<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 11, 1997
REGISTRATION NO. 33-93228
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C> <C>
Sun Healthcare Group, Inc. Delaware 85-0410612
Sun Financing I Delaware To Be Applied For
Sun Financing II Delaware To Be Applied For
(Exact Name of Registrant (State or Other Jurisdiction of (IRS Employer Identification No.)
as Specified in Its Charter) Incorporation or Organization)
</TABLE>
101 SUN LANE, N.E.
ALBUQUERQUE, NM 87109
(505) 821-3355
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
ROBERT F. MURPHY
SENIOR VICE PRESIDENT, GENERAL COUNSEL
SUN HEALTHCARE GROUP, INC.
101 SUN LANE, N.E.
ALBUQUERQUE, NM 87109
(505) 821-3355
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPIES TO:
William H. Hinman, Jr., Esq.
Shearman & Sterling
555 California Street
San Francisco, CA 94104
(415) 616-1100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: From time to time after the effective date of this Registration
Statement
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PRICE PER UNIT(2) PRICE(1)(2) FEE(6)
Trust Preferred Securities of Sun Financing I and
Sun Financing II................................ --
<S> <C> <C> <C> <C>
Debt Securities of Sun Healthcare Group,
Inc.(3)......................................... 100%
Guarantees of Trust Preferred Securities of Sun
Financing I and Sun Financing II by Sun
Healthcare Group, Inc. and certain back-up
undertakings(4)................................. --
Preferred Stock, $0.01 par value of Sun Healthcare $1,000,000,000 -- $1,000,000,000 $303,030
Group, Inc.(3)..................................
Depositary Shares of Sun Healthcare Group, Inc.... --
Common Stock, $0.01 par value of Sun Healthcare
Group, Inc.(3)(5)............................... --
Warrants of Sun Healthcare Group, Inc............. 100%
</TABLE>
(FOOTNOTES ON FOLLOWING PAGE)
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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- --------------------------------------------------------------------------------
<PAGE>
(FOOTNOTES FOR PREVIOUS PAGE)
- ------------------------------
(1) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies. Such amount
represents the aggregate offering price of the Trust Preferred Securities of
Sun Financing I and Sun Financing II and the Debt Securities, Preferred
Stock, Depositary Shares, Common Stock, Warrants to Purchase Debt Securities
and Warrants to Purchase Equity Securities of Sun Healthcare Group, Inc.,
and the exercise price of any Securities issuable upon exercise of Warrants
of Sun Healthcare Group, Inc. Subordinated Debt Securities of Sun Healthcare
Group, Inc. may be issued and sold to Sun Financing I and Sun Financing II
in which event such Subordinated Debt Securities may later be distributed to
the holders of Trust Preferred Securities.
(2) Estimated for the sole purpose of computing the registration fee pursuant to
Rule 457(o) under the Securities Act of 1933.
(3) Also includes such indeterminate number of shares of Preferred Stock,
Depositary Shares, and Common Stock as may be issued upon conversion of or
exchange for any Debt Securities, Preferred Stock or Depositary Shares that
provide for conversion or exchange into other securities and such
indeterminate number of shares of Common Stock as may be issued upon
conversion of Trust Preferred Securities. No separate consideration will be
received for the Debt Securities, Preferred Stock, Common Stock or
Depositary Shares issuable upon conversion of or in exchange for such other
Securities.
(4) No separate consideration will be received for any Guarantees. The
Guarantees include the rights of holders of the Trust Preferred Securities
under the Guarantees and certain back up undertakings, comprised of
obligations of Sun Healthcare Group, Inc., under the Subordinated Indenture
and the Supplemental Indentures thereto and under the Declarations of Trust
of each of Sun Financing I and Sun Financing II as described in the
Registration Statement.
(5) The number of shares of Common Stock registered hereunder is limited to that
which is permissible under Rule 415(a)(4) of the Securities Act. Includes
the associated Preferred Share Purchase Rights.
(6) A portion of the registration fee amounting to $103,449 was paid previously
in respect of $300 million of unsold securities registered hereby.
<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 STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED NOVEMBER 11, 1997
PROSPECTUS
$1,000,000,000
SUN HEALTHCARE GROUP, INC.
DEBT SECURITIES, PREFERRED STOCK, DEPOSITARY SHARES,
COMMON STOCK AND WARRANTS
---------------------
SUN FINANCING I
SUN FINANCING II
TRUST PREFERRED SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED BY
SUN HEALTHCARE GROUP, INC.
---------------------
Sun Healthcare Group, Inc. ("Sun" or the "Company"), a Delaware corporation,
may offer from time to time, together or separately, (i) its debt securities
(the "Debt Securities"), which may be either senior debt securities (the "Senior
Debt Securities") or subordinated debt securities (the "Subordinated Debt
Securities"), consisting of notes, debentures or other secured or unsecured
evidences of indebtedness in one or more series, (ii) shares of its preferred
stock, par value $0.01 per share (the "Preferred Stock"), which may be issued in
the form of depositary shares evidenced by depositary receipts (the "Depositary
Shares"), (iii) shares of its common stock, par value $0.01 per share (the
"Common Stock"), and (iv) warrants to purchase Debt Securities, Preferred Stock,
Depositary Shares, or Common Stock or any combination thereof, as shall be
designated by the Company at the time of the offering (the "Warrants") in
amounts, at prices and on terms to be determined at the time of the offering.
Sun Financing I and Sun Financing II (each a "Sun Trust"), each a statutory
business trust created under the laws of the State of Delaware, may offer, from
time to time, preferred securities, representing undivided beneficial interests
in the assets of the respective Sun Trust ("Trust Preferred Securities"). The
payment of periodic cash distributions ("distributions") with respect to Trust
Preferred Securities of each of the Sun Trusts out of moneys held by each of the
Sun Trusts, and payment on liquidation, redemption or otherwise with respect to
such Trust Preferred Securities, will be guaranteed by the Company to the extent
described herein (each a "Trust Preferred Securities Guarantee"). See
"Description of Trust Preferred Securities Guarantees." The Company's
obligations under the Trust Preferred Securities Guarantees will be subordinate
and junior in right of payment to all other liabilities of the Company and rank
pari passu with the most senior preferred stock, if any, issued from time to
time by the Company. Subordinated Debt Securities may be issued and sold from
time to time in one or more series to a Sun Trust, or a trustee of such Sun
Trust, in connection with the investment of the proceeds from the offering of
Trust Preferred Securities and Trust Common Securities (as defined herein,
together the "Trust Securities") of such Sun Trust. The Subordinated Debt
Securities purchased by a Sun Trust may be subsequently distributed pro rata to
holders of Trust Preferred Securities and Trust Common Securities in connection
with the dissolution of such Sun Trust upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement.
The Trust Preferred Securities Guarantees, when taken together with the
Company's obligations under the Subordinated Debt Securities, the Indenture
related thereto and the Declaration of Trust, including its obligations to pay
costs, expenses, debts and liabilities of the Sun Trusts (other than with
respect to the Trust Securities), will provide a full and unconditional
guarantee on a subordinated basis by the Company of payments due on the Trust
Preferred Securities. The Debt Securities, Preferred Stock, Depositary Shares,
Common Stock, Warrants and the Trust Preferred Securities and the related Trust
Preferred Securities Guarantees are collectively called the "Securities." The
Securities may be offered as separate series or issuances at an aggregate
initial public offering price not to exceed $1,000,000,000 or, if applicable,
the equivalent thereof in one or more foreign currencies, currency units,
composite currencies or in amounts determined by reference to an index as shall
be designated by the Company, in amounts, at prices and on terms to be
determined in light of market conditions at the time of sale and set forth in
the applicable Prospectus Supplement. The Prospectus Supplement relating to any
series of Securities will contain information concerning United States federal
income tax considerations, if applicable.
Unless otherwise specified in a Prospectus Supplement, the Senior Debt
Securities, when issued, will be unsecured and will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. The Subordinated
Debt Securities, when issued, will be subordinated in right of payment to all
Senior Debt (as hereinafter defined) of the Company. If the Debt Securities are
secured, the security, which may consist of real estate properties or other
assets owned by the Company, and any related mortgage will be described in the
Prospectus Supplement.
Certain specific terms of the particular Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement, including, where applicable, (i) in the case of Debt Securities, the
title, aggregate principal amount, denominations, maturity, subordination terms,
if any, any interest rate (which may be fixed or variable) and time of payment
of any interest, the right of the Company, if any, to defer payment of interest
on the Debt Securities and the maximum length of such deferral period, any terms
for redemption at the option of the Company or the holder, any terms for sinking
fund payments, any terms for conversion or exchange into other Securities,
currency or currencies of denomination and payment, if other than U.S. dollars,
any security applicable to Debt Securities which are secured, any listing on a
securities exchange and any other terms in connection with the offering and sale
of the Debt Securities in respect of which this Prospectus is delivered, as well
as the initial public offering price; (ii) in the case of Trust Preferred
Securities, the issuer, designation and number, liquidation preference per Trust
Preferred Security, initial public offering price, any listing on a securities
exchange, distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, terms for any conversion or exchange into other Securities,
any redemption, exchange or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Trust
Preferred Securities and the terms upon which the proceeds of the sale of the
Trust Preferred Securities shall be used to purchase a specific series of
Subordinated Debt Securities of the Company; (iii) in the case of Preferred
Stock and Depositary Shares, the specific title, the aggregate amount, any
dividend (including the method of calculating payment of dividends), seniority,
liquidation, redemption, voting and other rights, any terms for any conversion
or exchange into other Securities, any listing on a securities exchange, the
initial public offering price and any other terms; (iv) in the case of Common
Stock, the number of shares of Common Stock and the terms of offering thereof;
and (v) in the case of Warrants, the designation and number, the exercise price,
any listing of the Warrants or the underlying Securities on a securities
exchange and any other terms in connection with the offering, sale and exercise
of the Warrants.
The Company's Common Stock is listed on the New York Stock Exchange (the
"NYSE") under the trading symbol "SHG." Any Common Stock sold pursuant to a
Prospectus Supplement will be listed on such exchange, subject to official
notice of issuance.
The Company and/or each of the Sun Trusts may sell the Securities directly,
through agents, underwriters or dealers as designated from time to time, or
through a combination of such methods. See "Plan of Distribution." If agents of
the Company and/or any Sun Trust or any dealers or underwriters are involved in
the sale of the Securities in respect of which this Prospectus is being
delivered, the names of such agents, dealers or underwriters and any applicable
commissions or discounts will be set forth in or may be calculated from the
Prospectus Supplement with respect to such Securities.
SEE "RISK FACTORS" ON PAGE 5 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
SECURITIES.
---------------------
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.
--------------------------
Prior to issuance there will have been no market for the Securities other
than Common Stock, and there can be no assurance that a secondary market for the
Securities will develop. This Prospectus may not be used to consummate sales of
securities unless accompanied by a Prospectus Supplement. Securities may be
offered directly to purchasers or to or through dealers, underwriters or agents
designated from time to time, as set forth in this Prospectus Supplement. Net
proceeds to the Company and to the Sun Trusts from such sale also will be set
<PAGE>
forth in a Prospectus Supplement. See "Plan of Distribution" for possible
indemnification arrangements for dealers, underwriters and agents.
------------------------------
THE DATE OF THIS PROSPECTUS IS NOVEMBER , 1997
<PAGE>
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS OR IN THE PROSPECTUS SUPPLEMENT, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS
AND ANY ACCOMPANYING PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY SECURITIES OTHER THAN THE SECURITIES TO WHICH
THEY RELATE OR BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS
NOT QUALIFIED TO DO SO OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS, NOR ANY SALE
MADE HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN
OR THEREIN BY ANYONE IS CORRECT AS OF ANY TIME SUBSEQUENT TO THEIR RESPECTIVE
DATES.
------------------------
AVAILABLE INFORMATION
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 ("Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549 and at its Regional Offices located
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511, and 7 World Trade Center, 13th Floor, New York, New York 10048.
Copies of such material can be obtained at prescribed rates from the Public
Reference Section of the Commission, 450 Fifth Street, N.W. Plaza, Washington,
D.C. 20549. The Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. The address of the
site is http://www.sec.gov. In addition, such reports and proxy statements can
be inspected at the offices of The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Company and the Sun Trusts have filed with the Commission a Registration
Statement on Form S-3 (together with all amendments, supplements and exhibits
thereto, the "Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the Securities offered hereby.
This Prospectus, which constitutes a part of the Registration Statement, and any
accompanying Prospectus Supplement do not contain all the information set forth
in the Registration Statement, certain parts of which were omitted in accordance
with the rules and regulations of the Commission. For further information with
respect to the Company and the Securities offered hereby, reference is hereby
made to the Registration Statement. Statements contained in this Prospectus or
any Prospectus Supplement as to the contents of certain documents are not
necessarily complete, and, with respect to each such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission,
reference is made to the copy of the document so filed. Each such statement is
qualified in its entirety by such reference.
No separate financial statements any of the the Sun Trusts have been
included herein. The Company does not consider that such financial statements
would be material to holders of the Trust Preferred Securities because (i) all
of the voting securities of each of the Sun Trusts will be owned, directly or
indirectly, by the Company, a reporting company under the Exchange Act, (ii)
each of the Sun Trusts has no independent operations but exists for the sole
purpose of issuing securities representing undivided beneficial interests in the
assets of such Sun Trust and investing the proceeds thereof in Subordinated Debt
Securities issued by the Company, and (iii) the Company's obligations described
herein and in any accompanying Prospectus Supplement under the Declarations of
each Sun Trust, the guarantee issued with respect to Trust Preferred Securities
issued by that Sun Trust, the Subordinated Debt Securities purchased by that Sun
Trust and the related Indenture, taken together, constitute a full and
unconditional guarantee of payments due on the Trust Preferred Securities. See
"Description of Debt Securities" and "Description of Trust Preferred Securities
Guarantees."
The Sun Trusts are not currently subject to the information reporting
requirements of the Exchange Act. The Sun Trusts will become subject to such
requirements upon the effectiveness of the Registration Statement, although they
intend to seek and expect to receive exemptions therefrom.
2
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
1-12040) are incorporated herein by reference:
1. Sun Healthcare Group, Inc.'s Annual Report on Form 10-K for the fiscal
year ended December 31, 1996;
2. Sun Healthcare Group, Inc.'s Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1997 and June 30, 1997;
3. Sun Healthcare Group, Inc.'s Amendment No. 1 to the Annual Report on
Form 10-K/A for the fiscal year ended December 31, 1996 filed April 30,
1997;
4. Sun Healthcare Group, Inc.'s Current Reports on Form 8-K filed February
14, 1997, February 24, 1997, March 28, 1997, April 14, 1997, May 30,
1997, June 18, 1997, July 9, 1997, August 26, 1997 and October 23, 1997;
and
5. The description of Sun Healthcare Group, Inc.'s capital stock contained
in Sun Healthcare Group, Inc.'s Registration Statement on Form 10 filed
on June 1, 1993, and the description of Sun's Preferred Stock Purchase
Rights contained in its Registration Statement on Form 8-A filed on June
6, 1995, as amended by Form 8-A/A-1 filed on August 17, 1995.
All documents filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the initial
registration statement and prior to effectiveness of the registration statement
and all such documents filed after the date of this Prospectus and prior to the
date of the termination of the offering of the Securities offered hereby shall
be deemed to be incorporated herein by reference and to be a part hereof from
the date of filing of each such document. Any statement contained herein or in a
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein shall be deemed to be modified or superseded for purposes of
the Registration Statement or this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein or in the Prospectus Supplement
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of the Registration Statement or this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any of the
documents incorporated by reference herein, except for the exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents). Requests should be directed to 101 Sun Lane N.E., Albuquerque,
New Mexico 87109, Attention: Investor Relations (Telephone: (505) 856-2341).
3
<PAGE>
THE COMPANY
THE FOLLOWING INFORMATION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO,
CONTAINED OR INCORPORATED HEREIN BY REFERENCE. PROSPECTIVE PURCHASERS OF
SECURITIES SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH OR REFERRED TO IN
THE APPLICABLE PROSPECTUS SUPPLEMENT UNDER THE HEADING "RISK FACTORS." OTHER
THAN STATEMENTS OF HISTORICAL FACT, STATEMENTS CONTAINED IN THIS PROSPECTUS AND
THE APPLICABLE PROSPECTUS SUPPLEMENT, INCLUDING STATEMENTS AS TO FUTURE
FINANCIAL PERFORMANCE, CONSTITUTE FORWARD-LOOKING STATEMENTS. WHEN USED IN THIS
PROSPECTUS AND THE APPLICABLE PROSPECTUS SUPPLEMENT, THE WORDS "BELIEVES,"
"ANTICIPATES," "INTENDS," "EXPECTS" AND SIMILAR EXPRESSIONS ARE INTENDED TO
IDENTIFY SUCH FORWARD-LOOKING STATEMENTS. SUN'S ACTUAL RESULTS MAY DIFFER
SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS PROSPECTUS AND THE APPLICABLE PROSPECTUS SUPPLEMENT. FACTORS
THAT MIGHT CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED OR REFERRED TO IN THE SECTION SET FORTH IN THE APPLICABLE PROSPECTUS
SUPPLEMENT UNDER THE HEADING "RISK FACTORS." PROSPECTIVE PURCHASERS ARE
CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THE FORWARD-LOOKING STATEMENTS
CONTAINED IN THIS PROSPECTUS AND THE APPLICABLE PROSPECTUS SUPPLEMENT, WHICH
SPEAKS ONLY AS OF THE DATE HEREOF. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION
TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO SUCH FORWARD-LOOKING
STATEMENTS WHICH MAY BE MADE TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE
HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. UNLESS OTHERWISE
INDICATED OR THE CONTEXT OTHERWISE REQUIRES, ALL REFERENCES TO "SUN" OR THE
"COMPANY" INCLUDE SUN HEALTHCARE GROUP, INC. AND ITS SUBSIDIARIES.
Sun is a leading provider of high quality and cost efficient long-term,
subacute and related specialty healthcare services. At September 30, 1997,
before giving effect to the Regency Merger (as defined herein), Sun operated 192
long-term and subacute care facilities with 22,802 licensed beds in 21 states in
the United States and 138 long-term care facilities with 7,965 beds in the
United Kingdom. Sun also is a leading provider of ancillary services, including
rehabilitation therapy, respiratory therapy, temporary therapy staffing services
and pharmaceutical products and services. Sun provides these services to over
1,000 affiliated and nonaffiliated long-term and subacute care facilities in the
United States. On October 8, 1997, Sun announced that it had completed the
acquisition (the "Regency Merger") of Regency Health Services, Inc. ("Regency"),
an operator of approximately 110 long-term care facilities and a diversified
provider of rehabilitation therapy, institutional pharmacy and home health
services.
Sun's inpatient care facilities provide a broad range of healthcare
services, including nursing care, subacute care, therapy and other specialized
services such as care to patients with Alzheimer's disease. Sun's long-term and
subacute care operations have experienced significant growth since Sun's
inception in 1989, primarily from acquisitions of additional facilities. Sun
believes its inpatient care operations provide it with a platform to expand its
therapy and pharmaceutical businesses (which include dispensing pharmaceuticals
for such purposes as infusion therapy, pain management, antibiotic therapy and
parenteral nutrition) to affiliated and nonaffiliated long-term and subacute
care facilities. Sun believes that its expertise in operating long-term and
subacute care facilities enables it to provide its therapy and pharmaceutical
services more effectively and efficiently than providers without such operating
expertise.
The Company's principal executive offices are located at 101 Sun Lane, N.E.,
Albuquerque, New Mexico 87109, and its telephone number at such address is (505)
821-3355.
4
<PAGE>
THE TRUSTS
Each of Sun Financing I and Sun Financing II is a statutory business trust
created under Delaware law pursuant to (i) a separate declaration of trust (each
a "Declaration") executed by the Company, as sponsor for such trust (the
"Sponsor"), and the Sun Trustees (as defined herein) for such trust and (ii) the
filing of a certificate of trust with the Delaware Secretary of State on
November 7, 1997. Each Sun Trust exists for the exclusive purposes of (i)
issuing the Trust Preferred Securities and common securities representing
undivided beneficial interests in the assets of such Trust (the "Trust Common
Securities" and, together with the Trust Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds of the Trust Securities in a
specific series of Subordinated Debt Securities and (iii) engaging in only those
other activities necessary or incidental thereto. All of the Trust Common
Securities will be directly or indirectly owned by the Company. The Trust Common
Securities will rank pari passu, and payments will be made thereon pro rata,
with the Trust Preferred Securities except that upon an event of default under
the Declaration, the rights of the holders of the Trust Common Securities to
payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Trust
Preferred Securities. The Company will, directly or indirectly, acquire Trust
Common Securities in an aggregate liquidation amount equal to 3% of the total
capital of each Sun Trust. Each Sun Trust has a term of approximately 55 years,
but may dissolve earlier as provided in the Declaration. Each Sun Trust's
business and affairs will be conducted by the trustees (the "Sun Trustees")
appointed by the Company, as the direct or indirect holder of all the Trust
Common Securities. The holder of the Trust Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the Sun
Trustees of a Sun Trust. The duties and obligations of the Sun Trustees shall be
governed by the Declaration of such Sun Trust. A majority of the Sun Trustees
(the "Regular Trustees") of each Sun Trust will be persons who are employees or
officers of or affiliated with the Company. One Sun Trustee of each Sun Trust
will be a financial institution which will be unaffiliated with the Company and
which shall act as property trustee and as indenture trustee for purposes of the
Trust Indenture Act of 1939 (the "Trust Indenture Act"), pursuant to the terms
set forth in a Prospectus Supplement (the "Property Trustee"). In addition,
unless the Property Trustee maintains a principal place of business in the State
of Delaware, and otherwise meets the requirements of applicable law, one Sun
Trustee of each Sun Trust will have its principal place of business or reside in
the State of Delaware (the "Delaware Trustee"). The Company will pay all fees
and expenses related to the Sun Trusts and the offering of Trust Securities, the
payment of which will be guaranteed by the Company. The office of the Delaware
Trustee for each Sun Trust in the State of Delaware is White Clay Center, Route
273, Newark, Delaware 19711. The principal place of business of each Sun Trust
shall be 101 Sun Lane, NE, Albuquerque, New Mexico, 87109.
RISK FACTORS
See the applicable Prospectus Supplement under the heading "Risk Factors"
for a discussion of risks associated with this offering.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the net
proceeds from the sale of Securities will be used by the Company for general
corporate purposes, which may include refinancings or repayments of
indebtedness, acquisitions, capital expenditures, expansion of domestic and
international operations, working capital, minority investments, and repurchases
and redemptions of securities.
The Sun Trusts will invest all proceeds received from the sale of its Trust
Securities in a particular series of Subordinated Debt Securities.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges for
the Company and its consolidated subsidiaries for the periods indicated. The
Company to date has not issued Preferred Stock; therefore, the ratios of
earnings to combined fixed charges and preferred stock dividends are unchanged
from the ratios presented here.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- -----------------
1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- -----------------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........ 1.92 3.34 1.76 1.15 1.64 1.97
</TABLE>
The computation of the ratio of earnings to fixed charges is based on
applicable amounts of the Company and its consolidated subsidiaries plus
dividends received from less than fifty percent owned affiliates. "Earnings"
consist of income from continuing operations before income taxes and fixed
charges excluding capitalized interest. "Fixed charges" consist of interest on
indebtedness, including amounts capitalized, amortization of debt discount and
expense, an estimated amount of rental expense that it deemed to be
representative of the interest factor and other interest charges.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Senior Debt Securities will be issued under an Indenture as supplemented
by one or more supplemental indentures (as so supplemented, the "Senior
Indenture"), to be entered into between the Company and the trustee named in the
Indenture. The Subordinated Debt Securities will be issued under a separate
Indenture, as supplemented by one or more supplemental indentures (as so
supplemented, the "Subordinated Indenture"), to be entered into between the
Company and the trustee named in the Indenture. The Senior Indenture and the
Subordinated Indenture are sometimes referred to collectively as the
"Indentures." Forms of the Senior Indenture and the Subordinated Indenture have
been filed as exhibits to the Registration Statement. The trustees under the
Senior Indenture and under the Subordinated Indenture are referred to herein as
the "Debt Trustees."
The following summaries of certain material provisions of the Senior Debt
Securities, the Subordinated Debt Securities and the Indentures are subject to,
and qualified in their entirety by reference to, all the provisions of the
Indenture applicable to a particular series of Debt Securities, including the
definitions therein of certain terms. Wherever particular Sections, Articles or
defined terms of the Indentures are referred to herein or in a Prospectus
Supplement, it is intended that such Sections, Articles or defined terms shall
be incorporated by reference herein or therein, as the case may be. Section and
Article references used herein are references to the applicable Indenture.
Except as otherwise indicated, the terms of the Senior Indenture and the
Subordinated Indenture are identical. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the applicable Indenture.
GENERAL
The Indentures will not limit the aggregate principal amount of Debt
Securities which may be issued thereunder, and each Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more series up
to the aggregate amount from time to time authorized by the Company for each
series. (Section 3.1). Unless otherwise specified in the Prospectus Supplement,
the Senior Debt Securities when issued will be unsecured and unsubordinated
obligations of the Company and will rank equally and
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ratably with all other unsecured and unsubordinated indebtedness of the Company.
Unless otherwise specified in the Prospectus Supplement, the Subordinated Debt
Securities when issued will be unsecured obligations of the Company,
subordinated in right of payment to the prior payment in full of all Senior Debt
(as defined in the Subordinated Indenture) of the Company as described in the
applicable Prospectus Supplement. (Section 15.1 of the Subordinated Indenture).
If the Debt Securities are secured, the security, which may consist of real
estate properties or other assets owned by the Company, and any related mortgage
will be described in the Prospectus Supplement.
In the event Subordinated Debt Securities are issued to a Sun Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Sun Trust, such Subordinated Debt Securities subsequently may be
distributed pro rata to the holders of such Trust Securities in connection with
the dissolution of such Sun Trust upon the occurrence of certain events
described in the Prospectus Supplement relating to such Trust Securities. Only
one series of Subordinated Debt Securities will be issued to a Sun Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Sun Trust.
Reference is made to the Prospectus Supplement relating to the particular
series of Debt Securities offered thereby for a description of the following
terms or additional provisions of the Debt Securities: (1) the title of the Debt
Securities; (2) whether the Debt Securities are Senior Debt Securities or
Subordinated Debt Securities and the terms of subordination; (3) any limit on
the aggregate principal amount of the Debt Securities; (4) whether the Debt
Securities are to be issuable as Registered Securities or Bearer Securities or
both, whether any of the Debt Securities shall be issuable in whole or in part
in temporary or permanent global form or in the form of Book-Entry Securities
and, if so, the circumstances under which any such global securities or
Book-Entry Securities may be exchanged for Debt Securities registered in the
name of, and any transfer of such global or Book-Entry Securities may be
registered to, a Person other than the depository for such temporary or
permanent global securities or Book-Entry Securities or its nominee; (5) the
price or prices (expressed as a percentage of the aggregate principal amount
thereof) at which the Debt Securities will be issued; (6) the date or dates on
which the Debt Securities will mature and the right, if any, to extend such date
or dates; (7) the rate or rates per annum at which the Debt Securities will bear
interest, if any, and the date from which any such interest will accrue; (8) the
Interest Payment Dates on which any such interest on the Debt Securities will be
payable, the Regular Record Date for any interest payable on any Debt Securities
which are Registered Securities on any Interest Payment Date and the extent to
which, or the manner in which, any interest payable on a temporary global
Security on an Interest Payment Date will be paid; (9) the right, if any, to
extend the interest payment periods and the duration of such extension; (10) any
mandatory or optional sinking fund or analogous provisions; (11) each office or
agency where, subject to the terms of the applicable Indenture as described
below under "Payment and Paying Agents," the principal of and any premium and
interest on the Debt Securities will be payable and each office or agency where,
subject to the terms of the applicable Indenture as described below under "Form,
Exchange, Registration and Transfer," the Debt Securities may be presented for
registration of transfer or exchange; (12) the date, if any, after which and the
price or prices at which the Debt Securities may, pursuant to any optional or
mandatory redemption provisions, be redeemed, in whole or in part, and the other
detailed terms and provisions of any such optional or mandatory redemption
provisions, which may include with respect to a particular series or particular
Debt Securities within a series, a redemption option of Holders upon certain
conditions, as defined in the applicable Indenture; (13) the denominations in
which any Debt Securities which are Registered Securities will be issuable, if
other than denominations of $1,000 and any integral multiple thereof, and the
denomination or denominations in which any Debt Securities which are Bearer
Securities will be issuable, if other than the denomination of $5,000; (14) the
currency or currency units of payment of the principal of (and premium, if any)
and interest on the Debt Securities; (15) any index used to determine the amount
of payments of the principal of (and premium, if any) and interest on the Debt
Securities and the manner in which such amounts shall be determined; (16) the
terms and conditions, if any, pursuant to which such Debt Securities are
convertible or exchangeable into a security or securities of the Company; (17)
the terms pursuant to which such Debt Securities are subject to defeasance; (18)
the terms and conditions, if
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<PAGE>
any, pursuant to which such Debt Securities are secured; and (19) any other
terms of the Debt Securities not inconsistent with the provisions of the
applicable Indenture. Any such Prospectus Supplement will also describe any
special provisions for the payment of additional amounts with respect to the
Debt Securities. Debt Securities may also be issued under the Indenture upon the
exercise of Warrants. See "Description of Warrants."
Debt Securities may be issued as Original Issue Discount Securities. An
Original Issue Discount Security is a Debt Security, including any Zero-Coupon
Security, which is issued at a price lower than the amount payable upon the
Stated Maturity thereof and which provides that upon redemption or acceleration
of the maturity, an amount less than the amount payable upon the Stated
Maturity, determined in accordance with the terms of such Debt Security, shall
become due and payable. (Sections 3.1 and 5.2). All material United States
federal income tax, accounting and other considerations applicable to Debt
Securities sold at an original issue discount will be described in the
Prospectus Supplement relating thereto. In addition, certain special United
States federal income tax or other considerations applicable to any Debt
Securities which are denominated in a currency or currency unit other than
United States dollars may be described in the applicable Prospectus Supplement
relating thereto.
Under the Indentures, the Company will have the ability, in addition to the
ability to issue Debt Securities with terms different from those of Debt
Securities previously issued, without the consent of the holders, to reopen a
previous issue of a series of Debt Securities and issue additional Debt
Securities of such series (unless such reopening was restricted when such series
was created), in an aggregate principal amount determined by the Company.
(Section 3.1).
FORM, EXCHANGE, REGISTRATION AND TRANSFER
Debt Securities of a series may be issuable in definitive form solely as
Registered Securities, solely as Bearer Securities or as both Registered
Securities and Bearer Securities. (Section 3.1). Unless otherwise indicated in
an applicable Prospectus Supplement, Bearer Securities will have interest
coupons attached. (Section 2.1). The Indentures also will provide that Debt
Securities of a series may be issuable in temporary or permanent global form and
may be issued as Book-Entry Securities that will be deposited with, or on behalf
of, The Depository Trust Company (the "Depository") or another depository named
by the Company and identified in a Prospectus Supplement with respect to such
series. See "Global and Book-Entry Debt Securities."
In connection with its original issuance, no Bearer Security (including a
Debt Security exchangeable for a Bearer Security or a Debt Security in global
form that is either a Bearer Security or exchangeable for Bearer Securities)
shall be mailed or otherwise delivered to any location in the United States (as
defined under "Limitations on Issuance of Bearer Securities") and a Bearer
Security may be delivered in connection with its original issuance only if the
Person entitled to receive such Bearer Security furnishes written certification
of the beneficial ownership of the Bearer Security as required by Treasury
Regulation Section 1.163-5(c)(2)(i)(D)(3) (or any comparable successor
provisions). In the case of a Bearer Security in permanent global form, such
certification must be given in connection with notation of a beneficial owner's
interest therein in connection with the original issuance of such Debt Security.
See "Global and Book-Entry Debt Securities" and "Limitations on Issuance of
Bearer Securities."
Registered Securities of any series will be exchangeable for other
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor. In addition, if Debt Securities of
any series are issuable as both Registered Securities and Bearer Securities, at
the option of the Holder upon request confirmed in writing, and subject to the
terms of the applicable Indenture, Bearer Securities (with all unmatured
coupons, except as provided below, and all matured coupons in default) of such
series will be exchangeable into Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor.
Bearer Securities surrendered in exchange for Registered Securities between a
Regular Record Date or a Special Record Date and the
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<PAGE>
relevant date for payment of interest shall be surrendered without the coupon
relating to such date for payment of interest and interest accrued as of such
date will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the terms of the applicable Indenture.
Registered Securities will not be issued in exchange for Bearer Securities.
(Section 3.5). Each Bearer Security, and any coupon attached thereto, other than
a temporary global Bearer Security will bear the following legend: "Any United
States person who holds this obligation will be subject to limitations under the
United States income tax laws, including the limitations provided in Sections
165(j) and 1287(a) of the United States Internal Revenue Code." A Book-Entry
Security may not be registered for transfer or exchange (other than as a whole
by the Depository to a nominee or by such nominee to such Depository) unless the
Depository or such nominee notifies the Company that it is unwilling or unable
to continue as Depository or the Depository ceases to be qualified as required
by the applicable Indenture or the Company instructs the Trustee in accordance
with the applicable Indenture that such Book-Entry Securities shall be so
registrable and exchangeable or there shall have occurred and be continuing an
Event of Default or an event which after notice or lapse of time would be an
Event of Default with respect to the Debt Securities evidenced by such
Book-Entry Securities or there shall exist such other circumstances if any, as
may be specified in the applicable Prospectus Supplement.
Debt Securities may be presented for exchange as provided above, and
Registered Securities may be presented or surrendered for registration of
transfer or for exchange (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or at the office of any
transfer agent designated by the Company for such purpose with respect to any
series of Debt Securities and referred to in an applicable Prospectus
Supplement, without service charge and upon payment of any taxes and other
governmental charges as described in the applicable Indenture. Such transfer or
exchange will be effected upon the Security Registrar or such transfer agent, as
the case may be, being satisfied with the documents of title and identity of the
person making the request. If a Prospectus Supplement refers to any transfer
agents (in addition to the Security Registrar) initially designated by the
Company with respect to any series of Debt Securities, the Company may at any
time rescind the designation of any such transfer agent or approve a change in
the location through which any such transfer agent acts, except that, if Debt
Securities of a series are issuable solely as Registered Securities, the Company
will be required to maintain a transfer agent in each Place of Payment for such
series and, if Debt Securities of a series are issuable as Bearer Securities,
the Company will be required to maintain (in addition to the Security Registrar)
a transfer agent in a Place of Payment for such series located outside the
United States. The Company may at any time designate additional transfer agents
with respect to any series of Debt Securities. (Section 10.2).
In the event of any redemption in part, the Company shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Security being redeemed in part,
except the unredeemed portion of any Registered Security being redeemed in part;
or (iii) exchange any Bearer Security so selected for redemption, except that
such Bearer Security may be exchanged for a Registered Security of that series
and like tenor, provided that such Registered Security shall be simultaneously
surrendered for redemption. (Section 3.5).
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of the principal of (and premium, if any) and interest on Bearer Securities will
be made, subject to any applicable laws and
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<PAGE>
regulations, at the offices of such Paying Agents outside the United States as
the Company may designate from time to time, at the option of the Holder, by
check or by transfer to an account maintained by the payee with a bank located
outside the United States. Unless otherwise indicated in an applicable
Prospectus Supplement, payment of interest on Bearer Securities on any Interest
Payment Date will be made only against surrender to the Paying Agent of such
coupon relating to such Interest Payment Date. (Section 10.1). No payment with
respect to any Bearer Security will be made at any office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States. Notwithstanding the foregoing, payments of the principal of (and
premium, if any) and interest on Bearer Securities denominated and payable in
U.S. dollars will be made at the office of the Company's Paying Agent in the
Borough of Manhattan, The City of New York, if (but only if) payment of the full
amount thereof in U.S. dollars at all offices or agencies outside the United
States is illegal or effectively precluded by exchange controls or other similar
restrictions. (Section 10.2).
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of the principal of (and premium, if any) and interest on Registered Securities
will be made 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 by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of any
installment of interest on Registered Securities will be made to the Person in
whose name such Registered Security is registered at the close of business on
the Regular Record Date for such interest. (Section 3.7).
Unless otherwise indicated in an applicable Prospectus Supplement, the
Corporate Trust Office of the Debt Trustee in The City of New York will be
designated as a Paying Agent for the Company for payments with respect to Debt
Securities which are issuable solely as Registered Securities and the Company
will maintain a Paying Agent outside of the United States for payments with
respect to Debt Securities (subject to the limitations described above in the
case of Bearer Securities) which are issuable solely as Bearer Securities or
both Registered Securities and Bearer Securities. (Section 10.2). Any Paying
Agents outside the United States and any other Paying Agent in the United States
initially designated by the Company for the Debt Securities will be named in an
applicable Prospectus Supplement. The Company may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that,
if Debt Securities of a series are issuable solely as Registered Securities, the
Company will be required to maintain a Paying Agent in each Place of Payment for
such series and, if Debt Securities of a series are issuable as Bearer
Securities, the Company will be required to maintain (i) a Paying Agent in the
Borough of Manhattan, The City of New York for payments with respect to any
Registered Securities of the series (and for payments with respect to Bearer
Securities of the series in the circumstances described above, but not
otherwise), and (ii) a Paying Agent in a Place of Payment located outside the
United States where Debt Securities of such series and any coupons appertaining
thereto may be presented and surrendered for payment; provided that if the Debt
Securities of such series are listed on The Stock Exchange of the United Kingdom
and the Republic of Ireland or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent in London or Luxembourg or any
other required city located outside the United States, as the case may be, for
the Debt Securities of such series. (Section 10.2).
Payments of the principal of (and premium, if any) and interest on
Book-Entry Securities registered in the name of any Depository or its nominee
will be made to the Depository or its nominee, as the case may be, as the
registered owner of the global security representing such Book-Entry Securities.
The Company expects that the Depository, upon receipt of any payment of the
principal of (and premium, if any) or interest, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests as shown on the records of such Depository or
its nominee. Neither the
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Company, the Debt Trustee, any Paying Agent nor the Securities Registrar for
such Debt Securities will have any responsibility or liability for any aspects
of the records relating to, or payments made on account of, such beneficial
ownership interests in the Book-Entry Securities or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interests.
All moneys paid by the Company to a Paying Agent for the payment of the
principal of (and premium, if any) or interest on any Debt Securities which
remain unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable will be repaid to the Company and the
Holder of such Debt Security or any coupon will thereafter, as an unsecured
general creditor, look only to the Company for payment thereof. (Section 10.3).
GLOBAL AND BOOK-ENTRY DEBT SECURITIES
If so specified in an applicable Prospectus Supplement, the portion of the
Debt Securities of a series which are issuable as Bearer Securities will
initially be represented by one or more temporary or permanent global Debt
Securities, without interest coupons, to be deposited with a common depositary
in London for the benefit of Euro-clear System ("Euro-clear") and Cedel Bank,
Societe Anonyme ("Cedel") for credit to the respective accounts of the
beneficial owners of such Debt Securities (or to such other accounts as they may
direct). (Section 3.4). Unless otherwise indicated by an applicable Prospectus
Supplement, on or after 40 days following its issuance, each such temporary
global Debt Security will be exchangeable for definitive Bearer Securities,
definitive Registered Securities or all or a portion of a permanent global Debt
Security, or any combination thereof, as specified in an applicable Prospectus
Supplement, only upon written certification in the form and to the effect
described under "Form, Exchange, Registration and Transfer." No Bearer Security
(including a Debt Security in permanent global form) delivered in exchange for a
portion of a temporary or permanent global Debt Security shall be mailed or
otherwise delivered to any location in the United States in connection with such
exchange. (Section 3.5).
A person having a beneficial interest in a permanent global Debt Security
will, except with respect to payment of the principal of (and premium, if any)
and interest on such permanent global Debt Security, be treated as a Holder of
such principal amount of Outstanding Debt Securities represented by such
permanent global Debt Security as shall be specified in a written statement of
the Holder of such permanent global Debt Security or, in the case of a permanent
global Debt Security in bearer form, of the operator of Euro-clear or Cedel
which is provided to the Trustee by such Person. (Section 2.3).
If Debt Securities to be sold in the United States are designated by the
Company in a Prospectus Supplement as Book-Entry Securities, a global security
representing the Book-Entry Securities will be deposited in the name of Cede &
Co., as nominee for the Depository representing the securities to be sold in the
United States. Upon such deposit of the Book-Entry Securities, the Depository
shall credit an account maintained or designated by an institution to be named
by the Company or any purchaser of the Debt Securities represented by the
Book-Entry Securities with an aggregate amount of Debt Securities equal to the
total number of Debt Securities that have been so purchased. The specific terms
of any depository arrangement with respect to any portion of a series of Debt
Securities to be represented by one or more global securities will be described
in the applicable Prospectus Supplement. Beneficial interests in such Debt
Securities will only be evidenced by, and transfers thereof will only be
effected through, records maintained by the Depository and the institutions that
are Depository participants.
