred to collectively as the "Redemption
Price." Holders will be given not less than 30 nor more than 60 days notice of
such redemption.
(b) (i) The "Maturity Redemption Price," with respect to
a redemption of Securities, shall mean an amount
equal to the principal of and accrued and unpaid
interest on the Debentures as of the Maturity Date.
(ii) In the case of an optional prepayment of
Debentures, if fewer than all the outstanding
Securities are to be redeemed, the Capital
Securities and the Common Securities will be
redeemed Pro Rata and the Capital Securities to
be redeemed will be determined as described in
Section 4(f) (ii) below. Upon the entry of an
order for the dissolution of the Trust by a
court of competent jurisdiction, the Debentures
thereafter will be subject to optional
repayment, in whole, but not in part, on or
after February 15, 2007 (the "Initial Optional
Redemption Date").
The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to prepay the Debentures in whole or in
part at any time on or after the Initial Optional Redemption Date, upon not less
than 30 days and not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of the Securities
to be redeemed by the Trust at the Optional Redemption Price on a Pro Rata
basis. The "Optional Redemption Price" of the Securities shall mean a price
equal to the percentage of the liquidation amount of Securities to be redeemed
plus accumulated and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12-month period beginning February 15 of the
years indicated below:
YEAR PERCENTAGE
2007 104.9375%
2008 104.4438
2009 103.9500
2010 103.4563
2011 102.9625
2012 102.4688
2013 101.9750
2014 101.4813
2015 100.9875
2016 100.4938
2017 and thereafter 100.0000%
(c) If at any time a Special Event (as defined below) occurs
and is continuing, the Debenture Issuer shall have the right (subject to the
conditions set forth in the Indenture) at any time prior to February 15, 2007,
upon not less than 30 nor more than 60 days notice, to prepay the Debentures in
whole, but not in part, within the 90 days following the occurrence of such
Special Event (the "90 Day Period"), and, simultaneous with such redemption, to
cause a Like Amount of the Securities to be redeemed by the Trust at the Special
Event Redemption Price on a Pro Rata basis.
"Special Event" means a Tax Event or an Investment Company Act
Event (each as defined below).
"Tax Event" means the receipt by the Sponsor and the Trust of
an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after January 27, 1997, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Debenture Issuer on the Debentures is not, or within 90 days of
the date of such opinion will not be, deductible by the Debenture Issuer, in
whole or in part, for United States federal income tax purposes, or (iii) the
Trust is, or will be within 90 days of the date of such opinion, subject to more
than a de minimis amount of other taxes, duties or other governmental charges.
"Investment Company Act Event" means the receipt by the
Sponsor and the Trust of an opinion of counsel experienced in practice under the
Investment Company Act of 1940, as amended (the A1940 Act"), to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in 1940 Act Law"),
there is more than an insubstantial risk that the Trust is or will be considered
an "investment Company" which is required to be registered under the 1940 Act,
which Change in 1940 Act Law becomes effective on or after Issue Date.
"Special Event Redemption Price" shall mean, with respect to a
redemption of Securities, a price equal to the greater of (i) 100% of the
principal amount of a Like Amount of
the Debentures to be prepaid or (ii) the sum, as determined by a Quotation
Agent (as defined in the Indenture), of the present values of the principal
amount and premium payable with respect to an optional prepayment of a Like
Amount of the Debentures on the Initial Optional Redemption Date, together with
scheduled payments of interest on the Debentures accruing from the redemption
date to and including the Initial Optional Redemption Date, discounted to the
redemption date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (as defined in the
Indenture), plus, in each case, accrued interest on the Debentures to the date
of prepayment.
(d) If the Sponsor has given a notice of its election to
terminate the Trust the Regular Trustees shall dissolve the Trust and, after
satisfaction of creditors (in accordance with Section 3805(e) of the Business
Trust Act), cause Debentures held by the Property Trustee to be distributed to
the Holders of the Securities in liquidation of such Holders' interests in the
Securities within 90 days following receipt of the Sponsor's notice of election.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the Capital
Securities, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and any
certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of
Debentures until such certificates are presented to the Debenture Issuer or its
agent for transfer or reissue.
(e) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all semi-annual Distribution periods terminating on or before the
date of redemption.
(f) The procedure with respect to redemptions or
distributions of Debentures shall be as follows:
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the
Securities (a "Redemption/Distribution Notice")
will be given at the Sponsor's direction, by
the Property Trustee by mail to each Holder of
Securities to be redeemed or exchanged not fewer
than 30 nor more than 60 days before the date
fixed for redemption or exchange thereof which,
in the case of a redemption, will be the date
fixed for redemption of the Debentures. For
purposes of the calculation of the date of
redemption or exchange and the dates on which
notices are given pursuant to this Section 4(f)
(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is
first mailed by first-class mail, postage
prepaid, to Holders. Each such notice of
redemption shall specify the CUSIP number of
the Securities to be redeemed, the date fixed
for redemption, the Redemption Price at which
Securities of such series are to be redeemed,
the place or places of payment, that payment
will be made upon presentation and surrender of
such Securities, that interest accrued to the
date fixed for redemption will be paid as
specified in said notice, and that on and after
said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If
less than all the Securities of such series are
to be redeemed the notice of redemption shall
specify the numbers of the Securities of that
series to be redeemed. In case any Security of a
series is to be redeemed in part only, the
notice of redemption shall state the portion of
the principal amount thereof to be redeemed and
shall state that on and after the date fixed
for redemption, upon surrender of such
Security, a new Security or Securities of that
series in principal amount equal to the
unredeemed portion thereof will be issued. Each
such notice of distribution of the Debentures
in exchange for the Securities shall include
the date fixed for such distribution and
exchange and the place or places that exchange
and distribution of the Securities will be made
upon presentation and surrender of such
Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of
Securities at the address of each such Holder
appearing in the books and records of the
Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity
of the redemption or exchange proceedings with
respect to any other Holder. Notwithstanding
the foregoing, such notice shall not be
required to state the Redemption Price where
such price may not otherwise be determined at
the time of the giving of such notice in
accordance with the terms of the Capital
Securities, in which event a second notice shall
be provided stating such redemption price at
the earliest practicable time following its
determination.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities
to be redeemed shall be redeemed Pro Rata from
each Holder of Capital Securities, it being
understood that, in respect of Capital
Securities registered in the name of and held of
record by the Clearing Agency or its nominee
(or any successor Clearing Agency or its
nominee), the distribution of the proceeds of
such redemption will be made to the Clearing
Agency and disbursed by such Clearing Agency in
accordance with the procedures applied by such
agency or nominee.
(iii) If Securities are to be redeemed and the
Trust gives a Redemption/Distribution Notice
(which notice will be irrevocable), then (A)
with respect to Capital Securities issued in
book-entry form, by 2:00 p.m., New York City
time, on the redemption date, provided that the
Sponsor has paid the Property Trustee a
sufficient amount of cash in connection with
the related prepayment or maturity of the
Debentures by 10:00 a.m., New York City time,
on the maturity date or the date of prepayment,
as the case requires, the Property Trustee will
deposit irrevocably with the Clearing Agency or
its nominee (or successor Clearing Agency or
its nominee) funds sufficient to pay the
applicable Redemption Price with respect to
such Capital Securities and will give the
Clearing Agency irrevocable instructions and
authority to pay the Redemption Price to the
relevant Clearing Agency Participants, and (B)
with respect to Capital Securities issued in
certificated form and Common Securities,
provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in
connection with the related prepayment or
maturity of the Debentures, the Property Trustee
will pay the relevant Redemption Price to the
Holders 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 accumulate on the
Securities so called for redemption and all
rights of Holders of Securities so called for
redemption will cease, except the right of the
Holders of such Securities to receive the
applicable Redemption Price, but without
interest on such Redemption Price, and such
Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid Distributions on
the Redemption Date of the Securities will be subject
to the rights of Holders of Securities on the close
of business on a regular record date in respect of a
Distribution Date occurring on or prior to such
Redemption Date.
Neither the Regular Trustees nor the Trust shall be required
to register or cause to be registered the transfer of (i) any Securities
beginning on the opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Securities for redemption or
(ii) any Securities selected for redemption except the unredeemed portion of any
Security being redeemed. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day that is a Business Day (and without any interest
or other payment in respect of any such delay), with the same force and effect
as if made on such date fixed for redemption, except that if such next
succeeding Business Day falls in the next calendar year, such payment will be
made on the immediately preceding Business Day. If payment of the Redemption
Price in respect of any Securities is improperly withheld or refused and not
paid either by the Property Trustee or by the Sponsor as guarantor pursuant to
the relevant Securities Guarantee, Distributions on Securities called for
redemption will continue to accumulate 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.
(v) Redemption/Distribution Notices shall be sent by
the Property Trustee on behalf of the Trust to
(A) in respect of the Capital Securities, the
Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) if
the Global Certificates have been issued or, if
Definitive Capital Security Certificates have
been issued, to the Holder thereof, and (B) in
respect of the Common Securities to the Holder
thereof.
(vi) Subject to the foregoing and applicable law
(including, without limitation, United States
federal securities laws and banking laws),
provided the acquiror is not the Holder of the
Common Securities or the obligor under the
Indenture, the Sponsor or any of its
subsidiaries may at any time and from time to
time purchase outstanding Capital Securities by
tender, in the open market or by private
agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights.
(b) So long as any Debentures are held by the
Property Trustee, the Property Trustee shall not (i) direct
the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust or power
conferred on the Property Trustee with respect to the Debentures, (ii) waive any
past default that is waivable under Section 5.07 of the Indenture, (iii)
exercise any right to rescind or annul a declaration of acceleration of the
maturity of the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures, where such
consent shall be required, without, in each case, obtaining the prior approval
of the Holders of a Majority in liquidation amount of all outstanding Capital
Securities; provided, however, that where a consent under the Indenture would
require the consent of a Super Majority of the holders of Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior approval of the Holders of at least the proportion in aggregate
Liquidation Amount of the Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of Debentures outstanding. The
Trustees shall not revoke any action previously authorized or approved by a vote
of the Holders of the Capital Securities except by subsequent vote of such
Holders. The Property Trustee shall notify each Holder of Capital Securities of
any notice of default of which a Responsible Officer of the Property Trustee has
actual knowledge of with respect to the Debentures. In addition to obtaining the
foregoing approvals of such Holders of the Capital Securities, prior to taking
any of the foregoing actions, the Property Trustee and the Regular Trustees
shall obtain an opinion of counsel experienced in such matters to the effect
that the Trust will not be classified as an association taxable as a corporation
for United States federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium, if any, or interest on the Debentures on
the due date (including in the case of prepayment, on the prepayment date), then
a Holder of Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or premium, if any, or
interest on a Like Amount of Debentures (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the holders of Common Securities will be subrogated to the
rights of such Holder of Capital Securities to the extent of any payment made by
the Debenture Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in the second preceding sentence, the Holders of Capital
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures or to assert directly any other rights in respect
of the Debentures.
Any approval or direction of Holders of Capital Securities may
be given at a separate meeting of Holders of Capital Securities convened for
such purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Property Trustees will cause a notice of any
meeting at which Holders of Capital 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 Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor 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. Subject to Section
6(b) hereof, Trustees may be appointed or removed without cause at any time
after the issuance of any Securities, if an Event of Default shall have occurred
and be continuing, with respect to the Property Trustee or the Delaware Trustee,
by vote of Holders of a Majority in Liquidation Amount of the Capital Securities
voting as a class at a meeting of Holders of the Capital Securities.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless a Debenture Event of Default shall have occurred
and be continuing, any Trustee may be removed at any time by the holder of the
Common Securities. If a Debenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time by the Holders of a Majority in liquidation amount of the outstanding
Capital Securities. In no event will the Holders of the Capital Securities have
the right to vote to appoint, remove or replace the Regular Trustees, which
voting rights are vested exclusively in the Sponsor as the holder of the Common
Securities. No resignation or removal of a Trustee and no appointment of a
successor trustee shall be effective until the acceptance of appointment by the
successor trustee in accordance with the provisions of the Declaration.
(c) Subject to Section 2.6 of the Declaration, so long as any
Debentures are held by the Property Trustee, the Trustees shall not (i) direct
the time, method and place of conducting any proceeding for any remedy available
to the Debenture Trustee, or executing any trust or power conferred on the
Property Trustee with respect to the Debentures, (ii) waive any past default
that is waivable under Section 5.07 of the Indenture, (iii) exercise any right
to rescind or annul a declaration of acceleration of the maturity of the
principal of the Debentures or (iv) consent to any amendment, modification or
termination of the Indenture or the Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the Holders of
a Majority in liquidation amount of all outstanding Common Securities; provided
however, that where a consent under the Indenture would require the consent of a
Super Majority of the holders of Debentures affected thereby, no such consent
shall be given by the Property Trustee without the prior approval of the Holders
of at least the proportion in aggregate Liquidation Amount of the Capital
Securities that the relevant Super Majority represents of the aggregate
principal amount of Debentures outstanding. The Trustees shall not revoke any
action previously authorized or approved by a vote of the Holders of Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default of which a
Responsible Officer of the Property Trustee has actual knowledge with respect to
the Debentures. In addition to obtaining the foregoing approvals of such Holders
of the Common Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain an opinion of counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or premium if any, or interest on the Debentures on
the due date (including in the case of prepayment, on the prepayment date), then
a Holder of Common Securities may institute a Direct Action for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures on or after the respective due date specified in the
Debentures. In connection with a Direct Action, the rights of the Common
Securities Holder will be subordinated to the rights of the Holders of Capital
Securities to the extent of any payment made by the Debenture Issuer to such
Holder of Common Securities in such Direct Action. Except as provided in the
second preceding sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of the Debentures.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance
with the Declaration and the terms of the Securities.