SUBORDINATION OF SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the Prospectus Supplement, the following
provisions will apply to the Subordinated Debt Securities.
The Subordinated Debt Securities will, to the extent set forth in the
Subordinated Indenture, be subordinate in right of payment to the prior payment
in full of all Senior Debt. (Section 15.1 of the
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Subordinated Indenture). In the event of (a) any insolvency or bankruptcy case
or proceeding, or any receivership, liquidation, reorganization or other similar
case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of the Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) any assignment for the benefit of
creditors or any other marshaling of assets and liabilities of the Company, then
and in any such event the holders of Senior Debt shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Debt, or provision shall be made for such payment in cash, before the
Holders of Subordinated Debt Securities are entitled to receive any payment on
account of principal of (or premium, if any) or interest on Subordinated Debt
Securities, and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof, any payment or distribution of
any kind or character, whether in cash, property or securities, including any
such payment or distribution which may be payable or deliverable by reason of
the payment of any other indebtedness of the Company being subordinated to the
payment of Subordinated Debt Securities, which may be payable or deliverable in
respect of the Subordinated Debt Securities in any such case, proceeding,
dissolution, liquidation or other winding up event. (Section 15.2 of the
Subordinated Indenture).
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company may recover less, ratably, than Holders of Senior Debt
and may recover more, ratably, than the Holders of the Subordinated Debt
Securities.
In the event of the acceleration of the maturity of any Subordinated Debt
Securities, the Holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon before the Holders of the Subordinated Debt Securities will be
entitled to receive any payment upon the principal of (and premium, if any) or
interest on, the Subordinated Debt Securities. (Section 15.3 of the Subordinated
Indenture).
No payments on account of the principal of (and premium, if any) or interest
in respect of the Subordinated Debt Securities may be made if there shall have
occurred and be continuing a default in any payment with respect to Senior Debt,
or an event of default with respect to any Senior Debt resulting in the
acceleration of the maturity thereof. (Section 15.4 of the Subordinated
Indenture). For purposes of the subordination provisions, the payment, issuance
and delivery of cash, property or securities (other than common stock and
certain subordinated securities of the Company) upon conversion of a
Subordinated Debt Security will be deemed to constitute payment on account of
the principal of such Subordinated Debt Security. (Section 15.15 of the
Subordinated Indenture).
The Subordinated Indenture does not limit or prohibit the incurrence of
additional Senior Debt, which may include indebtedness that is senior to the
Subordinated Debt Securities, but subordinate to other obligations of the
Company. The Senior Debt Securities constitute Senior Debt under the
Subordinated Indenture.
"Senior Debt" is defined to include the principal of (and premium, if any)
and interest (including interest accrued on or after the filing of any petition
in bankruptcy or for reorganization relating to the Company to the extent that
such claim for post-petition interest is allowed in such proceeding) on all
indebtedness of the Company (including indebtedness of others guaranteed by the
Company), other than the Subordinated Debt Securities, whether outstanding on
the date of the Subordinated Indenture or thereafter created, incurred or
assumed, which is (i) for money borrowed, (ii) evidenced by a note or similar
instrument given in connection with the acquisition by the Company or any
subsidiary of the Company of any businesses, properties or assets of any kind,
(iii) obligations of the Company as lessee under leases required to be
capitalized on the balance sheet of the lessee under generally accepted
accounting principles or leases of property or assets made as part of any sale
and leaseback transaction to which the Company is a party, and (iv) amendments,
renewals, extensions, modifications and refundings of any such indebtedness or
obligation, unless in any case the instrument creating or evidencing any such
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indebtedness or obligation or pursuant to which the same is outstanding provides
that such indebtedness or obligation is not superior in right of payment to the
Subordinated Debt Securities. (Section 1.1 of the Subordinated Indenture).
The Prospectus Supplement may further describe the provisions, if any,
applicable to the subordination of the Subordinated Debt Securities of a
particular series.
CERTAIN COVENANTS OF THE COMPANY
If Subordinated Debt Securities are issued to a Sun Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such Sun Trust
and (i) there shall have occurred any event that would constitute an Event of
Default, (ii) the Company shall be in default with respect to its payment of any
obligations under the related Trust Preferred Securities Guarantee or Trust
Common Securities Guarantee or (iii) the Company shall have given notice of its
election to defer payments of interest on such Subordinated Debt Securities by
extending the interest payment period as provided in the Indenture and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of Common
Stock in connection with the satisfaction by the Company of its obligations
under any employee benefit plans, (ii) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock or, (iii) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock of the Company or the security being converted or exchanged) or make any
guarantee payments with respect to the foregoing and (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company which rank pari passu with or junior to such Subordinated Debt
Securities.
In the event Subordinated Debt Securities are issued to a Sun Trust or a
trustee of such trust in connection with the issuance of Trust Securities of
such Sun Trust, for so long as such Trust Securities remain outstanding, the
Company will covenant (i) to directly or indirectly maintain 100% ownership of
the Trust Common Securities of such Sun Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of such Trust Common Securities, (ii) to use its reasonable
efforts to cause such Sun Trust (a) to remain a statutory business trust, except
in connection with the distribution of Subordinated Debt Securities to the
holders of Trust Securities in liquidation of such Sun Trust, the redemption of
all of the Trust Securities of such Sun Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration of such
Sun Trust, and (b) to continue to be classified as a grantor trust for United
States federal income tax purposes and (iii) to use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Subordinated Debt Securities. (Section 10.5).
CONVERSION OR EXCHANGE RIGHTS
The terms on which Debt Securities of any series are convertible into or
exchangeable for Common Stock or other securities of the Company will be set
forth in the Prospectus Supplement relating thereto. Such terms will include
provisions as to whether conversion or exchange is mandatory, at the option of
the Holder or at the option of the Company, and may include provisions pursuant
to which the number of shares of Common Stock or other securities of the Company
to be received by the Holders of Debt Securities would be subject to adjustment.
(Section 3.1 and Article XIV).
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SECURITY FOR SECURED DEBT SECURITIES
The terms and conditions pursuant to which the Debt Securities of any series
are secured, a description of the security, which may consist of real estate
properties or other assets owned by the Company, and the related mortgage will
be set forth in the Prospectus Supplement relating thereto. (Section 3.1).
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company may not merge or consolidate or sell or convey all or
substantially all of its assets unless the successor corporation (if other than
the Company) is a domestic corporation and assumes the Company's obligations on
the Debt Securities and under the applicable Indenture, and unless after giving
effect to such transaction the Company or the successor corporation would not be
in default under the applicable Indenture. (Section 8.1).
Unless otherwise specified in the Prospectus Supplement, the Indentures
contain no restrictive covenant that would afford holders of the Debt Securities
protection in the event of a change in control or a highly leveraged transaction
involving the Company or any of its affiliates.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the applicable Indenture with respect to Debt Securities of any series: (a)
failure to pay any interest on any Debt Security of that series when due,
continued for 30 days (in the case of the Subordinated Indenture, whether or not
such payment is prohibited by the subordination provisions) provided, however,
that a valid extension of the interest payment period shall not constitute a
default in the payment of interest for this purpose; (b) failure to pay the
principal of (or premium, if any) on any Debt Security of that series when due
(in the case of the Subordinated Indenture, whether or not such payment is
prohibited by the subordination provisions) provided, however, that a valid
extension of the maturity of such Debt Securities shall not constitute a default
for this purpose; (c) failure to deposit any sinking fund payment, when due, in
respect of any Debt Security of that series (in the case of the Subordinated
Indenture, whether or not such deposit is prohibited by the subordination
provisions); (d) failure to perform any other covenant of the Company in the
applicable Indenture or such Debt Security (other than a covenant included in
the applicable Indenture solely for the benefit of a series of Debt Securities
other than that series), continued for 90 days after written notice has been
given as provided in the applicable Indenture; (e) if the Debt Securities are
convertible into shares of Common Stock, failure by the Company to deliver
Common Stock upon an appropriate election by the holder or holders of the Debt
Securities to convert the Debt Securities into shares of Common Stock; (f)
certain events in bankruptcy, insolvency or reorganization involving the
Company; (g) in the event Subordinated Debt Securities are issued to a Sun Trust
or a trustee of such trust in connection with the issuance of Trust Securities
by such Sun Trust, the voluntary or involuntary dissolution, winding-up or
termination of such Sun Trust, except in connection with the distribution of
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of such Sun Trust, the redemption of all of the Trust Securities of such Sun
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration of such Sun Trust; or (h) any other Event of Default provided
with respect to the Debt Securities of that series. (Section 5.1). No event of
default described in clause (a), (b), (c) or (d) above with respect to a
particular series of Debt Securities necessarily constitutes an Event of Default
with respect to any other series of Debt Securities.
The Indentures provide that if an Event of Default under clauses (a), (b),
(c), (d), (e) or (g) above shall have occurred and be continuing (but in the
case of clause (d), only if the Event of Default is with respect to less than
all series of Debt Securities then outstanding), either the Trustee or the
holders of not less than 25% in aggregate principal amount of the then
outstanding Debt Securities of the series affected by such Event of Default
(each such series voting as a separate class) may declare the principal (or
portion
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thereof specified in the terms of any series) of all the Debt Securities of such
series, together with any accrued interest, to be due and payable immediately.
If an Event of Default under clause (d) (but in the case of clause (d), only if
the Event of Default under clause (d) is with respect to all of the series of
Debt Securities then outstanding), or (f) above shall have occurred and be
continuing, either the Trustee or the holders of not less than 25% in aggregate
principal amount of all the Debt Securities then outstanding (voting as one
class) may declare the principal (or portion thereof specified in the terms of
the series) of all the Debt Securities, together with any accrued interest, to
be due and payable immediately. Upon certain conditions such declaration
(including a declaration caused by a default in the payment of principal or
interest, the payment for which has subsequently been provided) may be annulled
by the holders of a majority in principal amount of the Debt Securities of each
series as was entitled to declare such default (each such series voting as a
separate class) or of all the Debt Securities voting as one class, as the case
may be. In addition, past defaults may be waived by the holders of a majority in
principal amount of the Debt Securities of each series as was entitled to
declare such default (each such series voting as a separate class) or of all the
Debt Securities voting as one class, as the case may be, except a default in the
payment of principal or interest on the Debt Securities or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the approval of the holder of each Debt Security affected. (Section
5.2).
Notwithstanding anything in the Indenture to the contrary, the right of any
holder of a Debt Security to receive payment of the principal of and interest on
such Debt Security, on and after the respective due dates expressed in such Debt
Security (as the same may be extended in accordance with the terms of such Debt
Security) or to institute suit for the enforcement of any such payment shall not
be impaired or affected without the consent of such holder, including, in the
case of a Subordinated Debt Security issued to a Sun Trust, the holders of the
Trust Preferred Securities issued by such Sun Trust. In addition, in the case of
a Subordinated Debt Security issued to a Sun Trust, 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 then a holder of Trust Preferred Securities
of such Sun Trust may directly institute a proceeding against the Company for
payment.
The Indentures will provide that, subject to the duty of the Debt Trustee
during default to act with the required standard of care, the Debt Trustee will
be under no obligation to exercise any of its rights or powers under the
applicable Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to the Debt Trustee reasonable indemnity.
(Section 6.1). Subject to such provisions for the indemnification of the Debt
Trustee, the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of any series will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Debt Trustees or exercising any trust or power conferred on the Debt
Trustee, with respect to the Debt Securities of that series. (Section 5.12).
The Company will be required to furnish to the applicable Debt Trustee
annually a statement as to the performance of certain of its obligations under
the applicable Indenture and as to any default in such performance. (Section
10.7).
DEFEASANCE AND DISCHARGE
If so specified with respect to any particular series of Debt Securities,
the Company may discharge its indebtedness and its obligations or certain of its
obligations under the applicable Indenture with respect to such series by
depositing funds or obligations issued or guaranteed by the United States of
America with the Trustee. (Section 4.3).
The Indentures will provide that, if so specified with respect to the Debt
Securities of any series, the Company will be discharged from any and all
obligations in respect of the Debt Securities of such series (including, in the
case of Subordinated Debt Securities, the subordination provisions described
under "Subordination of Subordinated Debt Securities" herein and, except for
certain obligations relating to
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temporary Debt Securities and exchange of Debt Securities, registration of
transfer or exchange of Debt Securities of such series, replacement of stolen,
lost or mutilated Debt Securities of such series, maintenance of paying
agencies, to hold monies for payment in trust, payment of additional amounts, if
any, required in consequence of United States withholding taxes imposed on
payments to non-United States persons and, if applicable, conversion of Debt
Securities into Common Stock or other securities) upon the deposit with the Debt
Trustee, in trust, of money and/or U.S. Government Obligations which through the
payment of interest and principal in respect thereof in accordance with their
terms will provide money in an amount sufficient to pay the principal of (and
premium, if any), each installment of interest on, and any sinking fund payments
on, the Debt Securities of such series on the Stated Maturity of such payments
in accordance with the terms of the applicable Indenture and the Debt Securities
of such series. (Section 4.6) Such a trust may only be established if, among
other things, (a) the Company has delivered to the applicable Debt Trustee an
Opinion of Counsel to the effect that (i) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of the applicable Indenture there has been a change in applicable
federal income tax law, in either case to the effect that, and based thereon
such Opinion of Counsel shall confirm that, the Holders of Debt Securities of
such series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, defeasance and discharge, and will be
subject to federal income tax on the same amounts and in the same manner and at
the same times as would have been the case if such deposit, defeasance and
discharge had not occurred; (b) the Debt Securities of such series, if then
listed on any domestic or foreign securities exchange, will not be delisted as a
result of such deposit, defeasance and discharge; and (c) in the case of the
Subordinated Debt Securities, (x) no default in the payment of the principal of
(and premium, if any) or any interest on any Senior Debt beyond any applicable
grace period shall have occurred and be continuing, and (y) no other default
with respect to any Senior Debt shall have occurred and be continuing and shall
have resulted in the acceleration of such Senior Debt. In the event of any such
defeasance and discharge of Debt Securities of such series, Holders of Debt
Securities of such series would be able to look only to such trust fund for
payment of principal of and any premium and any interest on their Debt
Securities until Maturity. (Section 4.6).
DEFEASANCE OF CERTAIN OBLIGATIONS
The Indentures will provide that, if so specified with respect to the Debt
Securities of any series, the Company may omit to comply with any covenants
applicable to such Debt Securities which are subject to covenant defeasance and
any such omission shall not be an Event of Default with respect to the Debt
Securities of such series, upon the irrevocable deposit with the Debt Trustee,
in trust, of money and/or U.S. Government Obligations which through the payment
of interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), each installment of interest on and any sinking fund payments thereof and
in accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium, if any), and each installment of principal (and
premium, if any) and interest on the Debt Securities of such series on the
Stated Maturity of such payments or upon optional redemption and any mandatory
sinking fund payments or analogous payments on the Debt Securities of such
series on the day on which such payments are due and payable in accordance with
the terms of the applicable Indenture and the Debt Securities of such series.
(Sections 4.5 and 4.6). The obligations of the Company under the applicable
Indenture and the Debt Securities of such series other than with respect to such
covenants shall remain in full force and effect. (Section 4.5). Such a trust may
be established only if, among other things, the Company has delivered to the
Debt Trustee an Opinion of Counsel to the effect that (i) the Holders of the
Debt Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit, defeasance and
discharge of certain obligations and will be subject to federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred and (ii) the
Debt Securities of such series, if then
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listed on any domestic or foreign securities exchange, will not be delisted as a
result of such deposit, defeasance and discharge. (Section 4.6).
In the event the Company exercises its option to omit compliance with the
covenants described in any Prospectus Supplement with respect to the Debt
Securities of such series and such Debt Securities are declared due and payable
because of the occurrence of any Event of Default, then the amount of money and
U.S. Government Obligations on deposit with the Debt Trustee will be sufficient
to pay amounts due on the Debt Securities of such series at the time of their
Stated Maturity but may not be sufficient to pay amounts due on the Debt
Securities of such series at the time of the acceleration resulting from such
Default. The Company shall in any event remain liable for such payments as
provided in the Indentures.
The Debt Trustee must deliver or pay to the Company from time to time, upon
request of the Company, any amounts held by it with respect to any Securities
which, in the opinion of a nationally recognized firm of independent public
accountants or investment or commercial bank, are in excess of the amount which
would then be required to be deposited to effect a satisfaction, discharge or
defeasance, as the case may be, with respect to such Securities.
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indentures may be made by the Company
and the Debt Trustee under the applicable Indenture with the consent of the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities issued under the applicable Indenture and affected by such
modification or amendment unless a greater percentage of such principal amount
is specified in the applicable Prospectus Supplement; provided, however, that no
such modification or amendment may, without the consent of each Holder of each
Outstanding Debt Security affected thereby, (a) change the Stated Maturity of
the principal of, or any installment of principal of or interest on, any such
Debt Security, (b) reduce the principal amount of (and premium, if any) or
interest on, any such Debt Security, (c) change any obligation of the Company to
pay additional amounts, (d) reduce the amount of principal of an Original Issue
Discount Security or any other Debt Security payable upon acceleration of the
maturity thereof, (e) change the coin or currency in which any Debt Security or
any premium or interest thereon is payable, (f) impair the right to institute
suit for the enforcement of any payment on or with respect to any such Debt
Security, (g) adversely change the right to convert or exchange, including
decreasing the conversion rate or increasing the conversion price of, such Debt
Security (if applicable), (h) in the case of the Subordinated Indenture, modify
the subordination provisions in a manner adverse to the Holders of the
Subordinated Debt Securities, (i) if the Debt Securities are secured, change the
terms and conditions pursuant to which the Debt Securities are secured in a
manner adverse to the Holders of the secured Debt Securities, (j) reduce the
percentage in principal amount of Outstanding Debt Securities of any series, the
consent of whose Holders is required for modification or amendment of the
applicable Indenture or for waiver of compliance with certain provisions of the
applicable Indenture or for waiver of certain defaults, (k) reduce the
requirements contained in the applicable Indenture for quorum or voting, if any
(l) change any obligations of the Company to maintain an office or agency in the
places and for the purposes required by the Indentures, or (m) modify any of the
above provisions. (Section 9.2).
Modifications and amendments of the Indentures may be made by the Company
and the Debt Trustee under the applicable Indenture without the consent of any
Holder to evidence a successor to the Company, to add to the Company's covenants
or Events of Default, to permit or facilitate Debt Securities to be issued by
book entry or in bearer form or relating to the place of payment thereof, to
provide for a successor trustee, to establish forms or terms of Debt Securities,
to change or eliminate any provisions not adversely affecting any interests of
Holders of Outstanding Debt Securities in any material respect or to cure any
ambiguity or inconsistency.
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of the Holders of all the Debt
Securities of that series, waive, insofar as that series is
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concerned, compliance by the Company with certain restrictive provisions of the
applicable Indenture and, if applicable, such Debt Securities, unless a greater
percentage of such principal amount is specified in the applicable Prospectus
Supplement. (Section 5.13).
If a Sun Trust or the Property Trustee of a Sun Trust holds a series of
Subordinated Debt Securities, no such supplemental indenture which requires the
approval of the holders of a certain percentage in aggregate principal amount of
Subordinated Debt Securities shall be effective without the approval of the
holders of the same percentage of aggregate liquidation preference of Preferred
Securities.
The applicable Indenture will provide that in determining whether the
Holders of the requisite principal amount of the Outstanding Debt Securities
have given any request, demand, authorization, direction, notice, consent or
waiver thereunder or are present at a meeting of Holders of Debt Securities for
quorum purposes, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination upon
acceleration of the Maturity thereof, and (ii) the principal amount of a Debt
Security denominated in a foreign currency or currency units shall be the U.S.
dollar equivalent, determined on the date of original issuance of such Debt
Security, of the principal amount of such Debt Security or, in the case of an
Original Issue Discount Security, the U.S. dollar equivalent, determined on the
date of original issuance of such Debt Security, of the amount determined as
provided in (i) above.
The applicable Indenture will contain provisions for convening meetings of
the Holders of Debt Securities of a series if Debt Securities of that series are
issuable as Bearer Securities. A meeting may be called at any time by the Debt
Trustee, and also, upon request, by the Company or the Holders of at least 25%
in principal amount of the Outstanding Debt Securities of such series, in any
such case upon notice given in accordance with "Notices" below. (Sections 13.1
and 13.2). Except for any consent which must be given by the Holder of each
Outstanding Debt Security affected thereby, as described above, any resolution
presented at a meeting or adjourned meeting at which a quorum is present may be
adopted by the affirmative vote of the Holders of a majority in principal amount
of the Outstanding Debt Securities of that series; provided, however, that,
except for any consent which must be given by the Holder of each Outstanding
Debt Security affected thereby, as described above, any resolution with respect
to any consent or waiver which may be given by the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of a series may
be adopted at a meeting or an adjourned meeting at which a quorum is present
only by the affirmative vote of a majority in principal amount of the
Outstanding Debt Securities of that series; and provided, further, that, except
for any consent which must be given by the Holder of each Outstanding Debt
Security affected thereby, as described above, any resolution with respect to
any request, demand, authorization, direction, notice, consent, waiver or other
action which may be made, given or taken by the Holders of a specified
percentage, which is less than a majority in principal amount of the Outstanding
Debt Securities of a series may be adopted at a meeting or adjourned meeting
duly reconvened at which a quorum is present by the affirmative vote of the
Holders of such specified percentage in the principal amount of the Outstanding
Debt Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Debt Securities of any series duly held in accordance with
the applicable Indenture will be binding on all Holders of Debt Securities of
that series and the related coupons. The quorum at any meeting called to adopt a
resolution or with respect to a consent or a waiver which may be given by the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of a series, and at any reconvened meeting, will be persons holding
or representing a majority in principal amount of the Outstanding Debt
Securities of a series; provided, however, that if any action is to be taken at
such meeting with respect to a consent or waiver which may be given by the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of a series then, with respect to such action (and only such action)
the Holders entitled to vote such lesser or greater percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
(Section 13.4).
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NOTICES
Except as otherwise provided in the applicable Indenture, notices to Holders
of Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and in such other city or cities as may be
specified in such Debt Securities. Notices to Holders of Registered Securities
will be given by mail to the address of such Holders as they appear in the
Security Register. (Section 1.6).
TITLE
Title to any temporary global Debt Security, any Bearer Securities
(including Bearer Securities in permanent global form) and any coupons
appertaining thereto will pass by delivery. The Company, the Debt Trustee and
any agent of the Company or the Debt Trustee may treat the bearer of any Bearer
Security and the bearer of any coupon and the registered owner of any Registered
Security as the absolute owner thereof (whether or not such Debt Security or
coupon shall be overdue and notwithstanding any notice to the contrary) for the
purpose of making payment and for all other purposes. (Section 3.8).
REPLACEMENT OF DEBT SECURITIES AND COUPONS
Any mutilated Debt Security or a Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
Holder upon surrender of such Debt Security to the Debt Trustee. Debt Securities
or coupons that became destroyed, stolen or lost will be replaced by the Company
at the expense of the Holder upon delivery to the Debt Trustee of the Debt
Security and coupons or evidence of the destruction, loss or theft thereof
satisfactory to the Company and the Debt Trustee; in the case of any coupon
which becomes destroyed, stolen or lost, such coupon will be replaced by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Debt Trustee and the Company may be
required at the expense of the Holder of such Debt Security or coupon before a
replacement Debt Security will be issued. (Section 3.6).
GOVERNING LAW
The Indentures, the Debt Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws. (Section 1.13).
REGARDING THE DEBT TRUSTEE
The Indentures contain limitations on the right of the Debt Trustee, as a
creditor of the Company, to obtain payment of claims in certain cases or to
realize on certain property received in respect of any such claim as security or
otherwise. (Section 6.10). In addition, the Debt Trustee may be deemed to have a
conflicting interest and may be required to resign as Debt Trustee if at the
time of a default under one of the Indentures it is a creditor of the Company.
(Section 6.8). The Company may from time to time maintain deposit accounts and
conduct its banking transactions with a Debt Trustee in the ordinary course of
business. (Section 6.3).
DESCRIPTION OF TRUST PREFERRED SECURITIES
Each Sun Trust may issue, from time to time, only one series of Trust
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Sun Trust authorizes the Regular
Trustees of such Sun Trust to issue on behalf of such Sun Trust one series of
Trust Preferred Securities. The Declaration will be qualified as an indenture
under the Trust Indenture Act. The Trust Preferred Securities will have such
terms, including distributions, redemption, voting, liquidation, conversion
rights and such other preferred, deferred or other special rights or such
restrictions as shall be set forth in the Declaration or made part of the
Declaration by the Trust Indenture Act, and which will
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mirror the terms of the Subordinated Debt Securities held by such Sun Trust and
described in the Prospectus Supplement related thereto. Reference is made to the
Prospectus Supplement relating to the Trust Preferred Securities of any Sun
Trust for specific terms, including (i) the distinctive designation of such
Trust Preferred Securities; (ii) the number of Trust Preferred Securities issued
by such Sun Trust; (iii) the annual distribution rate (or method of determining
such rate) for Trust Preferred Securities issued by such Sun Trust and the date
or dates upon which such distributions shall be payable; provided, however, that
distributions on such Trust Preferred Securities shall be payable on a quarterly
basis to holders of such Trust Preferred Securities as of a record date in each
quarter during which such Trust Preferred Securities are outstanding; (iv)
whether distributions on Trust Preferred Securities issued by such Sun Trust
shall be cumulative, and, in the case of Trust Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining the
date or dates from which distributions on Trust Preferred Securities issued by
such Sun Trust shall be cumulative; (v) the amount or amounts which shall be
paid out of the assets of such Sun Trust to the holders of Trust Preferred
Securities of such Sun Trust upon voluntary or involuntary dissolution,
winding-up or termination of such Sun Trust; (vi) the obligation, if any, of
such Sun Trust to purchase or redeem Trust Preferred Securities issued by such
Sun Trust and the price or prices at which, the period or periods within which,
and the terms and conditions upon which, Trust Preferred Securities issued by
such Sun Trust shall be purchased or redeemed, in whole or in part, pursuant to
such obligation; (vii) the voting rights, if any, of Trust Preferred Securities
issued by such Sun Trust in addition to those required by law, including the
number of votes per Preferred Security and any requirement for the approval by
the holders of Trust Preferred Securities, or of Trust Preferred Securities
issued by one or more Sun Trusts, or of both, as a condition to specified action
or amendments to the Declaration of such Sun Trust; (viii) the terms and
conditions, if any, upon which Trust Preferred Securities issued by such Sun
Trust may be converted into shares of Common Stock, including the conversion
price per share and the circumstances, if any, under which any such conversion
right shall expire; (ix) the terms and conditions, if any, upon which the
Subordinated Debt Securities may be distributed to holders of Trust Preferred
Securities; (x) if applicable, any securities exchange upon which the Trust
Preferred Securities shall be listed; and (xi) any other relevant rights,
preferences, privileges, limitations or restrictions of Trust Preferred
Securities issued by such Sun Trust not inconsistent with the Declaration of
such Sun Trust or with applicable law. All Trust Preferred Securities offered
hereby will be guaranteed by the Company to the extent set forth below under
"Description of Trust Preferred Securities Guarantees." Certain United States
federal income tax considerations applicable to any offering of Trust Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Trust Preferred Securities, each Sun
Trust will issue one series of Trust Common Securities. The Declaration of each
Sun Trust authorizes the Regular Trustees of such trust to issue on behalf of
such Sun Trust one series of Trust Common Securities having such terms including
distributions, redemption, voting and liquidation rights or such restrictions as
shall be set forth therein. The terms of the Trust Common Securities issued by a
Sun Trust will be substantially identical to the terms of the Trust Preferred
Securities issued by such trust and the Trust Common Securities will rank pari
passu, and payments will be made thereon pro rata, with the Trust Preferred
Securities except that, upon an event of default under the Declaration, the
rights of the holders of the Trust Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the Trust Preferred Securities.
Except in certain limited circumstances, the Trust Common Securities will also
carry the right to vote to appoint, remove or replace any of the Sun Trustees of
a Sun Trust. All of the Trust Common Securities of each Sun Trust will be
directly or indirectly owned by the Company.
PROPOSED TAX LEGISLATION
There can be no assurance that future legislative proposals will not affect
the ability of the Company to deduct interest on the Subordinated Debt
Securities. Congress and the Clinton Administration have from time to time
considered proposals that would deny an issuer a deduction for United States
income tax
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purposes for the payment of interest on instruments with characteristics similar
to the Subordinated Debt Securities. Such proposals have been considered in
connection with recent legislation, including the recently enacted Taxpayer
Relief Act of 1997 (the "1997 Act"). Although no such proposals have been
included in the final provisions of recent legislation, including the 1997 Act,
there can be no assurance that future legislation will not adversely affect the
tax treatments of the Junior Subordinated Debt Securities, potentially on
retroactive basis. Such a change could give rise to an event that may permit the
Company to cause a redemption of the Trust Preferred Securities.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default under the Declaration of a Sun Trust occurs and is
continuing, then the holders of Trust Preferred Securities of such Sun Trust
would rely on the enforcement by the Property Trustee of its rights as a holder
of the applicable series of Subordinated Debt Securities against the Company. In
addition, the holders of a majority in liquidation amount of the Trust Preferred
Securities of such Sun Trust will 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 under the applicable Declaration, including the right to direct
the Property Trustee to exercise the remedies available to it as a holder of the
Subordinated Debt Securities. If the Property Trustee fails to enforce its
rights under the applicable series of Subordinated Debt Securities, a holder of
Trust Preferred Securities of such Sun Trust may, to the fullest extent
permitted by law, institute a legal proceeding directly against the Company to
enforce the Property Trustee's rights under the applicable series of
Subordinated Debt Securities without first instituting any legal proceeding
against the Property Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default under the applicable Declaration has occurred
and is continuing and such event is attributable to the failure of the Company
to pay interest or principal on the applicable series of Subordinated Debt
Securities on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then a holder of Trust
Preferred Securities of such Sun Trust may directly institute a proceeding for
enforcement of payment to such holder of the principal of or interest on the
applicable series of Subordinated Debt Securities having a principal amount
equal to the aggregate liquidation amount of the Trust Preferred Securities of
such holder (a "Direct Action") on or after the respective due date specified in
the applicable series of Subordinated Debt Securities. In connection with such
Direct Action, the Company will be subrogated to the rights of such holder of
Trust Preferred Securities under the applicable Declaration to the extent of any
payment made by the Company to such holder of Trust Preferred Securities in such
Direct Action.
DESCRIPTION OF TRUST PREFERRED SECURITIES GUARANTEES
Set forth below is a summary of information concerning the Trust Preferred
Securities Guarantees which will be executed and delivered by the Company for
the benefit of the holders from time to time of Trust Preferred Securities. Each
Trust Preferred Securities Guarantee will be qualified as an indenture under the
Trust Indenture Act. The Bank of New York will act as the independent trustee
under each Trust Preferred Securities Guarantee (the "Preferred Guarantee
Trustee") for purposes of the Trust Indenture Act. The terms of each Trust
Preferred Securities Guarantee will be those set forth in such Trust Preferred
Securities Guarantee and those made part of such Trust Preferred Securities
Guarantee by the Trust Indenture Act. The summary is subject in all respects to
the provisions of, and is qualified in its entirety by reference to, the form of
Trust Preferred Securities Guarantee, which is filed as an exhibit to the
Registration Statement of which this Prospectus forms a part, and the Trust
Indenture Act. Each Trust Preferred Securities Guarantee will be held by the
Preferred Guarantee Trustee for the benefit of the holders of the Trust
Preferred Securities of the applicable Sun Trust.
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GENERAL
Pursuant to each Trust Preferred Securities Guarantee, the Company will
agree, to the extent set forth therein, to pay in full, to the holders of the
Trust Preferred Securities issued by a Sun Trust, the Guarantee Payments (as
defined herein) (except to the extent paid by such Sun Trust), as and when due,
regardless of any defense, right of set-off or counterclaim which such Sun Trust
may have or assert. The following payments with respect to Trust Preferred
Securities issued by a Sun Trust to the extent not paid by such Sun Trust (the
"Guarantee Payments"), will be subject to the Trust Preferred Securities
Guarantee thereon (without duplication): (i) any accrued and unpaid
distributions which are required to be paid on such Trust Preferred Securities,
to the extent such Sun Trust shall have funds available therefor; (ii) the
redemption price set forth in the applicable Prospectus Supplement (the
"Redemption Price"), which will not be lower than the liquidation amount, and
all accrued and unpaid distributions, to the extent such Sun Trust has funds
available therefor with respect to any Trust Preferred Securities called for
redemption by such Sun Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of such Sun Trust (other than in
connection with the distribution of Subordinated Debt Securities to the holders
of Trust Preferred Securities or the redemption of all of the Trust Preferred
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accrued and unpaid distributions on such Trust Preferred Securities to the date
of payment, to the extent such Sun Trust has funds available therefor and (b)
the amount of assets of such Sun Trust remaining available for distribution to
holders of such Trust Preferred Securities in liquidation of such Sun Trust. 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 Trust Preferred
Securities or by causing the applicable Sun Trust to pay such amounts to such
holders.
Each Trust Preferred Securities Guarantee will not apply to any payment of
distributions on the Trust Preferred Securities except to the extent such Sun
Trust shall have funds available therefor. If the Company does not make interest
payments on the Subordinated Debt Securities purchased by a Sun Trust, such Sun
Trust will not pay distributions on the Trust Preferred Securities issued by
such Sun Trust and will not have funds available therefor. See "Description of
Debt Securities--Certain Covenants of the Company." The Trust Preferred
Securities Guarantee, when taken together with the Company's obligations under
the Subordinated Debt Securities, the Indenture and the Declaration, including
its obligations to pay costs, expenses, debts and liabilities of such Sun Trust
(other than with respect to the Trust Securities); will provide a full and
unconditional guarantee on a subordinated basis by the Company of payments due
on the Preferred Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Sun Trusts with respect to the Trust Common
Securities (the "Trust Common Securities Guarantees") to the same extent as the
Trust Preferred Securities Guarantee, except that upon an event of default under
the Indenture, holders of Trust Preferred Securities shall have priority over
holders of Trust Common Securities with respect to distributions and payments on
liquidation, redemption or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In each Trust Preferred Securities Guarantee, the Company will covenant
that, so long as any Trust Preferred Securities issued by the applicable Sun
Trust remain outstanding, if there shall have occurred any event that would
constitute an event of default under such Trust Preferred Securities Guarantee
or the Declaration of such Sun Trust, then (a) the Company shall not declare or
pay any dividend on, make any distributions with respect to, or redeem, purchase
or make a liquidation payment with respect to, any of its capital stock (other
than (i) purchases or acquisitions of shares of Common Stock in connection with
the satisfaction by the Company of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Company's capital stock or
the exchange or conversion of one class or series of the Company's capital stock
for another class or series of the Company's capital stock or, (iii) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Company or the security being converted or exchanged) or make any
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guarantee payments with respect to the foregoing and (b) the Company shall not
make any payment of interest, principal or premium, if any, on or repay,
repurchase or redeem any debt securities (including guarantees) issued by the
Company which rank pari passu with or junior to such Subordinated Debt
Securities.
MODIFICATION OF THE TRUST PREFERRED SECURITIES GUARANTEES; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Trust Preferred Securities (in which case no vote will be
required) in any material respect, each Trust Preferred Securities Guarantee may
be amended only with the prior approval of the holders of not less than a
majority in liquidation amount of the outstanding Trust Preferred Securities
issued by applicable Sun Trust. The manner of obtaining any such approval of
holders of such Trust Preferred Securities will be as set forth in an
accompanying Prospectus Supplement. All guarantees and agreements contained in a
Trust Preferred Securities Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Trust Preferred Securities of the applicable Sun
Trust then outstanding.
TERMINATION
Each Trust Preferred Securities Guarantee will terminate as to the Trust
Preferred Securities issued by the applicable Sun Trust (a) upon full payment of
the Redemption Price of all Trust Preferred Securities of such Sun Trust, (b)
upon distribution of the Subordinated Debt Securities held by such Sun Trust to
the holders of the Trust Preferred Securities of such Sun Trust or (c) upon full
payment of the amounts payable in accordance with the Declaration of such Sun
Trust upon liquidation of such Sun Trust. Each Trust Preferred Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of Trust Preferred Securities issued by the
applicable Sun Trust must restore payment of any sums paid under such Trust
Preferred Securities or such Trust Preferred Securities Guarantee. The
subordination provisions of the Subordinated Debt Securities provide that in the
event payment is made on the Subordinated Debt Securities or the Trust Preferred
Securities Guarantee in contravention of such provisions, such payments shall be
paid over to the holders of Senior Indebtedness.
EVENTS OF DEFAULT
An event of default under a Trust Preferred Securities Guarantee will occur
upon (a) the failure of the Company to perform any of its payment or other
obligations thereunder or (b) if applicable, the failure by the Company to
deliver Common Stock upon an appropriate election by the holder or holders of
Trust Preferred Securities to convert the Trust Preferred Securities into shares
of Common Stock.
The holders of a majority in liquidation amount of the Trust Preferred
Securities relating to such Trust Preferred Securities Guarantee have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Preferred Guarantee Trustee in respect of the Trust Preferred
Securities Guarantee or to direct the exercise of any trust or power conferred
upon the Preferred Guarantee Trustee under such Trust Preferred Securities. If
the Preferred Guarantee Trustee fails to enforce such Trust Preferred Securities
Guarantee, any holder of Trust Preferred Securities relating to such Trust
Preferred Securities Guarantee may institute a legal proceeding directly against
the Company to enforce the Preferred Guarantee Trustee's rights under such Trust
Preferred Securities Guarantee, without first instituting a legal proceeding
against the relevant Sun Trust, the Preferred Guarantee Trustee or any other
person or entity. Notwithstanding the foregoing, if the Company has failed to
make a guarantee payment, a holder of Trust Preferred Securities may directly
institute a proceeding against the Company for enforcement of the Trust
Preferred Securities Guarantee for such payment. The Company waives any right or
remedy to require that any action be brought first against such Sun Trust or any
other person or entity before proceeding directly against the Company.
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STATUS OF THE TRUST PREFERRED SECURITIES GUARANTEES
The Trust Preferred Securities Guarantees will constitute unsecured
obligations of the Company and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Company, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Company and
with any guarantee now or hereafter entered into by the Company in respect of
any preferred or preference stock of any affiliate of the Company; and (iii)
senior to Common Stock. The terms of the Trust Preferred Securities provide that
each holder of Trust Preferred Securities issued by the applicable Sun Trust by
acceptance thereof agrees to the subordination provisions and other terms of the
Trust Preferred Securities Guarantee relating thereto.
The Trust Preferred Securities Guarantees will constitute a guarantee of
payment and not of collection (that is, the guaranteed party may institute a
legal proceeding directly against the guarantor to enforce its rights under the
guarantee without instituting a legal proceeding against any other person or
entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to a Trust Preferred Securities Guarantee, undertakes to perform only
such duties as are specifically set forth in such Trust Preferred Securities
Guarantee and, after default, shall exercise the same degree of care as a
prudent individual would exercise in the conduct of his or her own affairs.
Subject to such provisions, the Preferred Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Trust Preferred
Securities Guarantee at the request of any holder of Trust Preferred Securities,
unless offered reasonable indemnity against the costs, expenses and liabilities
which might be incurred thereby.
DESCRIPTION OF CAPITAL STOCK
The Company's authorized capital stock consists of 100,000,000 shares of
Common Stock, par value $.01 per share, and 5,000,000 shares of Preferred Stock
(the "Preferred Stock"). As of November 7, 1997, 49,596,728 shares of Common
Stock were issued and outstanding, net of 2,053,207 shares of Common Stock held
in treasury, and no shares of Preferred Stock were issued and outstanding.
DESCRIPTION OF PREFERRED STOCK
GENERAL
The Sun Certificate (as defined herein) authorizes the issuance of up to
5,000,000 shares of preferred stock, par value of $.01 per share, none of which
is currently outstanding. Of the 5,000,000 shares of the Company's authorized
preferred stock, the Company has reserved for issuance 1,000,000 shares of its
Series A Preferred Stock pursuant to the Company's Stockholders' Rights Plan. A
description of the Series A Preferred Stock has been incorporated herein by
reference to the Company's Registration Statement on Form 8-A. See
"Incorporation of Certain Documents By Reference." The Company may issue 450,001
shares of Series B Convertible Preferred Stock in connection with the Company's
acquisition of Retirement Care. Specifically, if the RCA Merger occurs, each
share of RCA Series F Preferred Stock, of which 403,334 shares were outstanding
as of March 31, 1997, would be convertible into one share of Series B Preferred
Stock. The Series B Preferred Stock will be convertible into the greater of
approximately .7322 shares of Common Stock or the number of shares of Common
Stock equal to 5.616 divided by 85% of the average closing bid price for the
five consecutive trading days immediately prior to the closing of the RCA
Merger. The Company's preferred stock may be issued from time to time in one or
more series, without stockholder approval. Subject to limitations prescribed by
law, the Board of Directors is authorized to determine the voting powers (if
any), designation, preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, for
each series of preferred stock that may be issued, and to fix the number of
shares of each such series and other terms and provisions as may
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be contained in the resolutions of the board of directors of the Company
providing for their issuance. The shares of any series of Preferred Stock will
be, when issued, fully paid and non-assessable and holders thereof will have no
preemptive rights in connection therewith. Thus, the Board of Directors, without
Stockholder approval, could authorize the issuance of preferred stock with
voting, conversion and other rights that could adversely affect the voting power
and other rights of holders of Common Stock or other series of preferred stock
or that could have the effect of delaying, deferring or preventing a change of
control of the Company. Among other things, the Preferred Stock may be issued
with extraordinary voting, dividend, redemption or conversion rights.
The following summary contains a description of certain general terms of the
Preferred Stock to which any Prospectus Supplement may relate. Certain terms of
any series of Preferred Stock offered by any Prospectus Supplement will be
described in the Prospectus Supplement relating thereto. If so indicated in the
Prospectus Supplement, the terms of any series may differ from the terms set
forth below. The description of certain material provisions of the Preferred
Stock is subject to and qualified in its entirety by reference to the provisions
of the Company's Certificate of Incorporation (the "Sun Certificate"), and the
Certificate of Designation (the "Certificate of Designation") relating to each
particular series of Preferred Stock which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement of
which this Prospectus is a part at or prior to the time of the issuance of such
Preferred Stock.
RANK
All series of Preferred Stock rank on a parity with each other and rank
senior to Common Stock with respect to payment of dividends and distributions of
assets upon liquidation.
DIVIDENDS
Holders of each series of Preferred Stock will be entitled to receive, when,
as and if declared by the board of directors of the Company out of funds legally
available therefor, cash dividends at such rates and on such dates as are set
forth in the Prospectus Supplement relating to such series of Preferred Stock.
Such rate may be fixed or variable or both. Dividends will be payable to holders
of record of Preferred Stock as they appear on the books of the Company (or, if
applicable, the records of the Depositary referred to below under "Description
of Depositary Shares") on such record dates as shall be fixed by the board of
directors. Dividends on any series of Preferred Stock will be cumulative.
Accumulations of dividends will not bear interest.
No full dividends may be declared or paid on funds set apart for the payment
of dividends on any series of Preferred Stock unless dividends shall have been
paid or set apart for such payment on the Preferred Stock of all series. If full
dividends are not so paid, all series of Preferred Stock shall share ratably in
the payment of dividends.
CONVERSION AND EXCHANGE
The Prospectus Supplement for any series of Preferred Stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of Preferred Stock or Common Stock or exchangeable for another
series of Preferred Stock, Common Stock or Debt Securities of the Company. The
Common Stock of the Company is described under "Description of Common Stock."
REDEMPTION
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject to
mandatory redemption pursuant to a sinking fund or otherwise upon terms and at
the redemption prices set forth in the Prospectus Supplement relating to such
series. The board of directors of the Company shall not create a sinking fund
for the redemption or purchase of shares of any series of Preferred Stock unless
provision for a sinking fund at least as beneficial
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to all issued and outstanding shares of Preferred Stock shall either then exist
or be at the same time created.
In the event of partial redemptions of Preferred Stock, whether by mandatory
or optional redemption, the shares to be redeemed will be determined by lot or
pro rata, as may be determined by the board of directors of the Company, or by
any other method determined to be equitable by the board of directors.
On and after a redemption date, unless the Company defaults in the payment
of the redemption price, dividends will cease to accrue on shares of Preferred
Stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of each series of Preferred Stock will be entitled to
receive out of assets of the Company available for distribution to shareholders,
before any distribution is made on any Common Stock, distributions upon
liquidation in the amount set forth in the Certificate of Designation or the
Prospectus Supplement, as applicable, relating to such series of Preferred
Stock, plus an amount equal to any accrued and unpaid dividends. If, upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
the amounts payable with respect to the Preferred Stock of any series are not
paid in full, the holders of the Preferred Stock of such series and all other
series of Preferred Stock will share ratably in any such distribution of assets
of the Company in proportion to the full liquidation preferences to which each
is entitled. After payment of the full amount of the liquidation preference to
which they are entitled, the holders of Preferred Stock will not be entitled to
any further participation in any distribution of assets of the Company.
VOTING RIGHTS
At every meeting of stockholders, the holders of Preferred Stock shall have
the right with the holders of Common Stock, voting as a single class, to vote in
the election of directors and upon each other matter coming before any meeting
of the stockholders on the basis of one vote for each share of Preferred Stock
or Common Stock held. If at the time of any meeting of shareholders, dividends
on all series of Preferred Stock then outstanding are in arrears in an aggregate
amount equal to six quarterly dividends, then the shares of all series of
Preferred Stock then outstanding, voting separately as a class, will have the
right at each meeting of stockholders thereafter held to elect two of the total
directors to be selected at such meeting until all arrearages of dividends
accumulated on all series of Preferred Stock for all preceding dividend periods
shall have been paid or declared or set apart for payment. While holders of
Preferred Stock voting as a class are entitled to elect two directors they are
not entitled to vote on the election of any other directors. Whenever all
arrearages of dividends have been paid or declared and set apart for payment,
the tenure of all directors so elected by them will automatically terminate.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The holders of shares of Common Stock have one vote per share on all matters
to be voted upon by stockholders. Subject to any preferences, voting powers,
qualifications and special or relative rights or privileges of any holders of
preferred stock, holders of Common Stock are entitled, among other things, to
dividends if, when and as declared from time to time by the Board of Directors
out of assets legally available therefor after payment of debts and expenses.
Sun's ability to pay dividends is restricted by the terms of its existing credit
facility and agreements governing certain outstanding indebtedness of the
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Company. With the exception of the rights issued pursuant to the Company's
Stockholders' Rights Plan, holders of shares of Common Stock have no preemptive
or other rights to subscribe for additional shares. The Common Stock is neither
redeemable nor convertible, and there are no sinking fund provisions. Upon the
voluntary or involuntary liquidation of Sun, holders of Common Stock are
entitled to receive all remaining assets of Sun available for distribution to
stockholders after payment of preference amounts owed to holders of any
preferred stock.
All of the outstanding shares of Common Stock are fully paid and
nonassessable.
The shares of Common Stock do not have cumulative voting rights, which means
that the holders of more than 50% of the shares voting can elect all the
directors if they so choose, and, in such event, the holders of the remaining
shares cannot elect any directors. No stockholder owns more than 50% of the
outstanding Common Stock.
CERTAIN PROVISIONS OF THE SUN CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE
GENERAL CORPORATION LAW
The Sun Certificate provides for a board of directors with three classes
consisting as nearly as possible of one-third of the directors. Each director
serves for a term of three years and until his or her successor is elected and
qualified. Directors may be removed with or without cause by the affirmative
vote of the holders of a majority of the outstanding shares entitled to vote. A
classified board of directors could make it more difficult for stockholders,
including those holding a majority of the outstanding shares, to force an
immediate change in the composition of a majority of the board of directors.
Staggered terms moderate the pace of changes in the board of directors by
extending the minimum time required to elect a majority of directors to two
years.
The Sun Certificate provides that any action required or permitted to be
taken by stockholders shall be taken only at a duly called special or annual
meeting of the stockholders. Stockholders have no authority to take action by
written consent unless approved in advance by Sun's Board of Directors. The Sun
Certificate also provides that special meetings of the common stockholders of
Sun may be called only by the Chairman, President or a majority of Sun's Board
of Directors.
The Sun Certificate limits the personal liability of each Sun director to
Sun or its stockholders for monetary damages for breach of his fiduciary duty as
a director except to the extent such limitation of liability is not permitted
under the Delaware General Corporation Law (the "DGCL"). The DGCL provides that
the liability of a director may not be limited (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) for liability for payment of dividends or stock
purchases or redemptions in violation of the DGCL or (iv) for any transaction
from which the director derived an improper personal benefit.
In addition, Sun's Bylaws provide that Sun shall indemnify any and all of
its directors, or former directors, to the fullest extent permitted by law
against claims and liabilities to which such persons may become subject. The
DGCL provides that indemnification is permissible only when the director acted
in good faith and in a manner 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 the conduct was unlawful. The
DGCL also permits indemnification in respect of any claim, issue, or matter as
to which such person shall have been adjudicated to be liable to the corporation
to the extent that the Delaware Court of Chancery or the court in which such
action or suit was brought has determined 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.
Section 203 of the DGCL, which is currently applicable to Sun, prohibits
certain publicly held Delaware corporations from engaging in a "business
combination" with an "interested stockholder" for a
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period of three years after the date of the transaction in which the person or
entity became an interested stockholder, unless, among other exemptions (i) the
business combination is approved by the board of directors prior to the date the
interested stockholder attained such status, and authorized by the holders of
two-thirds of the outstanding voting stock not owned by the interested
stockholders or (ii) the interested stockholder acquired 85% or more of the
outstanding voting stock of Sun in the transaction in which the person or entity
became an interested stockholder. For purposes of Section 203, a "business
combination" is defined broadly to include mergers, asset sales and other
transactions resulting in a financial benefit to the interested stockholder.
Subject to certain exceptions, an "interested stockholder" is a person or entity
who, together with affiliates and associates, owns or within the three years
immediately preceding a business combination did own 15% or more of the
corporation's outstanding voting stock.
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C. located in Ridgefield Park, New Jersey.
DESCRIPTION OF DEPOSITARY SHARES
The description set forth below of certain material provisions of the
Deposit Agreement (as defined below) and of the Depositary Shares and Depositary
Receipts (as defined below) is subject to and qualified in its entirety by
reference to the forms of Deposit Agreement and Depositary Receipt relating to
the Preferred Stock, which will be filed or incorporated by reference, as the
case may be, as exhibits to the Registration Statement of which this Prospectus
is a part.
GENERAL
The Company may, at its option, elect to offer fractional shares of
Preferred Stock, rather than full shares of Preferred Stock. In such event, the
Company will issue receipts for Depositary Shares, each of which will represent
a fraction (to be set forth in the Prospectus Supplement relating to a
particular series of Preferred Stock) of a share of a particular series of
Preferred Stock as described below.
The shares of any series of Preferred Stock represented by Depositary Shares
will be deposited under a Deposit Agreement (the "Deposit Agreement") between
the Company and a bank or trust company selected by the Company having its
principal office in the United States and having a combined capital and surplus
of at least $60,000,000 (the "Depositary"). Subject to the terms of the Deposit
Agreement, each owner of a Depositary Share will be entitled, in proportion to
the applicable fraction of a share of Preferred Stock represented by such
Depositary Share, to all the rights and preferences of the Preferred Stock
represented thereby (including dividend, voting, redemption, conversion and
liquidation rights).
The Depositary Shares will be evidenced by depositary receipts issued
pursuant to the Deposit Agreement (the "Depositary Receipts"). Depositary
Receipts will be distributed to those persons purchasing the fractional shares
of Preferred Stock in accordance with the terms of the applicable Prospectus
Supplement.
Pending the preparation of definitive Depositary Receipts, the Depositary
may, upon the written order of the Company or any holder of deposited Preferred
Stock, execute and deliver temporary Depositary Receipts which are substantially
identical to, and entitle the holders thereof to all the rights pertaining to,
the definitive Depositary Receipts. Depositary Receipts will be prepared
thereafter without unreasonable delay, and temporary Depositary Receipts will be
exchangeable for definitive Depositary Receipts.
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DIVIDENDS AND OTHER DISTRIBUTIONS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the deposited Preferred Stock to the record
holders of Depositary Shares relating to such Preferred Stock in proportion to
the numbers of such Depositary Shares owned by such holders.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Shares
entitled thereto. If the Depositary determines that it is not feasible to make
such distribution, it may, with the approval of the Company, sell such property
and distribute the net proceeds from such sale to such holders.
REDEMPTION OF STOCK
If a series of Preferred Stock represented by Depositary Shares is to be
redeemed, the Depositary Shares will be redeemed from the proceeds received by
the Depositary resulting from the redemption, in whole or in part, of such
series of Preferred Stock held by the Depositary. The Depositary Shares will be
redeemed by the Depositary at a price per Depositary Share equal to the
applicable fraction of the redemption price per share payable in respect of the
shares of Preferred Stock so redeemed. Whenever the Company redeems shares of
Preferred Stock held by the Depositary, the Depositary will redeem as of the
same date the number of Depositary Shares representing shares of Preferred Stock
so redeemed. If fewer than all the Depositary Shares are to be redeemed, the
Depositary Shares to be redeemed will be selected by the Depositary by lot or
pro rata or by any other equitable method as may be determined by the
Depositary.
WITHDRAWAL OF STOCK
Any holder of Depositary Shares may, upon surrender of the Depositary
Receipts at the corporate trust office of the Depositary (unless the related
Depositary Shares have previously been called for redemption), receive the
number of whole shares of the related series of Preferred Stock and any money or
other property represented by such Depositary Receipts. Holders of Depositary
Shares making such withdrawals will be entitled to receive whole shares of
Preferred Stock on the basis set forth in the related Prospectus Supplement for
such series of Preferred Stock, but holders of such whole shares of Preferred
Stock will not thereafter be entitled to deposit such Preferred Stock under the
Deposit Agreement or to receive Depositary Receipts therefor. If the Depositary
Shares surrendered by the holder in connection with such withdrawal exceed the
number of Depositary Shares that represent the number of whole shares of
Preferred Stock to be withdrawn, the Depositary will deliver to such holder at
the same time a new Depositary Receipt evidencing such excess number of
Depositary Shares.
VOTING DEPOSITED PREFERRED STOCK
Upon receipt of notice of any meeting at which the holders of any series of
deposited Preferred Stock are entitled to vote, the Depositary will mail the
information contained in such notice of meeting to the record holders of the
Depositary Shares relating to such series of Preferred Stock. Each record holder
of such Depositary Shares on the record date (which will be the same date as the
record date for the relevant series of Preferred Stock) will be entitled to
instruct the Depositary as to the exercise of the voting rights pertaining to
the amount of the Preferred Stock represented by such holder's Depositary
Shares. The Depositary will endeavor, insofar as practicable, to vote the amount
of such series of Preferred Stock represented by such Depositary Shares in
accordance with such instructions, and the Company will agree to take all
reasonable actions that may be deemed necessary by the Depositary in order to
enable the Depositary to do so. The Depositary will abstain from voting shares
of the Preferred Stock to the extent it does not receive specific instructions
from the holder of Depositary Shares representing such Preferred Stock.
29
<PAGE>
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time be amended by agreement
between the Company and the Depositary. However, any amendment which materially
and adversely alters the rights of the holders of the Depositary Shares
representing Preferred Stock of any series will not be effective unless such
amendment has been approved by the holders of at least the amount of the
Depositary Shares then outstanding representing the minimum amount of Preferred
Stock of such series necessary to approve any amendment that would materially
and adversely affect the rights of the holders of the Preferred Stock of such
series. Every holder of an outstanding Depositary Receipt at the time any such
amendment becomes effective, or any transferee of such holder, shall be deemed,
by continuing to hold such Depositary Receipt, or by reason of the acquisition
thereof, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. The Deposit Agreement automatically terminates if
(i) all outstanding Depositary Shares have been redeemed; or (ii) each share of
Preferred Stock has been converted into other Preferred Stock or Common Stock or
has been exchanged for Debt Securities; or (iii) there has been a final
distribution in respect of the Preferred Stock in connection with any
liquidation, dissolution or winding up of the Company and such distribution has
been distributed to the holders of Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay all charges of the Depositary in connection with the initial deposit of
the relevant series of Preferred Stock and any redemption of such Preferred
Stock. Holders of Depositary Receipts will pay other transfer and other taxes
and governmental charges and such other charges or expenses as are expressly
provided in the Deposit Agreement to be for their accounts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its intent to do so, and the Company may at any time remove the Depositary, any
such resignation or removal to take effect upon the appointment of a successor
Depositary and its acceptance of such appointment. Such successor Depositary
must be appointed within 60 days after delivery of the notice of resignation or
removal and must be a bank or trust company having its principal office in the
United States and having a combined capital and surplus of at least $60,000,000.
MISCELLANEOUS
The Depositary will forward all reports and communications from the Company
which are delivered to the Depositary and which the Company is required to
furnish to the holders of the deposited Preferred Stock.
Neither the Depositary nor the Company will be liable if it is prevented or
delayed by law or any circumstances beyond its control in performing its
obligations under the Deposit Agreement. The obligations of the Company and the
Depositary under the Deposit Agreement will be limited to performance in good
faith of their duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any Depositary Shares, Depositary
Receipts or shares of Preferred Stock unless satisfactory indemnity is
furnished. They may rely upon written advice of counsel or accountants, or upon
information provided by holders of Depositary Receipts or other persons believed
to be competent and on documents believed to be genuine.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities ("Debt Warrants"), Preferred Stock, including Preferred Stock
represented by Depositary Shares ("Preferred Stock
30
<PAGE>
Warrants"), Common Stock ("Common Stock Warrants"), or any combination thereof.
Warrants may be issued independently or together with any Securities and may be
attached to or separate from such Securities. The Warrants are to be issued
under warrant agreements (each a "Warrant Agreement") to be entered into between
the Company and a bank or trust company, as warrant agent (the "Warrant Agent"),
all as shall be set forth in the Prospectus Supplement relating to Warrants
being offered pursuant thereto.
DEBT WARRANTS
The applicable Prospectus Supplement will describe the terms of Debt
Warrants offered thereby, the Warrant Agreement relating to such Debt Warrants
and the certificates representing such Debt Warrants, including the following:
(1) the title of such Debt Warrants; (2) the aggregate number of such Debt
Warrants; (3) the price or prices at which such Debt Warrants will be issued;
(4) the currency or currencies, including composite currencies or currency
units, in which the price of such Debt Warrants may be payable; (5) the
designation, aggregate principal amount and terms of the Debt Securities
purchasable upon exercise of such Debt Warrants, and the procedures and
conditions relating to the exercise of such Debt Warrants; (6) the designation
and terms of any related Debt Securities with which such Debt Warrants are
issued, and the number of such Debt Warrants issued with each such Debt
Security; (7) the currency or currencies, including composite currencies or
currency units, in which the principal of or any premium or interest on the Debt
Securities purchasable upon exercise of such Debt Warrants will be payable; (8)
the date, if any, on and after which such Debt Warrants and the related Debt
Securities will be separately transferable; (9) the principal amount of Debt
Securities purchasable upon exercise of each Debt Warrant, and the price at
which and the currency or currencies, including composite currencies or currency
units, in which such principal amount of Debt Securities may be purchased upon
such exercise; (10) the date on which the right to exercise such Debt Warrants
will commence, and the date on which such right will expire; (11) the maximum or
minimum number of such Debt Warrants which may be exercised at any time; (12) a
discussion of any material federal income tax considerations; and (13) any other
terms of such Debt Warrants and terms, procedures and limitations relating to
the exercise of such Debt Warrants.
Certificates representing Debt Warrants will be exchangeable for new
certificates representing Debt Warrants of different denominations, and Debt
Warrants may be exercised at the corporate trust office of the Warrant Agent or
any other office indicated in the Prospectus Supplement. Prior to the exercise
of their Debt Warrants, holders of Debt Warrants will not have any of the rights
as holders of the Debt Securities purchasable upon such exercise and will not be
entitled to payment of principal of or any premium or interest on the Debt
Securities purchasable upon such exercise.
PREFERRED STOCK WARRANTS
The applicable Prospectus Supplement will describe the terms of Preferred
Stock Warrants offered thereby, the Warrant Agreement relating to such Preferred
Stock Warrants and the certificates representing such Preferred Stock Warrants,
including the following: (1) the title of such Preferred Stock Warrants; (2) the
aggregate number of such Preferred Stock Warrants; (3) the price or prices at
which such Preferred Stock Warrants will be issued; (4) the currency or
currencies, including composite currencies or currency units, in which the price
of such Preferred Stock Warrants may be payable; (5) the designation, number of
shares and terms (including, among others, dividend, liquidation, redemption and
voting rights) of the Preferred Stock (including Preferred Stock represented by
Depositary Shares) purchasable upon exercise of such Preferred Stock Warrants,
and the procedures and conditions relating to the exercise of such Preferred
Stock Warrants; (6) the designation and terms of any related Securities of the
Company with which such Warrants are issued, and the number of such Preferred
Stock Warrants issued with each such Security; (7) the date, if any, on and
after which such Preferred Stock Warrants and the related Securities will be
separately transferable; (8) the maximum or minimum number of Preferred Stock
Warrants which may be exercised at any time; (9) if applicable, a discussion of
any material federal income tax considerations; and (10) any other terms of such
Preferred Stock Warrants, including terms, procedures and limitations relating
to the exchange and exercise of such Preferred Stock Warrants.
31
<PAGE>
Certificates representing Preferred Stock Warrants will be exchangeable for
new certificates representing Preferred Stock Warrants of different
denominations, and Preferred Stock Warrants may be exercised at the corporate
trust office of the Warrant Agent or any office indicated in the Prospectus
Supplement. Prior to the exercise of their Preferred Stock Warrants, holders of
such Preferred Stock Warrants will not have any of the rights as holders of the
Preferred Stock purchasable upon such exercise and will not be entitled to any
dividend payments, liquidation premiums or voting rights of the Preferred Stock
(including Preferred Stock represented by Depositary Shares) purchasable upon
such exercise.
COMMON STOCK WARRANTS
The applicable Prospectus Supplement will describe the terms of any Common
Stock Warrants, the Warrant Agreement relating to such Common Stock Warrants and
the certificates representing such Common Stock Warrants in respect of which
this Prospectus is being delivered which may include: (1) the title of such
Common Stock Warrants; (2) the aggregate number of such Common Stock Warrants;
(3) the price or prices at which such Common Stock Warrants will be issued; (4)
the currency or currencies, including composite currencies or currency units, in
which the price of such Common Stock Warrants may be payable; (5) if applicable,
the designation and terms of any related Security with which such Common Stock
Warrants are issued, and the number of such Common Stock Warrants issued with
each such related Security; (6) if applicable, the date on and after which such
Common Stock Warrants and the related Security will be separately transferable;
(7) the date on which the right to exercise such Common Stock Warrants will
commence, and the date on which such right will expire; (8) the maximum or
minimum number of such Common Stock Warrants which may be exercised at any time;
(9) if applicable, a discussion of any material federal income tax
considerations; and (10) any other terms of such Common Stock Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Common Stock Warrants.
Certificates representing Common Stock Warrants will be exchangeable for new
certificates representing Common Stock Warrants of different denominations, and
Common Stock Warrants may be exercised at the corporate trust office of the
Warrant Agent or any other office indicated in the Prospectus Supplement. Prior
to the exercise of their Common Stock Warrants, holders of Common Stock Warrants
will not have any of the rights as holders of Common Stock purchasable upon such
exercise and will not be entitled to dividend payments, if any, or voting rights
of the Common Stock purchasable upon such exercise.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase for cash such principal
amount of Debt Securities or number of shares of Preferred Stock or Common Stock
at such exercise price as shall in each case be set forth in, or be determinable
as set forth in, the Prospectus Supplement relating to the Warrants offered
thereby. Warrants may be exercised as set forth in the Prospectus Supplement
relating to the Warrants offered thereby. Upon receipt of payment and the
certificate representing the Warrants properly completed and duly executed at
the corporate trust office of the Warrant Agent or any other office indicated in
the Prospectus Supplement, the Company will, as soon as practicable, forward the
Securities purchasable upon such exercise. If less than all of the Warrants
represented by such certificate are exercised, a new certificate will be issued
for the remaining Warrants. Warrants may be exercised at any time up to the
close of business on the expiration date set forth in the Prospectus Supplement
relating to the Warrants offered thereby. After the close of business on the
expiration date, unexercised Warrants will become void.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities (including Debt Securities that are exchangeable for Bearer
Securities and Debt Securities in permanent global form that are either Bearer
Securities or exchangeable for Bearer Securities) may not be offered, sold,
resold or delivered in connection with their original issuance in the United
States or to United States persons
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<PAGE>
(each as defined below) except as otherwise permitted by Treasury Regulation
Section 1.163-5(c)(2)(i)(D) including offers and sales to offices located
outside the United States of United States financial institutions (as defined in
Treasury Regulation Section 1.165-12(c)(1)(v)) which agree in writing to comply
with the requirements of Section 165(j)(3)(A),(B) or (C) of the Code, as defined
below, and the regulations thereunder, and any underwriters, agents and dealers
participating in the offering of Debt Securities must agree in writing that they
will not offer, sell or resell any Bearer Securities to persons within the
United States or to United States persons (except as described above) nor
deliver Bearer Securities within the United States. In addition, any such
underwriters, agents and dealers must represent in writing that they have in
effect, in connection with the offer and sale of the Debt Securities, procedures
reasonably designed to ensure that their employees or agents who are directly
engaged in selling the Debt Securities are aware that Bearer Securities cannot
be offered or sold to a person who is within the United States or is a United
States person except as otherwise permitted by Treasury Regulation Section
1.163-5(c)(2)(i)(D). Furthermore, the owner of the obligation (or the financial
institution or clearing organization through which the owner holds the
obligation) must certify to the Company that the owner is not a United States
Person. Bearer Securities and any coupons attached hereto will bear the
following legend: "Any United States person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the United States
Internal Revenue Code." Purchasers of Bearer Securities may be affected by
certain limitations under United States tax laws.
As used herein, "United States person" means (i) an individual who is, for
United States Federal income tax purposes, a citizen or resident of the United
States, (ii) a corporation, partnership or other entity created or organized in
or under the laws of the United States or of any political subdivision thereof,
or (iii) an estate or trust the income of which is subject to United States
Federal income taxation regardless of its source, and "United States" means the
United States of America (including the States and the District of Columbia),
its territories and its possessions.
PLAN OF DISTRIBUTION
The Company may sell any series of Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and Warrants and the Sun Trusts may sell the
Preferred Securities being offered hereby, to or through underwriters or
dealers, directly to other purchasers, or through agents. The Prospectus
Supplement with respect to the Securities will set forth the terms of the
offering of the Securities, including the name or names of any underwriters,
dealers or agents, the price of the offered Securities and the net proceeds to
the Company from such sale, any underwriting discounts or other items
constituting underwriters' compensation, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on which the
Securities may be listed.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public price or
at varying prices determined at the time of sale. The underwriter or
underwriters with respect to a particular underwritten offering of Securities
will be named in the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement, the obligations of the underwriters or agents to
purchase the Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Securities if any are
purchased. Any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers may be changed from time to time.
If a dealer is utilized in the sale of any Securities in respect of which
this Prospectus is delivered, the Company and/or, if applicable, any Sun Trust
will sell such Securities to the dealer, as principal. The dealer may then
resell such Securities to the public at varying prices to be determined by such
dealer at the time
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<PAGE>
of resale. The name of the dealer and the terms of the transaction will be set
forth in the Prospectus Supplement relating thereto.
Securities may be sold directly by the Company and/or, if applicable, any
Sun Trust to one or more institutional purchasers, or through agents designated
by the Company and/or, if applicable, any Sun Trust from time to time, at a
fixed price, or prices, which may be changed, or at varying prices determined at
time of sale. Any agent involved in the offer or sale of the Securities will be
named, and any commissions payable by the Company and/or, if applicable, any Sun
Trust to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Securities, underwriters or agents may
receive compensation from the Company and/or, if applicable, any Sun Trust or
from purchasers or Securities for whom they may act as agents in the form of
discounts, concessions, or commissions. Underwriters, agents, and dealers
participating in the distribution of the Securities may be deemed to be
underwriters, and any discounts or commissions received by them from the Company
and/or, if applicable, any Sun Trust and any profit on the resale of the
Securities by them may be deemed to be underwriting discounts or commissions
under the Securities Act.
Each underwriter, dealer and agent participating in the distribution of any
Debt Securities which are issuable in bearer form will agree that it will not
offer, sell or deliver, directly or indirectly, Debt Securities in bearer form
in the United States or to United States persons except as otherwise permitted
by Treasury Regulation Section 1.163-5(c)(2)(i)(D). See "Limitations on Issuance
of Bearer Securities."
Each series of Securities will be a new issue with no established trading
market, other than the Common Stock which is listed on the NYSE. Any Common
Stock sold pursuant to a Prospectus Supplement will be listed on the NYSE,
subject to official notice of issuance. Any underwriters to whom Securities are
sold by the Company or the Sun Trusts for public offering and sale may make a
market in such Securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. No assurance
can be given as to the liquidity of the trading market for any Securities.
Agents, dealers, and underwriters may be entitled under agreements entered
into with the Company and/or any Sun Trust to indemnification by the Company
and/or any Sun Trust against certain civil liabilities, including liabilities
under the Securities Act, or to contribution with respect to payments that such
agents, dealers, or underwriters may be required to make with respect thereto.
Underwriters, dealers, or agents and their associates may be customers of,
engage in transactions with and perform services for, the Company in the
ordinary course of business.
LEGAL MATTERS
The validity of the Securities offered will be passed upon for the Company
by Shearman & Sterling, San Francisco, California. The validity of the
Securities will be passed upon for the Sun Trusts by Richards, Layton & Finger,
Wilmington, Delaware.
EXPERTS
The audited consolidated financial statements and schedules of Sun
Healthcare Group, Inc, and subsidiaries incorporated by reference in this
prospectus and elsewhere in the registration statement and the financial
statements of Golden Care, Inc. for the year ended December 31, 1994 included in
the Sun's Current Report on Form 8-K filed with Securities and Exchange
Commission on March 28, 1997 and incorporated by reference in this prospectus
and elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following sets forth expenses, other than underwriting fees and
commissions, expected to be borne by the Registrant, in connection with the
distribution of the securities being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 303,030
Blue Sky fees and expenses...................................... 5,000
Rating agency fees.............................................. 200,000
Legal fees and expenses......................................... 500,000
Printing........................................................ 250,000
Accounting fees and expenses.................................... 150,000
Miscellaneous................................................... 91,970
---------
TOTAL....................................................... $1,500,000
---------
---------
</TABLE>
- ------------------------
* All amounts listed above, except for the registration fee, are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "DGCL") authorizes
a court to award or a corporation's Board of Directors to grant indemnification
to directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Act").
Sun's Certificate of Incorporation limits the personal liability of
directors to Sun or its stockholders for monetary damages for breach of their
fiduciary duty as a director except to the extent such limitation of liability
is not permitted under the DGCL. The DGCL provides that the liability of a
director may not be limited (i) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) for liability for payments of dividends or stock purchases or redemptions
in violation of the DGCL or (iv) for any transaction from which the director
derived an improper personal benefit.
In addition, Sun's Bylaws provide that Sun shall indemnify any and all of
its directors, or former directors, to the fullest extent permitted by law
against claims and liabilities to which such persons may become subject. The
DGCL provides that indemnification is permissible only when the director acted
in good faith and in a manner 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 the conduct was unlawful. The
DGCL also permits indemnification in respect of any claim, issue, or matter as
to which such person shall have been adjudicated to be liable to the corporation
to the extent that the Delaware Court of Chancery or the court in which such
action or suit was brought has determined 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. Sun has also entered into
indemnification agreements with certain of its officers and with its directors,
and also provides insurance coverage to such parties.
II-1
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ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
- ---------------- -----------------------------------------------------------------------------------------------------
<C> <S>
1 The forms of Underwriting Agreement will be filed as exhibits to a Current Report of the Registrant
on Form 8-K and incorporated herein by reference.
3(a) Certificate of Incorporation of Sun Healthcare Group, Inc. (incorporated herein by reference from an
Exhibit to Sun's Registration Statement on Form S-1 (No. 33-62670)).
3(b) Certificate of Amendment to Certificate of Incorporation dated April 15, 1993 (incorporated by
reference from an Exhibit to Sun's Form 10-Q for the quarter ended March 31, 1996).
3(c) Certificate of Amendment to Certificate of Incorporation dated June 23, 1994 (incorporated by
reference from an Exhibit to Sun's Form 10-Q for the quarter ended September 30, 1994).
3(d) Bylaws of Sun Healthcare Group, Inc., as amended, (incorporated herein by reference from Exhibits to
Sun's Registration Statement on Form S-1 (No. 33-62670) and Sun's Registration Statement on Form
S-1 (No. 33-77870)).
3(e) Certificate of Trust of Sun Financing I.
3(f) Certificate of Trust of Sun Financing II.
4(a) Form of Indenture for Senior Debt Securities between the Company and The Bank of New York, as
trustee.
4(b) Form of Indenture for Subordinated Debt Securities between the Company and The Bank of New York, as
trustee.
4(c) The form or forms of Securities with respect to each particular series of Securities registered
hereunder will be filed as an exhibit to a Current Report of the Company on Form 8-K and
incorporated herein by reference.
4(d) Form of Amended and Restated Declaration of Trust of Sun Financing I.
4(e) Form of Amended and Restated Declaration of Trust of Sun Financing II.
4(f) Form of Supplemental Indenture to be used in connection with the issuance of Subordinated Debt
Securities and Trust Preferred Securities.
4(g) Form of Preferred Securities Guarantee for the benefit of the holders of Trust Preferred Securities
of Sun Financing I.
4(h) Form of Preferred Securities Guarantee for the benefit of the holders of Trust Preferred Securities
of Sun Financing II.
4(i) Form of Rights Agreement dated as of June 2, 1995 between Sun and Boatmen's Trust Company
(incorporated by reference from an Exhibit to Sun's Form 8-A filed June 6, 1995).
4(j) First Amendment to the Rights Agreement dated as of August 11, 1995 between Sun and Boatmen's Trust
Company (incorporated by reference from an Exhibit to Sun's Form 8-A/1 filed August 17, 1995).
5(a)** Opinion of Richards, Layton & Finger.
5(b)** Opinion of Shearman & Sterling.
12 Statement regarding Computation of Ratios of Earnings to Fixed Charges.
23(a) Consent of Arthur Andersen LLP, Independent Public Accountants.
23(b)** Consent of Richards, Layton & Finger (included in Exhibit 5(a)).
23(c)** Consent of Shearman & Sterling (included in Exhibit 5(b)).
24(a)* Powers of Attorney relating to Sun Healthcare Group, Inc. for Andrew L. Turner, John E. Bingham, Zev
Karkomi, Robert A. Levin, Mark G. Wimer, James R. Tolbert, Lois E. Silverman, R. James Woolsey,
Martin G. Mand and Warren C. Schelling.
24(b) Powers of Attorney relating to Sun Financing I and Sun Financing II for Robert F. Murphy and Robert
D. Woltil (included on page II-7).
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
EXHIBIT NUMBER DESCRIPTION OF EXHIBITS
- ---------------- -----------------------------------------------------------------------------------------------------
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Senior Indenture.
<C> <S>
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Subordinated Indenture.
25(c) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Amended and Restated Declaration of Trust of Sun Financing I.
25(d) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Amended and Restated Declaration of Trust of Sun Financing II.
25(e) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Preferred Securities Guarantee of Sun Healthcare Group, Inc. for the benefit of
the holders of Trust Preferred Securities of Sun Financing I.
25(f) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Preferred Securities Guarantee of Sun Healthcare Group, Inc. for the benefit of
the holders of Trust Preferred Securities of Sun Financing II.
</TABLE>
- ------------------------
* Previously filed.
** To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned Registrants hereby undertake:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934, that are incorporated by reference in the
Registration Statement;
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<PAGE>
(b) That for the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The Registrants hereby undertake that, for the purposes of determining any
liability under the Securities Act of 1933, each filing of Sun's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions or otherwise, the Registrants
have been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrants of expenses is incurred or paid by a director, officer or
controlling person of the Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
2. The undersigned Registrants hereby undertake:
(a) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the registrants pursuant to Rule 424(b)(1) or
(4) or 497(b) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Trust
Indenture Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Albuquerque, New Mexico on the 11th day of November, 1997.
SUN HEALTHCARE GROUP, INC.
By: /s/ ANDREW L. TURNER
-----------------------------------------
Andrew L. Turner
CHIEF EXECUTIVE OFFICER
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 has been signed below by the following person in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
/s/ ANDREW L. TURNER Chairman of the Board and
- ------------------------------ Chief Executive Officer November 11, 1997
Andrew L. Turner of Sun
Chief Financial Officer
/s/ ROBERT D. WOLTIL and Director (Principal
- ------------------------------ Financial Officer) of November 11, 1997
Robert D. Woltil Sun
Vice President and
/s/ WILLIAM C. WARRICK Corporate Controller
- ------------------------------ (Principal Accounting November 11, 1997
William C. Warrick Officer) of Sun
*
- ------------------------------ Director of Sun November 11, 1997
John E. Bingaman
*
- ------------------------------ Director of Sun November 11, 1997
Zev Karkomi
*
- ------------------------------ Director of Sun November 11, 1997
Robert A. Levin
*
- ------------------------------ Director of Sun November 11, 1997
Mark G. Wimer
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
*
- ------------------------------ Director of Sun November 11, 1997
James R. Tolbert
*
- ------------------------------ Director of Sun November 11, 1997
Lois E. Silverman
*
- ------------------------------ Director of Sun November 11, 1997
R. James Woolsey
*
- ------------------------------ Director of Sun November 11, 1997
Martin G. Mand
*
- ------------------------------ Director of Sun November 11, 1997
Warren C. Schelling
</TABLE>
*By: /s/ WILLIAM C. WARRICK
-------------------------
William C. Warrick
ATTORNEY-IN-FACT
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of Sun
Financing I and Sun Financing II certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Registration Statement on Form S-3 or amendment thereto to be
signed on its behalf by the undersigned, thereunto duly authorized, in
Albuquerque, New Mexico on the 11th day of November, 1997.
SUN FINANCING I
By: /s/ ROBERT D. WOLTIL
-----------------------------------------
Name: Robert D. Woltil
Title: Regular Trustee
SUN FINANCING II
By: /s/ ROBERT D. WOLTIL
-----------------------------------------
Name: Robert D. Woltil
Title: Regular Trustee
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following person in the
capacities and on the dates indicated. Each person whose signature appears below
hereby appoints each of Robert F. Murphy and Robert D. Woltil, as his attorney-
in-fact to sign this Registration Statement on his behalf individually and in
the capacity stated below and to file all supplements, amendments and
post-effective amendments to this Registration Statement, and any and all
instruments or documents filed as part of or in connection with this
Registration Statement or any amendment or supplement thereto, and any such
attorney-in-fact may make such changes and additions to this Registration
Statement as such attorney-in-fact may deem necessary or appropriate.
By: /s/ ROBERT D. WOLTIL
-----------------------------------------
Name: Robert D. Woltil
Title:Regular Trustee of Sun Financing I
and Sun Financing II
By: /s/ ROBERT F. MURPHY
-----------------------------------------
Name: Robert F. Murphy
Title:Regular Trustee of Sun Financing I
and Sun Financing II
II-7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
<S> <C>
1 The forms of Underwriting Agreement will be filed as exhibits to a Current Report of the Registrant
on Form 8-K and incorporated herein by reference.
3(a) Certificate of Incorporation of Sun Healthcare Group, Inc. (incorporated herein by reference from an
Exhibit to Sun's Registration Statement on Form S-1 (No. 33-62670)).
3(b) Certificate of Amendment to Certificate of Incorporation dated April 15, 1993 (incorporated by
reference from an Exhibit to Sun's Form 10-Q for the quarter ended March 31, 1996).
3(c) Certificate of Amendment to Certificate of Incorporation dated June 23, 1994 (incorporated by
reference from an Exhibit to Sun's Form 10-Q for the quarter ended September 30, 1994).
3(d) Bylaws of Sun Healthcare Group, Inc., as amended, (incorporated herein by reference from Exhibits to
Sun's Registration Statement on Form S-1 (No. 33-62670) and Sun's Registration Statement on Form
S-1 (No. 33-77870)).
3(e) Certificate of Trust of Sun Financing I.
3(f) Certificate of Trust of Sun Financing II.
4(a) Form of Indenture for Senior Debt Securities between the Company and The Bank of New York, as
trustee.
4(b) Form of Indenture for Subordinated Debt Securities between the Company and The Bank of New York, as
trustee.
4(c) The form or forms of Securities with respect to each particular series of Securities registered
hereunder will be filed as an exhibit to a Current Report of the Company on Form 8-K and
incorporated herein by reference.
4(d) Form of Amended and Restated Declaration of Trust of Sun Financing I.
4(e) Form of Amended and Restated Declaration of Trust of Sun Financing II.
4(f) Form of Supplemental Indenture to be used in connection with the issuance of Subordinated Debt
Securities and Trust Preferred Securities.