7. Amendments to Declaration and Indenture.
In addition to the requirements under Section 12.1 of the
Declaration, the Declaration may be amended from time to time by the Sponsor,
the Property Trustee and the Regular Trustees, without the consent of the
Holders of the Securities (i) to cure any ambiguity, correct or supplement any
provisions in the Declaration that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions arising
under the Declaration which shall not be inconsistent with the other provisions
of the Declaration, or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an "Investment Company" under the Investment
Company Act; provided,
however, that such action shall not adversely affect in any material respect
the interests of the Holders of Securities, and any amendments of the
Declaration shall become effective when notice thereof is given to the Holders
of the Securities. The Declaration may be amended by the Trustees and the
Sponsor (i) with the consent of Holders representing a Majority in Liquidation
Amount of all outstanding Securities, and (ii) upon receipt by the Trustees of
an Opinion of Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment will not affect
the Trust's status as a grantor trust for United States federal income tax
purposes or the Trust's exemption from status as an "Investment Company" under
the Investment Company Act, provided that, without the consent of each Holder of
Trust Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or any redemption provisions
or otherwise adversely affect the amount of any Distribution required to be made
in respect of the Trust Securities as of a specified date or (ii) restrict the
right of a holder of Trust Securities to institute suit for the enforcement of
any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate Liquidation Amount of the Securities
held by the relevant Holder in relation to the aggregate Liquidation Amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the Capital
Securities pro rata according to the aggregate Liquidation Amount of Capital
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of all Capital Securities outstanding, and only after satisfaction of all
amounts owed to the Holders of the Capital Securities, to each Holder of Common
Securities pro rata according to the aggregate Liquidation Amount of Common
Securities held by the relevant Holder relative to the aggregate Liquidation
Amount of
all Common Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default
under the Declaration occurs and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the Holders of the Capital
Securities shall be paid in full the Distributions, Redemption Price,
Liquidation Distribution and other payments to which they are entitled at such
time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Capital Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee, the Common Securities Guarantee (as may be
appropriate) and/or the Indenture (including any supplemental indenture) to a
Holder without charge on written request to the Sponsor at its principal
place of business.
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY, INSERT:
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO TRANSFER OF THIS
CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY
THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL 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 CAPITAL
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
IF THIS SECURITY IS A RESTRICTED CAPITAL SECURITY, INSERT: THE
CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE CAPITAL SECURITIES WILL BE ISSUED, AND UNTIL REGISTERED
UNDER THE SECURITIES ACT MAY BE TRANSFERRED ONLY, IN BLOCKS HAVING AN AGGREGATE
LIQUIDATION AMOUNT OF NOT LESS THAN $100,000. ANY SUCH TRANSFER OF CAPITAL
SECURITIES IN A BLOCK HAVING AN AGGREGATE LIQUIDATION AMOUNT OF LESS THAN
$100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH
TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL SECURITIES FOR
ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PAYMENTS ON SUCH
CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST
WHATSOEVER IN SUCH CAPITAL SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
CAPITAL SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS THREE YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE
OWNER OF THIS CAPITAL SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (A) (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (E) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (D), TO REQUIRE THAT THE TRANSFEROR DELIVER
TO THE TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A
TO THE OFFERING MEMORANDUM DATED JANUARY 22, 1997. SUCH HOLDER FURTHER AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.]
<PAGE>
Certificate Number Aggregate Liquidation
R-____ Amount of Capital Securities
$__________________
CUSIP NO. ________
Certificate Evidencing Capital Securities
of
INTERPOOL CAPITAL TRUST
9-7/8% Series __ Capital Securities
(liquidation amount $1,000 per Capital Security)
INTERPOOL CAPITAL TRUST, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
_____________ (the "Holder") is the registered owner of $________ in aggregate
liquidation amount of Capital Securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the 9-7/8% Series___
Capital Securities (liquidation amount $1,000 per Capital Security) (the
"Capital Securities"). The Capital 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 Capital Securities represented hereby are issued and shall in
all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of January 27, 1997, as the same may
be amended from time to time (the "Declaration"), including the designation of
the terms of the Capital Securities as set forth in Annex I to the Declaration.
Capitalized terms used but not defined herein shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Capital Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Capital Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Capital
Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of ___________, 1997.
INTERPOOL CAPITAL TRUST
By:______________________________
Name:
Title: Regular Trustee
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
Dated: ___________, ___
IBJ SCHRODER BANK & TRUST COMPANY,
as Property Trustee
By: __________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be fixed at
a rate per annum of 9-7/8% (the "Interest Rate") of the liquidation amount of
$1,000 per Capital Security, such rate being equal to the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear interest thereon
compounded semi-annually at the Interest Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions," as used herein, includes such cash
distributions and any such interest and such Liquidated Damages payable unless
otherwise stated, but does not include Additional Sums (as defined in the
Indenture). A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 27, 1997 and will be payable
semi-annually in arrears, on February 15 and August 15 of each year, commencing
on February 15, 1997, except as otherwise described below. The amount of
Distributions payable for any period shall be computed on the basis of a 360-day
year of twelve 30-day months. For periods less than a full month, Distributions
shall be computed on the basis of the actual number of elapsed days based on a
360-day year.
So long as no Event of Default has occurred and is continuing
the Debenture Issuer has the right under the Indenture at any time and from time
to time to defer payments of interest by extending the interest payment period
on the Debentures for a period not exceeding 10 consecutive semi-annual periods,
including the first such semi-annual period during such extension period (each
an "Extension Period"), provided that no Extension Period shall extend beyond
the Maturity Date of the Debentures. As a consequence of such deferral,
Distributions on the Capital Securities will also be deferred for the same
period. Despite such deferral, semi-annual Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law, but
not at a rate exceeding the rate of interest then accruing on the Debentures) at
the Interest Rate, compounded semi-annually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions of such Extension Period, may not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such Extension Period, or
extend beyond the Maturity Date of the Debentures. Payments of accumulated
Distributions will be payable to Holders as they appear on the books and records
of the Trust on the record date with respect to the first Interest Payment Date
after the end of the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due on any distribution date, the
Debenture Issuer may elect to commence a new Extension Period, subject to the
above requirements.
Subject to certain conditions set forth in the Declaration and
the Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders of the Securities in liquidation of the Trust or, simultaneous with any
prepayment of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Capital Securities shall be redeemable as provided in the
Declaration.
<PAGE>
------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
============================================================================
- ----------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
============================================================================
============================================================================
(Insert address and zip code of assignee)
and irrevocably appoints
============================================================================
- --------------------------------------------------------------------- agent
to transfer this Common Security Certificate on the books of
the Trust. The agent may substitute another to act for him or
her.
Date: _____________________
Signature: ________________
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee*:
---------------------------------
- ---------------
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
<PAGE>
[Include the following if the Capital Security bears a
Restricted Capital Securities Legend --
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(l) G exchanged for the undersigned's own account
without transfer; or
(2) G transferred pursuant to and in compliance with
Rule 144A under the Securities Act of 1933; or
(3) G transferred to an institutional "Accredited
investor" within the meaning of subparagraph (a)
(1), (2), (3) or (7) of Rule 501 under the
Securities Act of 1933 that is acquiring the
Capital Securities for its own account, or for
the account of such an institutional "Accredited
investor," for investment purposes and not with
a view to, or for offer or sale in connection
with, any distribution in violation of the
Securities Act of 1933; or
(4) G transferred pursuant to another available
exemption from the registration requirements of
the Securities Act of 1933; or
(5) G transferred pursuant to an effective registration
statement.
Unless one of the boxes is checked, the Transfer Agent will refuse to register
any of the Capital Securities evidenced by this certificate in the name of any
person other than the registered Holder thereof; provided, however, that if box
(3) or (4) is checked, the Registrar may require, prior to registering any such
transfer of the Capital Securities such legal opinions, certifications and other
information as the Trust has reasonably requested to confirm that such transfer
is being made pursuant to an exemption from, or in a transaction not subject to,
the registration requirements of the Securities Act of 1933, such as the
exemption provided by Rule 144 under such Act; provided, further, that (i) if
box (2) is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (3) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached as Annex A to the Offering Memorandum of the
Trust dated January 22, 1997; provided, further, that after a Registration
Statement has been filed and so long as such Registration Statement continues to
be effective, the Registrar may only permit transfers for which box (5) has been
checked.
--------------------------
Signature
<PAGE>
SCHEDULE A*
The initial aggregate liquidation amount of Capital Securities
evidenced by the Certificate to which this Schedule is attached is $__________
(equivalent to ______ Capital Securities). The notations on the following table
evidence decreases and increases in the number of Capital Securities evidenced
by such Certificate.
Liquidation
Decrease in Increase in Amount of
Liquidation Liquidation Capital Securities Notation by
Amount of Amount of Capital Remaining After Registration
Capital Securities Such
Securities Decrease or
Increase
- ---------------------
* Append to Global Capital Securities only.
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THIS COMMON SECURITY MAY NOT BE TRANSFERRED EXCEPT TO
INTERPOOL, INC. OR A RELATED PARTY (AS DEFINED IN THE DECLARATION) OF
INTERPOOL, INC.
<PAGE>
Certificate Number Aggregate Liquidation
Securities Amount of Common
C- $2,320,000
Interpool Capital Trust, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Interpool, Inc. (the "Holder") is the registered owner of $2,320,000 in
aggregate liquidation amount of common securities of the Trust representing
undivided beneficial interests in the assets of the Trust designated the 9-7/8%
Common Securities (liquidation amount $1,000 per Common Security) (the "Common
Securities"). The Common Securities are transferable on the books and records of
the Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer. The designation,
rights, privileges, restrictions, preferences and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of January 27, 1997, as the same may be amended from time to
time (the "Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Sponsor 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 and to the benefits of
the Common Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _________, 1997.
INTERPOOL CAPITAL TRUST
By:______________________________
Name:
Title: Regular Trustee
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Declaration.
Dated: _________________ IBJ SCHRODER BANK & TRUST COMPANY,
as Property Trustee
By:_________________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF COMMON SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of 9-7/8% (the "Interest Rate") of the liquidation amount of
$1,000 per Common Security, such rate being equal to the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear interest thereon
compounded semi-annually at the Interest Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions", as used herein, includes such cash
distributions and any such interest and such Liquidated Damages payable unless
otherwise stated, but does not include Additional Sums (as defined in the
Indenture). A Distribution is payable only to the extent that payments are made
in respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative,
will accrue from the most recent date to which Distributions have been paid or,
if no Distributions have been paid, from January 27, 1997 and will be payable
semi-annually in arrears, on February 15 and August 15 of each year, commencing
on February 15, 1997, except as otherwise described below. The amount of
Distributions payable for any period shall be computed on the basis of a 360-day
year of twelve 30-day months. For periods less than a full month, Distributions
shall be computed on the basis of the actual number of elapsed days elapsed
based on a 360-day year.
So long as no Event of Default has occurred and is continuing
under the Indenture, the Debenture Issuer has the right under the Indenture at
any time and from time to time to defer payments of interest by extending the
interest payment period on the Debentures for a period not exceeding 10
consecutive semiannual periods, including the first such semi-annual period
during such extension period (each an "Extension Period"), provided that no
Extension Period shall extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions on the Common Securities will also
be deferred for the same period. Despite such deferral, Distributions will
continue to accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest then accruing
on the Debentures) at the Interest Rate, compounded semi-annually during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debenture Issuer may further defer payments of interest by further extending
such Extension Period; provided that such Extension Period, together with all
such previous and further extensions of such Extension Period, may not exceed 10
consecutive semi-annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Maturity Date of the Debentures.
Payments of accrued Distributions will be payable to Holders as they appear on
the books and records of the Trust on the record date with respect to the first
Distribution Date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due on any
distribution date, the Debenture Issuer may elect to commence a new Extension
Period, subject to the above requirements.
Subject to certain conditions set forth in the Declaration and
the Indenture, the Property Trustee may, at the direction of the Sponsor, at any
time liquidate the Trust and cause the Debentures to be distributed to the
holders to the Securities in liquidation of the Trust or, simultaneous with any
prepayment of the Debentures, cause a Like Amount of the Securities to be
redeemed by the Trust.
The Common Securities shall be redeemable as provided in the
Declaration.
<PAGE>
-------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
============================================================================
- ----------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
============================================================================
============================================================================
(Insert address and zip code of assignee)
and irrevocably appoints
============================================================================
- --------------------------------------------------------------------- agent
to transfer this Common Security Certificate on the books of
the Trust. The agent may substitute another to act for him or
her.
Date: _____________________
Signature: ________________
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature Guarantee*: ---------------------------------
- --------------
* Signature must be guaranteed by an "Eligible guarantor
institution" that is a bank, stockbroker, savings and
loan association or credit union meeting the requirements
of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "Signature
guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in
accordance with the Securities and Exchange Act of 1934,
as amended.
<PAGE>
[Include the following if the Common Security bears a
Restricted Common Securities Legend --
In connection with any transfer of any of the Common Securities evidenced by
this certificate, the undersigned confirms that such Common Securities are being
exchanged for the undersigned's own account without transfer or otherwise
transferred to either Interpool, Inc. or a Related Party (as defined in the
Declaration) of Interpool, Inc.
-------------------------------------
Signature
Exhibit 4.7
___________________________________________________________________________
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
INTERPOOL CAPITAL TRUST
Dated as of __________, 1997
___________________________________________________________________________
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION...............................2
SECTION 1.1 DEFINITIONS AND INTERPRETATION...................2
ARTICLE II TRUST INDENTURE ACT.........................................5
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.................5
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES...................5
SECTION 2.3 REPORTS BY THE CAPITAL GUARANTEE TRUSTEE.........6
SECTION 2.4 PERIODIC REPORTS TO CAPITAL GUARANTEE
TRUSTEE..........................................6
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT........................................6
SECTION 2.6 EVENTS OF DEFAULT; WAIVER........................6
SECTION 2.7 EVENT OF DEFAULT; NOTICE.........................6
SECTION 2.8 CONFLICTING INTERESTS............................7
ARTICLE III POWERS, DUTIES AND RIGHTS OF CAPITAL GUARANTEE
TRUSTEE....................................................7
SECTION 3.1 POWERS AND DUTIES OF THE CAPITAL
GUARANTEE TRUSTEE................................7
SECTION 3.2 CERTAIN RIGHTS OF CAPITAL GUARANTEE
TRUSTEE..........................................9
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE
OF CAPITAL SECURITIES GUARANTEE................10
ARTICLE IV CAPITAL GUARANTEE TRUSTEE..................................11
SECTION 4.1 CAPITAL GUARANTEE TRUSTEE; ELIGIBILITY..........11
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF
CAPITAL GUARANTEE TRUSTEE......................11
ARTICLE V GUARANTEE...................................................12
SECTION 5.1 GUARANTEE.......................................12
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.....................12
SECTION 5.3 OBLIGATIONS NOT AFFECTED........................12
SECTION 5.4 RIGHTS OF HOLDERS...............................13
SECTION 5.5 GUARANTEE OF PAYMENT............................14
SECTION 5.6 SUBROGATION.....................................14
SECTION 5.7 INDEPENDENT OBLIGATIONS.........................14
ARTICLE VI GUARANTEE..................................................14
SECTION 6.1 LIMITATION OF TRANSACTIONS......................14
SECTION 6.2 RANKING.........................................15
ARTICLE VII TERMINATION...............................................16
SECTION 7.1 TERMINATION.....................................16
ARTICLE VIII INDEMNIFICATION..........................................16
SECTION 8.1 EXCULPATION.....................................16
SECTION 8.2 INDEMNIFICATION.................................16
ARTICLE IX MISCELLANEOUS..............................................17
SECTION 9.1 SUCCESSORS AND ASSIGNS..........................17
SECTION 9.2 AMENDMENTS......................................17
SECTION 9.3 NOTICES.........................................17
SECTION 9.4 BENEFIT.........................................18
SECTION 9.5 GOVERNING LAW...................................18
<PAGE>
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital Securities
Guarantee"), dated as of _____________, 1997, is executed and delivered by
INTERPOOL, INC., a Delaware corporation (the "Guarantor"), and IBJ SCHRODER BANK
& TRUST COMPANY, a New York banking corporation, as trustee (the "Capital
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Series B Capital Securities (as defined herein) of Interpool
Capital Trust, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 1997, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof _______ capital securities, having an aggregate
liquidation amount of $___________, designated the 9 7/8% Series B Capital
Securities of the Issuer, such capital securities being designated the 9 7/8%
Series B Capital Securities (the "Series B Capital Securities") in connection
with the consummation of the Exchange Offer (as defined in the Declaration);
WHEREAS, as incentive for the Holders to exchange the Series A Capital
Securities (as defined herein), for the Series B Capital Securities in the
Exchange Offer, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Series B Capital Securities Guarantee, to pay to
the Holders of the Series B Capital Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein.
WHEREAS, the Guarantor has previously executed and delivered a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Series B Capital Securities Guarantee for the benefit of
the holders of the Common Securities (as defined herein), except that if an
Event of Default (as defined in the Indenture), has occurred and is continuing,
the rights of holders of the Common Securities to receive Guarantee Payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Series B Capital Securities to receive Guarantee Payments under this Series B
Capital Securities Guarantee.
NOW, THEREFORE, in consideration of the exchange by each Holder of
Series A Capital Securities for Series B Capital Securities, which purchase the
Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and
delivers this Series B Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
In this Series B Capital Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Series B Capital Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution of
this Series B Capital Securities Guarantee have the same meaning when used in
this Series B Capital Securities Guarantee;
(c) a term defined anywhere in this Series B Capital Securities
Guarantee has the same meaning throughout;
(d) all references to "the Series B Capital Securities Guarantee" or
"this Series B Capital Securities Guarantee" are to this Series B Capital
Securities Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Series B Capital Securities Guarantee to
Articles and Sections are to Articles and Sections of this Series B Capital
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Series B Capital Securities Guarantee, unless otherwise
defined in this Series B Capital Securities Guarantee or unless the context
otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"CAPITAL GUARANTEE TRUSTEE" means IBJ Schroder Bank & Trust Company, a
New York banking corporation, until a Successor Capital Guarantee Trustee has
been appointed and has accepted such appointment pursuant to the terms of this
Series B Capital Securities Guarantee and thereafter means each such Successor
Capital Guarantee Trustee.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer, issued pursuant to the
Declaration.
"CORPORATE TRUST OFFICE" means the office of the Capital Guarantee
Trustee at which the corporate trust business of the Capital Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at One State Street, New York,
New York 10004.
"COVERED PERSON" means any Holder or beneficial owner of Series B
Capital Securities.
"DEBENTURES" means the series of junior subordinated debt securities
of the Guarantor designated the 9 7/8% Series B Junior Subordinated Deferrable
Interest Debentures due February 15, 2027 held by the Property Trustee of the
Issuer.
"EVENT OF DEFAULT" means a failure by the Guarantor to perform any of
its payment or other obligations under this Series B Capital Securities
Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Series B Capital Securities, to the
extent not paid by or on behalf of the Issuer: (i) any accumulated and unpaid
Distributions that are required to be paid on the Series B Capital Securities,
to the extent the Issuer has funds on hand legally available therefor, (ii) the
redemption price, including all accumulated and unpaid Distributions to the date
of redemption (the "Redemption Price"), with respect to any Series B Capital
Securities called for redemption by the Issuer, to the extent the Issuer has
funds on hand legally available therefor, and (iii) upon a voluntary or
involuntary termination and liquidation of the Issuer (unless the Debentures are
distributed to the Holders in exchange for Series B Capital Securities as
provided in the Declaration), the lesser of (a) the aggregate of the liquidation
amount of the Series B Capital Securities plus all accumulated and unpaid
Distributions on the Series B Capital Securities to the date of payment, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee Agreement are subordinated to the rights
of Holders of Series B Capital Securities to receive Guarantee Payments.
"HOLDER" shall mean any holder as registered on the books and records
of the applicable Clearing Agency.
"INDEMNIFIED PERSON" means the Capital Guarantee Trustee, any
Affiliate of the Capital Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Capital Guarantee Trustee.
"INDENTURE" means the Indenture dated as of January 27, 1997,
among the Guarantor (the "Debenture Issuer") and IBJ Schroder Bank & Trust
Company, as trustee, together with the First Supplemental Indenture dated as of
January 27, 1997 and any other indenture supplemental thereto, pursuant to which
certain junior subordinated debt securities of the Debenture Issuer are to be
issued to the Property Trustee (as defined in the Declaration) of the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Series B Capital Securities by the Trust Indenture
Act, Holder(s) of outstanding Series B Capital 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, dissolution or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all Series B Capital 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 Series B Capital 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.
"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 Capital Guarantee
Trustee, within the Corporate Trust Office of the Capital Guarantee Trustee, any
senior trust officer, any trust officer or any other officer of the Corporate
Trust Office of the Capital 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.
"SENIOR INDEBTEDNESS" shall mean, with respect to the Guarantor, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
the Guarantor for money borrowed, whether outstanding on the date of the
Indenture or thereafter created, and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by the Guarantor; (ii) all
capital lease obligations of the Guarantor; (iii) all obligations of the
Guarantor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Guarantor and all obligations of the
Guarantor under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of the
Guarantor for the reimbursement on any letter of credit, banker's acceptance,
security purchase facility or similar credit transactions; (v) all obligations
of the Guarantor arising from off-balance sheet guarantees by the Guarantor and
direct credit substitutes and obligations of the Guarantor associated with
derivative products such as interest and foreign exchange rate contracts,
commodity contracts, swap agreements (including interest and foreign exchange
swap agreements), cap agreements, floor agreements, collar agreements, interest
rate agreements, foreign exchange rate agreements, options, commodity futures
contracts and commodity option contracts; (vi) all obligations of the type
referred to in clauses (i) through (v) of other Persons for the payment of which
the Guarantor is responsible or liable as obligor, guarantor or otherwise; and
(vii) all obligations of the type referred to in clauses (i) through (vi) above
of other Persons secured by any lien on any property or asset of the Guarantor
(whether or not such obligation is assumed by the Guarantor), except for (1) any
such indebtedness that by its terms is subordinated to or ranks pari passu with
the Series B Capital Securities Guarantee, and (2) any indebtedness between or
among the Guarantor and its Affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (a) the Issuer or (b)
any other trust, or a trustee of such trust, partnership or other entity
affiliated with the Guarantor which is a financing vehicle of the Guarantor (a
"financing entity") in connection with the issuance by such financing entity of
preferred securities or other securities that rank pari passu with, or junior
to, the Series B Capital Securities.
"SUCCESSOR CAPITAL GUARANTEE TRUSTEE" means a successor Capital
Guarantee Trustee possessing the qualifications to act as Capital Guarantee
Trustee under Section 4.1.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.
"TRUST SECURITIES" means the Common Securities, the Series A Capital
Securities and the Series B Capital Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Series B Capital Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Series B Capital 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 Series B Capital
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) Unless the Capital Guarantee Trustee is also the registrar for the
Series B Capital Securities, the Guarantor shall provide the Capital Guarantee
Trustee with a list, in such form as the Capital Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Series B
Capital Securities ("List of Holders") as of such date, (i) within 14 days after
each record date, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Capital Guarantee Trustee;
PROVIDED, HOWEVER 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 Capital Guarantee Trustee by the Guarantor. The
Capital Guarantee Trustee may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Capital 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 CAPITAL GUARANTEE TRUSTEE
Within 60 days after December 31 of each year, the Capital Guarantee
Trustee shall provide to the Holders of the Capital 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 Capital
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO CAPITAL GUARANTEE TRUSTEE
The Guarantor shall provide to the Capital Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Capital Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Series B Capital 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) shall 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 Series B
Capital Securities may, by vote, on behalf of the Holders of all of the Series B
Capital 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 Series B Capital Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE
(a) The Capital 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 Series B Capital Securities, notices of all
Events of Default actually known to a Responsible Officer of the Capital
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, the Capital Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Capital
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Series B Capital Securities.
(b) The Capital Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Capital Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Capital
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
Series B Capital 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 CAPITAL GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE CAPITAL GUARANTEE TRUSTEE
(a) This Series B Capital Securities Guarantee shall be held by the
Capital Guarantee Trustee for the benefit of the Holders of the Series B Capital
Securities, and the Capital Guarantee Trustee shall not transfer this Series B
Capital Securities Guarantee to any Person except a Holder of Series B Capital
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Capital Guarantee Trustee on acceptance by such Successor Capital
Guarantee Trustee of its appointment to act as Successor Capital Guarantee
Trustee. The right, title and interest of the Capital Guarantee Trustee shall
automatically vest in any Successor Capital 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
Capital Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Capital Guarantee Trustee has occurred and is continuing, the Capital
Guarantee Trustee shall enforce this Series B Capital Securities Guarantee for
the benefit of the Holders of the Series B Capital Securities.
(c) The Capital Guarantee Trustee, other than during the continuance
of a default by the Company in performance of its obligations under this Series
B Capital Securities Guarantee, shall undertake to perform only such duties as
are specifically set forth in this Series B Capital Securities Guarantee, and no
implied covenants shall be read into this Series B Capital Securities Guarantee
against the Capital Guarantee Trustee. In case such a default by the Company has
occurred (which has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Capital Guarantee Trustee, the
Capital Guarantee Trustee shall exercise such of the rights and powers vested in
it by this Series B Capital Securities Guarantee, and use the same degree of
care and skill in its exercise thereof, as a prudent individual would exercise
or use under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Series B Capital Securities Guarantee shall
be construed to relieve the Capital 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 of which a
Responsible Officer of the Capital Guarantee Trustee has actual knowledge, and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Capital Guarantee Trustee shall
be determined solely by the express provisions of this Series B
Capital Securities Guarantee, and the Capital Guarantee Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Series B
Capital Securities Guarantee, and no implied covenants or
obligations shall be read into this Series B Capital Securities
Guarantee against the Capital Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Capital Guarantee
Trustee, the Capital 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 Capital Guarantee Trustee and conforming to the
requirements of this Series B Capital Securities Guarantee; but
in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the
Capital Guarantee Trustee, the Capital Guarantee Trustee shall be
under a duty to examine the same to determine whether or not they
conform to the requirements of this Series B Capital Securities
Guarantee;
(ii) the Capital Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the Capital
Guarantee Trustee, unless it shall be proved that the Capital Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Capital Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Series B Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available to the
Capital Guarantee Trustee, or exercising any trust or power conferred upon the
Capital Guarantee Trustee under this Series B Capital Securities Guarantee; and
(iv) no provision of this Series B Capital Securities Guarantee
shall require the Capital 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 Capital
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 Capital Securities Guarantee or indemnity, reasonably satisfactory to the
Capital Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
SECTION 3.2 CERTAIN RIGHTS OF CAPITAL GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
(i) The Capital 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
Series B Capital Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Series B Capital
Securities Guarantee, the Capital Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or omitting any
action hereunder, the Capital 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 and/or an Opinion of Counsel
which, upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Capital 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 Capital 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
Capital Guarantee Trustee shall have the right at any time to seek instructions
concerning the administration of this Series B Capital Securities Guarantee from
any court of competent jurisdiction.
(vi) The Capital Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Series B Capital
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have offered to the Capital Guarantee Trustee an indemnity,
reasonably satisfactory to the Capital Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the expenses of the Capital
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 Capital Guarantee Trustee;
PROVIDED, HOWEVER, that nothing contained in this Section 3.2(a)(vi) shall be
taken to relieve the Capital Guarantee Trustee, upon the occurrence of an Event
of Default of which a Responsible Officer of the Capital Securities Trustee has
actual knowledge, of its obligation to exercise the rights and powers vested in
it by this Series B Capital Securities Guarantee.
(vii) The Capital 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 Capital Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit.
(viii) The Capital 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 Capital Guarantee
Trustee shall not be responsible for any misconduct or negligence on the part of
any agent, nominee, custodian or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Capital Guarantee Trustee or its
agents hereunder shall bind the Holders of the Series B Capital Securities, and
the signature of the Capital 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 Capital Guarantee Trustee to so
act or as to its compliance with any of the terms and provisions of this Series
B Capital Securities Guarantee, both of which shall be conclusively evidenced by
the Capital Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Series B Capital
Securities Guarantee the Capital Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of the
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 Capital 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 Series B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities Guarantee shall
be deemed to impose any duty or obligation on the Capital 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 Capital 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 Capital Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SERIES B CAPITAL
SECURITIES GUARANTEE
The recitals contained in this Series B Capital Securities Guarantee
shall be taken as the statements of the Guarantor, and the Capital Guarantee
Trustee does not assume any responsibility for their correctness. The Capital
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL GUARANTEE TRUSTEE
SECTION 4.1 CAPITAL GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Capital 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 Property Trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $50,000,000, and subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority referred to
above, then, for the purposes of this Section 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 Capital Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Capital Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Capital Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital 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 CAPITAL GUARANTEE TRUSTEE
(a) Subject to Section 4.2(b), the Capital Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except during an
event of default.
(b) The Capital Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Capital Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Capital Guarantee Trustee and delivered to the Guarantor.