4(g) Form of Preferred Securities Guarantee for the benefit of the holders of Trust Preferred Securities
of Sun Financing I.
4(h) Form of Preferred Securities Guarantee for the benefit of the holders of Trust Preferred Securities
of Sun Financing II.
4(i) Form of Rights Agreement dated as of June 2, 1995 between Sun and Boatmen's Trust Company
(incorporated by reference from an Exhibit to Sun's Form 8-A filed June 6, 1995).
4(j) First Amendment to the Rights Agreement dated as of August 11, 1995 between Sun and Boatmen's Trust
Company (incorporated by reference from an Exhibit to Sun's Form 8-A/1 filed August 17, 1995).
5(a)** Opinion of Richards, Layton & Finger.
5(b)** Opinion of Shearman & Sterling.
12 Statement regarding Computation of Ratios of Earnings to Fixed Charges.
23(a) Consent of Arthur Andersen LLP, Independent Public Accountants.
23(b)** Consent of Richards, Layton & Finger (included in Exhibit 5(a)).
23(c)** Consent of Shearman & Sterling (included in Exhibit 5(b)).
24(a)* Powers of Attorney relating to Sun Healthcare Group, Inc. for Andrew L. Turner, John E. Bingham, Zev
Karkomi, Robert A. Levin, Mark G. Wimer, James R. Tolbert, Lois E. Silverman, R. James Woolsey,
Martin G. Mand and Warren C. Schelling.
24(b) Powers of Attorney relating to Sun Financing I and Sun Financing II for Robert F. Murphy and Robert
D. Woltil (included on page II-7).
25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Senior Indenture.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ----------- -----------------------------------------------------------------------------------------------------
25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Subordinated Indenture.
<S> <C>
25(c) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Amended and Restated Declaration of Trust of Sun Financing I.
25(d) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Amended and Restated Declaration of Trust of Sun Financing II.
25(e) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Preferred Securities Guarantee of Sun Healthcare Group, Inc. for the benefit of
the holders of Trust Preferred Securities of Sun Financing I.
25(f) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of The Bank of New York, as
Trustee under the Preferred Securities Guarantee of Sun Healthcare Group, Inc. for the benefit of
the holders of Trust Preferred Securities of Sun Financing II.
</TABLE>
- ------------------------
* Previously filed.
** To be filed by amendment.
<PAGE>
CERTIFICATE OF TRUST
The undersigned, the trustees of Sun Financing I, desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 DEL. C. Section
3801, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Sun Financing I".
2. 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:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
3. This Certificate of Trust shall be effective as of the date of filing.
Dated: November 7, 1997
/s/ Robert F. Murphy
-----------------------------
Name: Robert F. Murphy
Title: Regular Trustee
/s/ Robert D. Woltil
-----------------------------
Name: Robert D. Woltil
Title: Regular Trustee
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Fredrick Clark
-------------------------
Name: Fredrick Clark
Title: Authorized Signatory
<PAGE>
EXHIBIT 3(F)
CERTIFICATE OF TRUST
The undersigned, the trustees of Sun Financing II, desiring to form a
business trust pursuant to Delaware Business Trust Act, 12 DEL. C. Section
3801, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust") is
"Sun Financing II".
2. 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:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
3. This Certificate of Trust shall be effective as of the date of filing.
Dated: November 7, 1997
/s/ Robert F. Murphy
-------------------------------
Name: Robert F. Murphy
Title: Regular Trustee
/s/ Robert D. Woltil
-------------------------------
Name: Robert D. Woltil
Title: Regular Trustee
The Bank of New York (Delaware),
as Delaware Trustee
By: /s/ Fredrick Clark
---------------------------
Name: Fredrick Clark
Title: Authorized Signatory
<PAGE>
SUN HEALTHCARE GROUP, INC.
TO
THE BANK OF NEW YORK
Trustee
Indenture
Dated as of _________________
Senior Debt Securities
<PAGE>
TABLE OF CONTENTS (1)
PAGE
----
RECITALS OF THE COMPANY
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . 1
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Compliance Certificates and Opinions. . . . . . . . . 8
SECTION 1.3 Form of Documents Delivered to Trustee. . . . . . . . 8
SECTION 1.4 Acts of Holder. . . . . . . . . . . . . . . . . . . . 10
SECTION 1.5 Notices, Etc., to Trustee and Company . . . . . . . . 12
SECTION 1.6 Notice to Holders of Securities; Waiver . . . . . . . 13
SECTION 1.7 Language of Notices, Etc. . . . . . . . . . . . . . . 14
SECTION 1.8 Conflict with Trust Indenture Act . . . . . . . . . . 14
SECTION 1.9 Effect of Headings and Table of Contents. . . . . . . 14
SECTION 1.10 Successors and Assigns . . . . . . . . . . . . . . . 14
SECTION 1.11 Separability Clause. . . . . . . . . . . . . . . . . 14
SECTION 1.12 Benefits of Indenture. . . . . . . . . . . . . . . . 14
SECTION 1.13 Governing Law. . . . . . . . . . . . . . . . . . . . 14
SECTION 1.14 Legal Holidays . . . . . . . . . . . . . . . . . . . 15
SECTION 1.15 Judgment Currency. . . . . . . . . . . . . . . . . . 15
SECTION 1.16 Immunity of Incorporators, Shareholders,
Officers, Directors and Employees. . . . . . . . . . 15
ARTICLE II
SECURITY FORMS . . . . . . . . . . 16
SECTION 2.1 Forms Generally . . . . . . . . . . . . . . . . . . . 16
SECTION 2.2 Form of Trustee's Certificate of Authentication . . . 17
SECTION 2.3 Securities in Global Form . . . . . . . . . . . . . . 17
SECTION 2.4 Form of Legend for Book-Entry Securities. . . . . . . 18
SECTION 2.5 Form of Conversion Notice . . . . . . . . . . . . . . 18
- ------------------
(1) NOTE: This table of contents shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
ARTICLE III
THE SECURITIES . . . . . . . . . . 19
SECTION 3.1 Amount Unlimited; Issuable in Series. . . . . . . . . 19
SECTION 3.2 Denominations . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.3 Execution, Authentication, Delivery and Dating. . . . 22
SECTION 3.4 Temporary Securities. . . . . . . . . . . . . . . . . 24
SECTION 3.5 Registration, Registration of Transfer and Exchange . 27
SECTION 3.6 Mutilated, Destroyed, Lost and Stolen Securities
and Coupons . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.7 Payment of Interest; Interest Rights Preserved. . . . 31
SECTION 3.8 Persons Deemed Owners . . . . . . . . . . . . . . . . 33
SECTION 3.9 Cancellation. . . . . . . . . . . . . . . . . . . . . 33
SECTION 3.10 Computation of Interest. . . . . . . . . . . . . . . 34
SECTION 3.11 Electronic Security Issuance . . . . . . . . . . . . 34
ARTICLE IV
SATISFACTION AND DISCHARGE . . . . . . . 34
SECTION 4.1 Satisfaction and Discharge of Indenture . . . . . . . 34
SECTION 4.2 Application of Trust Money. . . . . . . . . . . . . . 35
SECTION 4.3 Company's Option to Effect Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.4 Discharge and Defeasance. . . . . . . . . . . . . . . 36
SECTION 4.5 Covenant Defeasance . . . . . . . . . . . . . . . . . 36
SECTION 4.6 Conditions to Defeasance or Covenant Defeasance. . . 37
ARTICLE V
REMEDIES. . . . . . . . . . . . 39
SECTION 5.1 Events of Default . . . . . . . . . . . . . . . . . . 39
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. . 41
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . . . . . 42
SECTION 5.4 Trustee May File Proofs of Claim. . . . . . . . . . . 43
SECTION 5.5 Trustee May Enforce Claims Without Possession of
Securities or Coupons . . . . . . . . . . . . . . . . . . . . 44
SECTION 5.6 Application of Money Collected. . . . . . . . . . . . 44
SECTION 5.7 Limitation on Suits . . . . . . . . . . . . . . . . . 44
SECTION 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.9 Restoration of Rights and Remedies. . . . . . . . . . 45
SECTION 5.10 Rights and Remedies Cumulative . . . . . . . . . . . 45
SECTION 5.11 Delay or Omission Not Waiver . . . . . . . . . . . . 46
SECTION 5.12 Control by Holders of Securities . . . . . . . . . . 46
SECTION 5.13 Waiver of Past Defaults. . . . . . . . . . . . . . . 46
SECTION 5.14 Undertaking for Costs. . . . . . . . . . . . . . . . 46
ii
<PAGE>
SECTION 5.15 Waiver of Stay or Extension Laws . . . . . . . . . . 47
ARTICLE VI
THE TRUSTEE . . . . . . . . . . . 47
SECTION 6.1 Certain Rights of Trustee . . . . . . . . . . . . . . 47
SECTION 6.2 Not Responsible for Recitals or Issuance of Securities 48
SECTION 6.3 May Hold Securities . . . . . . . . . . . . . . . . . 48
SECTION 6.4 Money Held in Trust . . . . . . . . . . . . . . . . . 49
SECTION 6.5 Compensation and Reimbursement. . . . . . . . . . . . 49
SECTION 6.6 Resignation and Removal; Appointment of Successor . . 49
SECTION 6.7 Acceptance of Appointment by Successor. . . . . . . . 51
SECTION 6.8 Disqualification; Conflicting Interests . . . . . . . 52
SECTION 6.9 Corporate Trustee Required; Eligibility . . . . . . . 52
SECTION 6.10 Preferential Collection of Claims Against Company. . 52
SECTION 6.11 Merger, Conversion Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.12 Appointment of Authenticating Agent. . . . . . . . . 53
SECTION 6.13. Notice of Defaults. . . . . . . . . . . . . . . . . 54
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . 55
SECTION 7.1 Preservation of Information; Communications
to Holders . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.2 Reports by Trustee. . . . . . . . . . . . . . . . . . 56
SECTION 7.3. Reports by Company . . . . . . . . . . . . . . . . . 57
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR . . . . . . 57
SECTION 8.1 Company May Consolidate, Etc. on Certain Terms. . . . 57
SECTION 8.2 Successor Corporation Substituted.. . . . . . . . . . 58
SECTION 8.3 Opinion of Counsel to Trustee.. . . . . . . . . . . . 58
ARTICLE IX
SUPPLEMENTAL INDENTURES . . . . . . . . 59
SECTION 9.1 Supplemental Indentures Without Consent of Holders. . 59
SECTION 9.2 Supplemental Indentures with Consent of Holders . . . 60
SECTION 9.3 Execution of Supplemental Indentures. . . . . . . . . 61
SECTION 9.4 Effect of Supplemental Indentures . . . . . . . . . . 62
SECTION 9.5 Conformity with Trust Indenture Act . . . . . . . . . 62
SECTION 9.6 Reference in Securities to Supplemental Indentures. . 62
iii
<PAGE>
ARTICLE X
COVENANTS. . . . . . . . . . . . 62
SECTION 10.1 Payment of Principal, Premium and Interest . . . . . 62
SECTION 10.2 Maintenance of Office or Agency. . . . . . . . . . . 62
SECTION 10.3 Money for Securities Payments to Be Held in Trust. . 64
SECTION 10.4 Additional Amounts . . . . . . . . . . . . . . . . . 65
SECTION 10.5 Existence. . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.6 Purchase of Securities by Company or Subsidiary. . . 66
SECTION 10.7 Statement by Officers as to Default. . . . . . . . . 66
ARTICLE XI
REDEMPTION OF SECURITIES. . . . . . . . 67
SECTION 11.1 Applicability of Article . . . . . . . . . . . . . . 67
SECTION 11.2 Election to Redeem; Notice to Trustee. . . . . . . . 67
SECTION 11.3 Selection by Trustee of Securities to Be Redeemed. . 67
SECTION 11.4 Notice of Redemption . . . . . . . . . . . . . . . . 68
SECTION 11.5 Deposit of Redemption Price. . . . . . . . . . . . . 69
SECTION 11.6 Securities Payable on Redemption Date. . . . . . . . 69
SECTION 11.7 Securities Redeemed in Part. . . . . . . . . . . . . 70
ARTICLE XII
SINKING FUNDS. . . . . . . . . . . 70
SECTION 12.1 Applicability of Article . . . . . . . . . . . . . . 70
SECTION 12.2 Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 12.3 Redemption of Securities for Sinking Fund. . . . . . 71
ARTICLE XIII
MEETINGS OF HOLDERS OF SECURITIES. . . . . . 72
SECTION 13.1 Purposes for Which Meetings May be Called. . . . . . 72
SECTION 13.2 Call, Notice and Place of Meetings . . . . . . . . . 72
SECTION 13.3 Persons Entitled to Vote at Meetings . . . . . . . . 72
SECTION 13.4 Quorum; Action . . . . . . . . . . . . . . . . . . . 73
SECTION 13.5 Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . . . . . . . . 74
SECTION 13.6 Counting Votes and Recording Action of Meetings. . . 75
ARTICLE XIV
CONVERSION OF SECURITIES. . . . . . . . 75
SECTION 14.1 Applicability of Article . . . . . . . . . . . . . . 75
iv
<PAGE>
SECTION 14.2 Exercise of Conversion Privilege . . . . . . . . . . 75
SECTION 14.3 No Fractional Shares . . . . . . . . . . . . . . . . 77
SECTION 14.4 Adjustment of Conversion Price . . . . . . . . . . . 77
SECTION 14.5 Notice of Certain Corporate Actions. . . . . . . . . 78
SECTION 14.6 Reservation of Shares of Common Stock. . . . . . . . 78
SECTION 14.7 Payment of Certain Taxes upon Conversion . . . . . . 79
SECTION 14.8 Nonassessability . . . . . . . . . . . . . . . . . . 79
SECTION 14.9 Effect of Consolidation or Merger on Conversion
Privilege . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 14.10 Duties of Trustee Regarding Conversion. . . . . . . 80
SECTION 14.11 Repayment of Certain Funds upon Conversion. . . . . 81
v
<PAGE>
INDENTURE, dated as of ________________, between Sun Healthcare
Group, Inc., a corporation duly organized and existing under the laws of the
State of Delaware (herein called the "Company"), having its principal office
at 101 Sun Lane, N.E., Albuquerque, New Mexico 87109, and The Bank of New
York, as Trustee (herein called the "Trustee") .
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its secured or
unsecured debentures, notes or other evidences of indebtedness (herein called
the "Securities"), to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a series
thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States of America, and, except as
otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or
permitted hereunder shall mean such accounting principles as are
gener-
<PAGE>
ally accepted in the United States of America at the date of such
computation; and
(4) The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.12 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper, in the English language or
in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in the place, in connection with which
the term is used, or in the financial community of such place. Where
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different newspapers in
the same city meeting the foregoing requirements and in each case on any
Business Day.
"Bearer Security" means any Security in the form established
pursuant to Section 2.1 which is payable to bearer.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Book-Entry Security" means a Security bearing the legend specified
in Section 2.4, evidencing all or part of a series of Securities, issued to
the Depository for such series or its nominee, and registered in the name of
such Depository or nominee. Book-Entry Securities shall not be deemed to be
securities in global form for purposes of Sections 2.1 and 2.3 and Article
III of the Indenture.
"Business Day", when used with respect to any Place of Payment or any
other
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particular location referred to in this Indenture or in the Securities, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or other location are
authorized or obligated by law or executive order to close.
"Cedel Bank" means Cedel Bank, Societe Anonyme, or its successor.
"Commission" means the United States Securities and Exchange
Commission.
"Common Depository" has the meaning specified in Section 3.4.
"Common Stock" includes any stock of any class of the Company which
has no preference in respect of dividends or of amounts payable in the event
of any voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by the Chairman of the Board of
Directors or the President or any Vice Chairman or any Vice President and by
the Treasurer or the Secretary or any Assistant Treasurer or any Assistant
Secretary of the Company and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee
in New York, New York at which at any particular time its corporate trust
business shall be administered.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Coupon" means any interest coupon appertaining to a Bearer Security.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.4.
"Depository" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Securities, the clearing agency registered under the Securities Exchange Act
of 1934, as amended specified for that purpose as contemplated by Section 3.1.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public
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and private debts.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels Office, or its successor as operator of the Euroclear System.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Date" has the meaning specified in Section 3.4.
"Holder", when used with respect to any Security, means in the case
of a Registered Security, the Person in whose name the Security is registered
in the Security Register and in the case of a Bearer Security the bearer
thereof and, when used with respect to any coupon, means the bearer thereof.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 3.1.
"Interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security,
means the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security or an installment of principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman
of the Board of Directors or the President or any Vice Chairman or any Vice
President and by the Treasurer or the Secretary or any Assistant Treasurer or
any Assistant Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable
upon a declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture,
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except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands such Securities are valid
obligations of the Company; provided, however, that in determining
whether the Holders of the requisite principal amount of the
Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or whether a quorum is
present at a meeting of Holders of Securities (i) the principal amount
of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be
due and payable as of the date of such determination upon acceleration
of the Maturity thereof pursuant to Section 5.2, (ii) the principal
amount of a Security denominated in a foreign currency or currencies
shall be the U.S. dollar equivalent, determined on the date of
original issuance of such Security, of the principal amount (or, in
the case of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security of the
amount determined as provided in (i) above) of such Security, and
(iii) Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, or upon any such determination as to the presence of a quorum,
only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith
may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect
to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or
of such other obligor; and
(iv) Securities as to which Defeasance has been effected pursuant to
Section 4.4.
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"Paying Agent" means any Person authorized by the Company to pay the
principal of and any premium and interest on any Securities or any Coupons
appertaining thereto on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where, subject to the provisions of Section
10.2, the principal of and any premium and interest on the Securities of that
series are payable as specified as contemplated by Section 3.1.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or
a Security to which a mutilated, destroyed, lost or stolen coupon appertains
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Security or the Security to which the mutilated, destroyed, lost or
stolen coupon appertains, as the case may be.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Security" means any Security in the form established
pursuant to Section 2.1 which is registered in the Security Register.
"Regular Record Date" for the interest payable on any Interest
Payment Date on the Registered Securities of any series means the date
specified for that purpose as contemplated by Section 3.1., whether or not
such day is a Business Day.
"Responsible Officer", when used with respect to the Trustee, means
the chairman of the board of directors, the executive committee of the board
of directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more
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particularly means any Securities authenticated and delivered under this
Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Special Record Date" for the payment of any Defaulted Interest on
the Registered Securities of any series means a date fixed by the Trustee
pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security or a Coupon representing such installment of
interest as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect
to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"United States Alien" means any Person who, for United States
Federal income tax purposes, is a foreign corporation, a non-resident alien
individual, a non-resident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of which is, for United States
Federal income tax purposes, a foreign corporation, a non-resident alien
individual or a nonresident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency
or instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of
1933, as amended) as custodian with respect to any such U.S. Government
Obligations or a specific payment of principal of or interest on any such
U.S. Government Obligations held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by law)
such custodian is not authorized to
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make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligations or the specific payment of principal of or interest on
the U.S. Government Obligations evidenced by such depository receipt.
"Yield to Maturity" means the yield to maturity on a series of
Securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series,
and calculated in accordance with accepted financial practice.
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that in
the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 10.7, shall
include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by,
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or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. If Securities of a series are issuable as Bearer
Securities, any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of such series may, alternatively, be embodied in and evidenced
by the record of Holders of Securities of such series voting in favor thereof,
either in person or by proxies duly appointed in writing, at any meeting of
Holders of Securities of such series duly called and held in accordance with the
provisions of Article XIII, or a combination of such instruments and any such
record. Except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both are delivered to
the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments and any such record (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at any such
meeting. Proof of execution of any such instrument or of a writing appointing
any such agent or proxy, or of the holding by any Person of a Security, shall be
sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Securities
shall be proved in the manner provided in Section 13.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The principal amount and serial numbers of Registered Securities
held by any Person, and the date of holding the same, shall be proved by the
Security Register.
(d) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the production
of such Bearer Securities or by a certificate executed, as depositary, by any
trust company, bank, banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depositary, or
exhibited to it, the Bearer Securities therein described; or such facts may be
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proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The principal amount and
serial numbers of Bearer Securities held by any Person, and the date of holding
the same, may also be proved in any other manner which the Trustee deems
sufficient.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(f) With respect to the Securities of any Series, upon receipt by the
Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
5.1 with respect to Securities of such series or (ii) any written demand,
request or notice with respect to any matter on which the Holders of Securities
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, the requisite principal
amount of Outstanding Securities or such series entitled to give such demand,
request or notice, the Trustee shall establish a record date for determining
Holders of Outstanding Securities of such series entitled to join in such
demand, request or notice, which record date shall be the close of business on
the day the Trustee received such demand, request or notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such demand, request or notice whether or not such Holders
remain Holders after such record date; provided, however, that unless the
Holders of the requisite principal amount of Outstanding Securities of such
series shall have joined in such demand, request or notice prior to the day
which is the ninetieth day after such record date, such demand, request or
notice shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, (i) after the expiration of such 90-day period,
a new demand, request or notice identical to a demand, request or notice which
has been canceled pursuant to the proviso to the preceding sentence or (ii)
during any such 90-day period, a new demand, request or notice which has been
canceled pursuant to the proviso to the preceding sentence or (iii) during any
such 90-day period, a new demand, request or notice contrary to or different
from such demand, request or notice, in either of which events a new record date
shall be established pursuant to the provisions of this clause.
(g) The Company may set any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any re-
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quest, demand, authorization, direction, notice, consent, waiver or other
action provided or permitted by this Indenture to be given or taken by
Holders of Securities of such series. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Securities of the
relevant series on such record date (or their duly appointed agents), and
only such Persons, shall be entitled to give or take the relevant action,
whether or not such Holders remain Holders after such record date. With
regard to any action that may be given or taken hereunder only by Holders of
a requisite principal amount of Outstanding Securities of any series (or
their duly appointed agents) and for which a record date is set pursuant to
this paragraph, the Company may, at its option, set an expiration date after
which no such action purported to be given or taken by any Holder shall be
effective hereunder unless given or taken on or prior to such expiration date
by Holders of the requisite principal amount of Outstanding Securities of
such series on such record date (or their duly appointed agents). On or prior
to any expiration date set pursuant to this paragraph, the Company may, on
one or more occasions at its option, extend such date to any later date.
Nothing in this paragraph shall prevent any Holder (or any duly appointed
agent thereof) from giving or taking, after any expiration date, any action
identical to, or, at any time, contrary to or different from, any action
given or taken, or purported to have been given or taken, hereunder by a
Holder on or prior to such date, in which event the Company may set a record
date in respect thereof pursuant to this paragraph. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this paragraph shall not apply with respect to,
any action to be given or taken by Holders pursuant to Section 5.1, 5.2 or
5.12.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at its Corporate Trust Office,
Attention: ____________, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to
the Company addressed to it at the address of its principal office
specified in the first paragraph of this Indenture, to the attention
of its Treasurer, or at any other address previously furnished in
writing to the Trustee by the Company.
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SECTION 1.6 NOTICE TO HOLDERS OF SECURITIES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event:
(1) such notice shall be sufficiently given to Holders of Registered
Securities if in writing and mailed, first-class postage prepaid, to
each Holder of a Registered Security affected by such event, at the
address of such Holder as it appears in the Security Register, not
earlier than the earliest date, and not later than the latest date,
prescribed for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of Bearer
Securities if published in an Authorized Newspaper in The City of New
York, The City of London and in such other city or cities as may be
specified in such Securities on a Business Day at least twice, the
first such publication to be not earlier than the earliest date, and
not later than the latest date, prescribed for the giving of such
notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Securities by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. In any case where notice to Holders of
Registered Securities is given by mail, neither the failure to mail such notice,
nor any defect in any notice mailed to any particular Holder of a Registered
Security shall affect the sufficiency of such notice with respect to other
Holders of Registered Securities or the sufficiency of any notice to Holders of
Bearer Securities given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification as shall be given with the approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Securities as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice to Holders of Registered Securities given
as provided herein.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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SECTION 1.7 LANGUAGE OF NOTICES, ETC.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 1.8 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with the duties imposed by, or with another provision (an
"incorporated provision") included in this Indenture by operation of Sections
310 to 318, inclusive, of the Trust Indenture Act, such imposed duties of
incorporated provision shall control.
SECTION 1.9 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.10 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.11 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.12 BENEFITS OF INDENTURE.
Nothing in this Indenture or the Securities or coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Securities Registrar and their
successors hereunder and the Holders of Securities and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.13 GOVERNING LAW.
This Indenture and the Securities and coupons shall be governed by and
construed in accordance with the laws of the State of New York without regard to
conflicts of laws.
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SECTION 1.14 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
sinking fund payment date, Maturity or Stated Maturity of any Security shall
not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Securities or coupons other than
a provision in the Securities of any series which specifically states that
such provision shall apply in lieu of this Section) payment of interest or
principal (and premium, if any) need not be made at such Place of Payment on
such date, but may be made on the next succeeding Business Day at such Place
of Payment with the same force and effect as if made on the Interest Payment
Date or Redemption Date, or at the Stated Maturity, provided that no interest
shall accrue on the amount so payable for the period from and after such
Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, to such succeeding Business Day.
SECTION 1.15 JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert the sum due on the Securities of any
series from the currency in which such sum is payable in accordance with the
terms of such Securities (the "Required Currency") into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange
used shall be the rate at which in accordance with normal banking procedures
the Trustee could purchase in The City of New York the Required Currency with
the Judgment Currency on the New York Banking Day preceding that on which a
final unappealable judgment is rendered and (b) its obligations under this
Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any
judgment (whether or not entered in accordance with subsection (a)), in any
currency other than the Required Currency, except to the extent that such
tender or recovery shall result in the actual receipt, by the payee, of the
full amount of the Required Currency expressed to be payable in respect of
such payments, (ii) shall be enforceable as an alternative or additional
cause of action for the purpose of recovering in the Required Currency the
amount, if any, by which such actual receipt shall fall short of the full
amount of the Required Currency so expressed to be payable and (iii) shall
not be affected by judgment being obtained for any other sum due under this
Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
SECTION 1.16 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS
AND EMPLOYEES.
No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of any Security, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer, director or employee, as such, past,
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present or future, of the Company or of any successor corporation, either
directly or through the Company, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations of the Company,
and that no such personal liability whatever shall attach to, or is or shall
be incurred by, the incorporators, shareholders, officers, directors or
employees, as such, of the Company or of any successor corporation, or any of
them, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations or agreements contained in this Indenture or
in any of the Securities or implied therefrom; and that any and all such
personal liability, either at common law or in equity or by constitution or
statute, of, and any and all such rights and claims against, every such
incorporator, shareholder, officer, director or employee, as such, because of
the creation of the indebtedness hereby authorized, or under of by reason of
the obligations or agreements contained in this Indenture or in any of the
Securities or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture
and the issue of such Securities.
All payments of interest and other amounts, if any, to be made by
the Trustee hereunder shall be made only from the money deposited with the
Trustee and only to the extent that the Trustee shall have sufficient income
or proceeds to make such payments in accordance with the terms of this
Indenture, and each holder hereof, by its acceptance of a Security, agrees
that it will look solely to the income and proceeds deposited with the
Trustee to the extent available for distribution to the holder hereof as
provided and that the Trustee is not personally liable in any manner to the
holder hereof for any amounts payable or any liability under this Indenture
or any Security.
ARTICLE II
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY.
The Registered Securities, if any, of each series and the Bearer
Securities, if any, of each series and related coupons shall be in such form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such
Securities or coupons, as evidenced by their execution of the Securities or
coupons. If temporary Securities of any series are issued in global form as
permitted by Section 3.4, the form thereof shall be established as provided
in the preceding sentence. If the forms of Securities or coupons of
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any series (or any such temporary global Security) are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Company Order contemplated by
Section 3.3 for the authentication and delivery of such Securities (or any
such temporary global Security) or coupons.
Unless otherwise specified as contemplated by Section 3.1,
Securities in bearer form shall have interest coupons attached.
The definitive Securities and coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities or
coupons, as evidenced by their execution of such Securities or coupons.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York
As Trustee
By____________________________
Authorized Signatory
SECTION 2.3 SECURITIES IN GLOBAL FORM.
If Securities of a series are issuable in global form, as specified
as contemplated by Section 3.1, then, notwithstanding clause (12) of Section
3.1 and the provisions of Section 3.2, any such Security shall represent such
of the Outstanding Securities of such series as shall be specified therein
and may provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities represented thereby may from time to time be
reduced to reflect exchanges. Any endorsement of a Security in global form to
reflect the amount, or any increase or decrease in the amount, of Outstanding
Securities represented thereby shall be made by the Trustee in such manner
and upon instructions given by such Person or Persons as shall be specified
therein or in the Company Order to be delivered to the Trustee pursuant to
Section 3.3 or Section 3.4. Subject to the provisions of Section 3.3 and, if
applicable, Section 3.4, the Trustee shall deliver and redeliver any Security
in permanent global form in the manner and upon instructions given by the
Person or Persons specified therein or in the
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applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4
has been, or simultaneously is, delivered, any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in global
form shall be in writing but need not comply with Section 1.2 and need not be
accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to
any Security represented by a Security in global form if such Security was
never issued and sold by the Company and the Company delivers to the Trustee
the Security in global form together with written instructions (which need
not comply with Section 1.2 and need not be accompanied by an Opinion of
Counsel) with regard to the reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of
and any premium and interest on any Security in permanent global form shall
be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat a Person as the Holder of such principal
amount of Outstanding Securities represented by a permanent global Security
as shall be specified in a written statement of the Holder of such permanent
global Security or, in the case of a permanent global Security in bearer
form, of Euroclear or Cedel Bank which is provided to the Trustee by such
Person.
SECTION 2.4 FORM OF LEGEND FOR BOOK-ENTRY SECURITIES.
Any Book-Entry Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. This Security is exchangeable for
Securities registered in the name of a Person other than the Depository or
its nominee only in the limited circumstances described in the Indenture, and
no transfer of this Security (other than a transfer of this Security as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository) may be
registered except in such limited circumstances."
SECTION 2.5 FORM OF CONVERSION NOTICE.
The Form of conversion notice for the conversion of Securities into
shares of Common Stock or other securities of the Company shall be in
substantially the form included with the applicable form of Securities as
shall be established pursuant to Section 2.1 herein-
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above.
ARTICLE III
THE SECURITIES
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 3.4, 3.5, 3.6, 9.6 or
11.7 and except for any Securities which, pursuant to Section 3.3, are
deemed never to have been authenticated and delivered hereunder);
(3) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities or both, whether any Securities of the
series are to be issuable initially in temporary global form and
whether any Securities of the series are to be issuable in permanent
global form with or without coupons and, if so, whether beneficial
owners of interests in any such permanent global Security may exchange
such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any
such exchanges may occur, if other than in the manner provided in
Section 3.5;
(4) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, the
manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining thereto as they
severally mature, and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment
Date will be paid if other than
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in the manner provided in Section 3.4;
(5) the date or dates, or the method by which such date or dates will
be determined or extended, on which the principal of the Securities of
the series is payable;
(6) the rate or rates at which the Securities of the series shall
bear interest, if any, or the formula pursuant to which such rate or
rates shall be determined, the date or dates from which any such
interest shall accrue, the Interest Payment Dates on which any such
interest shall be payable, and the Regular Record Date for any
interest payable on any Registered Securities on any Interest Payment
Date and the basis upon which interest shall be calculated if other
than that of a 360-day year consisting of twelve 30-day months;
(7) the place or places where, subject to the provisions of Sections
11.4 and 10.2, the principal of and any premium and interest on
Securities of the series shall be payable, any Registered Securities
of the series may be surrendered for registration of transfer,
Securities of the series may be surrendered for conversion or
exchange, notices and demands to or upon the Company in respect of the
Securities of the series and this Indenture may be served and where
notices to Holders of Bearer Securities pursuant to Section 1.6 will
be published;
(8) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option of the Company;
(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which Securities of the series may
be redeemed, in whole or in part as shall be set forth in an Officers'
Certificate or supplemental indenture;
(10) the obligation, if any, of the Company to redeem, repay or
purchase Securities of the series, or particular Securities within the
series, pursuant to any sinking fund or analogous provisions and the
period or periods within which, the price or prices at which and the
terms and conditions upon which such Securities shall be redeemed,
repaid or purchased, in whole or in part, pursuant to such obligation;
(11) the terms of any right to convert or exchange Securities of the
series, either at the option of the Holder thereof or the Company,
into or for shares of Common Stock of the Company or other securities
or property, including without limitation the period or periods within
which and the price or prices (including adjustments thereto) at which
any Securities of the series shall be converted or exchanged, in whole
or in part;
(12) the denominations in which any Registered Securities of the
series shall be
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issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the denomination or denominations in which any
Bearer Securities of the series shall be issuable, if other than the
denomination of $5,000;
(13) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the
Securities of the series shall be payable if other than the currency
of the United States of America;
(14) if the principal of and any premium or interest on the
Securities of the series are to be payable, at the election of the
Company or a Holder thereof, in a currency or currencies, including
composite currencies, other than that or those in which the Securities
are stated to be payable, the currency or currencies in which payment
of the principal of and any premium and interest on Securities of such
series as to which such election is made shall be payable, and the
periods within which and the terms and conditions upon which such
election is to be made;
(15) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with
reference to an index, the manner in which such amounts shall be
determined;
(16) if other than the principal amount thereof, the portion of the
principal amount of any Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 5.2;
(17) the Person who shall be the Security Registrar, if other than
the Trustee;
(18) whether the Securities of the series shall be issued upon
original issuance in whole or in part in the form of one or more
Book-Entry Securities and, in such case, (a) the Depository with
respect to such Book-Entry Security or Securities; and (b) the
circumstances under which any such Book-Entry Security may be
exchanged for Securities registered in the name of, and any transfer
of such Book-Entry Security may be registered to, a Person other than
such Depository or its nominee, if other than as set forth in Section
3.5;
(19) if the provisions of Section 4.4 or 4.5 are applicable to the
Securities of such series;
(20) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(21) any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of
the series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
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(22) whether and under what conditions additional amounts will be
payable to Holders of Securities of the series pursuant to Section
10.4;
(23) the terms and conditions, if any, pursuant to which such
Securities are secured; and
(24) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any
Bearer Securities of such series shall be substantially identical except, in the
case of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to the Board Resolution referred to above and (subject
to Section 3.3) set forth in, or determined in the manner provided in, the
Officers' Certificate referred to above or in any such indenture supplemental
hereto. Not all Securities of any one series need be issued at the same time,
and, unless otherwise provided, a series may be reopened for issuances of
additional Securities of such series.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting forth the
terms, or the manner of determining the terms, of the series.
SECTION 3.2 DENOMINATIONS.
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, any Registered Securities of a series shall be
issuable in denominations of $1,000 and any integral multiple thereof and any
Bearer Securities of a series shall be issuable in the denomination of $5,000.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be signed on behalf of the Company by both (a)
its Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or its President or one of its Senior Vice Presidents or Vice
Presidents and (b) its Treasurer or one of its Assistant Treasurers or its
Secretary or one of its Assistant Secretaries, under its corporate seal which
may, but need not, be attested. The signature of any of these officers on the
Securities may be manual or facsimile. Coupons shall bear the facsimile
signature of the Treasurer of the Company.
Securities and Coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the
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authentication and delivery of such Securities or did not hold such offices
at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, together with
any Coupons appertaining thereto executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided, FURTHER,
that a Bearer Security may be delivered in connection with its original issuance
only if the Person entitled to receive such Bearer Security shall have furnished
a certificate in the form specified in such Security as to certain tax matters
in respect of United States citizens, dated no earlier than 15 days prior to the
earlier of the date on which such Bearer Security is delivered and the date on
which any temporary global Security first becomes exchangeable for such Bearer
Security in accordance with the terms of such temporary global Security and this
Indenture. If any Security shall be represented by a permanent global Bearer
Security, then, for purposes of this Section and Section 3.4, the notation of a
beneficial owner's interest therein upon original issuance of such Security or
upon exchange of a portion of a temporary global Security shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Security. Except as permitted by Section 3.6,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant Coupons for interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time
and if the Board Resolution and indenture supplement establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of such Securities and determining the terms of
particular Securities of such series, such as interest rate, maturity date, date
of issuance and date from which interest shall accrue.
If the forms or terms of the Securities of the series and any related
Coupons have been established in or pursuant to one or more Board Resolutions as
permitted by Sections 2.1 and 3.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) that such forms have been established in conformity with the
provisions of this Indenture;
(b) that such terms, or the manner of determining such terms, have
been established in conformity with the provisions of this Indenture;
and
(c) that such Securities, together with any Coupons appertaining
thereto, when
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authenticated and delivered by the Trustee and issued by the
Company in the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and legally binding
obligations of the Company, enforceable in accordance with their
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to
or affecting the enforcement of creditors' rights and to general
equity principles.
If such forms or terms have been so established, the Trustee shall not
be required to authenticate such Securities if the issue or such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraphs at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued.
Each Registered Security shall be dated the date of its
authentication; and each Bearer Security shall be dated as of the date of
original issuance of the first Security of such series to be issued.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security, or the Security to which such coupon appertains, a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 3.9 together with a written
statement (which need not comply with Section 1.2 and need not be accompanied by
an Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
SECTION 3.4 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities
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in lieu of which they are issued, in registered form or, if authorized, in
bearer form with one or more coupons or without coupons, and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities or coupons may determine, as evidenced by
their execution of such Securities or coupons. In the case of any series
issuable as Bearer Securities, such temporary Securities may be in global
form. A temporary Bearer Security shall be delivered only in compliance with
the conditions set forth in Section 3.3.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following paragraphs), if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company maintained pursuant to Section 10.2 in a Place of Payment for such
series for the purpose of exchanges of Securities of such series, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities of any series (accompanied by any unmatured coupons appertaining
thereto) the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like aggregate principal amount of definitive
Securities of the same series and of like tenor of authorized denominations;
provided, however, that no definitive Bearer Security shall be delivered in
exchange for a temporary Registered Security.
If temporary Securities of any series are issued in global form, any
such temporary global Security shall, unless otherwise provided therein, be
delivered to the London office of a depositary or common depositary (the "Common
Depositary"), for the benefit of Euroclear and Cedel Bank, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities of that series, in aggregate principal amount equal to the
principal amount of such temporary global Security, executed by the Company. On
or after the Exchange Date such temporary global Security shall be surrendered
by the Common Depositary to the Trustee, as the Company's agent for such
purpose, to be exchanged, in whole or from time to time in part, for definitive
Securities of such series without charge and the Trustee shall authenticate and
deliver, in exchange for each portion of such temporary global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such temporary
global Security to be exchanged; provided, however, that, unless otherwise
specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euroclear
as to the portion of such temporary global Security held for its account then to
be exchanged and a certificate dated the
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Exchange Date or a subsequent date and signed by Cedel Bank as to the portion
of such temporary global Security held for its account then to be exchanged,
each in the form or in such form as shall be specified in such Security. The
definitive Securities to be delivered in exchange for any such temporary
global Security shall be in bearer form, registered form, permanent global
bearer form or permanent global registered form, or any combination thereof,
as specified as contemplated by Section 3.1, and, if any combination thereof
is so specified, as requested by the beneficial owner thereof; provided,
however, that definitive Bearer Securities shall be delivered in exchange for
a portion of a temporary global Security only in compliance with the
requirements of Section 3.3.
Unless otherwise specified in such temporary global Security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or Cedel Bank, as the case may be, to request such exchange on his
behalf and delivers to Euroclear or Cedel Bank, as the case may be, a
certificate in such form as shall be specified in such Security, dated no
earlier than 15 days prior to the Exchange Date, copies of which certificate
shall be available from the offices of Euroclear and Cedel Bank, the Trustee,
any Authenticating Agent appointed for such series of Securities and each Paying
Agent. Unless otherwise specified in such temporary global Security, any such
exchange shall be made free of charge to the beneficial owners of such temporary
global Security, except that a Person receiving definitive Securities must bear
the cost of insurance, postage, transportation and the like in the event that
such Person does not take delivery of such definitive Securities in person at
the offices of Euroclear or Cedel Bank Definitive Securities in bearer form to
be delivered in exchange for any portion of a temporary global Security shall be
delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by section 3.1, interest payable on a temporary global
Security on an Interest Payment Date for Securities of such series occurring
prior to the applicable Exchange Date shall be payable to Euroclear and Cedel
Bank on such Interest Payment Date upon delivery by Euroclear and Cedel Bank to
the Trustee of a certificate or certificates in such form as shall be specified
in such Security, for credit without further interest on or after such Interest
Payment Date to the respective accounts of the Persons who are the beneficial
owners of such temporary global Security on such Interest Payment Date and who
have each delivered to Euroclear or Cedel Bank, as the case may be, a
certificate in such form as shall be specified in such Security. Any interest so
received by Euroclear and Cedel Bank and not paid as herein provided shall be
returned to the Trustee immediately prior to the expiration of two years after
such Interest Payment Date in order to be repaid to the Company in accordance
with Section 10.3.