(c) The Capital Guarantee Trustee appointed to office shall hold
office until a Successor Capital Guarantee Trustee shall have been appointed or
until its removal or resignation. The Capital Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Capital Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Capital
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Capital Guarantee Trustee and
delivered to the Guarantor and the resigning Capital Guarantee Trustee.
(d) If no Successor Capital 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 Capital
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Capital Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Capital Guarantee Trustee.
(e) No Capital Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Capital Guarantee Trustee.
(f) Upon termination of this Series B Capital Securities Guarantee or
removal or resignation of the Capital Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Capital Guarantee Trustee all amounts
accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert (other than the
defense of payment). The Guarantor's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the 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 Series B
Capital 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 Series B Capital 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 Series B Capital 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, or any other sums payable under the terms of the
Series B Capital Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Series B
Capital Securities (other than an extension of time for payment of
Distributions, or other sum payable that results from the extension of any
interest payment period on the Debentures or any extension of the maturity date
of the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Series B Capital
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 Series B
Capital 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 or the Capital Guarantee
Trustee 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 Securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Capital Guarantee Trustee in respect of this
Series B Capital Securities Guarantee or to direct the exercise of any trust or
power conferred upon the Capital Guarantee Trustee under this Series B Capital
Securities Guarantee.
(b) If the Capital Guarantee Trustee fails to enforce such Series B
Capital Securities Guarantee, any Holder of Series B Capital Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Capital Guarantee Trustee's rights under this Series B Capital Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Capital Guarantee Trustee or any other Person. The Guarantor waives any right or
remedy to require that any action be brought first against the Issuer, the
Capital Guarantee Trustee or any other Person before proceeding directly against
the Guarantor.
SECTION 5.5 GUARANTEE OF PAYMENT
This Series B Capital Securities Guarantee creates a guarantee of
payment and not of collection. Subject to the provisions of Section 7.1, this
Series B Capital Securities Guarantee will not be discharged except by payment
of the Guarantee Payments in full (without duplication of amounts theretofore
paid by the Issuer) or upon distribution of the Debentures to the Holders of the
Series B Capital Securities as provided in the Declaration.
SECTION 5.6 SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Series B Capital Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Series B Capital
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
Series B Capital Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Series B Capital 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 Series B
Capital Securities, and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Series
B Capital 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
If (1) there shall have occurred any event of which the Guarantor has
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be, an Event of Default under the Series B Capital Securities
Guarantee or an Event of Default under the Indenture and (b) in respect of any
nonpayment default, which the Guarantor shall not have taken reasonable steps to
cure, and in respect of any payment default, which has not been cured, (2) the
Debentures are held by the Issuer, and the Guarantor shall be in default with
respect to its payment of any obligations under the Series B Capital Securities
Guarantee or (3) the Guarantor shall have given notice of its election of an
Extended Interest Payment Period, or any extension thereof, as provided in the
Indenture and shall not have rescinded such notice, and such period, or any
extension thereof, shall have commenced, then the Guarantor will not (i) declare
or pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of the
Guarantor's capital stock (which includes common and preferred stock), (ii) make
any payments of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Debentures or (iii) make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor
(including Other Guarantees) is such guarantee ranks pari passu or junior in
right of payment to the Debentures (other than (a) dividends or distributions in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, common stock of the Guarantor, (b) any declaration of a dividend in
connection with the implementation of a stockholder's rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under this Series B
Capital Securities Guarantee, (d) the purchase of fractional shares resulting
from a reclassification of the Guarantor's capital stock, (e) the exchange or
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock, (f) the purchase of fractional
interest in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged and (g) purchases of common stock related to the issuance of common
stock or rights under any of the Guarantor's benefit plans for its directors,
officers of employees or any of the Guarantor's dividend reinvestment plans).
SECTION 6.2 RANKING
This Series B Capital Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all Senior Indebtedness, in the same manner and to the
same extent as provided in the Indenture with respect to the Debentures, except
in the case of a bankruptcy or insolvency proceeding in respect of the
Guarantor, in which case this Series B Capital Securities Guarantee will rank
subordinate and junior in right of payment to all liabilities, including
contingent liabilities (but excluding any other guarantee now or hereafter
entered into by the Guarantor in respect of any preferred securities or
preference stock of any Affiliate of the Guarantor), (ii) pari passu with any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred securities 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 Series B Capital Securities Guarantee shall terminate and be of
no further force and effect (i) upon full payment of the applicable Redemption
Price of all Series B Capital Securities, (ii) upon the distribution of the
Debentures to the Holders of all of the Series B Capital Securities or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Series B Capital
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Capital Securities must restore
payment of any sums paid under the Series B Capital Securities or under this
Series B Capital Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Series B
Capital 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 Series B Capital Securities Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Series B Capital 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 (including reasonable legal fees and expenses) 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 Series B Capital Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Series B Capital
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 Series B Capital Securities then outstanding.
SECTION 9.2 AMENDMENTS
Except with respect to any changes that do not materially adversely
affect the rights of Holders (in which case no vote or consent of Holders will
be required), this Series B Capital Securities Guarantee may not be amended
without the prior approval of the Holders of at least a Majority in liquidation
amount of the outstanding 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 Series B Capital 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 Capital Guarantee Trustee, at the Capital
Guarantee Trustee's mailing address set forth below (or such other address as
the Capital Guarantee Trustee may give notice of to the Holders of the Series B
Capital Securities):
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
Attention: Corporate Trust Department
(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 Series B Capital Securities):
Interpool, Inc.
211 College Road East
Princeton, New Jersey 08540
Attention: Chief Executive Officer
(c) If given to any Holder of Series B Capital 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 Series B Capital Securities Guarantee is solely for the benefit
of the Holders of the Series B Capital Securities and, subject to Section
3.1(a), is not separately transferable from the Series B Capital Securities.
SECTION 9.5 GOVERNING LAW
THIS SERIES B CAPITAL 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.
IN WITNESS WHEREOF, this Series B Capital Securities Guarantee is
executed as of the day and year first above written.
INTERPOOL, INC., as Guarantor
By:______________________________________
Name:
Title:
IBJ SCHRODER BANK & TRUST COMPANY,
as Capital Guarantee Trustee
By:______________________________________
Name:
Title:
EX-4.8
REGISTRATION RIGHTS AGREEMENT
DATED JANUARY 27, 1997
AMONG
INTERPOOL, INC.
INTERPOOL CAPITAL TRUST
AND
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
OPPENHEIMER & CO., INC.
SMITH BARNEY INC.
AS INITIAL PURCHASERS
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is made and entered
into as of January 27, 1997 among Interpool, Inc., a Delaware corporation (the
"COMPANY"), Interpool Capital Trust, a business trust formed under the laws of
the state of Delaware (the "TRUST"), and MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED ("MERRILL LYNCH") and OPPENHEIMER & CO., INC. and SMITH BARNEY INC.
(together with Merrill Lynch, the "INITIAL PURCHASERS").
This Agreement is made pursuant to the Purchase Agreement dated January 22,
1997 (the "PURCHASE AGREEMENT"), among the Company, as issuer of 97/8% Junior
Subordinated Deferrable Interest Debentures due February 15, 2027 (the
"SUBORDINATED DEBENTURES"), the Trust and the Initial Purchasers, which provides
for among other things, the sale by the Trust to the Initial Purchasers of
75,000 of the Trust's 97/8% Capital Securities, liquidation amount $1,000 per
Capital Security (the "CAPITAL SECURITIES") the pro- ceeds of which will be used
by the Trust to purchase Subordinated Debentures. The Capital Securities,
together with the Subordi- nated Debentures and the Company's guarantee of the
Capital Securities (the "CAPITAL SECURITIES GUARANTEE"), are collectively
referred to as the "SECURITIES." In order to induce the Initial Purchasers to
enter into the Purchase Agreement, the Company and the Trust have agreed to
provide to the Initial Purchasers and their direct and indirect transferees the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the closing under the Purchase Agree- ment.
In consideration of the foregoing, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"APPLICABLE PERIOD" shall have the meaning set forth in Section 3(t)
hereof.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in the City of New York or Wilmington, Delaware are
authorized or required by law or executive order to close.
"CLOSING TIME" shall mean the Closing Time as defined in the Purchase
Agreement.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"DECLARATION" or "DECLARATION OF TRUST" shall mean the Amended and Restated
Declaration of Trust, dated as of January 27, 1997, by the trustees named
therein and the Company as sponsor.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; PROVIDED, HOWEVER, that such depositary must
have an address in the Borough of Manhattan, in the City of New York.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section 2(b)
hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"EXCHANGE OFFER" shall mean the offer by the Company and the Trust to the
Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a) hereof.
"EXCHANGE SECURITIES" shall mean (i) with respect to the Subordinated
Debentures, the Series B 97/8% Junior Subordinated Deferrable Interest
Debentures due February 15, 2027 (the "EXCHANGE DEBENTURES") containing terms
identical to the Subordinated Debentures (except that they will not contain
terms with respect to the transfer restrictions under the Securities Act, will
not require transfers thereof to be in minimum blocks of $100,000 principal
amount and will not provide for payment of Liquidated Damages thereon), (ii)
with respect to the Capital Securities, the Trust's Series B 97/8% Capital
Securities, liquida- tion amount $1,000 per Capital Security (the "EXCHANGE
CAPITAL SECURITIES") which will have terms identical to the Capital Securities
(except they will not contain terms with respect to transfer restrictions under
the Securities Act, will not require minimum transfers thereof to be in blocks
of $100,000 liquidation amount and will not provide for payment of Liquidated
Damages thereon) and (iii) with respect to the Capital Securities Guarantee, the
Company's guarantee (the "EXCHANGE CAPITAL SECURITIES GUARANTEE") of the
Exchange Capital Securities which will have terms identical to the Capital
Securities Guarantee (except that the Exchange Capital Securities Guarantee will
not contain terms with respect to transfer restrictions under the Securities
Act).
"HOLDER" shall mean the Initial Purchasers, for so long as they own any
Registrable Securities, and each of their respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"INDENTURE" shall mean the Indenture relating to the Subordinated
Debentures and the Exchange Debentures dated as of January 27, 1997 as
supplemented by the First Supplemental Indenture dated as of January 27, 1997,
among the Company, as issuer, and IBJ Schroder Bank and Trust Company, as
trustee, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.
"INITIAL PURCHASERS" shall have the meaning set forth in the preamble to
this Agreement.
"INSPECTORS" shall have the meaning set forth in Sec- tion 3(n) hereof.
"ISSUE DATE" shall mean the date of original issuance of the Securities.
"LIQUIDATED DAMAGES" shall have the meaning set forth in Section 2(e)
hereof.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the aggregate
liquidation amount of outstanding Capital Securities.
"PARTICIPATING BROKER-DEALER" shall have the meaning set forth in Section
3(t) hereof.
"PERSON" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability company, or a government or
agency or political subdivision thereof.
"PRIVATE EXCHANGE" shall have the meaning set forth in Section 2(a) hereof.
"PRIVATE EXCHANGE SECURITIES" shall have the meaning set forth in Section
2(a) hereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the preamble to
this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(n) hereof.
"REGISTRATION DEFAULT" shall have the meaning set forth in Section 2(e)
hereof.
"REGISTRABLE SECURITIES" shall mean the Securities and, if issued, the
Private Exchange Securities; PROVIDED, HOWEVER, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities or
Private Exchange Securities, as the case may be, shall have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
including Rule 144A) under the Securities Act, (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be outstanding or
(iv) with respect to the Securities, such Securities have been exchanged for
Exchange Securities upon consummation of the Exchange Offer and are thereafter
freely tradeable by the holder thereof (other than an affiliate of the Company).
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securi- ties in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of counsel for any
underwriters or Holders in connection with blue sky qualification of any of the
Exchange Securities or Registrable Securities) and compliance with the rules of
the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distrib- uting any Registration
Statement, any Prospectus and any amend- ments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any underwriting
agreements, securities sales agreements and other documents relating to the
performance of and compliance with this Agreement, (iv) all rating agency fees,
(v) the fees and disbursements of counsel for the Company and of the independent
certified public accountants of the Company, including the expenses of any "cold
comfort" letters required by or incident to such performance and compli- ance,
(vi) the fees and expenses of the Trustees, and any ex- change agent or
custodian, (vii) all fees and expenses incurred in connection with the listing,
if any, of any of the Registrable Securities on any securities exchange or
exchanges, and (viii) the reasonable fees and expenses of any special experts
retained by the Company in connection with any Registration Statement.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company and the Trust which covers any of the Exchange Securities or Registrable
Securities pursuant to the provisions of this Agreement, and all amendments and
supplements to any such Registration Statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
"RULE 144(K) PERIOD" shall mean the period of three years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the pream- ble to this
Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended from
time to time.
"SHELF REGISTRATION" shall mean a registration effected pursuant to Section
2(b) hereof.
"SHELF REGISTRATION EVENT" shall have the meaning set forth in Section 2(b)
hereof.
"SHELF REGISTRATION EVENT DATE" shall have the meaning set forth in Section
2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration statement
of the Company and the Trust pursuant to the provisions of Section 2(b) hereof
which covers all of the Regis- trable Securities or all of the Private Exchange
Securities, as the case may be, on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(l) hereof.
"TRUSTEES" shall mean any and all trustees with respect to (i) the Capital
Securities under the Declaration, (ii) the Subordinated Debentures under the
Indenture and (iii) the Capital Securities Guarantee.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. To the extent not prohibited by any applicable law or
applicable interpretation of the staff of the SEC, the Company and the Trust
shall, for the benefit of the Holders, at the Company's cost, use their best
efforts to (i) cause to be filed with the SEC within 150 days after the Issue
Date an Exchange Offer Registration Statement on an appropriate form under the
Securities Act covering the Exchange Offer, (ii) cause such Exchange Offer
Registration Statement to be declared effective under the Securities Act by the
SEC not later than the date which is 180 days after the Issue Date, and (iii)
keep such Exchange Offer Registration Statement effective for not less than 30
calendar days (or longer if required by applicable law) after the date notice of
the Exchange Offer is mailed to the Holders. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company and the Trust shall promptly
commence the Exchange Offer, it being the objective of such Exchange Offer to
enable each Holder eligible and electing to exchange Registrable Securities for
a like principal amount of Exchange Debentures or a like liquidation amount of
Exchange Capital Securities, together with the Exchange Guarantee, as applicable
(assuming that such Holder is not an affiliate of the Company within the meaning
of Rule 405 under the Securities Act and is not a broker-dealer tendering
Registrable Securities acquired directly from the Company for its own account,
acquires the Exchange Securities in the ordinary course of such Holder's
business and has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the Exchange
Securities), to transfer such Exchange Securities from and after their receipt
without any limitations or restrictions under the Securities Act and under state
securities or blue sky laws.
In connection with the Exchange Offer, the Company and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not less
than 30 days after the date notice thereof is mailed to the Holders (or longer
if required by applicable law) (such period referred to herein as the "EXCHANGE
PERIOD");
(iii) utilize the services of the Depositary for the Ex- change Offer;
(iv) permit Holders to withdraw tendered Securities at any time prior to
the close of business, New York time, on the last Business Day of the Exchange
Period, by sending to the institution specified in the notice, a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder,
the principal amount of Securities delivered for exchange, and a statement that
such Holder is withdrawing his election to have such Securities exchanged;
(v) notify each Holder that any Security not tendered by such Holder in the
Exchange Offer will remain outstanding and continue to accrue interest or
accumulate distributions, as the case may be, but will not retain any rights
under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws relating to
the Exchange Offer.
If any Initial Purchaser determines upon advice of its outside counsel that
it is not eligible to participate in the Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment in the
initial distribution, as soon as practicable upon receipt by the Company and the
Trust of a written request from such Initial Purchaser, the Company and the
Trust, as applicable, shall issue and deliver to such Initial Purchaser in
exchange (the "PRIVATE EXCHANGE") for the Securities held by such Initial
Purchaser, a like liquidation amount of Capital Securities of the Trust,
together with the Exchange Guarantee, or a like principal amount of the
Subordinated Debentures of the Company, as applicable, that are identical
(except that such securities may bear a customary legend with respect to
restrictions on transfer pursuant to the Securities Act) to the Exchange
Securities (the "PRIVATE EXCHANGE SECURITIES") and which are issued pursuant to
the Indenture, the Declaration or the Guarantee (which provides that the
Exchange Securities will not be subject to the transfer restrictions set forth
in the Indenture or the Declaration, as applicable, and that the Exchange
Securities, the Private Exchange Securities and the Securities will vote and
consent together on all matters as one class and that neither the Exchange
Securities, the Private Exchange Securities nor the Securities will have the
right to vote or consent as a separate class on any matter). The Private
Exchange Securities shall be of the same series as the Exchange Securities and
the Company and the Trust will seek to cause the CUSIP Service Bureau to issue
the same CUSIP Numbers for the Private Exchange Securities as for the Exchange
Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Company and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered and not
validly withdrawn pursuant to the Exchange Offer or the Private Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by the
Company; and
(iii) issue, and cause the applicable Trustee under the Indenture, the
Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange Securities,
as applicable, equal in principal amount to the principal amount of the
Subordinated Debentures or equal in liquidation amount to the liquidation amount
of the Capital Securities (together with the guarantee thereof) as are
surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on each
Exchange Debenture and Private Exchange Security issued pursuant to the
Registered Exchange Offer and in the Private Exchange will accrue from the last
date on which a Distribution or interest was paid on the Capital Security or the
Subordinated Debenture surrendered in exchange therefore or, if no Distribution
or interest has been paid on such Capital Security or Subordinated Debenture,
from the Issue Date. To the extent not prohibited by any law or applicable
interpretation of the staff of the SEC, the Company and the Trust shall use
their best efforts to complete the Exchange Offer as provided above, and shall
comply with the applicable requirements of the Securities Act, the Exchange Act
and other applicable laws in connection with the Exchange Offer. The Exchange
Offer shall not be subject to any conditions, other than that the Exchange Offer
does not violate applicable law or any applicable interpretation of the staff of
the SEC. Each Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to make certain customary representations in connection therewith,
including, in the case of any Holder of Capital Securities, representations that
(i) it is not an affiliate of the Trust or the Company, (ii) the Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no arrangement with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. The Company and the Trust
shall inform the Initial Purchasers, after consultation with the Trustee, of the
names and addresses of the Holders to whom the Exchange Offer is made, and the
Initial Purchasers shall have the right to contact such Holders and otherwise
facilitate the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with this Section
2(a), the provisions of this Agreement shall continue to apply, MUTATIS
MUTANDIS, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Company and the Trust shall have no further obligation
to register the Registrable Securities (other than Private Exchange Securities)
pursuant to Section 2(b) of this Agreement.
(b) SHELF REGISTRATION. In the event that (i) the Company, the Trust or the
Majority Holders reasonably determine, after conferring with counsel (which may
be in-house counsel), that the Exchange Offer Registration provided in Section
2(a) above is not available because of any change in law or in currently
prevailing interpretations of the staff of the SEC, (ii) the Company shall
determine in good faith that there is a reasonable likelihood that, or a
material uncertainty exists as to whether, consummation of the Exchange Offer
would result in a material adverse tax consequence to the Company, (iii) the
Exchange Offer Registration Statement is not declared effective within 180 days
of the Issue Date or (iv) upon the request of any Initial Purchaser with respect
to any Registrable Securities held by it, if such Initial Purchaser is not
permitted, in the reason- able opinion of Skadden, Arps, Slate, Meagher & Flom
LLP or such other counsel experienced in such matters, pursuant to applicable
law or applicable interpretations of the staff of the SEC, to participate in the
Exchange Offer and thereby receive securities that are freely tradeable without
restriction under the Securi- ties Act and applicable blue sky or state
securities laws (any of the events specified in (i)-(iv) being a "SHELF
REGISTRATION EVENT" and the date of occurrence thereof, the "SHELF REGISTRA-
TION EVENT DATE"), the Trust shall (x) promptly deliver to the Holders and the
Delaware Trustee written notice thereof and (y), at the Company's sole expense,
the Company and the Trust will use their best efforts to cause to be filed as
promptly as practi- cable after such Shelf Registration Event Date, and, in any
event, within 45 days after such Shelf Registration Event Date (which shall be
no earlier than 75 days after the Closing Time), a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, and
shall use their best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable Securities
shall be entitled to include any of its Registrable Securities in any Shelf
Registration pursuant to this Agreement unless and until such Holder agrees in
writing to be bound by all of the provisions of this Agreement applicable to
such Holder and furnishes to the Company and the Trust in writ- ing, within 15
days after receipt of a request therefor, such information as the Company and
the Trust may, after conferring with counsel with regard to information relating
to Holders that would be required by the SEC to be included in such Shelf Regis-
tration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Company and the Trust all information with respect to such Holder
neces- sary to make the information previously furnished to the Company by such
Holder not materially misleading.
The Company and the Trust agree to use their best efforts to keep the Shelf
Registration Statement continuously effective for the Rule 144(k) Period
(subject to extension pursuant to the last paragraph of Section 3 hereof) (90
days in the case of a Shelf Registration Statement filed at the request of an
Initial Purchaser under Section 2(b)(iv) hereof) or for such shorter period
which will terminate when all of the Regis- trable Securities covered by the
Shelf Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding (the "EFFECTIVENESS PERIOD"). The Company
and the Trust shall not permit any securities other than Registrable Securities
to be included in the Shelf Registration. The Company and the Trust will, in the
event a Shelf Registration Statement is declared effective, provide to each
Holder a reason- able number of copies of the Prospectus which is a part of the
Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and use its best efforts to take certain other
actions as are required to permit certain unrestricted resales of the
Registrable Securities. The Company and the Trust further agree, if necessary,
to supplement or amend the Shelf Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used by
the Company for such Shelf Registration Statement or by the Securities Act or by
any other rules and regulations thereun- der for shelf registrations, and the
Company and the Trust agree to furnish to the Holders of Registrable Securities
copies of any such supplement or amendment promptly after its being used or
filed with the SEC.
(c) EXPENSES. The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a) or 2(b) hereof and will reimburse
the Initial Purchasers for the reasonable fees and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchasers, incurred in
connection with the Exchange Offer and, if applicable, the Private Exchange
Offer, and any one other counsel designated in writing by the Majority Holders
to act as counsel for the Holders of the Registrable Securities in connection
with a Shelf Registration Statement, which other counsel shall be reasonably
satisfactory to the Company. Except as provided herein, each Holder shall pay
all expenses of its counsel, underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holder's Registrable
Securities pursuant to the Shelf Registration Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been de- clared effective by the SEC; PROVIDED, HOWEVER, that if,
after it has been declared effective, the offering of Registrable Securi- ties
pursuant to a Shelf Registration Statement is interfered with by any stop order,
injunction or other order or requirement of the SEC or any other governmental
agency or court, such Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Trust will be deemed not to have used their best
efforts to cause the Exchange Offer Registration Statement or the Shelf
Registration Statement, as the case may be, to become, or to remain, effective
during the requisite period if either of them voluntarily take any action that
would result in any such Registration Statement not being declared effective or
in the Holders of Registrable Securities covered thereby not being able to
exchange or offer and sell such Registrable Securities during that period unless
such action is required by applicable law.
(e) LIQUIDATED DAMAGES. In the event that (i) (A) neither the Exchange
Offer Registration Statement nor a Shelf Registration Statement is filed with
the SEC on or prior to the 150th day after the Issue Date or (B) notwithstanding
that the Company and the Trust have consummated or will consummate an Exchange
Offer, the Company and the Trust are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not filed on or prior to the
date required by Section 2(b) hereof, then commencing on the day after the
applicable required filing date, liquidated damages shall be payable on the
principal amount of the Subordinated Debentures, and additional distributions
shall accumulate on the liquidation amount of the Capital Securities, each at a
rate of 0.25% per annum; or
(ii) (A) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the 30th
day after the applicable required filing date or (B) notwithstanding that the
Company and the Trust have consummated or will consummate an Exchange Offer, the
Company and the Trust are required to file a Shelf Registration Statement and
such Shelf Registration Statement is not declared effective by the SEC on or
prior to the 30th day after the date such Shelf Registration Statement was
required to be filed, then, commencing on the 31st day after the applicable
required filing date, liquidated damages shall be payable on the principal
amount of the Subordinated Debentures, and additional distributions shall
accumulate on the liquidation amount of the Capital Securities, each at a rate
of 0.25% per annum; or
(iii) (A) the Trust has not exchanged Exchange Capital Securities for all
Capital Securities or the Company has not exchanged Exchange Guarantees or
Exchange Subordinated Debentures for all Guarantees or Subordinated Debentures
validly tendered, in accordance with the terms of the Exchange Offer on or prior
to the 45th day after the date on which the Exchange Offer Registra- tion
Statement was declared effective or (B) if applicable, the Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be available to a Holder of Registrable Securities for use in
connection with the sale of such Registrable Securities at any time prior to the
expiration of the Rule 144(k) Period (or prior to the expiration of 90 days from
the effective date of such registration statement in the case of a Shelf
Registration Statement filed at the request of an Initial Purchaser) (other than
after such time as all Capital Securities have been disposed of thereunder or
otherwise cease to be Registrable Securities), and such event continues for a
period exceeding 45 consecutive days or 90 days in any 360 day period whether or
not consecutive, then liquidated damages shall be payable on the principal
amount of Subordinated Debentures, and additional distributions shall accumulate
on the liquidation amount of the Capital Securities, each at a rate of 0.25% per
annum commencing on (x) the 46th day after such effective date, in the case of
(A) above, or (y) the 46th consecutive day or 91st day in any 360 day period
following the day such Shelf Registration Statement ceases to be available in
the case of (B) above;
provided, however, that neither the liquidated damages rate on the
Subordinated Debentures, nor the additional distribution rate on the liquidation
amount of the Capital Securities, may exceed in the aggregate 0.25% per annum;
provided, further, however, that (1) upon the filing of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of clause
(i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (ii) above),
or (3) upon the exchange of Exchange Capital Securities, Exchange Guarantees and
Exchange Subordinated Debentures for all Capital Securities, Guarantees and
Subordinated Debentures tendered (in the case of clause (iii)(A) above), or upon
the availability of the Shelf Registration Statement which had ceased to remain
available (in the case of clause (iii)(B) above), liquidated damages on the
Subordinated Debentures, and additional distributions on the liquidation amount
of the Capital Securities as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue or accumulate, as the case
may be.
Any amounts of liquidated damages and additional distributions due pursuant
to Section 2(e)(i), (ii) or (iii) above ("LIQUIDATED DAMAGES") will be payable
in cash on the next succeeding February 15 or August 15, as the case may be, to
Holders on the February 1 or August 1 immediately preceding such payment date
for the payment of interest and Distributions pursu- ant to the Indenture and
the Declaration, respectively.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies available to the
Holders, the Company and the Trust acknowledge that any failure by the Company
or the Trust to comply with its obligations under Section 2(a) and Section 2(b)
hereof may result in material irreparable injury to the Holders for which there
is no adequate remedy at law, that it would not be possible to measure damages
for such injuries precisely and that, in the event of any such failure, any
Holder may obtain such relief as may be required to specifically enforce the
Company's and the Trust's obligations under Section 2(a) and Section 2(b)
hereof.