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SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.2 a register (the
"Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of
registering Registered Securities and transfers of Registered Securities as
herein provided.
Upon due surrender for registration of transfer of any Registered
Security of any series at the office or agency of the Company maintained
pursuant to Section 10.2 for such purpose in a Place of Payment for such
series, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of the same series of any authorized denominations
and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Securities of any series may
be exchanged for other Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor,
upon surrender of the Securities to be exchanged at any such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Registered
Securities may not be exchanged for Bearer Securities.
At the option of the Holder, Bearer Securities of any series may be
exchanged for Registered Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon
surrender of the Bearer Securities to be exchanged at any such office or
agency, with all unmatured coupons, and all matured coupons in default
appertaining thereto. If the Holder of a Bearer Security is unable to produce
any such unmatured coupon or coupons or matured coupon or coupons in default,
such exchange may be effected if the Bearer Securities are accompanied by
payment in funds acceptable to the Company in an amount equal to the face
amount of such missing coupon or coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there is
furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Securities shall surrender to any Paying Agent any such missing coupon in
respect of which such a payment shall have been made, such Holder shall be
entitled to receive the amount of such payment; provided, however, that,
except as otherwise provided in Section 10.2, interest represented by coupons
shall be payable only upon presentation and surrender of those coupons at an
office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in exchange for a Registered Security of the same series and
like tenor after the close of business at such office or agency on (i) any
Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before
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the opening of business at such office or agency on the related proposed date
for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date
for payment, as the case may be, and interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed
date for payment, as the case may be, in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due in accordance with the provisions of this
Indenture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Security shall be
exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Security are entitled to exchange such
interests for Securities of such series and of like tenor and principal
amount of another authorized form and denomination, as specified as
contemplated by Section 3.1, then without unnecessary delay but in any event
not later than the earliest date on which such interests may be so exchanged,
the Company shall deliver to the Trustee definitive Securities of that series
in aggregate principal amount equal to the principal amount of such permanent
global Security, executed by the Company. On or after the earliest date on
which such interests may be so exchanged, such permanent global Security
shall be surrendered by the Common Depositary or such other depositary or
Common Depositary as shall be specified in the Company Order with respect
thereto to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
of such series without charge and the Trustee shall authenticate and deliver,
in exchange for each portion of such permanent global Security, a like
aggregate principal amount of definitive Securities of the same series of
authorized denominations and of like tenor as the portion of such permanent
global Security to be exchanged which, unless the Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, as
specified as contemplated by Section 3.1, shall be in the form of Bearer
Securities or Registered Securities, or any combination thereof, as shall be
specified by the beneficial owner thereof; provided, however, that no Bearer
Security delivered in exchange for a portion of a permanent global Security
shall be mailed or otherwise delivered to any location in the United States.
If a Registered Security is issued in exchange for any portion of a permanent
global Security after the close of business at the office or agency where
such exchange occurs on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted
Interest, interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the
case may be, in respect of such Registered Security, but will be payable on
such Interest Payment Date or proposed date for payment, as the case may be,
only to the Person to whom interest in respect of such portion of such
permanent global Security is payable in accordance with the provisions of
this Indenture.
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All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee or
any transfer agent) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar or
any transfer agent duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange Securities of any series during a period beginning at
the opening of business 15 days before any selection of Securities of that
series to be redeemed and ending at the close of business on (A) if
Securities of the series are issuable only as Registered Securities, the day
of the mailing of the relevant notice of redemption and (B) if Securities of
the series are issuable as Bearer Securities, the day of the first
publication of the relevant notice of redemption or, if Securities of the
series are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption, in whole or in part, except the unredeemed portion of any
Security being redeemed in part, or (iii) to exchange any Bearer Security so
selected for redemption except that such a Bearer Security may be exchanged
for a Registered Security of that series and like tenor, provided that such
Registered Security shall be simultaneously surrendered for redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Book-Entry Security shall be exchangeable
pursuant to this Section 3.5 or Sections 3.4, 9.6 and 11.7 for Securities
registered in the name of, and a transfer of a Book-Entry Security or any
series may be registered to, any Person other than the Depository for such
Security or its nominee only if (i) such Depository notifies the Company that
it is unwilling or unable to continue as Depository for such Book-Entry
Security or if at any time such Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, (ii) the
Company executes and delivers to the Trustee a Company Order that such
Book-Entry Security shall be so exchangeable and the transfer thereof so
registerable or (iii) there shall have occurred and be continuing an Event of
Default, or an event which after notice or lapse of time would be an Event of
Default, with respect to the Securities of such series. Upon the occurrence
in respect of any Book-Entry Security of any series of any one or more of the
conditions specified in clauses (i), (ii) or (iii) or the preced-
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ing sentence or such other conditions as may be specified as contemplated by
Section 3.1 for such series, such Book-Entry Security may be exchanged for
Securities registered in the names of, and the transfer of such Book-Entry
Security may be registered to, such Persons (including Persons other than the
Depository with respect to such series and its nominees) as such Depository
shall direct. Notwithstanding any other provision of this Indenture, any
Security authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Book-Entry Security shall also be a
Book-Entry Security and shall bear the legend specified in Section 2.4 except
for any Security authenticated and delivered in exchange for, or upon
registration of transfer of, Book-Entry Security pursuant to the preceding
sentence.
Notwithstanding anything in this Indenture or in the terms of a
Security to the contrary, the exchange of Bearer Securities for Registered
Securities will be subject to satisfaction of the provisions of the United
States federal income tax laws in effect at the time of such exchange. None
of the Company, the Trustee or any Authenticating Agent of the Company or the
Trustee (any of which, other than the Company, shall rely on an Officers'
Certificate and an Opinion of Counsel) shall be required to exchange any
Bearer Security for a Registered Security if as a result thereof and in the
Company's reasonable judgment, the Company would incur adverse consequences
under then applicable United States federal income tax laws.
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES AND COUPONS.
If any mutilated Security or a Security with a mutilated coupon
appertaining thereto is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered
Security and such mutilated Security or a Security with a mutilated coupon,
if any, shall be cancelled by the Trustee in accordance with the Indenture.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security or coupon and (ii) such security or indemnity as may be required by
them, then, in the absence of notice to the Company or the Trustee that such
Security or coupon has been acquired by a bona fide purchaser, the Company
shall, subject to the following paragraph, execute, and the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security or in exchange for the Security to which a destroyed, lost or stolen
coupon appertains (with all appurtenant coupons not destroyed, lost or
stolen), a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or to the Security to which such destroyed, lost or stolen
coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has be-
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come or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security or coupon;
provided, however, that principal of and any premium and interest on Bearer
Securities shall, except as otherwise provided in Section 10.2, be payable
only at an office or agency located outside the United States.
Upon the issuance of any new Security under this Section, the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series, with any coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Security or in exchange for a Security to which a destroyed, lost or
stolen coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Security and any coupons appertaining thereto, or the destroyed, lost or
stolen coupon shall be at any time enforceable by anyone, and any such new
Security and coupons, if any, shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of
that series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise provided as contemplated by Section 3.1 with
respect to any series of Securities, interest on any Registered Security
which is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest.
Any interest on any Registered Security of any series which is
payable, but is not punctually paid or duly provided for, on any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Company, at
its election in each case, as provided in Clause (1) and (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Registered Security of such
series and the date of the proposed payment, and at the same time the
Com-
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pany shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15 days and
not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company
of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities
of such series at the address of such Holder as it appears in the
Security Register, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities)
are registered at the close of business on such Special Record Date
and shall no longer be payable pursuant to the following Clause (2);
and
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of, transfer
of or in exchange for or in lieu of any other Security shall carry the rights
to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
In the case of any Security which is converted into Common Stock of
the Company after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Security whose Maturity is
prior to such Interest Payment Date), interest whose Stated Maturity is on
such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Security
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security shall not be payable.
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SECTION 3.8 PERSONS DEEMED OWNERS.
Prior to due presentment of a Registered Security for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Security is
registered as the owner of such Registered Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) any interest on such Security and for all other
purposes whatsoever, whether or not such Security shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and the Bearer of
any coupon as the absolute owner of such Security or coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9 CANCELLATION.
All Securities and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Registered Securities and matured coupons so
delivered shall be promptly cancelled by the Trustee. All Bearer Securities
and unmatured coupons so delivered shall be cancelled. All Bearer Securities
and unmatured coupons held by the Trustee pending such cancellation or
reissuance shall be deemed to be delivered for cancellation for all purposes
of this Indenture and the Securities. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Securities and coupons held by the
Trustee shall be disposed of as directed by a Company Order, or in the
absence of a Company Order, may be destroyed by the Trustee.
Notwithstanding the foregoing, with respect to any Book-Entry
Security, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by a Depository or
impair, as between a Depository and holders of beneficial interests in any
Book-Entry Security, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominee) as Holder of such
Book-Entry Security.
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SECTIN 3.10 COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 ELECTRONIC SECURITY ISSUANCE.
The Securities may, pursuant to a Board Resolution and Officers'
Certificate complying with Section 3.1 hereof, be issued by means of an
electronic issuance system. Any such Security issuance instructions may
specify the name, address and taxpayer identification number of the Holder,
the principal amount and Maturity of the Security, the interest rate to be
borne by the Security and any other terms not inconsistent with such Board
Resolution and Officers' Certificate. Nothing in this Section 3.11 shall be
construed as prohibiting the Company from issuing Securities by any means not
inconsistent with the provisions of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for, and any right to
receive additional amounts, as provided in Section 10.4), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(1) either
(A) all Securities theretofore authenticated and delivered and all
coupons, if any, appertaining thereto (other than (i) coupons
appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
3.5, (ii) Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
3.6, (iii) coupons appertaining to Securities called for redemption
and maturing after the relevant Redemption Date, whose surrender has
been waived as provided in Section 11.6, and (iv) Securities and
coupons for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
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(B) all such Securities and, in the case of (i) or (ii) below, any
coupons appertaining thereto not theretofore delivered to the Trustee
for cancellation,
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company, and the Company, in the case of (i), (ii) or (iii)
above, has deposited or caused to be deposited with the Trustee
as trust funds in trust for the purpose, an amount sufficient to
pay and discharge the entire indebtedness on such Securities and
coupons not theretofore delivered to the Trustee for
cancellation, for principal (and premium, if any) and any
interest to the date of such deposit (in the case of Securities
which have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.5, the
obligations of the Trustee to any Authenticating Agent under Section 6.12
and, if money shall have been deposited with the Trustee pursuant to clause
(1)(B) of this Section, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 10.3 shall survive .
SECTION 4.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 4.1 or 4.3 and all money received by the Trustee in respect of such U.S.
Government Obligations shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any) and any interest for
whose payment such money and U.S. Government Obligations has been deposited with
or received by the Trustee.
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SECTION 4.3 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
If applicable to a particular series of Securities, the Company may
elect, at its option at any time, to have Section 4.4 or Section 4.5 applied
to any such series of Securities or any Securities of such series, as the
case may be, designated pursuant to Section 3.1 as being defeasible pursuant
to such Section 4.4 or 4.5, in accordance with any applicable requirements
provided pursuant to Section 3.1 and upon compliance with the conditions set
forth below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 3.1 for
such Securities.
SECTION 4.4 DISCHARGE AND DEFEASANCE.
If this Section 4.4 is specified, as contemplated by Section 3.1, to
be applicable to Securities of any series, then notwithstanding Section 4.1
and upon compliance with the applicable conditions set forth in 4.6: (1) the
Company shall be deemed to have paid and discharged the entire indebtedness
on all the Outstanding Securities of any such series ("Defeasance"); and (ii)
the provisions of this Indenture as it relates to such Outstanding Securities
shall no longer be in effect (except as to the rights of Holders of
Securities to receive, solely from the trust fund described in Section 4.6,
payment of (x) the principal of (and premium, if any) and any installment of
principal of (and premium, if any) or interest on such Securities on the
Stated Maturity of such principal (and premium, if any) or installment of
principal (and premium, if any) or interest or upon optional redemption
and/or (y) any mandatory sinking fund payments or analogous payments
applicable to the Securities of that series on that day on which such
payments are due and payable in accordance with the terms of the Indenture
and of such Securities, the Company's obligations with respect to such
Securities under Sections 3.4, 3.5, 3.6, 10.2, 10.3, and 10.4 and the rights,
powers, trusts, duties and immunities of the Trustee hereunder, including
those under Section 6.7 hereof);
SECTION 4.5 COVENANT DEFEASANCE.
If this Section 4.5 is specified, as contemplated by Section 3.1, to
be applicable to any series of Securities or any Securities of such series,
as the case may be, (1) the Company shall be released from its obligations
under Sections 10.4 through 10.7, inclusive, and any covenants provided
pursuant to Section 3.1(21) or 9.1(2) for the benefit of the Holders of such
Securities that pursuant to the terms of such Securities are defeasible
pursuant to this Section 4.5 and (2) the occurrence of any event specified in
Sections 5.1(4) (with respect to any of Sections 10.3 through 10.7,
inclusive, and any such covenants provided pursuant to Section 3.1(21),
9.1(2), or 9.1(6) and 5.1(7) (if pursuant to the terms of such Securities
this Section 4.5 is applicable to any such event specified in Section 5.1(7))
shall be deemed not to be or result in an Event of Default, in each case with
respect to such Securities as provided in this Section on and after the date
the conditions set forth in Section 4.6 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to such Securities, the Company may omit to comply with
and shall have no liability in respect of any term, condition or limitation
set forth in any such specified
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Section (to the extent so specified in the case of Section 5.1(4) and
5.1(7)), whether directly or indirectly by reason of any reference elsewhere
herein to any such Section or by reason of any reference in any such Section
to any other provision herein or in any other document, but the remainder of
this Indenture and such Securities shall be unaffected thereby.
SECTION 4.6 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
4.4 or Section 4.5 to any applicable series of Securities or any Securities
of such series, as the case may be.
(1) either
(A) with respect to all Outstanding Securities of such series or such
Securities of such Series, as the case may be, with reference to this
Section 4.6, the Company has deposited or caused to be deposited with
the Trustee irrevocably (but subject to the provisions of Section 4.2
and the last paragraph of Section 10.3), as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of such Securities, (X) lawful money of the
United States in an amount, or (Y) U.S. Government Obligations which
through the payment of interest and principal in respect thereof in
accordance with their terms will provide not later than the opening of
business on the due dates of any payment referred to in clause (i) or
(ii) of this subparagraph (1)(A) lawful money of the United States in
an amount, or (Z) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee,
to pay and discharge (i) the principal of (and premium, if any) and
each installment of principal (and premium, if any) and interest on
such Securities the Stated Maturity of such principal or installment
of principal or interest or upon optional redemption and (ii) any
mandatory sinking fund payments or analogous payments applicable to
such Securities on the day on which such payments are due and payable
in accordance with the terms of this Indenture and of such Securities;
or
(B) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
3.1, to be applicable to the Securities of such series;
(2) the Company has paid or caused to be paid all other sums payable
with respect to such Securities;
(3) such deposit will not result in a breach or violation of, or
constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(4) no Event of Default or event which with the giving of notice or
lapse of time,
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or both, would become an Event of Default with respect to such
Securities shall have occurred and be continuing on the date of
such deposit and no Event of Default under Section 5.1(5) or
Section 5.1(6) or event which with the giving of notice or lapse of
time, or both, would become an Event of Default under Section
5.1(5) or Section 5.1(6) shall have occurred and be continuing on
the 91st day after such date;
(5) in the event of an election to have Section 4.4 apply to any
series of Securities, the Company has delivered to the Trustee an
Opinion of Counsel to the effect that (a) the Company has received
from, or there has been published by, the Internal Revenue Service a
ruling, or (b) since the date of this Indenture there has been a
change in applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm
that, the Holders of Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance and
discharge had not occurred;
(6) in the event of an election to have Section 4.5 apply to any
series of Securities, the Company shall have delivered to the Trustee
an Opinion of Counsel, to the effect that the Holders of such
Securities will not recognize gain or loss for federal income tax
purposes as a result of the deposit and Covenant Defeasance to be
effected with respect to such Securities and will be subject to
federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant
Defeasance were not to occur;
(7) if the Securities of that series are then listed on any domestic
or foreign securities exchange, the Company shall have delivered to
the Trustee an Opinion of Counsel to the effect that such deposit,
defeasance and discharge will not cause such Securities to be
desisted; and
(8) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the Defeasance or Covenant Defeasance
with respect to such Securities of any such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a
result of such deposit and the related exercise of the Company's
option under this Article, registration is not required under the
Investment Company Act of 1940, as amended, by the Company, the trust
funds representing such deposit or the Trustee or (ii) all necessary
registrations under said Act have been effected.
Any deposits with the Trustee referred to in Section 4.6(1)(A) above
shall be irrevocable and shall be made under the terms of an escrow/trust
agreement in form and
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substance satisfactory to the Trustee. If any Outstanding Securities of such
series are to be redeemed prior to their Stated Maturity, whether pursuant to
any optional redemption provisions or in accordance with any mandatory
sinking fund requirement, the applicable escrow trust agreement shall provide
therefor and the Company shall make such arrangements as are satisfactory to
the Trustee for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
Upon Defeasance with respect to all the Securities of a series, the
terms and conditions of such Securities, including the terms and conditions
with respect thereto set forth in this Indenture, shall no longer be binding
upon, or applicable to, the Company; provided that the Company shall not be
discharged from any payment obligations in respect of Securities which are
deemed not to be Outstanding under clause (iii) of the definition thereof if
such obligations continue to be valid obligations of the Company under
applicable law.
Notwithstanding the cessation, termination and discharge of all
obligations, covenants and agreements (except as provided above in this
Section 4.6) of the Company under this Indenture with respect to any series
of Securities, the obligations of the Company to the Trustee under Section
6.5, and the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive with respect to such series of
Securities.
Anything in this Article to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
this Section 4.6 with respect to any Securities which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to such
Securities.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any additional
amounts payable in respect of any Security of that series when it
becomes due and payable, and continuance of such default for a period
of 30 days; or
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(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other
than that series), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the Company and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series, a written notice specifying
such default or breach and requiring it to be remedied and stating
that such notice is a "Notice of Default," hereunder; or
(5) the entry by a court having jurisdiction in the premises of a
decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law, or appointing a
custodian, receiver, liquidation, assignee, trustee, sequestrator or
other similar official of the Company or of any substantial part of
their property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or
any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding
to be adjudicated a bankrupt or insolvent, or the consent by it to the
entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidation, assignee, trustee, sequestrator or similar official of
the Company or of any substantial part of their property, or the
making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally
as they become due, or the taking of corporate action by the Company
in furtherance of any such action; or
(7) any other Event of Default provided with respect to Securities of
that series.
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SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in clause (1), (2), (3) or (4) (if
the Event of Default under clause (4) is with respect to less than all series of
Securities then Outstanding) of Section 5.1 above occurs and is continuing,
then, and in each and every such case, unless the principal of all of the
Securities of such series shall have already become due and payable, either the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Securities of such series then Outstanding hereunder (each such series voting as
a separate class), by notice in writing to the Company (and to the Trustee if
given by Securityholders), may declare the entire principal (or, if the
Securities of such series are Original Issue Discount Securities, such portion
of the principal amount as may be specified in the terms of such series) of all
Securities of such series and the interest accrued thereon, if any, to be due
and payable immediately, and upon any such declaration the same shall become
immediately due and payable. If an Event of Default described in clause (4) (if
the Event of Default under clause (4) relates to all series of Securities then
Outstanding), (5) or (6) of Section 5.1 occurs and is continuing, then and in
each and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Company (and to
the Trustee if given by Securityholders), may declare the entire principal (or,
if any Securities are Original Issue Discount Securities such portion of the
principal as may be specified in the terms thereof) of all the Securities then
Outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as the
case may be) then Outstanding shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Securities of such series (or of all the Securities, as
the case may be) and the principal of any and all Securities of such series (or
of all the Securities, as the case may be) which shall have become due otherwise
than by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series, (or at the respective rates of interest or Yields to
Maturity of all the Securities, as the case may be) to the date of such payment
or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee, and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and if any and all Events of Default under
the Indenture, other than the non-payment
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of the principal of Securities (or, if any Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) which shall have become due by acceleration, shall have been
cured, waived or otherwise remedied as provided herein -- then and in every
such case the Holders of a majority in aggregate principal amount of all the
Securities of such Series, each series voting as a separate class (or of all
the Securities, as the case may be, voting as a single class), then
Outstanding, by written notice to the Company and to the Trustee, may waive
all such defaults with respect to such series (or with respect to all the
Securities, as the case may be) and rescind and annul such declaration and
its consequence, but not such waiver or rescission and annulment shall extend
to or shall affect any subsequent default or shall impair any right
consequent thereon.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if,
(1) default is made in the payment of any interest on any Security of
any series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities of that series and any coupons appertaining thereto,
to margin the whole amount then due and payable on such Securities of that
series and coupons for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable, interest on any
overdue principal and on the premium, if any, and overdue interest, at the rate
or rates prescribed therefor in such Securities of that series and, in addition
thereto, such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any coupons appertaining thereto by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and en-
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force any such rights, whether for the specific enforcement of any covenant
or agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal and
any premium and interest owing and unpaid in respect of the Securities
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders of
Securities and coupons allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidation, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES OR
COUPONS.
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities or coupons, or both, as the
case may be, and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.7; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities and
coupons in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities and
coupons for principal and any premium and interest, respectively.
SECTION 5.7 LIMITATION ON SUITS.
No Holder of any Security of any series or any related coupons shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless;
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
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(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 3.7) interest on such Security, and any additional
amounts contemplated by Section 10.4 in respect of such Security or payment
of such coupon on the Stated Maturity or Maturities expressed in such
Security or coupon (or, in the case of redemption, on the Redemption Date)
and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of a Security or coupon has instituted
any proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the
Trustee and the Holders of Securities and coupons shall be restored severally
and respectively to their former positions hereunder and thereafter all
rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Securities or coupons is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall
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not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
or coupon to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article or by law to the Trustee or to the Holders of Securities or
coupons may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 5.12 CONTROL BY HOLDERS OF SECURITIES.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, with respect to
the Securities of such series, provided that,
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series and any coupons appertaining thereto waive any past
default hereunder with respect to the Securities of such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or any
interest on any Security of such series except as provided in Section
5.2, or
(2) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14 UNDERTAKING FOR COSTS.
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All parties to this Indenture agree, and each Holder of any Security
or coupon by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to
any suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities of
any series, or to any suit instituted by any Holder of any Security or coupon
for the enforcement of the payment of the principal of or any premium or
interest on any Security or the payment of any coupon on or after the Stated
Maturity or Maturities expressed in such Security or coupon (or, in the case
of redemption, on or after the Redemption Date).
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently
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evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior
to taking, suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically prescribed) may, in the
absence of bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series or any
related coupons pursuant to this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents
or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 6.2 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) and in any coupons shall be taken
as the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons. The Trustee or any Authenticating Agent shall not be
accountable for the use or application by the Company of Securities or the
proceeds thereof.
SECTION 6.3 MAY HOLD SECURITIES.
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The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Securities and coupons
and, subject to Section 6.8 and 6.10, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Authenticating
Agent, Paying Agent, Security Registrar or such other agent.
SECTION 6.4 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Company.
SECTION 6.5 COMPENSATION AND REIMBURSEMENT..
The Company agrees:
(1) to pay to the Trustee or any predecessor Trustee from time to
time reasonable compensation for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee or any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
SECTION 6.6 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.7 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
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(b) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(c) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and
Section 310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Company or by any such Holder,
or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose
of rehabilitation, conservation or liquidation, then, in any such
case, (i) the Company by a Board Resolution may remove the Trustee
with respect to all Securities, or (ii) subject to Section 5.14 any
Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee with respect to all Securities and the appointment of a
successor Trustee or Trustees.
(d) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Securities of any particular series) and
shall comply with the applicable requirements of Section 6.7. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Securities of any
series shall be appointed by Act of the Holders of a majority in principal
amount of Outstanding Securities of such series delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 6.7, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Securities of any series shall have been so appointed by the Company or the
Holders of Securities of that series and accepted appointment in the manner
required by Section 6.7, any Holder of a Security who has been a bona fide
Holder of a Security of such series for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the
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appointment of a successor Trustee with respect to the Securities of such
series.
(e) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee with respect to the Securities of such series
and the address of its Corporate Trust Office.
SECTION 6.7 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and
such successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Trustee; but on the request of the Company or the successor Trustee, such
retiring Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (l) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees as
co-trustees of the same trust and that each such Trustee shall be trustee of
a trust or trusts hereunder separate and apart from any trust or trusts
hereunder administered by any other such Trustee; and upon the execution and
delivery of such supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided therein and
each such successor Trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and
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deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 6.8 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall be at all times a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereunder specified in this Article.
SECTION 6.10 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.11 MERGER, CONVERSION CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee shall be the successor of the
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Trustee hereunder, provided such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 6.12 APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act
on behalf of the Trustee to authenticate Securities of such series issued
upon original issue or upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 3.6, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall
be valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the authentication
and delivery of Securities by the Trustee or the Trustee's certificate of
authentication such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of such Authenticating Agent, shall continue to
be an Authenticating Agent provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall
promptly give notice of such appointment to all
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Holders of Securities pursuant to Section 1.6. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with
all the rights, powers and duties of its predecessor hereunder with like
effect as if originally named as an Authenticating Agent. No successor
Authenticating Agent shall be appointed unless eligible under the provisions
of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.5.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York
As Trustee
By
Authenticating Agent
By
Authorized Signatory
If all of the Securities of a series may not be originally issued at
one time, and if the Company has an Affiliate eligible to be appointed as an
Authenticating Agent hereunder or the Trustee does not have an office capable
of authenticating Securities upon original issuance located in a Place of
Payment where the Company wishes to have Securities of such series
authenticated upon original issuance, the Trustee, if so requested by the
Company in writing (which writing need not comply with Section 1.2 and need
not be accompanied by an Opinion of Counsel), shall appoint in accordance
with this Section an Authenticating Agent (which if so requested by the
Company, shall be such Affiliate of the Company) having an office in a Place
of Payment designated by the Company with respect to such series of
Securities.
SECTION 6.13. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Securities of any
series, the Trustee
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shall give the Holders of Securities of such series notice of such default as
and to the extent provided by the Trust Indenture Act; provided, however,
that in the case of any default of the character specified in Section 5.1(4)
with respect to Securities of such series, no such notice to Holders shall be
given until at least 30 days after the occurrence thereof. For the purpose
of this Section, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of Securities (i)
contained in the most recent list furnished to the Trustee as provided in
Section 312(a) of the Trust Indenture Act, (ii) received by the Trustee in
its capacity as Security Registrar and (iii) filed with it within the two
preceding years pursuant to Section 313(c)(2) of the Trust Indenture Act. The
Trustee may (i) destroy any list furnished to it as provided in Section
312(a) of the Trust Indenture Act upon receipt of a new list so furnished,
(ii) destroy any information received by it as Paying Agent (if so acting)
hereunder upon delivering to itself as Trustee, not earlier than March 20 or
September 20 of each year, a list containing the names and addresses of the
Holders of Securities obtained from such information since the delivery of
the next previous list, if any, (iii) destroy any list delivered to itself as
Trustee which was compiled from information received by it as Paying Agent
(if so acting) hereunder upon the receipt of a new list so delivered and (iv)
destroy not earlier than two years after filing, any information filed with
it pursuant to Section 313(c)(2) of the Trust Indenture Act. For purposes of
Section 312(a) of the Trust Indenture Act, the term "stated intervals" shall
mean January 15 and July 15.
(b) If three or more Holders of Securities (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period
of at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders of Securities with respect to their rights under this Indenture or
under the Securities and is accompanied by a copy of the form of proxy or
other communication which such applicants propose to transmit, then the
Trustee shall, within five business days after the receipt of such
application, at its election, either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 7.1(a), or
(ii) inform such applicants as to the approximate number of Holders
of Securities
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whose names and addresses appear in the information preserved at the
time by the Trustee in accordance with Section 7.1(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities whose name and address appears
in the information preserved at the time by the Trustee in accordance with
Section 7.1(a) a copy of the form of proxy or other communication which is
specified in such request, with reasonable promptness after a tender to the
Trustee of the material to be mailed and of payment, or provision for the
payment of the reasonable expenses of mailing, unless within five days after
such tender the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a written
statement to the effect that, in the opinion of the Trustee, such mailing
would be contrary to the best interest of the Holders of Securities or would
be in violation of applicable law. Such written statement shall specify the
basis of such opinion. If the Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed, shall enter
an order refusing to sustain any of such objections or if after the entry of
an order sustaining one or more of such objections, the Commission shall
find, after notice and opportunity for hearing that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders of Securities with
reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
(c) Every Holder of Securities or coupons, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of any such information as to the names and
addresses of the Holders of Securities in accordance with Section 7.1(b),
regardless of the source from which such information was derived and that the
Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 7.1(b).
SECTION 7.2 REPORTS BY TRUSTEE.
The Trustee shall in each year transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto and as of a date at least one year after the date of original
issuance of the Securities hereunder, and each anniversary thereafter, such
report, if so required, to be transmitted within 60 days of each such
anniversary date.
A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securi-
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ties are listed on any stock exchange or market center.
SECTION 7.3. REPORTS BY COMPANY.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is required
to file the same with the Commission, copies of the annual reports and of
the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or,
if the Company is not required to file information, documents or reports
pursuant to either of such Sections, then it shall file with the Trustee
and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and
registered on a national securities exchange as may be prescribed from time
to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports required to be
filed with respect to compliance by the Company with the conditions
and covenants of this Indenture as may be required from time to time
by such rules and regulations; and
(3) transmit to all Holders, in the manner and to the extent provided
in Trust Indenture Act Section 313(c), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and
(2) of this Section as may be required by rules and regulations prescribed
from time to time by the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
The Company shall not merge or consolidate with any other corporation
or sell or convey all or substantially all of its assets to any Person, unless
(i) either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) shall be a corporation organized under
the laws of the United States of America or any State thereof and shall
expressly assume the due and punctual payment of the principal of and interest
on all the Securities, according to their tenor, and the due and punctual
performance and
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observance of all of the covenants and conditions of this Indenture to be
performed or observed by the Company, by supplemental indenture satisfactory
to the Trustee, executed and delivered to the Trustee by such corporation,
and (ii) the Company or such successor corporation, as the case may be, shall
not, immediately after such merger or consolidation, or such sale or
conveyance, be in default in the performance of any such covenant or
condition.
SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED.-
In case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein. Such successor corporation may
cause to be signed, and may issue either in its own name or in the name of
the Company prior to such succession any or all of the Securities issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any securities which previously shall have been signed and
delivered by the officers of the Company, to the Trustee for authentication,
and any Securities which such successor corporation thereafter shall cause to
be signed and delivered to the Trustee for that purpose. All of the
Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms or this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE.
The Trustee may receive an Opinion of Counsel, prepared in
accordance with Section 1.2, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption,
and any such liquidation or dissolution, complies with the applicable
provisions of this Indenture.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are
to be for the benefit of less than all series of Securities, stating
that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company; or
(3) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of less than all series of
Securities, stating that such Events of Default are expressly being
included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registerable as to principal, to
change or eliminate any restrictions on the payment of principal of or
any premium or interest on Bearer Securities, to permit Bearer
Securities to be issued in exchange for Registered Securities, to
permit Bearer Securities to be issued in exchange for Bearer
Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided
that any such action shall not adversely affect the interests of the
Holders of Securities of any series or any related coupons in any
material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective
only when there is no Security Outstanding of any series created prior
to the execution of such supplemental indenture which is entitled to
the benefit of such provision; or
(6) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 2.1 and 3.1; or
(7) to evidence and provide for the acceptance of appointment
thereunder by a
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successor Trustee with respect to the Securities of one or more series
and to add to or change any of the provisions of this Indenture as
shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.7(b); or
(8) to make provision with respect to the conversion rights of Holders
pursuant to the requirements of Article XIV, including providing for
the conversion of the Securities into any security or property (other
than the Common Stock of the Company); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions
arising under this Indenture, provided that such action shall not
adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series and any related coupons under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or change any obligation of the Company
to pay additional amounts pursuant to Section 10.4 (except as
contemplated by Section 8.1 and permitted by Section 9.1(1)), or
reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2 or change
the coin or currency in which any Security or any premium or interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver of certain defaults hereunder and their
consequences provided for in this Indenture, or reduce
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the requirements of Section 13.4 for quorum or voting, or
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 10.2,
or
(4) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall not be
deemed to require the consent of any Holder of a Security or coupon
with respect to changes in the references to "the Trustee" and
concomitant changes in this Section or the deletion of this proviso,
in accordance with the requirements of Sections 6.7(b) and 9.1(8), or
(5) make any change that adversely affects the right to convert any
Security as provided in Article XIV or pursuant to Section 3.1 (except
as permitted by Section 9.1) or decrease the conversion rate or
increase the conversion price of any such Security, or
(6) if the Securities are secured, change the terms and conditions
pursuant to which the Securities are secured in a manner adverse
to the Holders of the secured Securities.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder and of any coupons appertaining thereto shall be bound
thereby.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act of 1939, as amended,
in effect on such date.
SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any
premium and interest on the Securities of that series in accordance with the
terms of the Securities, any coupons appertaining thereto and this Indenture.
Unless otherwise specified as contemplated by Section 3.1 with respect to any
series of Securities, any interest due on Bearer Securities on or before
Maturity shall be payable only upon presentation and surrender outside the
United States of the several coupons for such interest installments as are
evidenced thereby as they severally mature.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
If Securities of a series are issuable only as Registered
Securities, the Company will maintain in each Place of Payment for such
series an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series
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may be surrendered for registration of transfer, exchange, or conversion and
where notices and demands to or upon the Company in respect of the Securities
of that series and this Indenture may be served. If Securities of a series
are issuable as Bearer Securities, the Company will maintain (A) in The City
of New York, an office or agency where any Registered Securities of that
series may be presented or surrendered for payment, where any Registered
Securities of that series may be surrendered for registration of transfer,
where Securities of that series may be surrendered for conversion or
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and
not otherwise), (B) subject to any laws or regulations applicable thereto, in
a Place of Payment for that series which is located outside the United
States, an office or agency where Securities of that series and related
coupons may be presented and surrendered for payment (including payment of
any additional amounts payable on Securities of that series pursuant to
Section 10.4); provided, however, that if the Securities of that series are
listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland, the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, the
Company will maintain a Paying Agent for the Securities of that series in
London, Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Securities of that series are
listed on such exchange, and (C) subject to any laws or regulations
applicable thereto in a Place of Payment for that series located outside the
United States an office or agency where any Registered Securities of that
series may be surrendered for registration of transfer, where Securities of
that series may be surrendered for conversion or exchange and where notices
and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. The Company will give prompt notice
to the Trustee and to the Holders as provided in Sections 1.5 and 1.6,
respectively, of the location and any change in the location, of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency in respect of any series of Securities or shall
fail to furnish the Trustee with the address thereof, such presentations and
surrenders of Securities of that series may be made and notices and demands
may be made or served at the Corporate Trust Office of the Trustee, except
that Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any additional
amounts payable on Bearer Securities of that series pursuant to Section 10.4)
at the office of the Trustee for such series located outside the United
States, and the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Securities
shall be made at any office or agency of the Company in the United States or
by check mailed to any address in the United States or by transfer to any
account maintained with a bank located in the United States; provided,
however, that if the Securities of a series are denominated and payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any additional amounts payable on Securities of such
series pursuant to Section 10.4) shall be made at the office of the Company's
Paying Agent in The City of New
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York, if (but only if) payment in Dollars of the full amount of such
principal, premium, interest or additional amounts, as the case may be, at
all offices or agencies outside the United States maintained for the purpose
by the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in accordance with the requirements set forth
above for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee and the Holders of any such designation
or rescission and of any change in the location of any such other office or
agency.
SECTION 10.3 MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of
the principal of and any premium or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities it will, prior to each due date of the principal of and
any premium or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject
to the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of and
any premium or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any
payment of principal of
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and any premium or interest on the Securities of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and any
premium or interest on any Security of any series and remaining unclaimed for
two years after such principal and any premium or interest has become due and
payable shall be paid to the Company on Company Request, or (if then held by
the Company) shall be discharged from such trust; and the Holder of such
Security or any coupon appertaining thereto shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust
money and all liability of the Company as trustee thereof shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause
to be published once, in an Authorized Newspaper in each Place of Payment,
notice that such money remains unclaimed and that after a date specified
therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 10.4 ADDITIONAL AMOUNTS.
If the Securities of a series provide for the payment of additional
amounts, the Company will pay to the Holder of any Security of such series or
any coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of any Security
of any series or payment of any related coupon or the net proceeds received
on the sale or exchange of any Security of any series, such mention shall be
deemed to include mention of the payment of additional amounts provided for
in this Section to the extent that, in such context additional amounts are,
were or would be payable in respect thereof pursuant to the provisions of
this Section and express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as excluding
additional amounts in those provisions hereof where such express mention is
not made.
If the Securities of a series provide for the payment of additional
amounts, at least
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10 days prior to the first Interest Payment Date with respect to that series
of Securities (or if the Securities of that series will not bear interest
prior to Maturity, the first day on which a payment of principal and any
premium is made), and at least 10 days prior to each date of payment of
principal and any premium or interest if there has been any change with
respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Securities of that series shall be made to Holders of Securities of that
series or any related coupons who are United States Aliens without
withholding for or on account of any tax assessment or other governmental
charge described in the Securities of that series. If any such withholding
shall be required, then such Officers' Certificate shall specify by country
the amount, if any, required to be withheld on such payments to such Holders
of Securities or coupons and the Company will pay to the Trustee or such
Paying Agent the additional amounts required by this Section. The Company
covenants to indemnify the Trustee and any Paying Agent for, and to hold them
harmless against, any loss, liability or expense reasonably incurred without
negligence or willful misconduct on their part arising out of or in
connection with actions taken or omitted by any of them in reliance on any
Officers' Certificate furnished pursuant to this Section.
SECTION 10.5 EXISTENCE.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 10.6 PURCHASE OF SECURITIES BY COMPANY OR SUBSIDIARY.
If and so long as the Securities of a series are listed on The Stock
Exchange of the United Kingdom and the Republic of Ireland and such stock
exchange shall so require, the Company will not, and will not permit any of
its Subsidiaries to, purchase any Securities of that series by private treaty
at a price (exclusive of expenses and accrued interest) which exceeds 120% of
the mean of the nominal quotations of the Securities of that series as shown
in The Stock Exchange Daily Official List for the last trading day preceding
the date of purchase.
SECTION 10.7 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate signed by its principal executive officer, principal
financial officer or principal accounting officer stating
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whether or not to the best knowledge of the signer thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of which they
may have knowledge.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 APPLICABILITY OF ARTICLE.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any
series) in accordance with this Article.
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities shall be
evidenced by an Officers' Certificate. In the case of any redemption, at the
election of the Company of less than all the Securities of any series, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of
Securities of such series to be redeemed. In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, or
(ii) pursuant to an election of the Company which is subject to a condition
specified in the terms of such Securities, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction or condition.
SECTION 11.3 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities of any series and of like tenor are
to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series and of like tenor not previously called
for redemption, by such method as the Trustee shall deem fair and appropriate
and which may provide for the selection, for redemption of portions (equal to
the minimum authorized denomination for Securities of that series or any
integral multiple thereof) of the principal amount of Registered Securities
of such series of a denomination larger than the minimum authorized
denomination for Securities of that series. If so specified in the Securities
of a series, partial redemptions must be in an amount not less than
$1,000,000 principal amount of Securities.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the con-
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verted portion of such Security shall be deemed (so far as may be) to be the
portion selected for redemption. Securities (or portions thereof) which have
been converted during a selection of Securities to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one Security is registered in the same name, the
Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Security.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 11.4 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in
Section 1.6 to the Holders of Securities to be redeemed not less than 30 nor
more than 60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if less than all the Outstanding Securities of any series are to
be redeemed, the identification (and, in the case of partial
redemption, the principal amounts) of the particular Securities to be
redeemed, and a statement to the effect that on or after the
Redemption Date upon surrender of such Security a new Security in the
principal amount equal to the unredeemed portion will be issued;
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said date;
(5) the place or places where such Securities, together in the case of
Bearer Securities with all coupons appertaining thereto, if any
maturing after the Redemption Date, are to be surrendered for payment
of the Redemption Price;
(6) that the redemption is for a sinking fund, if such is the case;
and
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(7) if applicable, the conversion rate or price, the date on which the
right to convert the Securities to be redeemed will terminate and the
place or places where such Securities may be surrendered for
conversion.