3. REGISTRATION PROCEDURES. In connection with the obligations of the
Company and the Trust with respect to the Registration Statements pursuant to
Sections 2(a) and 2(b) hereof, the Company and the Trust shall use their best
efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and 2(b) hereof
within the relevant time period specified in Section 2 hereof on the
appropriate form under the Securities Act, which form (i) shall be
selected by the Company and the Trust, (ii) shall, in the case of a
Shelf Registration, be available for the sale of the Registrable
Securities by the selling Holders thereof and (iii) shall comply as to
form in all material respects with the requirements of the applicable
form and include all financial statements required by the SEC to be
filed therewith; and use its best efforts to cause such Registration
Statement to become effective and remain effective in accordance with
Section 2 hereof; PROVIDED, HOWEVER, that if (1) such filing is
pursuant to Section 2(b), or (2) a Prospectus contained in an Exchange
Offer Registration Statement filed pursuant to Section 2(a) is required
to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Securities, before filing any
Registration Statement or Prospectus or any amendments or supplements
thereto, the Company and the Trust shall furnish to and afford the
Holders of the Registrable Securities and each such Participating
Broker-Dealer, as the case may be, covered by such Registration
Statement, their counsel and the managing underwriters, if any, a
reasonable opportunity to review copies of all such documents
(including copies of any documents to be incorporated by reference
therein and all exhibits thereto) proposed to be filed. The Company and
the Trust shall not file any Registration Statement or Prospectus or
any amendments or supplements thereto in respect of which the Holders
must be afforded an opportunity to review prior to the filing of such
document if the Majority Holders or such Participating Broker-Dealer,
as the case may be, their counsel or the managing underwriters, if any,
shall reasonably object;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be
necessary to keep such Registration Statement effective for the
Effectiveness Period or the Applicable Period, as the case may be; and
cause each Prospectus to be supplemented, if so determined by the
Company or the Trust or requested by the SEC, by any required
prospectus supplement and as so supplemented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities
Act, and comply with the provisions of the Securities Act, the Exchange
Act and the rules and regulations promulgated thereunder applicable to
it with respect to the disposition of all securities covered by each
Registration Statement during the Effectiveness Period or the
Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof
described in this Agreement (including sales by any Participating
Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf Registration
Statement, at least three Business Days prior to filing, that a Shelf
Registration Statement with respect to the Registrable Securities is
being filed and advising such Holder that the distribution of
Registrable Securities will be made in accordance with the method
selected by the Majority Holders; and (ii) furnish to each Holder of
Regis- trable Securities included in the Shelf Registration Statement
and to each underwriter of an underwritten offering of Registrable
Securities, if any, without charge, as many copies of each Prospectus,
including each preliminary Prospectus, and any amendment or supplement
thereto and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Securities; and (iii) consent to the use
of the Prospectus or any amendment or supplement thereto by each of the
selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or
supplement thereto;
(d) in the case of a Shelf Registration, use its best efforts
to register or qualify the Registrable Securities by the time the
applicable Registration Statement is declared effective by the SEC
under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement and each underwriter of an underwritten offering
of Regis- trable Securities shall reasonably request in writing in
advance of such date of effectiveness, and do any and all other acts
and things which may be reasonably necessary or advisable to enable
such Holder and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
PROVIDED, HOWEVER, that the Company and the Trust shall not be required
to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(d), (ii) file any general consent to service of
process in any jurisdiction where it would not otherwise be subject to
such service of process or (iii) subject itself to taxation in any such
jurisdiction if it is not then so subject;
(e) in the case of (1) a Shelf Registration or (2)
Participating Broker-Dealers from whom the Company or the Trust has
received prior written notice that they will be utilizing the
Prospectus contained in the Exchange Offer Registration Statement as
provided in Section 3(t) hereof, are seeking to sell Exchange
Securities and are required to deliver Prospectuses, notify each Holder
of Registrable Securities, or such Participating Broker-Dealers, as the
case may be, their counsel and the managing underwriters, if any,
promptly and promptly confirm such notice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of any
request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration Statement
or the qualification of the Registrable Securities or the Exchange
Securities to be offered or sold by any Participating Broker-Dealer in
any jurisdiction described in paragraph 3(d) hereof or the initiation
of any proceedings for that purpose, (iv) in the case of a Shelf
Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered
thereby, the representations and warranties of the Company and the
Trust contained in any purchase agreement, securities sales agreement
or other similar agreement, if any, cease to be true and correct in all
material respects, and (v) of the happening of any event or the failure
of any event to occur or the discovery of any facts or otherwise,
during the Effectiveness Period which makes any statement made in such
Registration Statement or the related Prospectus untrue in any material
respect or which causes such Registration Statement or Prospectus to
omit to state a material fact necessary to make the state- ments
therein, in the light of the circumstances under which they were made,
not misleading, and (vi) the Company and the Trust's reasonable
determination that a post-effective amendment to the Registration
Statement would be appropri- ate;
(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage of such
Shelf Registration Statement, without charge, at least one conformed
copy of each Registration Statement relating to such Shelf Registration
and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable
Securities to be sold and not bearing any restrictive legends and in
such denominations (consistent with the provisions of the Indenture and
the Declaration) and registered in such names as the selling Holders or
the underwriters may reasonably request at least two Business Days
prior to the closing of any sale of Regis- trable Securities pursuant
to such Shelf Registration Statement;
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, upon the occurrence of any circumstance contemplated by
Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its best
efforts to prepare a supplement or post-effective amendment to a
Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; and to notify each Holder to suspend use of
the Prospectus as promptly as practicable after the occurrence of such
an event, and each Holder hereby agrees to suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus
to correct such misstatement or omission;
(j) in the case of a Shelf Registration, a reasonable time
prior to the filing of any document which is to be incorporated by
reference into a Registration Statement or a Prospectus after the
initial filing of a Registration State- ment, provide a reasonable
number of copies of such document to the Holders; and make such of the
representatives of the Company and the Trust as shall be reasonably
requested by the Holders of Registrable Securities or the Initial Pur-
chasers on behalf of such Holders available for discussion of such
document;
(k) obtain a CUSIP number for all Exchange Capital Securities
and the Capital Securities (and if the Trust has made a distribution of
the Subordinated Debentures to the Holders of the Capital Securities,
the Subordinated Debentures or the Exchange Subordinated Debentures) as
the case may be, not later than the effective date of a Registration
Statement, and provide the Trustee with printed certificates for the
Exchange Securities or the Registrable Securities, as the case may be,
in a form eligible for deposit with the Depositary;
(l) cause the Indenture, the Declaration, the Guarantee and
the Exchange Guarantee to be qualified under the Trust Indenture Act of
1939 (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect
such changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute, and use
its best efforts to cause the relevant trustee to execute, all
documents as may be required to effect such changes, and all other
forms and documents required to be filed with the SEC to enable such
documents to be so qualified in a timely manner;
(m) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are customary in
underwritten offerings and take all such other appropriate actions as
are reasonably requested in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and in
such connection, whether or not an underwriting agreement is entered
into and whether or not the registration is an underwritten registra-
tion, if requested by (x) any Initial Purchaser, in the case where an
Initial Purchaser holds Securities acquired by it as part of its
initial distribution and (y) other Holders of Securities covered
thereby: (i) make such representations and warranties to Holders of
such Registrable Securities and the underwriters (if any), with respect
to the business of the Trust, the Company and its subsidiaries as then
con- ducted and the Registration Statement, Prospectus and docu- ments,
if any, incorporated or deemed to be incorporated by reference therein,
in each case, as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and the Trust and
updates thereof (which may be in the form of a reliance letter) in form
and substance reasonably satisfactory to the managing underwrit- ers
(if any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder and
the underwriters (if any) cover- ing the matters customarily covered in
opinions requested in underwritten offerings and such other matters as
may be reasonably requested by such underwriters (it being agreed that
the matters to be covered by such opinion may be sub- ject to customary
qualifications and exceptions); (iii) obtain "cold comfort" letters and
updates thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public accoun-
tants of the Company and the Trust (and, if necessary, any other
independent certified public accountants of any sub- sidiary of the
Company and the Trust or of any business acquired by the Company and
the Trust for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to
each of the underwriters, such letters to be in customary form and
covering matters of the type customarily covered in "cold comfort"
letters in connection with underwritten offerings and such other
matters as reasonably requested by such underwriters in accordance with
Statement on Auditing Standards No. 72; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provi- sions and procedures no less favorable than those set forth in
Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount of Registrable
Securities covered by such Registration Statement and the managing
underwriters or agents) with respect to all parties to be indemnified
pursuant to said Section (including, without limitation, such
underwriters and selling Holders). The above shall be done at each
closing under such underwriting agreement, or as and to the extent
required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks
to sell Exchange Securities during the Applicable Period, make
reasonably available for inspection by any selling Holder of such
Registrable Securities being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Securities, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "INSPECTORS"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and properties of the Trust, the Company
and its subsidiaries (collectively, the "RECORDS") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Trust, the Company and its subsidiaries to supply all
relevant information in each case reasonably requested by any such
Inspector in connection with such Registration Statement PROVIDED,
HOWEVER, that the foregoing inspection and information gathering shall
be coordinated on behalf of the Purchasers by the Representatives and
on behalf of the other parties, by one counsel designated by the
Representatives and on behalf of such other parties as described in
Section 2(c) hereof. Records which the Company and the Trust determine,
in good faith, to be confidential and any records which it notifies the
Inspectors are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in such Registration
Statement, (ii) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction or is
necessary in connection with any action, suit or proceeding or (iii)
the information in such Records has been made generally available to
the public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to agree in writing
that information obtained by it as a result of such inspections shall
be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Trust or the Company
unless and until such is made generally available to the public. Each
selling Holder of such Registrable Securities and each such
Participating Broker-Dealer will be required to further agree in
writing that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company
and allow the Company at its expense to undertake appropriate action to
prevent disclosure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be applicable and
make generally available to its security- holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 thereunder (or any similar rule promulgated under the
Securities Act) no later than 45 days after the end of any 12-month
period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the
first fiscal quarter of the Company after the effective date of a
Registration Statement, which statements shall cover said 12- month
periods;
(p) upon consummation of an Exchange Offer or a Private
Exchange, if requested by a Trustee, obtain an opinion of counsel to
the Company addressed to the Trustee for the benefit of all Holders of
Registrable Securities participating in the Exchange Offer or the
Private Exchange, as the case may be, and which includes an opinion
that (i) the Company and the Trust, as the case requires, have duly
authorized, executed and delivered the Exchange Securities and Private
Exchange Securities, and (ii) each of the Ex- change Securities or the
Private Exchange Securities, as the case may be, constitutes a legal,
valid and binding obliga- tion of the Company or the Trust, as the case
requires, enforceable against the Company or the Trust, as the case
requires, in accordance with its respective terms (in each case, with
customary exceptions);
(q) if an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Securities by Holders to
the Company or the Trust, as applicable (or to such other Person as
directed by the Company or the Trust, respectively), in exchange for
the Exchange Securities or the Private Exchange Securities, as the case
may be, the Company or the Trust, as applicable, shall mark, or cause
to be marked, on such Registrable Securities delivered by such Holders
that such Registrable Securities are being cancelled in exchange for
the Exchange Securities or the Private Exchange Securities, as the case
may be; in no event shall such Registrable Securities be marked as paid
or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if any,
participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be
made with the NASD;
(s) use its best efforts to take all other steps necessary to
effect the registration of the Registrable Securities covered by a
Registration Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration Statement a
section entitled "Plan of Distribution," which section shall be
reasonably acceptable to the Initial Purchasers or another
representative of the Participating Broker-Dealers, and which shall
contain a summary statement of the positions taken or policies made by
the staff of the SEC with respect to the potential "underwriter" status
of any broker-dealer (a "PARTICIPATING BROKER-DEALER") that holds
Registrable Securities acquired for its own account as a result of
market-making activities or other trading activ- ities and that will be
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)
of Exchange Securities to be received by such broker-dealer in the
Exchange Offer, whether such positions or policies have been publicly
disseminated by the staff of the SEC or such positions or policies, in
the reasonable judgment of the Initial Purchasers or such other
representative, represent the prevailing views of the staff of the SEC,
including a statement that any such broker-dealer who receives Exchange
Securities for Registrable Securities pursuant to the Exchange Offer
may be deemed a statutory underwriter and must deliver a prospectus
meeting the requirements of the Securities Act in connection with any
resale of such Exchange Securities, (ii) furnish to each Participating
Broker-Dealer who has delivered to the Company the notice referred to
in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any
prelim- inary prospectus, and any amendment or supplement thereto, as
such Participating Broker-Dealer may reasonably request (each of the
Company and the Trust hereby consents to the use of the Prospectus
forming part of the Exchange Offer Registration Statement or any
amendment or supplement there- to by any Person subject to the
prospectus delivery require- ments of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or transfer
of the Exchange Securities covered by the Prospectus or any amendment
or supplement thereto), (iii) use its best efforts to keep the Exchange
Offer Registration Statement effective and to amend and supplement the
Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery
requirements of the Securities Act for such period of time as such
Persons must comply with such requirements under the Securities Act and
applicable rules and regulations in order to resell the Exchange
Securities; PROVIDED, HOWEVER, that such period shall not be required
to exceed 180 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "APPLICABLE PERIOD"), and (iv)
include in the transmittal letter or similar documentation to be
executed by an exchange offeree in order to participate in the Exchange
Offer (x) the following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus
in connection with the exchange of Registrable Securities, the
broker-dealer will not be deemed to admit that it is an underwriter
within the meaning of the Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Company and the Trust agree to deliver to the Initial Purchasers or
to another representative of the Participating Broker-Dealers, if
requested by any such Initial Purchasers or such other representative
of the Participating Broker-Dealers, on behalf of the Participating
Broker-Dealers upon consummation of the Exchange Offer (i) an opinion
of counsel in form and substance reasonably satisfactory to the Initial
Purchasers or such other representative of the Participating
Broker-Dealers, covering the matters customarily covered in opinions
requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that
the matters to be covered by such opinion may be subject to customary
qualifications and exceptions), (ii) an officers' certificate
containing certifications substantial- ly similar to those set forth in
Section 5(g) of the Pur- chase Agreement and such additional
certifications as are customarily delivered in a public offering of
debt securi- ties and (iii) as well as upon the effectiveness of the
Exchange Offer Registration Statement, a comfort letter, in each case,
in customary form if permitted by Statement on Auditing Standards No.
72.
The Company or the Trust may require each seller of Registrable Securities
as to which any registration is being effected to furnish to the Company or the
Trust, as applicable, such information regarding such seller as may be required
by the staff of the SEC to be included in a Registration Statement. The Company
or the Trust may exclude from such registration the Registrable Securities of
any seller who unreasonably fails to furnish such information within a
reasonable time after receiving such request. The Company shall have no
obligation to register under the Securities Act the Registrable Securities of a
seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement or (2) Participating
Broker-Dealers who have notified the Company and the Trust that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(t) hereof, are seeking to sell Exchange Securities and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Company or the Trust of the happening of any event of the
kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof or until
it is advised in writing (the "ADVICE") by the Company and the Trust that the
use of the applicable Prospectus may be resumed, and, if so directed by the
Company and the Trust, such Holder will deliver to the Company or the Trust (at
the Company's or the Trust's expense, as the case requires) all copies in such
Holder's possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or Exchange
Securities, as the case may be, current at the time of receipt of such notice.
If the Company or the Trust shall give any such notice to suspend the
disposition of Registrable Securities or Exchange Securities, as the case may
be, pursuant to a Registration Statement, the Company and the Trust shall use
their best efforts to file and have declared effective (if an amendment) as soon
as practicable an amendment or supplement to the Registration Statement and
shall extend the period during which such Registration Statement shall be
maintained effective pursuant to this Agreement by the number of days in the
period from and including the date of the giving of such notice to and including
the date when the Company and the Trust shall have made available to the Holders
(x) copies of the supplemented or amended Prospec- tus necessary to resume such
dispositions or (y) the Advice.
4. INDEMNIFICATION AND CONTRIBUTION. (a) In connec- tion with any
Registration Statement, the Company and the Trust shall, jointly and severally,
indemnify and hold harmless each Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective directors, officers, employees and
agents, as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, arising
out of any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement (or any amendment
thereto), covering Registrable Securities or Exchange Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements there- in not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any 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) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any court or 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, if such settlement is effected with the prior
written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel chosen
by such Holder, such Participating Broker-Dealer, or any underwriter
(except to the extent otherwise expressly provided in Section 4(b)
hereof)), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any court
or governmental agency 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 subparagraph (i) or (ii) of this Section
4(a);
PROVIDED, HOWEVER, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker- Dealer or any
underwriter, as the case may be, expressly for use in the Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to such Holder, underwriter or
Participating Broker-Dealer and the loss, liability, claim, damage or expense of
such Holder, underwriter, Participating Broker-Dealer or controlling person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company or the Trust to an indemnified party pursuant to this
Section 4 as a result of such losses shall be returned to the Company or the
Trust if it shall be finally determined by such a court in a judgment not
subject to appeal or final review that such indemnified party was not entitled
to indemnification by the Company or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, the Trust, any underwriter and the other selling Holders
and each of their respective directors, officers (including each officer of the
Company and the Trust who signed the Registration Statement), employees and
agents and each Person, if any, who controls the Company, the Trust, any
underwriter or any other selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
loss, liability, claim, damage and expense whatsoever described in the indemnity
contained in Section 4(a) hereof, 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) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company or the Trust by such selling Holder with
respect to such Holder expressly for use in the Registration Statement (or any
amendment thereto), or any such Prospectus (or any amendment or supplement
thereto); PROVIDED, HOWEVER, that, in the case of a Shelf Registration
Statement, no such Holder shall be liable for any amount hereunder in excess of
the amount by which the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to such Shelf Registration Statement exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged omis-
sion.
(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers properly served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have under this
Section 4, except to the extent that it is materially prejudiced by such
failure. An indemnifying party may participate at its own expense in the defense
of such action. If an indemnifying party so elects within a reasonable time
after receipt of such notice, an indemnifying party, severally or jointly with
any other indemnifying parties receiving such notice, may assume the defense of
such action with counsel chosen by it and reasonably acceptable to the
indemnified parties defendant in such action, PROVIDED, HOWEVER, that if (i)
representation of such indemnified party by the same counsel would present a
conflict of interest or (ii) the actual or potential defendants in, or targets
of, any such action include both the indemnified party and the indemnifying
party and any such indemnified party reasonably determines that there may be
legal defenses available to such indemnified party which are different from or
in addition to those available to such indemnifying party, then in the case of
clauses (i) and (ii) of this Section 4(c) such indemnifying party and counsel
for each indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party and counsel for each indemni- fied party or parties shall be
entitled to conduct the defense of such indemnified party or parties. If an
indemnifying party assumes the defense of such action, in accordance with and as
permitted by the provisions of this paragraph, such indemnifying parties shall
not be liable for any fees and expenses of counsel for the indemnified parties
incurred thereafter in connection with such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to local counsel), separate from its 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 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional written release in form and substance
satisfactory to the indemnified parties of each indem- nified 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) Notwithstanding the last sentence of Section 4(c), 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 pursuant to
Section 4(a)(iii) above, such indemnifying party agrees that it shall be liable
for any settlement 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; PROVIDED that an indemnify- ing party shall not be liable for any
such settlement effected without its consent if such indemnifying party (1)
reimburses such indemnified party in accordance with such request to the extent
it considers reasonable and (2) provides written notice to the indemnified party
substantiating the unpaid balance as unreasonable, in each case prior to the
date of such settlement.
(e) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, and
the Holders shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, the Trust and the Holders, as incurred; PROVIDED that
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 that
was not guilty of such fraudulent misrepresentation. As between the Company, the
Trust and the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and Trust, on the one hand, and the Holders, on
the other hand, with respect to the statements or omissions which resulted in
such loss, liability, claim, damage or expense, or action in respect thereof, as
well as any other relevant equitable considerations. The relative fault of the
Company and the Trust, on the one hand, and of the Holders, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Trust, on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Trust and the
Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder, and each director of each of the
Company or the Trust, each officer of each of the Company or the Trust who
signed the Registration Statement, and each Person, if any, who controls each of
the Company and the Trust within the meaning of Section 15 of the Securities Act
or Section 20 of the Exchange Act shall have the same rights to contribution as
each of the Company or the Trust.
5. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No Holder may participate
in any underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. SELECTION OF UNDERWRITERS. The Holders of Regis- trable Securities
covered by the Shelf Registration Statement who desire to do so may sell the
securities covered by such Shelf Registration in an underwritten offering. In
any such underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of a
majority in aggregate principal amount of the Registrable Securities included in
such offering; PROVIDED, HOWEVER, that such underwriters and managers must be
reasonably satisfactory to the Company and the Trust.
7. MISCELLANEOUS.
(a) RULE 144 AND RULE 144A. For so long as the Company or the Trust is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, the Company and the Trust, as
the case may be, will use its best efforts to file the reports required to be
filed by it under the Securities Act and Section 13(a) or 15(d) of the Exchange
Act and the rules and regulations adopted by the SEC thereunder, or, if it
ceases to be so required to file such reports, it will, upon the request of any
Holder of Regis- trable Securities (a) make publicly available such information
as is necessary to permit sales of securities of the Company and the Trust
pursuant to Rule 144 under the Securities Act, (b) deliver such information to a
prospective purchaser as is necessary to permit sales of securities of the
Company and the Trust pursuant to Rule 144A under the Securities Act and it will
take such further action as any Holder of Registrable Securities may reasonably
request, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such rule may be amended from time to time, (ii)
Rule 144A under the Securities Act, as such rule may be amended from time to
time, or (iii) any similar rules or regulations hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Company and the
Trust will deliver to such Holder a written statement as to whether they have
complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company or the Trust has not entered
into nor will the Company or the Trust on or after the date of this Agreement
enter into any agreement which is inconsistent with the rights granted to the
Holders of Registrable Securities in this Agreement or otherwise conflicts with
the provisions hereof. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the
holders of the Company's or the Trust's other issued and outstanding securities
under any such agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
unless the Company and the Trust has obtained the written consent of Holders of
at least a majority in aggregate principal amount of the out- standing
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; PROVIDED no amendment, modification or supplement or waiver
or consent to the departure with respect to the provisions of Section 4 hereof
shall be effective as against any Holder of Registrable Securi- ties unless
consented to in writing by such Holder of Registrable Securities.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any Holder of Registrable Securities, by written
agreement signed by the Company, the Trust and Merrill Lynch, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be
inconsistent with any other provision of this Agreement or to make any other
provisions with respect to matters or questions arising under this Agreement
which shall not be inconsistent with other provisions of this Agreement, (ii)
this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written
agreement signed by the Company, the Trust and Merrill Lynch to the extent that
any such amendment, modification, supplement, waiver or consent is, in their
reasonable judgment, necessary or appropriate to comply with applicable law
(including any inter- pretation of the Staff of the SEC) or any change therein
and (iii) to the extent any provision of this Agreement relates to the Initial
Purchasers, such provision may be amended, modified or supplemented, and waivers
or consents to departures from such provisions may be given, by written
agreement signed by Merrill Lynch, the Company and the Trust.
(d) NOTICES. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to a Holder, at the most current address given by such Holder to the Company or
the Trust by means of a notice given in accordance with the provisions of this
Section 7(d), which address initially is, with respect to the Initial
Purchasers, the address set forth in the Purchase Agreement; and (ii) if to the
Company or the Trust, initially at the Company's address set forth in the
Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Initial
Purchasers, including, without limitation and without the need for an express
assignment, subsequent Holders; PROVIDED, HOWEVER, that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms of the Purchase Agreement or the Indenture.
If any transferee of any Holder shall acquire Registrable Securities, in any
manner, whether by operation of law or otherwise, such Registrable Securities
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities, such Person shall be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement and such Person shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARY. Each of the Initial Purchasers shall be a
third party beneficiary of the agreements made hereunder between the Company and
the Trust, on the one hand, and the Holders, on the other hand, and shall have
the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of
Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(j) SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) SECURITIES HELD BY THE COMPANY, THE TRUST OR ITS AFFILIATES. Whenever
the consent or approval of Holders of a specified percentage of Registrable
Securities is required hereunder, Registrable Securities held by the Company,
the Trust or its affiliates (as such term is defined in Rule 405 under the
Securities Act) shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
INTERPOOL, INC.
By:/s/ Richard W. Gross
Name: Richard W. Gross
Title: Senior Vice President
INTERPOOL CAPITAL TRUST
By:/s/ Richard W. Gross
Name: Richard W. Gross
Title: Regular Trustee
<PAGE>
Confirmed and accepted as of
the date first above
written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
OPPENHEIMER & CO., INC.
SMITH BARNEY INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED,
as Representatives of the
Several Initial Purchasers
By:/s/ William S. Susman
Name: William S. Susman
Title: Director
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Interpool, Inc.:
As independent public accountants, we hereby consent to the incorporation by
reference in this Form S-4 Registration Statement of our report dated February
18, 1997 (except for the matters described in Note 13 to the consolidated
financial statements, as to which the date is March 27, 1997) included in
Interpool, Inc.'s Form 10-K for the year ended December 31, 1996, and to all
references to out firm included in or made a part of this registration
statement.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
May 27, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (B) (2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Thomas McCutcheon, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
INTERPOOL, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-3467669
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 College Road East
Princeton, NJ 08540
(Address of principal executive office) (Zip code)
9 7/8 % SERIES B JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
(Title of Indenture Securities)
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of May 19, 1997
Col. A Col. B
Title of class Amount Outstanding
Not Applicable
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the
following information:
(a) Title of the securities outstanding under
each such other indenture
Not Applicable
(b) A brief statement of the facts relied upon as a basis
for the claim that no conflicting interest within the
meaning of Section 310 (b) (1) of the Act arises as a
result of the trusteeship under any such other
indenture, including a statement as to how the
indenture securities will rank as
compared with the securities issued under
such other indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- --------------- -------------- ------------ -------------------------
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and
each director, partner and executive officer of each such underwriter:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- ------------- -------------- -------------- -------------------------
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C/
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are so owned or held by
the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C/
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 10. Ownership or holdings by the trustee of voting securities of
certain affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to
the voting securities of such person:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C/
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such any of which are so owned or held by
the trustee:
As of May 19, 1997
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
---------------------- ------------------ ---------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C/
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default
with respect to the securities under this
indenture. Explain the nature of any such
default.
Not Applicable
(b) If the trustee is a trustee under another
indenture under which any other securities,
or certificates of interest or
participation in any other securities, of
the obligor are outstanding, or is trustee
for more than one outstanding series of
securities under the indenture, state
whether there has been a default under any
such indenture or series, identify the
indenture or series affected, and explain
the nature of any such default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended
to date (See Exhibit 4 to Form T-1, Securities and
Exchange Commission File No. 22- 19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No.
22-19146).
5. A copy of each Indenture referred to in Item 4, if the
Obligor is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
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.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
<PAGE>
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized,
all in the City of New York, and State of New York, on the 19th day of
May, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /S/THOMAS MCCUTCHEON
Thomas McCutcheon
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by Interpool, Inc., we
hereby consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /S/ THOMAS MCCUTCHEON
Thomas McCutcheon
Assistant Vice President
Dated: May 19, 1997
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of December 31, 1996
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
ASSETS
Cash and balance due from depository institutions:
<S> <C> <C>
Noninterest-bearing balances and currency and coin ......................................$ 32,466
Interest-bearing balances..................................................................$ 347,310
Securities: Held-to-maturity securities.....................................................$ 175,628
Available-for-sale securities.............................................$ 37,536
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold.........................................................................$ 13,900
Securities purchased under agreements to resell............................................$ 4,524
Loans and lease financing receivables:
Loans and leases, net of unearned income....................................$ 1,844,295
LESS: Allowance for loan and lease losses...................................$ 57,261
LESS: Allocated transfer risk reserve.......................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve............$ 1,787,034
Trading assets held in trading accounts........................................................$ 403
Premises and fixed assets (including capitalized leases).......................................$ 4,123
Other real estate owned........................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies............................$ -0-
Customers' liability to this bank on acceptances outstanding...................................$ 463
Intangible assets..............................................................................$ -0-
Other assets...................................................................................$ 87,430
TOTAL ASSETS...................................................................................$ 2,491,019
LIABILITIES
Deposits:
In domestic offices.........................................................................$ 792,944
Noninterest-bearing ....................................................$ 228,711
Interest-bearing........................................................$ 564,233
In foreign offices, Edge and Agreement subsidiaries, and IBFs...............................$ $1,125,928
Noninterest-bearing.....................................................$ 20,348
Interest-bearing........................................................$ 1,105,580
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:
Federal Funds purchased.....................................................................$ 185,300
Securities sold under agreements to repurchase..............................................$ -0-
Demand notes issued to the U.S. Treasury........................................................$ 5,098
Trading Liabilities.............................................................................$ 83
Other borrowed money:
a) With a remaining maturity of one year or less............................................$ 74,686
b) With a remaining maturity of more than one year..........................................$ 4,763
Mortgage indebtedness and obligations under capitalized leases..................................$ -0-
Bank's liability on acceptances executed and outstanding........................................$ 463
Subordinated notes and
debentures......................................................................................$ -0-
Other liabilities...............................................................................$ 82,930
TOTAL LIABILITIES...............................................................................$ 2,272,195
Limited-life preferred stock and related surplus................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus...................................................$ -0-
Common stock....................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)........................................$ 217,008
Undivided profits and capital reserves..........................................................$ (27,849)
Net unrealized gains (losses) on available-for-sale securities..................................$ 16
Cumulative foreign currency translation adjustments.............................................$ -0-
TOTAL EQUITY CAPITAL............................................................................$ 218,824
TOTAL LIABILITIES AND EQUITY CAPITAL............................................................$ 2,491,019
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (B) (2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Thomas McCutcheon, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
INTERPOOL CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware 13-3467669
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Interpool, Inc.