A notice of redemption published as contemplated by Section 1.6 need
not identify particular Registered Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on, all the Securities
which are to be redeemed on that date.
If any Security called for redemption is converted into Common Stock
of the Company, any money deposited with the Trustee or with any Paying Agent or
so segregated and held in trust for the redemption of such Security shall
(subject to any right of the Holder of such Security or any Predecessor Security
to receive interest as provided in the last paragraph of Section 3.7) be paid to
the Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 11.6 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall on the Redemption Date become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to any Bearer Securities so to be redeemed except to the
extent provided below, shall be void. Upon surrender of any such Security for
redemption in accordance with said notice together with all coupons, if any,
appertaining thereto maturing after the Redemption Date, such Security shall be
paid by the Company at the Redemption Price together with accrued interest to
the Redemption Date; provided, however, that installments of interest on Bearer
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 10.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of coupons for
such interest; and provided, FURTHER, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest on Registered Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable to
the Holders of such Securities or one or
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more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of
Section 3.7.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
however, that interest represented by coupons shall be payable only at an office
or agency located outside the United States (except as otherwise provided in
Section 10.2) and unless otherwise specified as contemplated by Section 3.1 only
upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 11.7 SECURITIES REDEEMED IN PART.
Any Registered Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Registered Security or Securities of the same
series and of like tenor of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of
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Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other
than any previously called for redemption), together in the case of any Bearer
Securities of such series with all unmatured coupons appertaining thereto, and
(2) may apply as a credit Securities of a series which have been redeemed either
at the election of the Company pursuant to the terms of such Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities, as provided for by the
terms of such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by the
Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.3 REDEMPTION OF SECURITIES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
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ARTICLE XIII
MEETINGS OF HOLDERS OF SECURITIES
SECTION 13.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
If Securities of a series are issuable as Bearer Securities, a meeting
of Holders of Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 13.2 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Securities of any series for any purpose specified in Section 13.1, to be held
at such time and at such place in the Borough of Manhattan, The City of New
York, or in London as the Trustee shall determine. Notice of every meeting of
Holders of Securities of any series, setting forth the time and the place of
such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 1.6, not less than 21
nor more than 180 days prior to the date fixed for the meeting (or, in the case
of a meeting of Holders with respect to Securities of a series all or part of
which are represented by a Book-Entry Security, not less than 20 nor more than
40 days).
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 13.1, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York or in London for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 13.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
Upon the calling of a meeting of Holders with respect to the
Securities of a series all or part of which are represented by a Book-Entry
Security, a record date shall be established for determining Holders of
Outstanding Securities of such series entitled to vote at such meeting, which
record date shall be the close of business on the day the notice of the meeting
of Holders is given in accordance with Section 13.2. The Holders on such record
date, and their designated proxies, and only such Persons, shall be entitled to
vote at any meeting of Holders. To be entitled to vote at any
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meeting of Holders a Person shall (a) be a Holder of one or more Securities
or (b) be a Person appointed by an instrument in writing as proxy by a Holder
of one or more Securities; provided, however, that in the case of any meeting
of Holders with respect to the Securities of a series all or part of which
are represented by a Book-Entry Security, only Holders, or their designated
proxies, of record on the record date established pursuant to Section 13.3
hereof shall be entitled to vote at such meeting. The only Persons who shall
be entitled to be present or to speak at any meeting of Holders shall be the
Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
SECTION 13.4 QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of the
Outstanding Securities of a series shall constitute a quorum for a meeting of
Holders of Securities of such series; provided, however, that if any action is
to be taken at such meeting with respect to a consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of Outstanding Securities of a series
that is less or greater than a majority in principal amount of the Outstanding
Securities of a series, then, with respect to such action (and only such action)
the Persons entitled to vote such lesser or greater percentage in principal
amount of the Outstanding Securities of such series shall constitute a quorum.
In the absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of Securities
of such series, be dissolved. In any other case the meeting may be adjourned for
a period of not less than 10 days as determined by the chairman of the meeting
prior to the adjournment of such meeting. In the absence of a quorum at any such
adjourned meeting, such adjourned meeting may be further adjourned for a period
of not less than 10 days as determined by the chairman of the meeting prior to
the adjournment of such adjourned meeting. Notice of the reconvening of any
adjourned meeting shall be given as provided in Section 13.2 (a), except that
such notice need be given only once not less than five days prior to the date on
which the meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the outstanding Securities of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders with
respect to Securities of any Series which is represented in whole or in part by
a Book-Entry Security, shall be adjourned to a date more than 90 days after the
record date for such meeting unless the Trustee shall send out a new notice of
meeting and establish, in accordance with Section 13.3, a new record date for
Holders entitled to vote at such meeting.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the Holders of a
majority in principal amount of the Outstanding Securities of that series;
provided, however, that, except as limited by the proviso to Section 9.2 any
resolution with respect to any consent or waiver which this Indenture expressly
provides may be given by the Holders of a specified percentage in aggregate
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principal amount of Outstanding Securities of a series that is less or greater
than a majority in principal amount of the Outstanding Securities of a series
may be adopted at a meeting or an adjourned meeting duly convened and at which a
quorum is present as aforesaid only by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding Securities of
that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION 13.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Securities of a series in regard to proof of the holding
of Securities of such series and of the appointment of proxies and in regard to
the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 1.4
and the appointment of any proxy shall be proved in the manner specified in
Section 1.4 or by having the signature of the person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 1.4 to certify to the holding of Bearer Securities. Such regulations may
provide that written instruments appointing proxies, regular on their face, may
be presumed valid and genuine without the proof specified in Section 1.4 or
other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 13.2(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $ 1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of any
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 13.2 at which a quorum is present may be adjourned from time
to time by Persons
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entitled to vote a majority in principal amount of the Outstanding Securities
of such series represented at the meeting; and the meeting may be held as so
adjourned without further notice.
SECTION 13.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Securities of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Securities of such series or of
their representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 13.2 and, if
applicable, Section 13.4. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company, and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE XIV
CONVERSION OF SECURITIES
SECTION 14.1 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to the Securities
of any series which are convertible into shares of Common Stock of the Company,
and the issuance of such shares of Common Stock upon the conversion of such
Securities, except as otherwise specified as contemplated by Section 3.1 for the
Securities of such series. The terms and provisions applicable to the conversion
of Securities of any series into securities of the Company (other than Common
Stock) shall, if applicable, be set forth in an Officers' Certificate or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of such series in accordance with Section 3.1.
SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise a conversion privilege, the Holder of a Security
of a series with such a privilege shall surrender such Security to the Company
at the office or agency
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maintained for that purpose pursuant to Section 10.2, accompanied by written
notice to the Company that the Holder elects to convert such Security or a
specified portion thereof. Such notice shall also state, if different from
the name and address of such Holder, the name or names (with address) in
which the certificate or certificates for shares of Common Stock which shall
be issuable on such conversion shall be issued. Securities surrendered for
conversion shall (if so required by the Company or the Trustee) be duly
endorsed by or accompanied by instruments of transfer in forms satisfactory
to the Company and the Trustee duly executed by the registered Holder or its
attorney duly authorized in writing; and Securities so surrendered for
conversion during the period from the close of business on any Regular Record
Date to the opening of business on the next succeeding Interest Payment Date
(excluding Securities or portions thereof called for redemption during such
period) shall also be accompanied by payment in funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment
Date on the principal amount of such Security then being converted, and such
interest shall be payable to such registered Holder notwithstanding the
conversion of such Security, subject to the provisions of Section 3.7
relating to the payment of Defaulted Interest by the Company. As promptly as
practicable after the receipt of such notice and of any payment required
pursuant to a Board Resolution and, subject to Section 3.1, set forth, or
determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto setting forth the
terms of such series of Security, and the surrender of such Security in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Security is surrendered, to such Holder or on its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Security (or specified portion thereof),
in accordance with the provisions of such Board Resolution, Officers'
Certificate or supplemental indenture, and cash as provided therein in
respect of any fractional share of such Common Stock otherwise issuable upon
such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which such notice
and such payment, if required, shall have been received in proper order for
conversion by the Company and such Security shall have been surrendered as
aforesaid (unless such Holder shall have so surrendered such Security and
shall have instructed the Company to effect the conversion on a particular
date following such surrender and such Holder shall be entitled to convert
such Security on such date, in which case such conversion shall be deemed to
be effected immediately prior to the close of business on such date) and at
such time the rights of the Holder of such Security as such Security Holder
shall cease and the person or persons in whose name or names any certificate
or certificates for shares of Common Stock of the Company shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby. Except as set forth above and
subject to the final paragraph of Section 3.7, no payment or adjustment shall
be made upon any conversion on account of any interest accrued on the
Securities surrendered for conversion or on account of any dividends on the
Common Stock of the Company issued upon such conversion.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to or on the order
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of the Holder thereof, at the expense of the Company, a new Security or
Securities of the same series, of authorized denominations, in aggregate
principal amount equal to the unconverted portion of such Security.
SECTION 14.3 NO FRACTIONAL SHARES.
No fractional share of Common Stock of the Company shall be issued
upon conversions of Securities of any series. If more than one Security shall
be surrendered for conversion at one time by the same Holder, the number of
full shares which shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Securities (or specified
portions thereof to the extent permitted hereby) so surrendered. If, except
for the provisions of this Section 14.3, any Holder of a Security or
Securities would be entitled to a fractional share of Common Stock of the
Company upon the conversion of such Security or Securities, or specified
portions thereof, the Company shall pay to such Holder an amount in cash
equal to the current market value of such fractional share computed, (i) if
such Common Stock is listed or admitted to unlisted trading privileges on a
national securities exchange, on the basis of the last reported sale price
regular way on such exchange on the last trading day prior to the date of
conversion upon which such a sale shall have been effected, or (ii) if such
Common Stock is not at the time so listed or admitted to unlisted trading
privileges on a national securities exchange, on the basis of the average of
the bid and asked prices of such Common Stock in the over-the-counter market,
on the last trading day prior to the date of conversion, as reported by the
National Quotation Bureau, Incorporated or similar organization if the
National Quotation Bureau, Incorporated is no longer reporting such
information, or if not so available, the fair market price as determined by
the Board of Directors. For purposes of this Section, "trading day" shall
mean each Monday, Tuesday, Wednesday, Thursday and Friday other than any day
on which the Common Stock is not traded on the New York Stock Exchange, or if
the Common Stock is not traded on the New York Stock Exchange, on the
principal exchange or market on which the Common Stock is traded or quoted.
SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE.
The conversion price of Securities of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassification, combinations or similar transactions in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of the Securities of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable Board
Resolution or supplemental indenture and shall prepare an Officers' Certificate
setting forth the adjusted conversion price and showing in reasonable detail the
facts upon which such adjustment is based, and such certificate shall forthwith
be filed at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2 and, if different, with the Trustee. The
Company shall forthwith cause a notice setting forth the adjusted conversion
price to be
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mailed, first class postage prepaid, to each Holder of Securities of such
series at its address appearing on the Security Register and to any
conversion agent other than the Trustee.
SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings (other than a dividend for which approval of any shareholders
of the Company is required); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights (other than any such grant for which approval of any
shareholders of the Company is required); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding shares of Common
Stock) or of any consolidation, merger or share exchange to which the
Company is a party and for which approval of any shareholders of the
Company is required, or of the sale of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to
be mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the purpose of such dividend, distribution, rights, options or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, dissolution, liquidation or winding up. If at any time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or treasury
shares, for the purpose
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of effecting the conversion of Securities, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all
outstanding Securities of any series that has conversion rights.
SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of its Common Stock on conversion
of Securities pursuant hereto. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of its Common Stock in a name other than that of
the Holder of the Security or Securities to be converted, and no such issue
or delivery shall be made unless and until the person requesting such issue
has paid to the Company the amount of any such tax, or has established, to
the satisfaction of the Company, that such tax has been paid.
SECTION 14.8 NONASSESSABILITY.
The Company covenants that all shares of its Common Stock which may
be issued upon conversion of Securities will upon issue in accordance with
the terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 14.9 EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE.
In case of any consolidation of the Company with, or merger of the
Company into or with any other Person, or in case of any sale of all or
substantially all of the assets of the Company, the Company or the Person
formed by such consolidation or the Person into which the Company shall have
been merged or the Person which shall have acquired such assets, as the case
may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding of any series
that is convertible into Common Stock of the Company shall have the right,
which right shall be the exclusive conversion right thereafter available to
said Holder (until the expiration of the conversion right of such Security),
to convert such Security into the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such consolidation,
merger or sale by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior
to such consolidation, merger or sale, subject to compliance with the other
provisions of this Indenture, such Security and such supplemental indenture.
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
such Security. The above provisions of this Section shall similarly apply to
successive consolidations, mergers or sales. It is expressly agreed and
understood that anything in this Indenture to the contrary notwithstanding,
if, pursuant to such merger, consolidation or sale, holders of outstanding
shares of Common Stock of the Company do not receive shares of common stock
of the surviving corporation but receive other securities, cash or other
property or any combination thereof, Holders of Securities shall not have the
right to thereafter convert their Securities
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into common stock of the surviving corporation or the corporation which shall
have acquired such assets, but rather, shall have the right upon such
conversion to receive the other securities, cash or other property receivable
by a holder of the number of shares of Common Stock of the Company into which
the Securities held by such holder might have been converted immediately
prior to such consolidation, merger or sale, all as more fully provided in
the first sentence of this Section 14.9. Anything in this Section 14.9 to the
contrary notwithstanding, the provisions of this Section 14.9 shall not apply
to a merger or consolidation of another corporation with or into the Company
pursuant to which both of the following conditions are applicable: (i) the
Company is the surviving corporation and (ii) the outstanding shares of
Common Stock of the Company are not changed or converted into any other
securities or property (including cash) or changed in number or character or
reclassified pursuant to the terms of such merger or consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Securities may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate
or opinion of an independent certified public accountant with respect
thereto; and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely thereon, and shall not be responsible or
accountable to any Holder of Securities for any provision in conformity
therewith or approved by such independent certified accountant which may be
contained in said supplemental indenture.
SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Securities of any series
that is convertible into Common Stock of the Company to determine whether any
facts exist which may require any adjustment of the conversion price, or with
respect to the nature or extent of any such adjustment when made, or with
respect to the method employed, whether herein or in any supplemental
indenture, any resolutions of the Board of Directors or written instrument
executed by one or more officers of the Company provided to be employed in
making the same. Neither the Trustee nor any conversion agent shall be
accountable with respect to the validity or value (or the kind or amount) of
any shares of Common Stock of the Company, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Securities and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer
or deliver any shares of its Common Stock or stock certificates or other
securities or property upon the surrender of any Security for the purpose of
conversion or to comply with any of the covenants of the Company contained in
this Article XIV or in the applicable supplemental indenture, resolutions of
the Board of Directors or written instrument executed by one or more duly
authorized officers of the Company. All Securities delivered for conversion
shall be delivered to the Trustee to be cancelled by or at the direction of
the Trustee, which shall dispose of the same as provided in Section 3.9.
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SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose
of paying the principal of, and premium, if any, and interest, if any, on any
of the Securities (including funds deposited for the sinking fund referred to
in Article III hereof) and which shall not be required for such purposes
because of the conversion of such Securities as provided in this Article XIV
shall after such conversion be repaid to the Company by the Trustee upon the
Company's written request.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
SUN HEALTHCARE GROUP, INC.
By: _____________________________
[Seal] Name
Title
Attest:
_____________________
THE BANK OF NEW YORK
By: _____________________________
[Seal] Name
Title
Attest:
_____________________
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SUN HEALTHCARE GROUP, INC.,
as Issuer
TO
THE BANK OF NEW YORK,
as Trustee
Indenture
Dated as of [___________]
Subordinated Debentures
<PAGE>
TABLE OF CONTENTS (1)
<TABLE>
<CAPTION>
PAGE
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<S> <C>
RECITALS OF THE COMPANY
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS. . . . . . . . . . . . . 10
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE. . . . . . . . . . . . 10
SECTION 1.4 ACTS OF HOLDER. . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY . . . . . . . . . . . . 13
SECTION 1.6 NOTICE TO HOLDERS OF DEBENTURES; WAIVER . . . . . . . . . . . 14
SECTION 1.7 LANGUAGE OF NOTICES, ETC. . . . . . . . . . . . . . . . . . . 15
SECTION 1.8 CONFLICT WITH TRUST INDENTURE ACT . . . . . . . . . . . . . . 15
SECTION 1.9 EFFECT OF HEADINGS AND TABLE OF CONTENTS. . . . . . . . . . . 15
SECTION 1.10 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . 15
SECTION 1.11 SEPARABILITY CLAUSE. . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.12 BENEFITS OF INDENTURE. . . . . . . . . . . . . . . . . . . . 15
SECTION 1.13 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 1.14 LEGAL HOLIDAYS . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.15 JUDGMENT CURRENCY. . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.16 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS
AND EMPLOYEES. . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE II
DEBENTURE FORMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.1 FORMS GENERALLY . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION . . . . . . . 18
SECTION 2.3 DEBENTURES IN GLOBAL FORM . . . . . . . . . . . . . . . . . . 18
SECTION 2.4 FORM OF LEGEND FOR BOOK-ENTRY DEBENTURES. . . . . . . . . . . 19
SECTION 2.5 FORM OF CONVERSION NOTICE . . . . . . . . . . . . . . . . . . 19
ARTICLE III
THE DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES. . . . . . . . . . . . . 20
- ----------------------------
1 NOTE: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE>
SECTION 3.2 DENOMINATIONS . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. . . . . . . . 23
SECTION 3.4 TEMPORARY DEBENTURES. . . . . . . . . . . . . . . . . . . . . 26
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE . . . . . 28
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES AND COUPONS. . 32
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. . . . . . . . 33
SECTION 3.8 PERSONS DEEMED OWNERS . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.9 CANCELLATION. . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 3.10 COMPUTATION OF INTEREST. . . . . . . . . . . . . . . . . . . 35
SECTION 3.11 ELECTRONIC DEBENTURE ISSUANCE. . . . . . . . . . . . . . . . 35
SECTION 3.12 CUSIP NUMBERS. . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IV
SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE . . . . . . . . . . . 36
SECTION 4.2 APPLICATION OF TRUST MONEY. . . . . . . . . . . . . . . . . . 37
SECTION 4.3 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. 38
SECTION 4.4 DISCHARGE AND DEFEASANCE. . . . . . . . . . . . . . . . . . . 38
SECTION 4.5 COVENANT DEFEASANCE . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4.6 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. . . . . . . 39
ARTICLE V
REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. . . . . . 43
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . . . . 46
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES OR
COUPONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 5.6 APPLICATION OF MONEY COLLECTED. . . . . . . . . . . . . . . . 47
SECTION 5.7 LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM
AND INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES. . . . . . . . . . . . . . 49
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE . . . . . . . . . . . . . . . 49
SECTION 5.11 DELAY OR OMISSION NOT WAIVER . . . . . . . . . . . . . . . . 49
SECTION 5.12 CONTROL BY HOLDERS OF DEBENTURES . . . . . . . . . . . . . . 49
SECTION 5.13 WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . . . 50
SECTION 5.14 UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . . . 50
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS . . . . . . . . . . . . . . 51
ii
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ARTICLE VI
THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT; PRIOR
TO DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . . 52
SECTION 6.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES. . . . 53
SECTION 6.4 MAY HOLD DEBENTURES . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.5 MONEY HELD IN TRUST . . . . . . . . . . . . . . . . . . . . . 54
SECTION 6.6 COMPENSATION AND REIMBURSEMENT. . . . . . . . . . . . . . . . 54
SECTION 6.8 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. . . . . . . . . . . . 56
SECTION 6.9 DISQUALIFICATION; CONFLICTING INTERESTS . . . . . . . . . . . 57
SECTION 6.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. . . . . . . . . . . 58
SECTION 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. . . . . . 58
SECTION 6.12 MERGER, CONVERSION CONSOLIDATION OR SUCCESSION TO BUSINESS . 58
SECTION 6.13 APPOINTMENT OF AUTHENTICATING AGENT. . . . . . . . . . . . . 58
SECTION 6.14. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY. . . . . . 60
SECTION 7.1 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. . . . 60
SECTION 7.2 REPORTS BY TRUSTEE. . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.3. REPORTS BY COMPANY . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE. . . . . . . . . . . . . . . . . . 63
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. . . . . . . . 63
SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED.. . . . . . . . . . . . . . 63
SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE.. . . . . . . . . . . . . . . . 64
ARTICLE IX
SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. . . . . . 64
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS . . . . . . . 66
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . 67
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . 67
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT . . . . . . . . . . . . . 68
SECTION 9.6 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES. . . . . . 68
ARTICLE X
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<PAGE>
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST . . . . . . . . . 68
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . . . 68
SECTION 10.3 MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST. . . . . . 70
SECTION 10.4 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES. . . . 71
SECTION 10.5 COVENANTS AS TO SUN TRUSTS.. . . . . . . . . . . . . . . . . 72
SECTION 10.6 ADDITIONAL AMOUNTS . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.7 EXISTENCE. . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.8 PURCHASE OF DEBENTURES BY COMPANY OR SUBSIDIARY. . . . . . . 73
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.9 STATEMENT BY OFFICERS AS TO DEFAULT. . . . . . . . . . . . . 73
SECTION 10.10 CALCULATION OF ORIGINAL ISSUE DISCOUNT. . . . . . . . . . . 74
ARTICLE XI
REDEMPTION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 11.1 APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . . . 74
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE. . . . . . . . . . . . 74
SECTION 11.3 SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED. . . . . . 74
SECTION 11.4 NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . . . 75
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . . . 76
SECTION 11.7 DEBENTURES REDEEMED IN PART. . . . . . . . . . . . . . . . . 77
ARTICLE XII
SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 12.1 APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . . . 78
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES. . . . 78
SECTION 12.3 REDEMPTION OF DEBENTURES FOR SINKING FUND. . . . . . . . . . 78
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES. . . . . . . . . . . . . . . . . . . . . . 79
SECTION 13.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED. . . . . . . . . . 79
SECTION 13.2 CALL, NOTICE AND PLACE OF MEETINGS . . . . . . . . . . . . . 79
SECTION 13.3 PERSONS ENTITLED TO VOTE AT MEETINGS . . . . . . . . . . . . 80
SECTION 13.4 QUORUM; ACTION . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 13.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 13.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS. . . . . . . 82
ARTICLE XIV
CONVERSION OF DEBENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . 82
iv
<PAGE>
SECTION 14.1 APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . . . . 82
SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE . . . . . . . . . . . . . . 83
SECTION 14.3 NO FRACTIONAL SHARES . . . . . . . . . . . . . . . . . . . . 84
SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE . . . . . . . . . . . . . . . 85
SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS. . . . . . . . . . . . . 85
SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK. . . . . . . . . . . . 86
SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION . . . . . . . . . . 86
SECTION 14.8 NONASSESSABILITY . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 14.9 EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE. . 86
SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION. . . . . . . . . . . 87
SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION. . . . . . . . . 88
ARTICLE XV
SUBORDINATION OF DEBENTURES . . . . . . . . . . . 88
SECTION 15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF
DEBENTURES.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.. . . . . . . 90
SECTION 15.5 PAYMENT PERMITTED IN CERTAIN SITUATIONS. . . . . . . . . . . 91
SECTION 15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS. . . 91
SECTION 15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS. . . . . . . . . 92
SECTION 15.8 TRUSTEE TO EFFECTUATE SUBORDINATION. . . . . . . . . . . . . 92
SECTION 15.9 NO WAIVER OF SUBORDINATION PROVISIONS. . . . . . . . . . . . 92
SECTION 15.10 NOTICE TO TRUSTEE.. . . . . . . . . . . . . . . . . . . . . 93
SECTION 15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS. . 94
SECTION 15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 15.14 ARTICLE APPLICABLE TO PAYING AGENTS.. . . . . . . . . . . . 94
SECTION 15.15 CERTAIN CONVERSIONS DEEMED PAYMENT. . . . . . . . . . . . . 95
</TABLE>
v
<PAGE>
INDENTURE, dated as of[__________], between Sun Healthcare Group, Inc.,
a corporation duly organized and existing under the laws of the State of
Delaware (herein called the "Company"), having its principal office at 101 Sun
Lane, N.E., Albuquerque, New Mexico 87109, and The Bank of New York, a New York
banking corporation having its principal corporate trust office at 101 Barclay
Street, Floor 21 West, New York, New York 10286, as Trustee (herein called the
"Trustee") .
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its secured or
unsecured subordinated debentures, notes or other evidences of indebtedness
(herein called the "Debentures"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Debentures by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Debentures or of a series thereof,
as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall
<PAGE>
mean such accounting principles as are generally accepted in the United
States of America at the date of such computation; and
(d) The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"ACT", when used with respect to any Holder of a Debenture, has the
meaning specified in Section 1.4.
"AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 6.13 to act on behalf of the Trustee to authenticate
Debentures of one or more series.
"AUTHORIZED NEWSPAPER" means a newspaper, in the English language or in
an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place, in connection with which the term is
used, or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"BEARER DEBENTURE" means any Debenture in the form established pursuant
to Section 2.1 which is payable to bearer.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of that board.
"BOARD RESOLUTION" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"BOOK-ENTRY DEBENTURE" means a Debenture bearing the legend specified
in Section 2.4, evidencing all or part of a series of Debentures, issued to the
Depository for such series or its nominee, and registered in the name of such
Depository or nominee. Book-Entry Debentures shall not be deemed to be
securities in global form for purposes of Sections 2.1 and 2.3 and Article III
of this Indenture.
"BUSINESS DAY", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Debentures,
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions
2
<PAGE>
in that Place of Payment or other location are authorized or obligated by law
or executive order to close.
"CEDEL S.A." means Cedel Bank, Societe Anonyme, or its successor.
"COMMISSION" means the United States Securities and Exchange
Commission.
"COMMON DEPOSITORY" has the meaning specified in Section 3.4.
"COMMON SECURITIES" means undivided beneficial interests in the assets
of a Sun Trust which rank pari passu with Preferred Securities issued by such
Sun Trust; provided, however, that upon the occurrence of an Event of Default,
the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"COMMON SECURITIES GUARANTEE" means any Guarantee that the Company
enters into with The Bank of New York or other Persons that operates directly or
indirectly for the benefit of holders of Common Securities of a Sun Trust.
"COMMON STOCK" includes any stock of any class of the Company which has
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the anti-
dilution provisions of any convertible Debenture, however, shares of Sun Common
Stock issuable on conversion of a Debenture shall include only shares of the
class designated as Common Stock of the Company at the date of any supplemental
indenture, Board Resolution or other instrument authorizing such Debenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of the payment
of dividends or the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which are not subject
to redemption by the Company, provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of such classes resulting from all such reclassifications.
"COMPANY" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by the Chairman of the Board of Directors or
the President or any Vice Chairman or any Vice President and by the Treasurer or
the Secretary or any Assistant Treasurer or any Assistant Secretary of the
Company and delivered to the Trustee.
3
<PAGE>
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COUPON" means any interest coupon appertaining to a Bearer Debenture.
"DEBENTURE REGISTER" and "DEBENTURE REGISTRAR" have the respective
meanings specified in Section 3.5.
"DEBENTURES" has the meaning stated in the first recital of this
Indenture and more particularly means any Debentures authenticated and delivered
under this Indenture.
"DECLARATION", with respect to a Sun Trust, means the Amended and
Restated Declaration of Trust of such Sun Trust.
"DEFAULTED INTEREST" has the meaning specified in Section 3.7.
"DEFEASANCE" has the meaning specified in Section 4.4.
"DEPOSITORY" means, with respect to the Debentures of any series
issuable or issued in whole or in part in the form of one or more Book-Entry
Debentures of such series, the clearing agency registered under the Securities
Exchange Act of 1934, as amended specified for that purpose as contemplated by
Section 3.1.
"DOLLAR" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"EUROCLEAR" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"EVENT OF DEFAULT" has the meaning specified in Section 5.1.
"EXCHANGE DATE" has the meaning specified in Section 3.4.
"GUARANTOR" means Sun Healthcare Group, Inc., a Delaware corporation,
in its capacity as guarantor under any Trust Securities Guarantees.
"HOLDER", when used with respect to any Debenture, means, in the case
of a Registered Debenture, the Person in whose name the Debenture is registered
in the Debenture Register and, in the case of a Bearer Debenture, the bearer
thereof and, when used with respect to any Coupon, the bearer thereof.
4
<PAGE>
"INDENTURE" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of Debentures of any series established as
contemplated by Section 3.1.
"INSTITUTIONAL TRUSTEE" has the meaning set forth in the Declaration of
the applicable Sun Trust.
"INTEREST", when used with respect to any Original Issue Discount
Debenture which by its terms bears interest only at Maturity, means interest
payable at Maturity.
"INTEREST PAYMENT DATE", when used with respect to any Debenture, means
the Stated Maturity of an installment of interest on such Debenture.
"SUN TRUST" means each of Sun Trust I and II, each, a Delaware
statutory business trust.
"MATURITY", when used with respect to any Debenture, means the date on
which the principal of such Debenture or an installment of such principal
becomes due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption, notice of
option to elect repayment or otherwise.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors or the President or any Vice Chairman or any Vice
President and by the Treasurer or the Secretary or any Assistant Treasurer or
any Assistant Secretary of the Company and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel, who may be an
employee of or counsel for the Company, and who shall be acceptable to the
Trustee.
"ORIGINAL ISSUE DISCOUNT DEBENTURE" means any Debenture which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"OUTSTANDING", when used with respect to Debentures of any series,
means, as of the date of determination, all Debentures of such series
theretofore authenticated and delivered under this Indenture, except:
(i) Debentures of such series theretofore cancelled by the Trustee or
any Paying Agent or delivered to the Trustee for cancellation or that have
previously been cancelled;
(ii) Debentures of such series for whose payment or redemption of which
money or United States Government Obligations in the necessary amount has
been theretofore deposited in accordance with Article IV with the Trustee or
any Paying Agent (other than the
5
<PAGE>
Company) in trust or set aside and segregated in trust by the Company (if the
Company shall act as its own Paying Agent) for the Holders of Debentures of
such series and any Coupons appertaining thereto; provided that, if Debentures
of such series or portions of Debentures of such series are to be redeemed
prior to the Maturity thereof, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee
has been made;
(iii) Debentures of such series which have been paid pursuant to
Section 3.6 or in exchange for or in lieu of which other Debentures of such
series have been authenticated and delivered pursuant to this Indenture,
other than any Debentures of such series in respect of which there shall have
been presented to the Trustee proof satisfactory to it that Debentures of
such series are held by a bona fide purchaser in whose hands Debentures of
such series are valid obligations of the Company; and
(iv) Debentures of such series as to which Defeasance has been
effected pursuant to Section 4.4;
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of the Outstanding Debentures of such series have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder or whether a quorum is present at a meeting of Holders of Debentures
of such series (A) the principal amount of an Original Issue Discount Debenture
of such series that shall be deemed to be Outstanding shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon acceleration of the Maturity thereof pursuant to Section 5.2,
(B) the principal amount of a Debenture of such series denominated in a foreign
currency or currencies shall be the U.S. dollar equivalent, determined on the
date of original issuance of such Debenture, of the principal amount (or, in the
case of an Original Issue Discount Debenture of such series, the U.S. dollar
equivalent on the date of original issuance of such Debenture of the amount
determined as provided in (A) above) of such Debenture, and (C) Debentures of
such series owned by the Company or any other obligor upon such Debentures, or
any Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, or upon any such determination as to the
presence of a quorum, only Debentures of such series which the Trustee actually
knows to be so owned shall be so disregarded. Debentures of such series so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Debentures and that the pledgee is not the Company or
any other obligor upon such Debentures or any Affiliate of the Company or of
such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of and any premium and interest on any Debentures or any Coupons
appertaining thereto on behalf of the Company.
6
<PAGE>
"PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, association, joint stock company,
limited liability company, unincorporated association or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PLACE OF PAYMENT", when used with respect to the Debentures of any
series, means the place or places where, subject to the provisions of Section
10.2, the principal of and any premium and interest on Debentures of such series
are payable as specified as contemplated by Section 3.1.
"PREDECESSOR DEBENTURE" of a Debenture of any series means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such Debenture; and, for the purposes of this definition, a
Debenture of any series authenticated and delivered under Section 3.6 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture or a
Debenture to which a mutilated, destroyed, lost or stolen Coupon appertains
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Debenture or the Debenture to which the mutilated, destroyed, lost or
stolen Coupon appertains, as the case may be.
"PREFERRED SECURITIES" means undivided beneficial interests in the
assets of a Sun Trust which rank pari passu with Common Securities issued by
such Sun Trust; provided, however, that upon the occurrence of an Event of
Default, the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
"PREFERRED SECURITIES GUARANTEE" means any Guarantee that the Guarantor
may enter into with The Bank of New York or other Persons that operates directly
or indirectly for the benefit of holders of Preferred Securities of such Sun
Trust.
"REDEMPTION DATE", when used with respect to any Debenture to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Debenture to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"REGISTERED DEBENTURE" means any Debenture in the form established
pursuant to Section 2.1 which is registered in the Debenture Register.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on Registered Debentures of any series means the date specified for that
purpose as contemplated by Section 3.1., whether or not such day is a Business
Day.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, the
chairman of the board of directors, the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any
7
<PAGE>
assistant secretary, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer, the controller or any assistant
controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter
8
<PAGE>
is referred because of such officer's knowledge of and familiarity with the
particular subject.
"SENIOR INDEBTEDNESS" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed and (b) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by the Company, including
interest accruing on or after a bankruptcy or other similar event, whether or
not an allowed claim therein; (ii) all capital lease obligations of the Company;
(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 transaction;
(v) all obligations of the types referred to in clauses (i) through (iv) of
other Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the types referred
to in clauses (i) through (v) 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 (A) any such indebtedness that is by its terms
subordinated to or PARI PASSU with the Debentures, and (B) any indebtedness
between or among the Company or its Affiliates, including all other debt
securities and guarantees in respect of those debt securities, issued to (a) any
Sun Trust or a trustee of such trust and (b) any other trust, or a trustee of
such trust, partnership or other entity affiliated with the Company that is a
financing vehicle of the Company (a "Financing Entity") in connection with the
issuance by such Financing Entity of preferred securities, unless otherwise
expressly provided in the terms of such debt securities.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on
Registered Debentures of any series means a date fixed by the Trustee pursuant
to Section 3.7.
"STATED MATURITY", when used with respect to any Debenture or any
installment of principal thereof or interest thereon, means the date specified
in such Debenture or a Coupon representing such installment of interest as the
fixed date on which the principal of such Debenture or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, (ii) any general
partnership, joint venture, business trust or similar entity, at least a
majority of whose outstanding partnership or similar interests shall at the time
be owned by such Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.
8-A
<PAGE>
"TRUSTEE" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder, and
if at any time there is more than one such Person, "Trustee" as used with
respect to Debentures of any series shall mean the Trustee with respect to
Debentures of such series.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed, provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUST SECURITIES" means Common Securities and Preferred Securities of
a Sun Trust.
"TRUST SECURITIES GUARANTEES" means the Common Securities Guarantee and
the Preferred Securities Guarantee.
"UNITED STATES" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"UNITED STATES ALIEN" means any Person who, for United States federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
nonresident alien fiduciary of a foreign estate or trust or a foreign
partnership.
"U.S. GOVERNMENT OBLIGATIONS" means direct obligations of the United
States for the payment of which its full faith and credit is pledged, or
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States and the payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank (as defined in
Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with
respect to any such U.S. Government Obligations or a specific payment of
principal of or interest on any such U.S. Government Obligations held by such
custodian for the account of the holder of such depository receipt, provided
that (except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligations or the specific payment of principal of or interest on the U.S.
Government Obligations evidenced by such depository receipt.
"VOTING STOCK", as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent)
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of such Person, other than shares, interests, participations or other
equivalents having such power only by reason of the occurrence of a
contingency.
"YIELD TO MATURITY" means the yield to maturity on Debentures of any
series, calculated at the time of issuance of such series, or, if applicable, at
the most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion by or on behalf of the Company with
respect to compliance with a condition or covenant provided for in this
Indenture, except for certificates provided for in Section 10.9, shall include:
(a) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, the
individual has made such examination or investigation as is necessary to enable
such individual to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing. If Debentures of any series are issuable as
Bearer Debentures of such series , any request, demand, authorization,
direction, notice, consent, waiver or other action provided or permitted by this
Indenture to be given or taken by Holders of Debentures of such series may,
alternatively, be embodied in and evidenced by the record of Holders of
Debentures of such series voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Debentures of
such series duly called and held in accordance with the provisions of Article
XIII, or a combination of such instruments and any such record. Except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record or both are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments and any such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments and so voting at any such meeting. Proof of
execution of any such instrument or of a writing appointing any such agent or
proxy, or of the holding by any Person of a Debenture of any series, shall be
sufficient for any purpose of this Indenture and (subject to Section 6.2)
conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Section. The record of any meeting of Holders of Debentures of
any series shall be proved in the manner provided in Section 13.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such notary public or other such
officer the execution thereof. Where such execution is by a signer acting in a
capacity other than
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the signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of the signer's authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee reasonably deems sufficient.
(c) The principal amount and serial numbers of Registered Debentures
of any series held by any Person, and the date of holding the same, shall be
proved by the Debenture Register.
(d) The principal amount and serial numbers of Bearer Debentures of
any series held by any Person, and the date of holding the same, may be proved
by the production of such Bearer Debentures or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on deposit with such
depositary, or exhibited to it, the Bearer Debentures therein described; or such
facts may be proved by the certificate or affidavit of the Person holding such
Bearer Debentures, if such certificate or affidavit is deemed by the Trustee to
be satisfactory. The Trustee and the Company may assume that such ownership of
any Bearer Debenture continues until (i) another certificate or affidavit
bearing a later date issued in respect of the same Bearer Debenture is produced,
or (ii) such Bearer Debenture is produced to the Trustee by some other Person,
or (iii) such Bearer Debenture is surrendered in exchange for a Registered
Debenture of such series, or (iv) such Bearer Debenture is no longer
Outstanding. The principal amount and serial numbers of Bearer Debentures held
by any Person, and the date of holding the same, may also be proved in any other
manner which the Trustee deems sufficient.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of a Debenture of any series shall bind every
future Holder of the same Debenture and the Holder of every Debenture issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
(f) With respect to the Debentures of any series, upon receipt by the
Trustee of (i) any written notice directing the time, method or place of
conducting any proceeding or exercising any trust or power pursuant to Section
5.1 with respect to Debentures of such series or (ii) any written demand,
request or notice with respect to any matter on which the Holders of Debentures
of such series are entitled to act under this Indenture, in each case from
Holders of less than, or proxies representing less than, the requisite principal
amount of Outstanding Debentures of such series entitled to give such demand,
request or notice, the Trustee shall establish a record date for determining
Holders of Outstanding Debentures of such series entitled to join in such
demand, request or notice, which record date shall be the close of business on
the day the Trustee received such demand, request or notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such demand, request or notice whether or not such Holders
remain Holders after such record date; provided,
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however, that unless the Holders of the requisite principal amount of
Outstanding Debentures of such series shall have joined in such demand,
request or notice prior to the day which is the ninetieth day after such
record date, such demand, request or notice shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
(i) after the expiration of such 90-day period, a new demand, request or
notice identical to a demand, request or notice which has been canceled
pursuant to the proviso to the preceding sentence or (ii) during any such
90-day period, a new demand, request or notice which has been canceled
pursuant to the proviso to the preceding sentence or (iii) during any such
90-day period, a new demand, request or notice contrary to or different from
such demand, request or notice, in either of which events a new record date
shall be established pursuant to the provisions of this clause.
(g) The Company may set any day as the record date for the purpose of
determining the Holders of Outstanding Debentures of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given or taken by
Holders of Debentures of such series. With regard to any record date set
pursuant to this paragraph, the Holders of Outstanding Debentures of such series
on such record date (or their duly appointed agents), and only such Persons,
shall be entitled to give or take the relevant action, whether or not such
Holders remain Holders after such record date. With regard to any action that
may be given or taken hereunder only by Holders of a requisite principal amount
of Outstanding Debentures of any series (or their duly appointed agents) and for
which a record date is set pursuant to this paragraph, the Company may, at its
option, set an expiration date after which no such action purported to be given
or taken by any Holder shall be effective hereunder unless given or taken on or
prior to such expiration date by Holders of the requisite principal amount of
Outstanding Debentures of such series on such record date (or their duly
appointed agents). On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its option, extend such
date to any later date. Nothing in this paragraph shall prevent any Holder (or
any duly appointed agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or different from,
any action given or taken, or purported to have been given or taken, hereunder
by a Holder on or prior to such date, in which event the Company may set a
record date in respect thereof pursuant to this clause. Notwithstanding the
foregoing or the Trust Indenture Act, the Company shall not set a record date
for, and the provisions of this clause shall not apply with respect to, any
action to be given or taken by Holders pursuant to Section 5.1, 5.2 or 5.12.