211 College Road East 08540
Princeton, NJ (Zip code)
(Address of principal executive office)
9 7/8% SERIES B CAPITAL SECURITIES
(Title of Securities)
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of May 19, 1997
Col. A Col. B
Title of class Amount Outstanding
Not Applicable
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the
following information:
(a) Title of the securities outstanding under
each such other indenture
Not Applicable
(b) A brief statement of the facts relied upon as a basis
for the claim that no conflicting interest within the
meaning of Section 310 (b) (1) of the Act arises as a
result of the trusteeship under any such other
indenture, including a statement as to how the
indenture securities will rank as
compared with the securities issued under
such other indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- --------------- -------------- ------------ -------------------------
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and
each director, partner and executive officer of each such underwriter:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- ------------- -------------- -------------- -------------------------
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are so owned or held by
the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 10. Ownership or holdings by the trustee of voting securities of
certain affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to
the voting securities of such person:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such any of which are so owned or held by
the trustee:
As of May 19, 1997
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
---------------------- ------------------ ---------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default
with respect to the securities under this
indenture. Explain the nature of any such
default.
Not Applicable
(b) If the trustee is a trustee under another
indenture under which any other securities,
or certificates of interest or
participation in any other securities, of
the obligor are outstanding, or is trustee
for more than one outstanding series of
securities under the indenture, state
whether there has been a default under any
such indenture or series, identify the
indenture or series affected, and explain
the nature of any such default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended
to date (See Exhibit 4 to Form T-1, Securities and
Exchange Commission File No. 22- 19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No.
22-19146).
5. A copy of each Indenture referred to in Item 4, if the
Obligor is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
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.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized,
all in the City of New York, and State of New York, on the 19th day of
May, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /S/THOMAS MCCUTCHEON
Thomas McCutcheon
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by Interpool, Inc., we
hereby consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By: /s/ Thomas McCutcheon
Thomas McCutcheon
Assistant Vice President
Dated: May 19, 1997
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of December 31, 1996
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
ASSETS
Cash and balance due from depository institutions:
<S> <C> <C>
Noninterest-bearing balances and currency and coin ......................................$ 32,466
Interest-bearing balances..................................................................$ 347,310
Securities: Held-to-maturity securities.....................................................$ 175,628
Available-for-sale securities.............................................$ 37,536
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold.........................................................................$ 13,900
Securities purchased under agreements to resell............................................$ 4,524
Loans and lease financing receivables:
Loans and leases, net of unearned income....................................$ 1,844,295
LESS: Allowance for loan and lease losses...................................$ 57,261
LESS: Allocated transfer risk reserve.......................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve............$ 1,787,034
Trading assets held in trading accounts........................................................$ 403
Premises and fixed assets (including capitalized leases).......................................$ 4,123
Other real estate owned........................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies............................$ -0-
Customers' liability to this bank on acceptances outstanding...................................$ 463
Intangible assets..............................................................................$ -0-
Other assets...................................................................................$ 87,430
TOTAL ASSETS...................................................................................$ 2,491,019
LIABILITIES
Deposits:
In domestic offices.........................................................................$ 792,944
Noninterest-bearing ....................................................$ 228,711
Interest-bearing........................................................$ 564,233
In foreign offices, Edge and Agreement subsidiaries, and IBFs...............................$ $1,125,928
Noninterest-bearing.....................................................$ 20,348
Interest-bearing........................................................$ 1,105,580
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:
Federal Funds purchased.....................................................................$ 185,300
Securities sold under agreements to repurchase..............................................$ -0-
Demand notes issued to the U.S. Treasury........................................................$ 5,098
Trading Liabilities.............................................................................$ 83
Other borrowed money:
a) With a remaining maturity of one year or less............................................$ 74,686
b) With a remaining maturity of more than one year..........................................$ 4,763
Mortgage indebtedness and obligations under capitalized leases..................................$ -0-
Bank's liability on acceptances executed and outstanding........................................$ 463
Subordinated notes and
debentures......................................................................................$ -0-
Other liabilities...............................................................................$ 82,930
TOTAL LIABILITIES...............................................................................$ 2,272,195
Limited-life preferred stock and related surplus................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus...................................................$ -0-
Common stock....................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)........................................$ 217,008
Undivided profits and capital reserves..........................................................$ (27,849)
Net unrealized gains (losses) on available-for-sale securities..................................$ 16
Cumulative foreign currency translation adjustments.............................................$ -0-
TOTAL EQUITY CAPITAL............................................................................$ 218,824
TOTAL LIABILITIES AND EQUITY CAPITAL............................................................$ 2,491,019
</TABLE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305 (B) (2)
IBJ SCHRODER BANK & TRUST COMPANY
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
New York 13-5375195
(State of Incorporation (I.R.S. Employer
if not a U.S. national bank) Identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
Thomas McCutcheon, Assistant Vice President
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
(212) 858-2000
(Name, Address and Telephone Number of Agent for Service)
INTERPOOL, INC.
(Exact name of obligor as specified in its charter)
Delaware 13-3467669
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
211 College Road East
Princeton, NJ 08540
(Address of principal executive office) (Zip code)
GUARANTEE OF SERIES B OF PREFERRED SECURITIES ISSUED BY INTERPOOL
CAPITAL TRUST BY INTERPOOL, INC.
(Title of Indenture Securities)
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
New York State Banking Department
Two Rector Street
New York, New York
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of New York Second District
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
Item 3. Voting securities of the trustee.
Furnish the following information as to each class of voting
securities of the trustee:
As of May 19, 1997
Col. A Col. B
Title of class Amount Outstanding
Not Applicable
Item 4. Trusteeships under other indentures.
If the trustee is a trustee under another indenture under which any
other securities, or certificates of interest or participation in any
other securities, of the obligor are outstanding, furnish the
following information:
(a) Title of the securities outstanding under
each such other indenture
Not Applicable
(b) A brief statement of the facts relied upon as a basis
for the claim that no conflicting interest within the
meaning of Section 310 (b) (1) of the Act arises as a
result of the trusteeship under any such other
indenture, including a statement as to how the
indenture securities will rank as
compared with the securities issued under
such other indenture.
Item 5. Interlocking directorates and similar relationships with the
obligor or underwriters.
If the trustee or any of the directors or executive officers of the
trustee is a director, officer, partner, employee, appointee, or
representative of the obligor or of any underwriter for the obligor,
identify each such person having any such connection and state the
nature of each such connection.
Not Applicable
Item 6. Voting securities of the trustee owned by the obligor or its
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by the obligor and each director, partner,
and executive officer of the obligor:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- --------------- -------------- ------------ -------------------------
Not Applicable
Item 7. Voting securities of the trustee owned by underwriters or their
officials.
Furnish the following information as to the voting securities of the
trustee owned beneficially by each underwriter for the obligor and
each director, partner and executive officer of each such underwriter:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially securities represented by
amount given in Col. C
- ------------- -------------- -------------- -------------------------
Not Applicable
Item 8. Securities of the obligor owned or held by the trustee
Furnish the following information as to securities of the obligor
owned beneficially or held as collateral security for obligations in
default by the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 9. Securities of underwriters owned or held by the trustee.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of an underwriter for the
obligor, furnish the following information as to each class of
securities of such underwriter any of which are so owned or held by
the trustee:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 10. Ownership or holdings by the trustee of voting securities of
certain affiliates or securityholders of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default voting securities of a person who, to the
knowledge of the trustee (1) owns 10 percent or more of the voting
securities of the obligor or (2) is an affiliate, other than a
subsidiary, of the obligor, furnish the following information as to
the voting securities of such person:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 11. Ownership or holdings by the trustee of any securities of a person
owning 50 percent or more of the voting securities of the obligor.
If the trustee owns beneficially or holds as collateral security for
obligations in default any securities of a person who, to the
knowledge of the trustee, owns 50 percent or more of the voting
securities of the obligor, furnish the following information as to
each class of securities of such any of which are so owned or held by
the trustee:
As of May 19, 1997
Col. A Col. B Col. C
Nature of Indebtedness Amount Outstanding Date Due
---------------------- ------------------ ---------
Not Applicable
Item 12. Indebtedness of the Obligor to the Trustee.
Except as noted in the instructions, if the obligor is indebted to the
trustee, furnish the following information:
As of May 19, 1997
Col A Col. B Col. C Col. D
Name of Owner Title of class Amount owned Percent of voting
beneficially or held as securities represented
collateral security for by amount given in
obligations in default Col. C
- ------------- -------------- ----------------------- ---------------------
Not Applicable
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default
with respect to the securities under this
indenture. Explain the nature of any such
default.
Not Applicable
(b) If the trustee is a trustee under another
indenture under which any other securities,
or certificates of interest or
participation in any other securities, of
the obligor are outstanding, or is trustee
for more than one outstanding series of
securities under the indenture, state
whether there has been a default under any
such indenture or series, identify the
indenture or series affected, and explain
the nature of any such default.
Not Applicable
Item 14. Affiliations with the Underwriters
If any underwriter is an affiliate of the trustee, describe each
such affiliation.
Not Applicable
Item 15. Foreign Trustees.
Identify the order or rule pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified or to be
qualified under the Act.
Not Applicable
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Schroder Bank & Trust
Company as amended to date. (See Exhibit 1A to Form
T-1, Securities and Exchange Commission File No.
22-18460).
*2. A copy of the Certificate of Authority of the Trustee
to Commence Business (Included in Exhibit I above).
*3. A copy of the Authorization of the Trustee, as amended
to date (See Exhibit 4 to Form T-1, Securities and
Exchange Commission File No. 22- 19146).
*4. A copy of the existing By-Laws of the Trustee, as amended to
date (See Exhibit 4 to Form T-1, Securities and Exchange
Commission File No.
22-19146).
5. A copy of each Indenture referred to in Item 4, if the
Obligor is in default. Not Applicable.
6. The consent of the United States institutional trustee
required by Section 321(b) of the Act.
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.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the
Securities and Exchange Commission, to which there have been no
amendments or changes.
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its
directors or officers, the trustee has relied upon information
furnished to it by the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item are based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items
1, 2 and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, IBJ Schroder Bank & Trust Company, a corporation
organized and existing under the laws of the State of New York, has
duly caused this statement of eligibility and qualification to be
signed on its behalf by the undersigned, thereunto duly authorized,
all in the City of New York, and State of New York, on the 19th day of
May, 1997.
IBJ SCHRODER BANK & TRUST COMPANY
By: /S/THOMAS MCCUTCHEON
Thomas McCutcheon
Assistant Vice President
<PAGE>
EXHIBIT 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of
1939, as amended, in connection with the proposed issue by Interpool, Inc., we
hereby consent that reports of examinations by Federal, State, Territorial, or
District authorities may be furnished by such authorities to the Securities and
Exchange Commission upon request therefor.
IBJ SCHRODER BANK & TRUST COMPANY
By:
Thomas McCutcheon
Assistant Vice President
Dated: May 19, 1997
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ SCHRODER BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of December 31, 1996
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
ASSETS
Cash and balance due from depository institutions:
<S> <C> <C>
Noninterest-bearing balances and currency and coin ......................................$ 32,466
Interest-bearing balances..................................................................$ 347,310
Securities: Held-to-maturity securities.....................................................$ 175,628
Available-for-sale securities.............................................$ 37,536
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and in
IBFs:
Federal Funds sold.........................................................................$ 13,900
Securities purchased under agreements to resell............................................$ 4,524
Loans and lease financing receivables:
Loans and leases, net of unearned income....................................$ 1,844,295
LESS: Allowance for loan and lease losses...................................$ 57,261
LESS: Allocated transfer risk reserve.......................................$ -0-
Loans and leases, net of unearned income, allowance, and reserve............$ 1,787,034
Trading assets held in trading accounts........................................................$ 403
Premises and fixed assets (including capitalized leases).......................................$ 4,123
Other real estate owned........................................................................$ 202
Investments in unconsolidated subsidiaries and associated companies............................$ -0-
Customers' liability to this bank on acceptances outstanding...................................$ 463
Intangible assets..............................................................................$ -0-
Other assets...................................................................................$ 87,430
TOTAL ASSETS...................................................................................$ 2,491,019
LIABILITIES
Deposits:
In domestic offices.........................................................................$ 792,944
Noninterest-bearing ....................................................$ 228,711
Interest-bearing........................................................$ 564,233
In foreign offices, Edge and Agreement subsidiaries, and IBFs...............................$ $1,125,928
Noninterest-bearing.....................................................$ 20,348
Interest-bearing........................................................$ 1,105,580
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:
Federal Funds purchased.....................................................................$ 185,300
Securities sold under agreements to repurchase..............................................$ -0-
Demand notes issued to the U.S. Treasury........................................................$ 5,098
Trading Liabilities.............................................................................$ 83
Other borrowed money:
a) With a remaining maturity of one year or less............................................$ 74,686
b) With a remaining maturity of more than one year..........................................$ 4,763
Mortgage indebtedness and obligations under capitalized leases..................................$ -0-
Bank's liability on acceptances executed and outstanding........................................$ 463
Subordinated notes and
debentures......................................................................................$ -0-
Other liabilities...............................................................................$ 82,930
TOTAL LIABILITIES...............................................................................$ 2,272,195
Limited-life preferred stock and related surplus................................................$ -0-
EQUITY CAPITAL
Perpetual preferred stock and related surplus...................................................$ -0-
Common stock....................................................................................$ 29,649
Surplus (exclude all surplus related to preferred stock)........................................$ 217,008
Undivided profits and capital reserves..........................................................$ (27,849)
Net unrealized gains (losses) on available-for-sale securities..................................$ 16
Cumulative foreign currency translation adjustments.............................................$ -0-
TOTAL EQUITY CAPITAL............................................................................$ 218,824
TOTAL LIABILITIES AND EQUITY CAPITAL............................................................$ 2,491,019
</TABLE>