SECTION 1.5 NOTICES, ETC., TO TRUSTEE AND COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
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(a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Trustee Administration, or
(b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to it
at the address of its principal office specified in the first paragraph of this
Indenture, to the attention of its Treasurer, or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.6 NOTICE TO HOLDERS OF DEBENTURES; WAIVER.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Debentures of any event:
(a) such notice shall be sufficiently given to Holders of Registered
Debentures of any series if in writing and mailed, first-class postage prepaid,
to each Holder of a Registered Debenture affected by such event, at the address
of such Holder as it appears in the Debenture Register, not earlier than the
earliest date, and not later than the latest date, prescribed for the giving of
such notice; and
(b) such notice shall be sufficiently given to Holders of Bearer
Debentures of any series if published in an Authorized Newspaper in The City of
New York, The City of London and in such other city or cities as may be
specified in such Debentures on a Business Day at least twice, the first such
publication to be not earlier than the earliest date, and the second such
publication to be not later than the latest date, prescribed for the giving of
such notice.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice to
Holders of Registered Debentures by mail, then such notification as shall be
made with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. In any case where notice to Holders of
Registered Debentures is given by mail, neither the failure to mail such notice,
nor any defect in any notice mailed to any particular Holder of a Registered
Debenture shall affect the sufficiency of such notice with respect to other
Holders of Registered Debentures or the sufficiency of any notice to Holders of
Bearer Debentures given as provided herein.
In case by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Debentures as provided
above, then such notification as shall be given with the approval of the Trustee
shall constitute sufficient notice to such Holders for every purpose hereunder.
Neither the failure to give notice by publication to Holders of Bearer
Debentures as provided above, nor any defect in any notice so published, shall
affect the sufficiency of any notice to Holders of Registered Debentures given
as provided herein.
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Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Debentures shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7 LANGUAGE OF NOTICES, ETC.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
SECTION 1.8 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required to be included in this Indenture by any of Sections 310 to 318,
inclusive, of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 1.9 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.10 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.11 SEPARABILITY CLAUSE.
In case any provision in this Indenture or the Debentures or Coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 1.12 BENEFITS OF INDENTURE.
Nothing in this Indenture or the Debentures or Coupons, express or
implied, shall give to any Person, other than the parties hereto, any
Authenticating Agent, any Paying Agent, any Debentures Registrar and their
successors hereunder and the Holders of Debentures and coupons, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.13 GOVERNING LAW.
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This Indenture and the Debentures and Coupons shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of laws principles thereof.
SECTION 1.14 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date, sinking
fund payment date, Maturity or Stated Maturity of a Debenture of any series
shall not be a Business Day at any Place of Payment, then (notwithstanding any
other provision of this Indenture or of the Debentures or Coupons other than a
provision in Debentures of any series which specifically states that such
provision shall apply in lieu of this Section) payment of interest or principal
(and premium, if any) need not be made at such Place of Payment on such date,
but may be made on the next succeeding Business Day at such Place of Payment
with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be, to such
succeeding Business Day.
SECTION 1.15 JUDGMENT CURRENCY.
The Company agrees, to the fullest extent that it may effectively do so
under applicable law, that (a) if for the purpose of obtaining judgment in any
court it is necessary to convert the sum due on Debentures of any series from
the currency in which such sum is payable in accordance with the terms of such
Debentures (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in The City of New York the Required Currency with the Judgment Currency on the
New York Banking Day preceding that on which a final unappealable judgment is
rendered and (b) its obligations under this Indenture to make payments in the
Required Currency (i) shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment (whether or not entered in accordance with
subsection (a)), in any currency other than the Required Currency, except to the
extent that such tender or recovery shall result in the actual receipt, by the
payee, of the full amount of the Required Currency expressed to be payable in
respect of such payments, (ii) shall be enforceable as an alternative or
additional cause of action for the purpose of recovering in the Required
Currency the amount, if any, by which such actual receipt shall fall short of
the full amount of the Required Currency so expressed to be payable and (iii)
shall not be affected by judgment being obtained for any other sum due under
this Indenture. For purposes of the foregoing, "New York Banking Day" means any
day except a Saturday, Sunday or a legal holiday in The City of New York or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
SECTION 1.16 IMMUNITY OF INCORPORATORS, SHAREHOLDERS, OFFICERS, DIRECTORS
AND EMPLOYEES.
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No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of a Debenture of any series, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
shareholder, officer, director or employee, as such, past, present or future, of
the Company or of any successor corporation, either directly or through the
Company, whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations of the Company, and that no such personal liability
whatever shall attach to, or is or shall be incurred by, the incorporators,
shareholders, officers, directors or employees, as such, of the Company or of
any successor corporation, or any of them, because of the creation of the
indebtedness hereby authorized, or under or by reason of the obligations or
agreements contained in this Indenture or in any of the Debentures or implied
therefrom; and that any and all such personal liability, either at common law or
in equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, shareholder, officer, director or
employee, as such, because of the creation of the indebtedness hereby
authorized, or under of by reason of the obligations or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issue of such Debentures.
All payments of interest and other amounts, if any, to be made by the
Trustee hereunder shall be made only from the money deposited with the Trustee
and only to the extent that the Trustee shall have sufficient income or proceeds
to make such payments in accordance with the terms of this Indenture, and each
Holder thereof, by its acceptance of a Debenture, agrees that it will look
solely to the income and proceeds deposited with the Trustee to the extent
available for distribution to such Holder as provided and that the Trustee is
not personally liable in any manner to such Holder for any amounts payable or
any liability under this Indenture or any Debenture.
ARTICLE II
DEBENTURE FORMS
SECTION 2.1 FORMS GENERALLY.
The Registered Debentures, if any, of each series and the Bearer
Debentures, if any, of each series and related Coupons shall be in such form
(including temporary or permanent global form) as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Debentures or Coupons, as evidenced by their execution
of the Debentures or Coupons. If temporary Debentures of any series are issued
in global form as permitted by Section 3.4, the form thereof
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shall be established as provided in the preceding sentence. If the forms of
Debentures or Coupons of any series (or any such temporary global Debenture)
are established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Debentures (or any such temporary global
Debenture) or Coupons.
Unless otherwise specified as contemplated by Section 3.1, Debentures
in bearer form shall have interest Coupons attached.
The definitive Debentures and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debentures or
Coupons, as evidenced by their execution of such Debentures or Coupons.
SECTION 2.2 FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Debentures of the series designated therein referred
to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By:
---------------
Authorized Signatory
SECTION 2.3 DEBENTURES IN GLOBAL FORM.
If Debentures of any series are issuable in global form, as specified
as contemplated by Section 3.1, then, notwithstanding clause (e) of Section 3.1
and the provisions of Section 3.2, any such Debenture shall represent such of
the Outstanding Debentures of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding Debentures
of such series from time to time endorsed thereon and that the aggregate amount
of Outstanding Debentures of such series represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Debenture in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Debentures of such series represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or Persons as
shall be specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 3.3 or Section 3.4. Subject
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to the provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee
shall deliver and redeliver any Debenture in permanent global form in the
manner and upon instructions given by the Person or Persons specified therein
or in the applicable Company Order. If a Company Order pursuant to Section
3.3 or 3.4 has been, or simultaneously is, delivered, any instructions by the
Company with respect to endorsement or delivery or redelivery of a Debenture
in global form shall be in writing but need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 3.3 shall apply to any
Debenture represented by a Debenture in global form if such Debenture was never
issued and sold by the Company and the Company delivers to the Trustee the
Debenture in global form together with written instructions (which need not
comply with Section 1.2 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Debentures represented
thereby, together with the written statement contemplated by the last sentence
of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless
otherwise specified as contemplated by Section 3.1, payment of principal of and
any premium and interest on any Debenture in permanent global form shall be made
to the Person or Persons specified therein.
Notwithstanding the provisions of Section 3.8 and except as provided in
the preceding paragraph, the Company, the Trustee and any agent of the Company
and the Trustee shall treat a Person as the Holder of such principal amount of
Outstanding Debentures represented by a permanent global Debenture as shall be
specified in a written statement of the Holder of such permanent global
Debenture or, in the case of a permanent global Debenture in bearer form, of
Euroclear or Cedel S.A. which is provided to the Trustee by such Person.
SECTION 2.4 FORM OF LEGEND FOR BOOK-ENTRY DEBENTURES.
Any Book-Entry Debenture authenticated and delivered hereunder shall
bear a legend in substantially the following form:
"This Debenture is a Book-Entry Debenture within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. This Debenture is exchangeable for Debentures
registered in the name of a Person other than the Depository or its nominee only
in the limited circumstances described in the Indenture, and no transfer of this
Debenture (other than a transfer of this Debenture as a whole by the Depository
to a nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository) may be registered except in
such limited circumstances."
SECTION 2.5 FORM OF CONVERSION NOTICE.
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The Form of conversion notice for the conversion of Debentures into
shares of Common Stock or other securities of the Company shall be in
substantially the form included with the applicable form of Debentures as shall
be established pursuant to Section 2.1 hereinabove.
ARTICLE III
THE DEBENTURES
SECTION 3.1 AMOUNT UNLIMITED; ISSUABLE IN SERIES.
The aggregate principal amount of Debentures which may be authenticated
and delivered under this Indenture is unlimited.
The Debentures may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth, or determined in the manner provided, in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Debentures of any series:
(a) the title of the Debentures of the series (which shall
distinguish the Debentures of the series from all other series of Debentures);
(b) any limit upon the aggregate principal amount of the Debentures of
the series which may be authenticated and delivered under this Indenture (except
for Debentures of the series authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Debentures of the series
pursuant to Section 3.4, 3.5, 3.6, 9.6 or 11.7 and except for any Debentures of
the series which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder);
(c) whether Debentures of the series are to be issuable as Registered
Debentures, Bearer Debentures or both, whether any Debentures of the series are
to be issuable initially in temporary global form and whether any Debentures of
the series are to be issuable in permanent global form with or without coupons
and, if so, whether beneficial owners of interests in any such permanent global
Debenture may exchange such interests for Debentures of the series and of like
tenor of any authorized form and denomination and the circumstances under which
any such exchanges may occur, if other than in the manner provided in Section
3.5;
(d) the Person to whom any interest on any Registered Debenture of the
series shall be payable, if other than the Person in whose name that Debenture
(or one or more Predecessor Debentures) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Debenture of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the
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manner in which, any interest payable on a temporary global Debenture on an
Interest Payment Date will be paid if other than in the manner provided in
Section 3.4;
(e) the date or dates, or the method by which such date or dates will
be determined or extended, on which the principal of the Debentures of the
series is payable;
(f) the rate or rates at which the Debentures of the series shall bear
interest, if any, or the formula pursuant to which such rate or rates shall be
determined, the date or dates from which any such interest shall accrue, the
Interest Payment Dates on which any such interest shall be payable, and the
Regular Record Date for any interest payable on any Registered Debentures on any
Interest Payment Date and the basis upon which interest shall be calculated if
other than that of a 360-day year consisting of twelve 30-day months;
(g) the place or places where, subject to the provisions of Sections
11.4 and 10.2, the principal of and any premium and interest on Debentures of
the series shall be payable, any Registered Debentures of the series may be
surrendered for registration of transfer, Debentures of the series may be
surrendered for conversion or exchange, notices and demands to or upon the
Company in respect of the Debentures of the series and this Indenture may be
served and where notices to Holders of Bearer Debentures of the series pursuant
to Section 1.6 will be published;
(h) the right, if any, to extend the interest payment periods in
respect of the Debentures of the series and the duration of such extension;
(i) the period or periods within which, the price or prices at which
and the terms and conditions upon which Debentures of the series may be
redeemed, in whole or in part, at the option of the Company;
(j) the obligation, if any, of the Company to redeem, repay or
purchase Debentures of the series, or any Debentures within the series, pursuant
to any sinking fund or analogous provisions and the period or periods within
which, the price or prices at which and the terms and conditions upon which such
Debentures shall be redeemed, repaid or purchased, in whole or in part, pursuant
to such obligation;
(k) the terms of any right to convert or exchange Debentures of the
series, either at the election of the Holder thereof or the Company, into or for
shares of Common Stock of the Company or other securities or property,
including, without limitation, the period or periods within which and the price
or prices (including adjustments thereto) at which any Debentures of the series
shall be converted or exchanged, in whole or in part and any other provision in
addition to or in lieu of those set forth in this Indenture;
(l) the denominations in which any Registered Debentures of the series
shall be issuable, if other than denominations of $1,000 and any integral
multiple thereof, and the
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denomination or denominations in which any Bearer Debentures of the series
shall be issuable, if other than the denomination of $5,000;
(m) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the Debentures
of the series shall be payable if other than the currency of the United States
of America;
(n) if the principal of and any premium or interest on the Debentures
of the series are to be payable, at the election of the Holder thereof or the
Company, in a currency or currencies, including composite currencies, other than
that or those in which the Debentures of the series are stated to be payable,
the currency or currencies in which payment of the principal of and any premium
and interest on Debentures of the series as to which such election is made shall
be payable, and the periods within which and the terms and conditions upon which
such election is to be made;
(o) if the amount of payments of principal of and any premium or
interest on the Debentures of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;
(p) if other than the principal amount thereof, the portion of the
principal amount of any Debentures of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2;
(q) the Person who shall be the Debenture Registrar, if other than the
Trustee;
(r) whether the Debentures of the series shall be issued upon original
issuance in whole or in part in the form of one or more Book-Entry Debentures
and, in such case, (a) the Depository with respect to such Book-Entry Debenture
or Debentures; and (b) the circumstances under which any such Book-Entry
Debenture may be exchanged for Debentures registered in the name of, and any
transfer of such Book-Entry Debenture may be registered to, a Person other than
such Depository or its nominee, if other than as set forth in Section 3.5;
(s) if the provisions of Section 4.4 or 4.5 are applicable to the
Debentures of the series;
(t) provisions, if any, granting special rights to the Holders of
Debentures of the series upon the occurrence of such events as may be specified;
(u) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to Debentures of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
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(v) whether and under what conditions additional amounts will be
payable to Holders of Debentures of the series pursuant to Section 10.6;
(w) the terms and conditions, if any, pursuant to which Debentures of
the series are secured;
(x) the subordination terms of the Debentures of the series; and
(y) any other terms of the Debentures of the series.
All Debentures of any series and the coupons appertaining to any Bearer
Debentures of such series shall be substantially identical except, in the case
of Registered Debentures of such series, as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution referred to above
and (subject to Section 3.3) set forth in, or determined in the manner provided
in, the Officers' Certificate referred to above or in any such indenture
supplemental hereto. Not all Debentures of any series need be issued at the
same time, and, unless otherwise provided, a series may be reopened for
issuances of additional Debentures of such series.
If any of the terms of the Debenture of any series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary of the Company and delivered to
the Trustee at or prior to the delivery of the Officers' Certificate setting
forth the terms, or the manner of determining the terms, of the series.
SECTION 3.2 DENOMINATIONS.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, any Registered Debentures shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Debentures shall be issuable in the denomination of $5,000.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
Debentures shall be signed on behalf of the Company by both (a) its
Chairman of the Board of Directors or any Vice Chairman of the Board of
Directors or its President or one of its Vice Presidents and (b) its Treasurer
or one of its Assistant Treasurers or its Secretary or one of its Assistant
Secretaries, under its corporate seal which may, but need not, be attested. The
signature of any of these officers on Debentures may be manual or facsimile.
Coupons shall bear the facsimile signature of the Treasurer of the Company.
Debentures and Coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to
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the authentication and delivery of such Debentures or did not hold such
offices at the date of such Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Debentures of any series, together with
any Coupons appertaining thereto executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of Debentures of such series, and the Trustee in accordance with the
Company Order shall authenticate and make Debentures of such series available
for delivery; provided, however, that, in connection with its original issuance,
no Bearer Debenture of such series shall be mailed or otherwise delivered to any
location in the United States; and provided, further, that a Bearer Debenture of
such series may be delivered in connection with its original issuance only if
the Person entitled to receive such Bearer Debenture shall have furnished a
certificate in the form specified in the Debenture of such series as to certain
tax matters in respect of United States citizens, dated no earlier than 15 days
prior to the earlier of the date on which the Bearer Debenture of such series is
delivered and the date on which any temporary global Debenture first becomes
exchangeable for such Bearer Debenture of such series in accordance with the
terms of such temporary global Debenture and this Indenture. If any Debenture of
such series shall be represented by a permanent global Bearer Debenture of such
series, then, for purposes of this Section and Section 3.4, the notation of a
beneficial owner's interest therein upon original issuance of such Debenture or
upon exchange of a portion of a temporary global Debenture shall be deemed to be
delivery in connection with its original issuance of such beneficial owner's
interest in such permanent global Debenture. Except as permitted by Section 3.6,
the Trustee shall not authenticate and deliver any Bearer Debenture of such
series unless all appurtenant Coupons for interest then matured have been
detached and cancelled.
If all the Debentures of any series are not to be issued at one time
and if the Board Resolution and indenture supplement establishing such series
shall so permit, such Company Order may set forth procedures acceptable to the
Trustee for the issuance of Debentures of such series and determining the terms
of such series, such as interest rate, maturity date, date of issuance and date
from which interest shall accrue.
If the forms or terms of the Debentures of any series, together with
any Coupons appertaining thereto, have been established in or pursuant to one or
more Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating
Debentures of such series, and accepting the additional responsibilities under
this Indenture in relation to such Debentures of such series, the Trustee shall
be entitled to receive, and (subject to Section 6.2) shall be fully protected in
relying upon, an Opinion of Counsel stating:
(a) that such forms have been established in conformity with the
provisions of this Indenture;
(b) that such terms, or the manner of determining such terms, have
been established in conformity with the provisions of this Indenture;
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(c) that Debentures of such series, together with any Coupons
appertaining thereto, when authenticated and delivered by the Trustee and issued
by the Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting the enforcement of
creditors' rights generally and general equity principles (regardless of whether
enforceability is considered in a proceeding at law or equity); and
(d) that all laws and requirements in respect of the execution and
delivery by the Company of Debentures of such series have been complied with.
If such forms or terms have been so established, the Trustee shall not
be required to authenticate Debentures of such series if the issue of such
Debentures pursuant to this Indenture will affect the Trustee's own rights,
duties or immunities under such Debentures and this Indenture or otherwise in a
manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all Debentures of any series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 3.1 or the Company Order and Opinion of
Counsel otherwise required pursuant to such preceding paragraphs at or prior to
the time of authentication of each Debenture of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Debenture of such series to be issued.
Each Registered Debenture of any series shall be dated the date of its
authentication; and each Bearer Debenture shall be dated as of the date of
original issuance of the first Debenture of such series to be issued.
No Debenture of any series or any Coupon appertaining thereto shall be
entitled to any benefit under this Indenture or be valid or obligatory for any
purpose unless there appears on the Debenture, or the Coupon appertaining to
such Debenture, a certificate of authentication substantially in the form
provided for herein executed by the Trustee by manual signature, and such
certificate upon any Debenture shall be conclusive evidence, and the only
evidence, that such Debenture has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Debenture shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Debenture to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating
that such Debenture has never been issued and sold by the Company, for all
purposes of this Indenture such Debenture shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
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SECTION 3.4 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
make available for delivery, temporary Debentures of such series which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Debentures
of such series in lieu of which they are issued, in registered form or, if
authorized, in bearer form with one or more coupons or without coupons, and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Debentures or Coupons may determine, as evidenced by
their execution of such Debentures or Coupons. In the case of Debentures of any
series issuable as Bearer Debentures, such temporary Debentures may be in global
form. A temporary Bearer Debenture shall be delivered only in compliance with
the conditions set forth in Section 3.3.
Except in the case of temporary Debentures in global form issued in a
transaction exempt from registration under the Securities Act of 1933, as
amended, pursuant to Regulation S thereunder (a "Regulation S Debenture")(which
shall be exchanged in accordance with the provisions of the following
paragraphs), if temporary Debentures of any series are issued, the Company will
cause definitive Debentures of such series to be prepared without unreasonable
delay. After the preparation of definitive Debentures of such series, the
temporary Debentures of such series shall be exchangeable for definitive
Debentures of such series upon surrender of the temporary Debentures of such
series at the office or agency of the Company maintained pursuant to Section
10.2 in a Place of Payment for such series for the purpose of exchanges of
Debentures of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Debentures of any series (accompanied
by any unmatured Coupons appertaining thereto) the Company shall execute and the
Trustee shall authenticate and make available for delivery in exchange therefor
a like aggregate principal amount of definitive Debentures of such series and of
like tenor of authorized denominations; provided, however, that no definitive
Bearer Debenture shall be delivered in exchange for a temporary Registered
Debenture.
If temporary Regulation S Debentures of any series are issued in global
form, any such temporary global Regulation S Debenture shall, unless otherwise
provided therein, be delivered to the London office of a depositary or common
depositary (the "Common Depositary"), for the benefit of Euro-clear and Cedel
S.A., for credit to the respective accounts of the beneficial owners of such
Debentures (or to such other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Regulation S Debenture of any series (the "Exchange Date"), the Company shall
deliver to the Trustee definitive Debentures of such series, in aggregate
principal amount equal to the principal amount of such temporary global
Regulation S Debenture, executed by the Company. On or after the Exchange Date
such temporary global Regulation S Debenture shall be surrendered by the Common
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Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Debentures of
such series without charge and the Trustee shall authenticate and make available
for delivery, in exchange for each portion of such temporary global Regulation S
Debenture, a like aggregate principal amount of definitive Debentures of such
series of authorized denominations and of like tenor as the portion of such
temporary global Regulation S Debenture to be exchanged; provided, however,
that, unless otherwise specified in such temporary global Regulation S
Debenture, upon such presentation by the Common Depositary, such temporary
global Regulation S Debenture is accompanied by a certificate dated the Exchange
Date or a subsequent date and signed by Euro-clear as to the portion of such
temporary global Regulation S Debenture held for its account then to be
exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by Cedel S.A. as to the portion of such temporary global Regulation S
Debenture held for its account then to be exchanged, each in the form or in such
form as shall be specified in such Regulation S Debenture. The definitive
Debentures of such series to be delivered in exchange for any such temporary
global Regulation S Debenture shall be in bearer form, registered form,
permanent global bearer form or permanent global registered form, or any
combination thereof, as specified as contemplated by Section 3.1, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that definitive Bearer Debentures of such series
shall be delivered in exchange for a portion of a temporary global Regulation S
Debenture of such series only in compliance with the requirements of Section
3.3.
Unless otherwise specified in such temporary global Regulation S
Debenture, the interest of a beneficial owner of Debentures of any series in a
temporary global Regulation S Debenture shall be exchanged for definitive
Debentures of such series and of like tenor following the Exchange Date when the
account holder instructs Euroclear or Cedel S.A., as the case may be, to request
such exchange on the Holder's behalf and delivers to Euro-clear or Cedel S.A.,
as the case may be, a certificate in such form as shall be specified in the
Regulation S Debenture of such series, dated no earlier than 15 days prior to
the Exchange Date, copies of which certificate shall be available from the
offices of Euroclear and Cedel S.A., the Trustee, any Authenticating Agent
appointed for the Debentures of such series and each Paying Agent. Unless
otherwise specified in such temporary global Regulation S Debenture, any such
exchange shall be made free of charge to the beneficial owners of such temporary
global Regulation S Debenture, except that a Person receiving definitive
Debentures of such series must bear the cost of insurance, postage,
transportation and the like in the event that such Person does not take delivery
of such definitive Debentures of such series in person at the offices of
Euro-clear or Cedel S.A. Definitive Debentures of such series in bearer form to
be delivered in exchange for any portion of a temporary global Regulation S
Debenture of such series shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Regulation S Debentures of any series shall in all respects be entitled to such
benefits under this Indenture as definitive Debentures of such series and of
like tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 3.1, interest payable
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on a temporary global Regulation S Debenture of such series on an Interest
Payment Date for Debentures of such series occurring prior to the applicable
Exchange Date shall be payable to Euro-clear and Cedel S.A. on such Interest
Payment Date upon delivery by Euroclear and Cedel S.A. to the Trustee of a
certificate or certificates in such form as shall be specified in the
Debenture of such series, for credit without further interest on or after
such Interest Payment Date to the respective accounts of the Persons who are
the beneficial owners of such temporary global Regulation S Debenture on such
Interest Payment Date and who have each delivered to Euroclear or Cedel S.A.,
as the case may be, a certificate in such form as shall be specified in the
Debenture of such series. Any interest so received by Euroclear and Cedel
S.A. and not paid as herein provided shall be returned to the Trustee
immediately prior to the expiration of two years after such Interest Payment
Date in order to be repaid to the Company in accordance with Section 10.3.
SECTION 3.5 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept at an office or agency to be
maintained by the Company in accordance with Section 10.2 a register (the
"Debenture Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Registered
Debentures and the registration of transfers of Registered Debentures. The
Trustee is hereby appointed "Debenture Registrar" for the purpose of registering
Registered Debentures and transfers of Registered Debentures as herein provided.
Upon due surrender for registration of transfer of any Registered
Debenture of any series at the office or agency of the Company maintained
pursuant to Section 10.2 for such purpose in a Place of Payment for such series,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, in the name of the designated transferee or transferees, one or
more new Registered Debentures of such series of any authorized denominations
and of a like aggregate principal amount and tenor.
At the option of the Holder, Registered Debentures of any series may be
exchanged for other Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Debentures to be exchanged at any such office or agency. Whenever any
Debentures are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, the Debentures which
the Holder making the exchange is entitled to receive. Registered Debentures may
not be exchanged for Bearer Debentures.
At the option of the Holder, Bearer Debentures of any series may be
exchanged for Registered Debentures of such series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Bearer Debentures of such series to be exchanged at any such office or
agency, with all unmatured Coupons, and all matured Coupons in default
appertaining thereto. If the Holder of a Bearer Debenture of such series is
unable to produce any such unmatured Coupon or Coupons or matured Coupon or
Coupons in default, such exchange may be effected if the Bearer Debentures of
such series are accom-
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panied by payment in funds acceptable to the Company in an amount equal to
the face amount of such missing Coupon or Coupons, or the surrender of such
missing Coupon or Coupons may be waived by the Company and the Trustee if
there is furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Debentures of such series shall surrender to any Paying Agent any such
missing Coupon in respect of which such a payment shall have been made, such
Holder shall be entitled to receive the amount of such payment; provided,
however, that, except as otherwise provided in Section 10.2, interest
represented by Coupons shall be payable only upon presentation and surrender
of those Coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Debenture of any series is
surrendered at any such office or agency in exchange for a Registered
Debenture of such series and of like tenor after the close of business at
such office or agency on (i) any Regular Record Date and before the opening
of business at such office or agency on the relevant Interest Payment Date,
or (ii) any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted
Interest, the Bearer Debenture of such series shall be surrendered without
the Coupon relating to such Interest Payment Date or proposed date for
payment, as the case may be, and interest or Defaulted Interest, as the case
may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of the Registered Debenture of
such series issued in exchange for such Bearer Debenture, but will be payable
only to the Holder of such Coupon when due in accordance with the provisions
of this Indenture.
Whenever any Debentures of any series are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Debentures of such series which the Holder making the exchange
is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 3.1, any permanent global Debenture of any series shall
be exchangeable only as provided in this paragraph. If the beneficial owners of
interests in a permanent global Debenture of any series are entitled to exchange
such interests for Debentures of such series and of like principal amount and
tenor of another authorized form and denomination, as specified as contemplated
by Section 3.1, then without unnecessary delay but in any event not later than
the earliest date on which such interests may be so exchanged, the Company shall
deliver to the Trustee definitive Debentures of such series in aggregate
principal amount equal to the principal amount of such permanent global
Debenture, executed by the Company. On or after the earliest date on which such
interests may be so exchanged, such permanent global Debenture of any series
shall be surrendered by the Common Depositary or such other depositary or Common
Depositary as shall be specified in the Company Order with respect thereto to
the Trustee, as the Company's agent for such purpose, to be exchanged, in whole
or from time to time in part, for definitive Debentures of such series without
charge and the Trustee shall authenticate and make available for delivery, in
exchange for each portion of such permanent global Debenture, a like aggregate
principal amount of definitive Debentures of such series of authorized
denominations and of like tenor as the portion of such permanent
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global Debenture of such series to be exchanged which, unless the Debentures
of such series are not issuable both as Bearer Debentures and as Registered
Debentures of such series, as specified as contemplated by Section 3.1, shall
be in the form of Bearer Debentures or Registered Debentures of such series,
or any combination thereof, as shall be specified by the beneficial owner
thereof; provided, however, that no Bearer Debenture of such series delivered
in exchange for a portion of a permanent global Debenture of such series
shall be mailed or otherwise delivered to any location in the United States.
If a Registered Debenture of such series is issued in exchange for any
portion of a permanent global Debenture of such series after the close of
business at the office or agency where such exchange occurs on (i) any
Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of the
Registered Debenture of such series, but will be payable on such Interest
Payment Date or proposed date for payment, as the case may be, only to the
Person to whom interest in respect of such portion of such permanent global
Debenture of such series is payable in accordance with the provisions of this
Indenture.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Registered Debenture presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee or
any transfer agent) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Debenture Registrar or
any transfer agent duly executed, by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Debentures, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange Debentures of any series during a period beginning at the opening
of business 15 days before any selection of Debentures of such series to be
redeemed and ending at the close of business on (A) if Debentures of such series
are issuable only as Registered Debentures, the day of the mailing of the
relevant notice of redemption and (B) if Debentures of such series are issuable
as Bearer Debentures, the day of the first publication of the relevant notice of
redemption or, if Debentures of such series are also issuable as Registered
Debentures and there is no publication, the mailing of the relevant notice of
redemption, (ii) to
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register the transfer of or exchange any Registered Debenture so selected for
redemption, in whole or in part, except the unredeemed portion of any
Debenture being redeemed in part, or (iii) to exchange any Bearer Debenture
so selected for redemption except that such a Bearer Debenture may be
exchanged for a Registered Debenture of such series and like tenor, provided
that such Registered Debenture shall be simultaneously surrendered for
redemption.
Notwithstanding the foregoing and except as otherwise specified or
contemplated by Section 3.1, any Book-Entry Debenture shall be exchangeable
pursuant to this Section 3.5 or Sections 3.4, 9.6 and 11.7 for Debentures
registered in the name of, and a transfer of a Book-Entry Debenture of any
series may be registered to, any Person other than the Depository for such
Debenture or its nominee only if (i) such Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Book-Entry
Debenture or if at any time such Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, (ii) the
Company executes and delivers to the Trustee a Company Order that such
Book-Entry Debenture shall be so exchangeable and the transfer thereof so
registerable or (iii) there shall have occurred and be continuing an Event of
Default, or an event which after notice or lapse of time would be an Event of
Default, with respect to the Debentures of such series. Upon the occurrence
in respect of any Book-Entry Debenture of any series of any one or more of
the conditions specified in clauses (i), (ii) or (iii) or the preceding
sentence or such other conditions as may be specified as contemplated by
Section 3.1 for such series, such Book-Entry Debenture may be exchanged for
Debentures registered in the names of, and the transfer of such Book-Entry
Debenture may be registered to, such Persons (including Persons other than
the Depository with respect to such series and its nominees) as such
Depository shall direct. Notwithstanding any other provision of this
Indenture, any Debenture authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Book-Entry Debenture
shall also be a Book-Entry Debenture and shall bear the legend specified in
Section 2.4 except for any Debenture authenticated and delivered in exchange
for, or upon registration of transfer of, Book-Entry Debenture pursuant to
the preceding sentence.
Notwithstanding anything in this Indenture or in the terms of a
Debenture to the contrary, the exchange of Bearer Debentures for Registered
Debentures will be subject to satisfaction of the provisions of the United
States federal income tax laws in effect at the time of such exchange. None of
the Company, the Trustee or any Authenticating Agent of the Company or the
Trustee (any of which, other than the Company, shall rely on an Officers'
Certificate and an Opinion of Counsel) shall be required to exchange any Bearer
Debenture for a Registered Debenture if as a result thereof and in the Company's
reasonable judgment, the Company would incur adverse consequences under then
applicable United States federal income tax laws.
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SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN DEBENTURES AND COUPONS.
If any mutilated Debenture of any series or a Debenture of any series
with a mutilated Coupon appertaining thereto is surrendered to the Trustee,
the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a new Debenture of such series
and of like principal amount and tenor and bearing a number not
contemporaneously outstanding, with Coupons corresponding to the Coupons, if
any, appertaining to the surrendered Debenture and such mutilated Debenture
or a Debenture with a mutilated Coupon, if any, shall be cancelled by the
Trustee in accordance with the Indenture.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Debenture of any series or any Coupon appertaining thereto and (ii) such
security or indemnity as may be required by them, then, in the absence of
notice to the Company or the Trustee that such Debenture or Coupon has been
acquired by a bona fide purchaser, the Company shall, subject to the
following paragraph, execute, and the Trustee shall authenticate and make
available for delivery, in lieu of any such destroyed, lost or stolen
Debenture or in exchange for the Debenture to which a destroyed, lost or
stolen Coupon appertains (with all appurtenant Coupons not destroyed, lost or
stolen), a new Debenture of such series and of like principal amount and
tenor and bearing a number not contemporaneously outstanding, with Coupons
corresponding to the Coupons, if any, appertaining to such destroyed, lost or
stolen Debenture or to the Debenture to which such destroyed, lost or stolen
Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Debenture or
Coupon appertaining thereto has become or is about to become due and payable,
the Company in its discretion may, instead of issuing a new Debenture, pay
such Debenture or Coupon; provided, however, that principal of and any
premium and interest on Bearer Debentures shall, except as otherwise provided
in Section 10.2, be payable only at an office or agency located outside the
United States.
Upon the issuance of any new Debenture under this Section, the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Debenture of any series, with any Coupons appertaining
thereto, issued pursuant to this Section in lieu of any destroyed, lost or
stolen Debenture or in exchange for a Debenture to which a destroyed, lost or
stolen Coupon appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Debenture and any Coupons appertaining thereto, or the destroyed, lost or
stolen Coupon shall be at any time enforceable by anyone, and any such new
Debenture and Coupons, if any, shall be entitled to all the benefits of this
Indenture equally and
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proportionately with any and all other Debentures of such series and Coupons
appertaining thereto, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Debentures or
Coupons.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, interest on any Registered Debenture which is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Debenture (or one or more
Predecessor Debentures) is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Debentures, any interest on any Registered Debenture of any
series which is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Holder on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (a)
and (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Debentures of such series (or
their respective Predecessor Debentures) are registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Registered Debenture of such series and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid in respect
of such Defaulted Interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days prior
to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered Debentures
of such series at the address of such Holder as it appears in the Debenture
Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to the
Persons in whose
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names the Registered Debentures of such series (or their respective
Predecessor Debentures) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (b); and
(b) The Company may make payment of any Defaulted Interest on the
Registered Debentures of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Debentures may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5,
each Debenture delivered under this Indenture upon registration of, transfer
of or in exchange for or in lieu of any other Debenture shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Debenture.
In the case of any Debenture which is converted into Common Stock of
the Company after any Regular Record Date and on or prior to the next
succeeding Interest Payment Date (other than any Debenture whose Maturity is
prior to such Interest Payment Date), interest whose Stated Maturity is on
such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Debenture (or one or more Predecessor Debentures) is registered at the close
of business on such Regular Record Date. Except as otherwise expressly
provided in the immediately preceding sentence, in the case of any Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Debenture shall not be payable.
SECTION 3.8 PERSONS DEEMED OWNERS.
Prior to due presentment of a Registered Debenture for registration
of transfer, the Company, the Trustee and any agent of the Company or the
Trustee may treat the Person in whose name such Registered Debenture is
registered as the owner of such Registered Debenture for the purpose of
receiving payment of principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) any interest on such Debenture and for all other
purposes whatsoever, whether or not such Debenture shall be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Debenture and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Debenture and the bearer of
any coupon as the absolute owner of such Debenture or coupon for the purpose
of receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Debenture or coupon shall be
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overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary.
SECTION 3.9 CANCELLATION.
All Debentures and coupons surrendered for payment, redemption,
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Registered Debentures and matured coupons so
delivered shall be promptly cancelled by the Trustee. All Bearer Debentures
and unmatured coupons so delivered shall be cancelled. All Bearer Debentures
and unmatured coupons held by the Trustee pending such cancellation or
reissuance shall be deemed to be delivered for cancellation for all purposes
of this Indenture and the Debentures. The Company may at any time deliver to
the Trustee for cancellation any Debentures previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for
delivery to the Trustee) for cancellation any Debentures previously
authenticated hereunder which the Company has not issued and sold, and all
Debentures so delivered shall be promptly cancelled by the Trustee. No
Debentures shall be authenticated in lieu of or in exchange for any
Debentures cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Debentures and coupons held by the
Trustee shall be returned to the Company.
Notwithstanding the foregoing, with respect to any Book-Entry
Debenture, nothing herein shall prevent the Company, the Trustee or any agent
of the Company or the Trustee, from giving effect to any written
certification, proxy or other authorization furnished by a Depository or
impair, as between a Depository and holders of beneficial interests in any
Book-Entry Debenture, the operation of customary practices governing the
exercise of the rights of the Depositary (or its nominee) as Holder of such
Book-Entry Debenture.
SECTION 3.10 COMPUTATION OF INTEREST.
Except as otherwise specified as contemplated by Section 3.1 for
Debentures of any series, interest on the Debentures of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 ELECTRONIC DEBENTURE ISSUANCE.
The Debentures may, pursuant to a Board Resolution and Officers'
Certificate complying with Section 3.1 hereof, be issued by means of an
electronic issuance system. Any such Debenture issuance instructions may
specify the name, address and taxpayer identification number of the Holder,
the principal amount and Maturity of the Debenture, the interest rate to be
borne by the Debenture and any other terms not inconsistent with such Board
Resolution and Officers' Certificate. Nothing in this Section 3.11 shall be
construed as
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prohibiting the Company from issuing Debentures by any means not inconsistent
with the provisions of this Indenture.
SECTION 3.12 CUSIP NUMBERS.
The Company in issuing the Debentures may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of
a redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Debentures herein expressly provided for, and any right to
receive additional amounts, as provided in Section 10.4), and the Trustee, at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(a) either
(1) all Debentures theretofore authenticated and delivered and all
coupons, if any, appertaining thereto (other than (i) coupons
appertaining to Bearer Debentures surrendered for exchange for
Registered Debentures and maturing after such exchange, whose surrender
is not required or has been waived as provided in Section 3.5, (ii)
Debentures and coupons which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.6, (iii)
coupons appertaining to Debentures called for redemption and maturing
after the relevant Redemption Date, whose surrender has been waived as
provided in Section 11.6, and (iv) Debentures and coupons for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation; or
(2) all such Debentures and, in the case of (i) or (ii) below, any
coupons appertaining thereto not theretofore delivered to the Trustee
for cancellation,
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(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within one
year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited
or caused to be deposited with the Trustee as trust funds in trust for
the purpose, an amount sufficient to pay and discharge the entire
indebtedness on such Debentures and coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any)
and any interest to the date of such deposit (in the case of
Debentures which have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6, the obligations
of the Company to any Authenticating Agent under Section 6.13 and, if money
shall have been deposited with the Trustee pursuant to clause (a)(2) of this
Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 4.1 or 4.3 and all money received by the Trustee in respect of such
U.S. Government Obligations shall be held in trust and applied by it, in
accordance with the provisions of the Debentures, the Coupons and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and any interest for whose payment such money and U.S. Government
Obligations has been deposited with or received by the Trustee. Money
deposited pursuant to this Section not in violation of this Indenture shall
not be subject to claims of the holders of Senior Indebtedness under Article
XV.
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SECTION 4.3 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
If applicable to Debentures of any series, the Company may elect, at
its option at any time, to have Section 4.4 or Section 4.5 applied to any
such series of Debentures or any Debentures of such series, as the case may
be, designated pursuant to Section 3.1 as being defeasible pursuant to such
Section 4.4 or 4.5, in accordance with any applicable requirements provided
pursuant to Section 3.1 and upon compliance with the conditions set forth
below in this Article. Any such election shall be evidenced by a Board
Resolution or in another manner specified as contemplated by Section 3.1 for
such Debentures.
SECTION 4.4 DISCHARGE AND DEFEASANCE.
If this Section 4.4 is specified, as contemplated by Section 3.1, to
be applicable to Debentures of any series, then notwithstanding Section 4.1
and upon compliance with the applicable conditions set forth in Section 4.6:
(1) the Company shall be deemed to have paid and discharged the entire
indebtedness on all the Outstanding Debentures of such series ("Defeasance");
and (2) the provisions of this Indenture as it relates to Outstanding
Debentures of such series shall no longer be in effect (except as to the
rights of Holders of Debentures of such series to receive, solely from the
trust fund described in Section 4.6, payment of (a) the principal of (and
premium, if any) and any installment of principal of (and premium, if any) or
interest on Debentures of such series on the Stated Maturity of such
principal (and premium, if any) or installment of principal (and premium, if
any) or interest or upon optional redemption and/or (b) any mandatory sinking
fund payments or analogous payments applicable to the Debentures of such
series on that day on which such payments are due and payable in accordance
with the terms of the Indenture and of Debentures of such series, the
Company's obligations with respect to Debentures of such series under
Sections 3.4, 3.5, 3.6, 10.2, 10.3, and 10.4 and the rights, powers, trusts,
duties and immunities of the Trustee hereunder, including those under Section
6.8 hereof);
SECTION 4.5 COVENANT DEFEASANCE.
If this Section 4.5 is specified, as contemplated by Section 3.1, to be
applicable to any series of Debentures or any Debentures of such series, as the
case may be, (a) the Company shall be released from its obligations under
Sections 10.4 through 10.7, inclusive, and any covenants provided pursuant to
Section 3.1(u) or 9.1(b) for the benefit of the Holders of Debentures of such
series that pursuant to the terms of such Debentures of such series are
defeasible pursuant to this Section 4.5 and (b) the occurrence of any event
specified in Sections 5.1(d) (with respect to any of Sections 10.3 through 10.7,
inclusive, and any such covenants provided pursuant to Section 3.1(u), 9.1(b),
or 9.1(f) and 5.1(g) (if pursuant to the terms of the Debentures of such series
this Section 4.5 is applicable to any such event specified in Section 5.1(g))
shall be deemed not to be or result in an Event of Default, in each case with
respect to the Debe-
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ntures of such series as provided in this Section on and after the date the
conditions set forth in Section 4.6 are satisfied (hereinafter called
"Covenant Defeasance"). For this purpose, such Covenant Defeasance means
that, with respect to the Debentures of such series, the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such specified Section (to the extent so
specified in the case of Section 5.1(d) and 5.1(g)), whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
by reason of any reference in any such Section to any other provision herein
or in any other document, but the remainder of this Indenture and the
Debentures of such series shall be unaffected thereby.
SECTION 4.6 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of Section
4.4 or Section 4.5 to any series of Debentures or any Debentures of such
series, as the case may be.
(a) either
(1) with respect to all Outstanding Debentures of such series or
such Debentures of such Series, as the case may be, with reference to
this Section 4.6, the Company has deposited or caused to be deposited
with the Trustee irrevocably (but subject to the provisions of Section
4.2 and the last paragraph of Section 10.3), as trust funds in trust,
specifically pledged as security for, and dedicated solely to, the
benefit of the Holders of the Debentures of such series, (i) lawful
money of the United States in an amount, or (ii) U.S. Government
Obligations which through the payment of interest and principal in
respect thereof in accordance with their terms will provide not later
than the opening of business on the due dates of any payment referred
to in clause (i) or (ii) of this subparagraph (a)(1) lawful money of
the United States in an amount, or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge (A) the
principal of (and premium, if any) and each installment of principal
(and premium, if any) and interest on such Debentures of such series on
the Stated Maturity of such principal or installment of principal or
interest or upon optional redemption and (B) any mandatory sinking fund
payments or analogous payments applicable to the Debentures of such
series on the day on which such payments are due and payable in
accordance with the terms of this Indenture and of the Debentures of
such series; or
(2) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by Section
3.1, to be applicable to the Debentures of such series;
(b) the Company has paid or caused to be paid all other sums payable
with respect to the Debentures of such series;
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(c) such deposit for the benefit of Holders of Debentures of such
series will not result in a breach or violation of, or constitute a default
under, this Indenture or any other agreement or instrument to which the
Company is a party or by which it is bound;
(d) no Event of Default or event which with the giving of notice or
lapse of time, or both, would become an Event of Default with respect to the
Debentures of such series shall have occurred and be continuing on the date
of such deposit and no Event of Default under Section 5.1(e) or Section
5.1(f) or event which with the giving of notice or lapse of time, or both,
would become an Event of Default under Section 5.1(e) or Section 5.1(f) shall
have occurred and be continuing on the 91st day after such date;
(e) in the event of an election to have Section 4.4 apply to the
Debentures of any series, the Company has delivered to the Trustee an Opinion
of Counsel to the effect that (i) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling, or (ii) since the
date of this Indenture there has been a change in applicable federal income
tax law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of Debentures of such series will not
recognize income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge had not occurred;
(f) in the event of an election to have Section 4.5 apply to
Debentures of any series, the Company shall have delivered to the Trustee an
Opinion of Counsel, to the effect that the Holders of Debentures of such
series will not recognize gain or loss for United States federal income tax
purposes as a result of the deposit and Covenant Defeasance to be effected
with respect to the Debentures of such series and will be subject to United
States federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit and Covenant Defeasance were
not to occur;
(g) if the Debentures of such series are then listed on any domestic
or foreign securities exchange, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that such deposit, defeasance and
discharge will not cause the Debentures of such series to be delisted;
(h) no default in the payment of the principal of (and premium, if
any) or any interest on any Senior Indebtedness beyond any applicable grace
period shall have occurred and be continuing;
(i) no other default with respect to any Senior Indebtedness shall
have occurred and be continuing and shall have resulted in the acceleration
of such Senior Indebtedness; and
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(j) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the Defeasance or Covenant
Defeasance with respect to such Debentures of such series have been complied
with and an Opinion of Counsel to the effect that either (i) as a result of
such deposit and the related exercise of the Company's option under this
Article, registration is not required under the Investment Company Act of
1940, as amended, by the Company, the trust funds representing such deposit
or the Trustee or (ii) all necessary registrations under said Act have been
effected.
Any deposits with the Trustee referred to in Section 4.6(a)(1) above
shall be irrevocable and shall be made under the terms of an escrow/trust
agreement in form and substance satisfactory to the Trustee. If any
Outstanding Debentures of such series are to be redeemed prior to their
Stated Maturity, whether pursuant to any optional redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable escrow
trust agreement shall provide therefor and the Company shall make such
arrangements as are satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company.
Upon Defeasance with respect to all the Debentures of any series, the
terms and conditions of the Debentures of such series, including the terms
and conditions with respect thereto set forth in this Indenture, shall no
longer be binding upon, or applicable to, the Company; provided that the
Company shall not be discharged from any payment obligations in respect of
Debentures of such series which are deemed not to be Outstanding under clause
(iii) of the definition thereof if such obligations continue to be valid
obligations of the Company under applicable law.
Notwithstanding the cessation, termination and discharge of all
obligations, covenants and agreements (except as provided above in this
Section 4.6) of the Company under this Indenture with respect to the
Debentures of any series, the obligations of the Company to the Trustee under
Section 6.6, and the obligations of the Trustee under Section 4.2 and the
last paragraph of Section 10.3 shall survive with respect to the Debentures
of such series.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request
any money or U.S. Government Obligations held by it as provided in this
Section 4.6 with respect to Debentures of any series which, in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect the
Defeasance or Covenant Defeasance, as the case may be, with respect to
Debentures of such series.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to this Section 4.6 or the principal and
interest received in respect thereof other than any
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such tax, fee or other charge which by law is for the account of the Holders
of Outstanding Debentures.
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"EVENT OF DEFAULT", wherever used herein with respect to Debentures
of any series, unless otherwise provided in the applicable supplemental
indenture, means any one or more of the following events (whatever the reason
for such Event of Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body):
(a) default in the payment of any interest upon or any additional
amounts payable in respect of any Debenture of such series when it becomes
due and payable, and continuance of such default for a period of 30 days
(whether or not such payment is prohibited by the subordination provisions
set forth in Article XV hereof); provided, however, that a valid extension of
an interest payment period by the Company in accordance with the terms of any
indenture supplemental hereto, shall not constitute a default in the payment
of interest for this purpose; or
(b) default in the payment of the principal of (or premium, if any,
on) any Debenture of such series as and when the same shall become due and
payable whether at maturity, upon redemption, by declaration or otherwise, or
in any payment required by any sinking or analogous fund established with
respect to that series (whether or not such payment is prohibited by the
subordination provisions set forth in Article XV hereof); provided, however,
that a valid extension of the maturity of the Debentures of such series in
accordance with the terms of any indenture supplemental hereto shall not
constitute a default in the payment of principal or premium, if any; or
(c) if the Debentures of such series are convertible or exchangeable
into or for shares of Common Stock of the Company or other securities, cash
or other property pursuant to any supplemental indenture, Board Resolution or
other instrument authorizing Debentures of such series, failure by the
Company to convert such Debentures (whether or not such conversion or
exchange is prohibited by the subordination provisions set forth in Article
XV); or
(d) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or warranty
a default in whose performance or whose breach is elsewhere in this Section
specifically dealt with or which has expressly been included in this
Indenture solely for the benefit of any series of Debentures
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other than such series), and continuance of such default or breach for a
period of 90 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Outstanding Debentures of
such series, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default,
hereunder; or
(e) the entry by a court having jurisdiction in the premises of a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a custodian, receiver,
liquidation, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of their property, or ordering the winding
up or liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or
(f) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated a bankrupt or insolvent, or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy
or insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidation, assignee, trustee, sequestrator or similar official of
the Company or of any substantial part of their property, or the making by it
of an assignment for the benefit of creditors; or
(g) in the event Debentures of any series are issued to a Sun Trust
or a trustee of such trust in connection with the issuance of Trust
Securities by such Sun Trust, such Sun Trust shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise terminated its
existence except in connection with (i) the distribution of Debentures of
such series to holders of Trust Securities in liquidation of their interest
in such Sun Trust, (ii) the redemption of all of the outstanding Trust
Securities of such Sun Trust or (iii) certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Sun Trust; or
(h) any other Event of Default provided with respect to Debentures of
such series.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default described in clause (a), (b), (c), (d), (g) or
(h) (if the Event of Default under clause (d) is with respect to less than
all series of Debentures then Outstanding) of Section 5.1 above occurs and is
continuing, then, and in each and every such case, unless the principal of
all of the Debentures of such series shall have already become
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due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Debentures of such series then Outstanding
hereunder (each such series voting as a separate class), by notice in writing
to the Company (and to the Trustee if given by the Holders of Debentures of
such series), may declare the entire principal (or, if the Debentures of such
series are Original Issue Discount Debentures, such portion of the principal
amount as may be specified in the terms of such series) of all Debentures of
such series and the interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable. If an Event of Default described in clause (d) (if the
Event of Default under clause (d) relates to all series of Debentures then
Outstanding), (e) or (f) of Section 5.1 occurs and is continuing, then and in
each and every such case, unless the principal of all the Debentures of all
series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of all the
Debentures of all series then Outstanding hereunder (treated as one class),
by notice in writing to the Company (and to the Trustee if given by Holders
of the Debentures), may declare the entire principal (or, if any Debentures
are Original Issue Discount Debentures, such portion of the principal as may
be specified in the terms thereof) of all Debentures of all series then
Outstanding and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately
due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if any Debentures are Original Issue
Discount Debentures, such portion of the principal as may be specified in the
terms thereof) of the Debentures of any series (or of all the Debentures of
all series, as the case may be) then Outstanding shall have been so declared
due and payable, and before any judgment or decree for the payment of such
moneys shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all the Debentures of such series
(or of all Debentures of all series, as the case may be) and the principal of
(and premium, if any, on) the Debentures of such series (or of all Debentures
of all series, as the case may be) which shall have become due otherwise than
by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Debentures) specified in
the Debentures of such series, (or at the respective rates of interest or
Yields to Maturity of all Debentures of all series, as the case may be) to
the date of such payment or deposit) and any other amounts payable in respect
of all the Debentures of such series and such amount as shall be sufficient
to cover reasonable compensation to the Trustee, and each predecessor
Trustee, their respective agents, attorneys and counsel, and all other
expenses and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence or bad faith, and
if any and all Events of Default under the Indenture, other than the
non-payment of the principal of Debentures of such series (or, if any
Debentures are Original Issue Discount Debentures, such portion of the
principal as may be specified in the terms thereof) which shall have become
due by acceleration, shall have been cured, waived or otherwise remedied as
provided herein -- then and
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in every such case the Holders of a majority in aggregate principal amount of
all the Debentures of such series, each series voting as a separate class (or
of all Debentures of all series, as the case may be, voting as a single
class), then Outstanding, by written notice to the Company and to the
Trustee, may waive all such defaults with respect to the Debentures of such
series (or with respect to all Debentures of all series, as the case may be)
and rescind and annul such declaration and its consequence, but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right with
respect to Debentures of such series under this Indenture and such
proceedings shall have been discontinued or abandoned because of such
rescission or annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company and the
Trustee shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company and the Trustee
shall continue as though no such proceedings had been taken.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if,
(a) default is made in the payment of any interest on any Debenture
of any series, or any payment required by any sinking or analogous fund
established with respect to Debentures of such series as and when the same
shall have become due and payable and such default continues for a period of
30 days, or
(b) default is made in the payment of the principal of (or premium,
if any, on) any Debenture of any series when the same shall have become due
and payable, whether upon maturity of the Debentures of such series or upon
redemption or upon declaration or otherwise,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of Debentures of such series and any Coupons appertaining
thereto, the whole amount then due and payable on Debentures of such series
and Coupons for principal and any premium and interest and, to the extent
that payment of such interest shall be legally enforceable under applicable
law, interest on any overdue principal and on the premium, if any, and
overdue interest, at the rate or rates prescribed therefor in Debentures of
such series and, if the Debentures of such series are held by a Sun Trust or
a trustee of such trust, without duplication of any other amounts paid by
such Sun Trust or trustee in respect thereof, upon overdue installments of
interest at the rate per annum expressed in the Debentures of such series;
and in addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
under Section 6.6.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon Debentures of
such series and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or any other
obligor upon Debentures of such series, wherever situated.
If an Event of Default with respect to Debentures of any series
occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Debentures of
such series and any Coupons appertaining thereto by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any such rights, either at law or in equity or in bankruptcy or otherwise
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to
enforce any other proper remedy.
SECTION 5.4 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Debentures of any series or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the
principal of Debentures of such series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal and
any premium and interest owing and unpaid in respect of the Debentures of any
series and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of Debentures of such
series and coupons allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidation, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder of Debentures of such series and Coupons appertaining thereto
to make such payments to the Trustee and, in the event that the Trustee shall
consent to the making of such payments directly to the Holders of Debentures
of such series and Coupons appertaining thereto, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 6.6.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a
Debenture of any series or any Coupon appertaining thereto any plan of
reorganization, arrangement, adjustment or composition affecting the
Debentures of such series or Coupons appertaining thereto or the rights of
any Holder thereof or to authorize the Trustee to vote in respect of the
claim of any Holder of Debentures of any series or any Coupon appertaining
thereto in any such proceeding.
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF DEBENTURES OR
COUPONS.
All rights of action and claims under this Indenture or under any of
the terms established with respect to the Debentures of any series or Coupons
appertaining thereto may be prosecuted and enforced by the Trustee without
the possession of any of the Debentures of such series or Coupons
appertaining thereto or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought
in its own name as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel
due under Section 6.6, be for the ratable benefit of the Holders of the
Debentures of such series and Coupons appertaining thereto in respect of
which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article with
respect to Debentures of any series shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or any premium or interest, upon
presentation of the Debentures of such series or any Coupons appertaining
thereto, or both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.6;
SECOND: To the payment of all Senior Indebtedness of the Company to
the extent required by Article XV;
THIRD: To the payment of the amounts then due and unpaid for principal
of and any premium and interest on the Debentures of such series and
Coupons appertaining thereto in respect of which or for the benefit of
which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on
Debentures of such series and Coupons appertaining thereto for
principal and any premium and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company.
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SECTION 5.7 LIMITATION ON SUITS.
No Holder of any Debenture of any series or any Coupons appertaining
thereto shall have any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the appointment of a
receiver or trustee, or for any other remedy hereunder, unless;
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Debentures of such
series and of the continuance thereof with respect to the Debentures of such
series specifying such Event of Default, as hereinbefore provided;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Debentures of such series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(c) such Holder or Holders shall have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Debentures of such series;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other of such Holders, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all of such Holders.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, but subject to
Article XV of this Indenture, the Holder of any Debenture of any series or
any Coupon appertaining thereto shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 3.7) interest on Debentures of such series, and any
additional amounts contemplated by Section 10.4 in respect of Debentures of
such series or payment of any Coupons appertaining thereto on the Stated
Maturity or Maturities expressed in the Debentures of such series or any
Coupons appertaining thereto (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such
Holder.
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SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder of Debentures of any series or any
Coupon appertaining thereto has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders of
Debentures of such series and any Coupons appertaining thereto shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Debentures or Coupons in the
last paragraph of Section 3.6, no right or remedy herein conferred upon or
reserved to the Trustee or to the Holders of Debentures or Coupons is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Debenture
or Coupon to exercise any right or remedy accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence
therein. Subject to the provisions of Section 5.7, every right and remedy
given by this Article or by law to the Trustee or to the Holders of
Debentures or Coupons may be exercised from time to time, and as often as may
be deemed expedient, by the Trustee or by the Holders of Debentures or
Coupons, as the case may be.
SECTION 5.12 CONTROL BY HOLDERS OF DEBENTURES.
The Holders of a majority in aggregate principal amount of the
Outstanding Debentures of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with
respect to the Debentures of such series, provided that,
(a) such direction shall not be in conflict with any rule of law or
with this Indenture, and
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(b) the Trustee may take any other action deemed proper by the
Trustee; provided, however, that such direction shall not be in conflict with
any rule of law or with this Indenture or be unduly prejudicial to the rights
of Holders of Debentures of any other series at the time Outstanding.
Subject to the provisions of Section 6.2, the Trustee shall have the right to
decline to follow any such direction if the trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding
so directed would involve the Trustee in personal liability.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount of the
Outstanding Debentures of any series may on behalf of the Holders of all the
Debentures of such series and any Coupons appertaining thereto waive any past
default hereunder with respect to the Debentures of such series and its
consequences, except a default
(a) in the payment of the principal of (or premium, if any) or any
interest on any Debenture of such series as and when the same shall become
due by the terms of Debentures of such series otherwise than by acceleration
(unless such default has been cured and sums sufficient to pay all matured
installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 5.2), or
(b) in the covenants contained in Section 10.4, or
(c) in respect of a covenant or provision hereof which under Article
IX cannot be modified or amended without the consent of the Holder of each
Outstanding Debenture of such series affected;
provided, however, that if the Debentures of such series are held by a Sun
Trust or a trustee of such trust, such waiver or modification to such waiver
shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable Sun Trust shall have
consented to such waiver or modification to such waiver; provided further,
that if the consent of the Holder of each Outstanding Debenture of such
series is required, such waiver shall not be effective until each holder of
the Trust Securities of the applicable Sun Trust shall have consented to such
waiver.
Upon any such waiver, the default covered thereby shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Indenture and the Company, the Trustee
and the holders of the Debentures of such series shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 5.14 UNDERTAKING FOR COSTS.
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All parties to this Indenture agree, and each Holder of any Debenture
or Coupon by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Company, to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Debentures of any series, or to any suit instituted by any Holder
of any Debenture or Coupon for the enforcement of the payment of the
principal of or any premium or interest on such Debenture or the payment of
any Coupon on or after the Stated Maturity or Maturities expressed in such
Debenture or Coupon (or, in the case of redemption, on or after the
Redemption Date).
SECTION 5.15 WAIVER OF STAY OR EXTENSION LAWS.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT; PRIOR
TO DEFAULT.
With respect to the Holders of any series of Debentures issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to the Debentures of such series and after the curing or waiving of
all Events of Default which may have occurred with respect to Debentures of
such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Debentures of any series has occurred (which has not been
cured or waived), the Trustee shall exercise with respect to the Debentures
of such series such of the rights and powers vested in it by this Indenture,
and shall use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
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No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act or its own wilful misconduct, except that:
(a) prior to the occurrence of an Event of Default with respect to
the Debentures of any series and after the curing or waiving of all such
Events of Default with respect to the Debentures of such series which may
have occurred:
(i) the duties and obligations of the Trustee with respect to the
Debentures of such series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable except for
the performance of such duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the 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 pursuant to Section 5.12 relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of the Trust Indenture Act:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
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direction, consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order or as
otherwise expressly provided herein and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Debentures of any series or any Coupons appertaining
thereto pursuant to this Indenture, unless such Holders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other paper
or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 6.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF DEBENTURES.
The recitals contained herein and in the Debentures (except the
Trustee's certificates of authentication) and in any Coupons shall be taken
as the statements of the Company, and the Trustee or any Authenticating Agent
assumes no responsibility for their correctness.
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The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of any Debentures or Coupons. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by
the Company of Debentures or the proceeds thereof.
SECTION 6.4 MAY HOLD DEBENTURES.
The Trustee, any Authenticating Agent, any Paying Agent, any
Debenture Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner or pledgee of Debentures and Coupons
and, subject to Section 6.9 and 6.11, may otherwise deal with the Company
with the same rights it would have if it were not Trustee, Authenticating
Agent, Paying Agent, Debenture Registrar or such other agent.
SECTION 6.5 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except
as otherwise agreed in writing with the Company.
SECTION 6.6 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee or any predecessor Trustee from time to
time such compensation as shall be agreed in writing between the Company and
the Trustee for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of
a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee or any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the compensation
and the expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee and any predecessor Trustee for, and to
hold it harmless against, any and all loss, damage, claim, liability or
expense, including taxes (other than taxes based on the income of the
Trustee) incurred without negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
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When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or Section 5.1(f), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency
or other similar laws.
The provisions of this Section 6.6 shall survive the termination of
this Indenture.
SECTION 6.7 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.8.
(b) The Trustee may resign at any time with respect to the
Debentures of one or more series by giving written notice thereof to the
Company. If the instrument of acceptance by a successor Trustee required by
Section 6.8 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Debentures of such series.
(c) The Trustee may be removed at any time with respect to the
Debentures of any series by Act of the Holders of a majority in principal
amount of the Outstanding Debentures of such series delivered to the Trustee
and to the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.8 shall not have been delivered to the Trustee within
30 days after the delivery of such Act of removal, the Trustee being removed
may petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Debentures of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the Company or by
any Holder of a Debenture who has been a bona fide Holder of a
Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.10 and
Section 310(a) of the Trust Indenture Act and shall fail to resign
after written request therefor by the Company or by any Holder of a
Debenture who has been a bona fide Holder of a Debenture for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its
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property or affairs for the purpose of rehabilitation, conservation
or liquidation, then, in any such case,(i) the Company by a Board
Resolution may remove the Trustee with respect to all Debentures, or
(ii) subject to Section 5.14 any Holder of a Debenture who has been a
bona fide Holder of a Debenture for at least six months may, on
behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee with
respect to all Debentures and the appointment of a successor Trustee
or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Debentures of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Debentures of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Debentures of
one or more or all of such series and that at any time there shall be only
one Trustee with respect to the Debentures of any particular series) and
shall comply with the applicable requirements of Section 6.8. If, within one
year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee with respect to the Debentures of any
series shall be appointed by Act of the Holders of a majority in principal
amount of Outstanding Debentures of such series delivered to the Company and
the retiring Trustee, the successor Trustee so appointed shall, forthwith
upon its acceptance of such appointment in accordance with the applicable
requirements of Section 6.8, become the successor Trustee with respect to the
Debentures of such series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the
Debentures of any series shall have been so appointed by the Company or the
Holders of Debentures of such series and accepted appointment in the manner
required by Section 6.8, any Holder of a Debenture of such series who has
been a bona fide Holder of a Debenture of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Debentures of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Debentures of any series and each
appointment of a successor Trustee with respect to the Debentures of any
series in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee with respect to the Debentures of such series
and the address of its Corporate Trust Office.
SECTION 6.8 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Debentures, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee; but
on the written re-
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quest of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring
to such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Debentures of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Debentures of such series shall execute and deliver an indenture supplemental
hereto wherein each successor Trustee shall accept such appointment and which
(i) shall contain such provisions as shall be necessary or desirable to
transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Debentures of such series to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all
Debentures, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Debentures of such series as to which
the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees as co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Trustee;
and upon the execution and delivery of such supplemental indenture the
resignation or removal of the retiring Trustee shall become effective to the
extent provided therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Debentures of
such series to which the appointment of such successor Trustee relates; but,
on the written request of the Company or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with respect to
the Debentures of such series to which the appointment of such successor
Trustee relates.
(c) Upon the written request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers
and trusts referred to in paragraph (a) or (b) of this Section, as the case
may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 6.9 DISQUALIFICATION; CONFLICTING INTERESTS.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent
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and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 6.10 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall be at all times a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such
and has a combined capital and surplus of at least $50,000,000. If such
Person publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such Person
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
it shall resign immediately in the manner and with the effect hereunder
specified in this Article.
SECTION 6.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Debentures), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.12 MERGER, CONVERSION CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act
on the part of any of the parties hereto. In case any Debentures shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating
Trustee may adopt such authentication and deliver the Debentures so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Debentures.
SECTION 6.13 APPOINTMENT OF AUTHENTICATING AGENT.
The Trustee may appoint an Authenticating Agent or Agents with
respect to Debentures of one or more series which shall be authorized to act
on behalf of the Trustee to authenticate Debentures of each such series
issued upon original issue or upon exchange, registration of transfer or
partial redemption thereof or pursuant to Section 3.6, and Debentures of such
series so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder.
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Wherever reference is made in this Indenture to the authentication and
delivery of Debentures by the Trustee or the Trustee's certificate of
authentication such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating
Agent shall be a party, or any corporation succeeding to the corporate agency
or corporate trust business of such Authenticating Agent, shall continue to
be an Authenticating Agent provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall
promptly give notice of such appointment to all Holders of Debentures
pursuant to Section 1.6. Any successor Authenticating Agent upon acceptance
of its appointment hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to Debentures of one or more series is
made pursuant to this Section, the Debentures of such series may have
endorsed thereon, in addition to the Trustee's certificate of authentication,
an alternative certificate of authentication in the following form:
This is one of the Debentures of the series designated therein
referred to in the within-mentioned Indenture.
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The Bank of New York,
As Trustee
By
---------------------
Authenticating Agent
By
---------------------
Authorized Signatory
If all of the Debentures of any series may not be originally issued
at one time, and if the Company has an Affiliate eligible to be appointed as
an Authenticating Agent hereunder or the Trustee does not have an office
capable of authenticating Debentures of such series upon original issuance
located in a Place of Payment where the Company wishes to have Debentures of
such series authenticated upon original issuance, the Trustee, if so
requested by the Company in writing (which writing need not comply with
Section 1.2 and need not be accompanied by an Opinion of Counsel), shall
appoint in accordance with this Section an Authenticating Agent (which if so
requested by the Company, shall be such Affiliate of the Company) having an
office in a Place of Payment designated by the Company with respect to such
series of Debentures.
SECTION 6.14. NOTICE OF DEFAULTS.
If a default occurs hereunder with respect to Debentures of any
series, the Trustee shall give the Holders of Debentures of such series
notice of such default as and to the extent provided by the Trust Indenture
Act; provided, however, that in the case of any default of the character
specified in Section 5.1(d) with respect to Debentures of such series, no
such notice to Holders shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to Debentures of such series.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Debentures (i) contained in
the most recent list furnished to the Trustee as provided in Section 312(a) of
the Trust Indenture Act, (ii) received by the Trustee in its capacity as
Debenture Registrar and (iii) filed with it within the two
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preceding years pursuant to Section 313(c)(2) of the Trust Indenture Act. The
Trustee may (A) destroy any list furnished to it as provided in Section
312(a) of the Trust Indenture Act upon receipt of a new list so furnished,
(B) destroy any information received by it as Paying Agent (if so acting)
hereunder upon delivering to itself as Trustee, not earlier than March 20 or
September 20 of each year, a list containing the names and addresses of the
Holders of Debentures obtained from such information since the delivery of
the next previous list, if any, (C) destroy any list delivered to itself as
Trustee which was compiled from information received by it as Paying Agent
(if so acting) hereunder upon the receipt of a new list so delivered and (D)
destroy not earlier than two years after filing, any information filed with
it pursuant to Section 313(c)(2) of the Trust Indenture Act. For purposes of
Section 312(a) of the Trust Indenture Act, the term "stated intervals" shall
mean January 15 and July 15.
(b) If three or more Holders of Debentures of any series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Debenture
of such series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Debentures of such series with respect to
their rights under this Indenture or under the Debentures of such series and
is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
business days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved at
the time by the Trustee in accordance with Section 7.1(a), or
(ii) inform such applicants as to the approximate number of Holders
of Debentures of such series whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
Section 7.1(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Debentures of such series whose name and
address appears in the information preserved at the time by the Trustee in
accordance with Section 7.1(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment of the reasonable expenses of mailing, unless
within five days after such tender the Trustee shall mail to such applicants
and file with the Commission, together with a copy of the material to be
mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interest of the Holders
of Debentures of such series or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if
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after the entry of an order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing that all the
objections so sustained have been met and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Holders of
Debentures of such series with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their application.
(c) Every Holder of Debentures or Coupons, by receiving and holding
the same, agrees with the Company and the Trustee that neither the Company
nor the Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of any such information as to the names and
addresses of the Holders of Debentures in accordance with Section 7.1(b),
regardless of the source from which such information was derived and that the
Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under Section 7.1(b).
SECTION 7.2 REPORTS BY TRUSTEE.
The Trustee shall in each year transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be
required pursuant to the Trust Indenture Act in the manner provided pursuant
thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within 60 days after each May 15 following the date of this
Indenture deliver to Holders a brief report, dated as of such May 15, which
complies with the provisions of Section 313(a).
A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Debentures are listed, with the Commission and with the Company. The Company
will promptly notify the Trustee when any Debentures are listed on any stock
exchange or market center.
SECTION 7.3. REPORTS BY COMPANY.
The Company shall:
(a) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the Exchange
Act; or, if the Company is not required to file information, documents or
reports pursuant to either of such Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports which may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered
on a national securities exchange as may be prescribed from time to time in
such rules and regulations;
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(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports required to be filed with
respect to compliance by the Company with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(c) transmit to all Holders, in the manner and to the extent
provided in Trust Indenture Act Section 313(c), within 30 days after the
filing thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs (a)
and (b) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS.
The Company shall not merge or consolidate with any other corporation
or sell or convey all or substantially all of its assets to any Person,
unless (a) either the Company shall be the continuing corporation, or the
successor corporation (if other than the Company) shall be a corporation
organized under the laws of the United States of America or any State thereof
and shall expressly assume the due and punctual payment of the principal of
and interest on all the Debentures, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Company, by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee
by such corporation, and (b) the Company or such successor corporation, as
the case may be, shall not, immediately after such merger or consolidation,
or such sale or conveyance, be in default in the performance of any such
covenant or condition.
SECTION 8.2 SUCCESSOR CORPORATION SUBSTITUTED.
In case of any such consolidation, merger, sale or conveyance, and
following such an assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein. Such successor corporation may
cause to be signed, and may issue either in its own name or in the name of
the Company prior to such succession any or all of the Debentures issuable
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hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any securities which previously shall have been signed and
delivered by the officers of the Company, to the Trustee for authentication,
and any Debentures which such successor corporation thereafter shall cause to
be signed and delivered to the Trustee for that purpose. All of the
Debentures so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Debentures theretofore or thereafter
issued in accordance with the terms or this Indenture as though all of such
Debentures had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale or conveyance such
changes in phraseology and form (but not in substance) may be made in the
Debentures thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance
by way of lease) the Company or any successor corporation which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Debentures and may be liquidated and dissolved.
SECTION 8.3 OPINION OF COUNSEL TO TRUSTEE.
The Trustee may receive an Opinion of Counsel, prepared in accordance
with Section 1.2, as conclusive evidence that any such consolidation, merger,
sale, lease or conveyance, and any such assumption, and any such liquidation
or dissolution, complies with the applicable provisions of this Indenture.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders of Debentures or Coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following
purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Debentures; or
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(b) to add to the covenants of the Company for the benefit of the
Holders of Debentures of all or any series (and if such covenants are to be
for the benefit of Debentures of less than all series, stating that such
covenants are expressly being included solely for the benefit of such series)
or to surrender any right or power herein conferred upon the Company; or
(c) to add any additional Events of Default (and if such Events of
Default are to be for the benefit of Debentures of less than all series,
stating that such Events of Default are expressly being included solely for
the benefit of such series); or
(d) to add to or change any of the provisions of this Indenture to
provide that Bearer Debentures may be registerable as to principal, to change
or eliminate any restrictions on the payment of principal of or any premium
or interest on Bearer Debentures, to permit Bearer Debentures to be issued in
exchange for Registered Debentures, to permit Bearer Debentures to be issued
in exchange for Bearer Debentures of other authorized denominations or to
permit or facilitate the issuance of Debentures in uncertificated form,
provided that any such action shall not adversely affect the interests of the
Holders of Debentures of any series or any related Coupons in any material
respect; or
(e) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Debenture Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision; or
(f) to establish the form or terms of Debentures of any series and
any related coupons as permitted by Sections 2.1 and 3.1; or
(g) to evidence and provide for the acceptance of appointment
thereunder by a successor Trustee with respect to the Debentures of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of the
trusts hereunder by more than one Trustee, pursuant to the requirements of
Section 6.8(b); or
(h) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIV, including providing for
the conversion of the Debentures into any security or property (other than
the Common Stock of the Company); or
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Indenture, provided that such action shall not adversely affect the interests
of the Holders of Debentures of any series or any related Coupons in any
material respect.
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SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Debentures of each series
affected by such supplemental indenture, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Debentures of such
series and any related coupons under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of each Holder of
each Outstanding Debenture of the series affected thereby,
(a) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Debenture of any series, or
reduce the principal amount thereof or the rate of interest thereon or any
premium payable upon the redemption thereof, or change any obligation of the
Company to pay additional amounts pursuant to Section 10.6 (except as
contemplated by Section 8.1 and permitted by Section 9.1(a)), or reduce the
amount of the principal of an Original Issue Discount Debenture that would be
due and payable upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.2 or change the coin or currency in which any Debenture
or any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or
(b) reduce the percentage in principal amount of the Outstanding
Debentures of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required for
any waiver of certain defaults hereunder and their consequences provided for
in this Indenture, or reduce the requirements of Section 13.4 for quorum or
voting, or
(c) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 10.2, or
(d) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the consent
of the Holder of each Outstanding Debenture of the series affected thereby;
provided, however, that this clause shall not be deemed to require the
consent of any Holder of a Debenture of such series or Coupon appertaining
thereto with respect to changes in the references to "the Trustee" and
concomitant changes in this Section or the deletion of this proviso, in
accordance with the requirements of Sections 6.7(b) and 9.1(h), or
(e) make any change that adversely affects the right to convert any
Debenture of any series as provided in Article XIV or pursuant to Section 3.1
(except as permitted by Sec-
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tion 9.1) or decrease the conversion rate or increase the conversion price of
any such Debenture of such series, or
(f) if the Debentures of any series are secured, change the terms
and conditions pursuant to which the Debentures of such series are secured in
a manner adverse to the Holders of the secured Debentures of such series, or
(g) make any change in Article XV that adversely affects the rights
of any Holders of Outstanding Debentures of such series;
If the Debentures of such series are held by a Sun Trust or a trustee
of such trust, such supplemental indenture shall not be effective until the
holders of a majority in liquidation preference of Trust Securities of the
applicable Trust shall have consented to such supplemental indenture;
provided, that if the consent of the Holder of each Outstanding Debenture of
such series is required, such supplemental indenture shall not be effective
until each holder of the Trust Securities of the applicable Sun Trust shall
have consented to such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of Debentures of one or more series, or which modifies the
rights of the Holders of Debentures of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Debentures of any other series.
It shall not be necessary for any Act of Holders of Debentures of any
series under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such Act shall approve
the substance thereof.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 6.2) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Debentures theretofore or there-
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after authenticated and delivered hereunder and of any Coupons appertaining
thereto shall be bound thereby.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act of 1939, as amended,
in effect on such date.
SECTION 9.6 REFERENCE IN DEBENTURES TO SUPPLEMENTAL INDENTURES.
Debentures of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debentures of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Debentures of such series.
ARTICLE X
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company covenants and agrees for the benefit of Debentures of any
series that it will duly and punctually pay the principal of and any premium
and interest on the Debentures of such series in accordance with the terms of
the Debentures of such series, any Coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 3.1 with
respect to Debentures of such series, any interest due on Bearer Debentures
of such series on or before Maturity shall be payable only upon presentation
and surrender outside the United States of the several Coupons for such
interest installments as are evidenced thereby as they severally mature.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
If Debentures of any series are issuable only as Registered
Debentures, the Company will maintain in each Place of Payment for Debentures
of such series an office or agency where Debentures of such series may be
presented or surrendered for payment, where Debentures of such series may be
surrendered for registration of transfer, exchange, or conversion and where
notices and demands to or upon the Company in respect of Debentures of such
series and this Indenture may be served. If Debentures of any series are
issuable as Bearer Debentures, the Company will maintain (a) in The City of
New York, an office or agency where any Registered Debentures of such series
may be presented or surrendered for payment, where any Registered Debentures
of such series may be surrendered for registra-
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tion of transfer, where Debentures of such series may be surrendered for
conversion or exchange, where notices and demands to or upon the Company in
respect of Debentures of such series and this Indenture may be served and
where Bearer Debentures of such series and related Coupons may be presented
or surrendered for payment in the circumstances described in the following
paragraph (and not otherwise), (b) subject to any laws or regulations
applicable thereto, in a Place of Payment for such series which is located
outside the United States, an office or agency where Debentures of such
series and related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Debentures of such
series pursuant to Section 10.4); provided, however, that if Debentures of
such series are listed on The Stock Exchange of the United Kingdom and the
Republic of Ireland, the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for Debentures of such
series in London, Luxembourg or any other required city located outside the
United States, as the case may be, so long as Debentures of such series are
listed on such exchange, and (c) subject to any laws or regulations
applicable thereto in a Place of Payment for Debentures of such series
located outside the United States an office or agency where any Registered
Debentures of such series may be surrendered for registration of transfer,
where Debentures of such series may be surrendered for conversion or exchange
and where notices and demands to or upon the Company in respect of the
Debentures of such series and this Indenture may be served. The Company will
give prompt notice to the Trustee and to the Holders as provided in Sections
1.5 and 1.6, respectively, of the location and any change in the location, of
any such office or agency. If at any time the Company shall fail to maintain
any such required office or agency in respect of Debentures of any series or
shall fail to furnish the Trustee with the address thereof, such
presentations and surrenders of Debentures of such series may be made and
notices and demands may be made or served at the Corporate Trust Office of
the Trustee, except that Bearer Debentures of such series and the related
Coupons may be presented and surrendered for payment (including payment of
any additional amounts payable on Bearer Debentures of such series pursuant
to Section 10.4) at the office of the Trustee for such series located outside
the United States, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands.
No payment of principal, premium or interest on Bearer Debentures
shall be made at any office or agency of the Company in the United States or
by check mailed to any address in the United States or by transfer to any
account maintained with a bank located in the United States; provided,
however, that if the Debentures of any series are denominated and payable in
Dollars, payment of principal of and any premium and interest on any Bearer
Debenture of such series (including any additional amounts payable on
Debentures of such series pursuant to Section 10.4) shall be made at the
office of the Company's Paying Agent in The City of New York, if (but only
if) payment in Dollars of the full amount of such principal, premium,
interest or additional amounts, as the case may be, at all offices or
agencies outside the United States maintained for the purpose by the Company
in accordance with this Indenture is illegal or effectively precluded by
exchange controls or other similar restrictions.
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The Company may also from time to time designate one or more other
offices or agencies where the Debentures of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in accordance with the requirements set forth
above for Debentures of any series for such purposes. The Company will give
prompt written notice to the Trustee and the Holders of Debentures of such
series of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 10.3 MONEY FOR DEBENTURES PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent with
respect to Debentures of any series, it will, on or before each due date of
the principal of and any premium or interest on any of the Debentures of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium or interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure to act.
Whenever the Company shall have one or more Paying Agents for
Debentures of any series it will, prior to each due date of the principal of
and any premium or interest on any Debentures of such series, deposit with a
Paying Agent a sum sufficient to pay the principal and any premium or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure to act.
The Company will cause each Paying Agent for Debentures of any series
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of and
any premium or interest on Debentures of such series in trust for the benefit
of the Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any
other obligor upon the Debentures of such series) in the making of any
payment of principal of and any premium or interest on the Debentures of such
series; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held
in trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying Agent
to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of and any
premium or interest on any Debenture of any series and remaining unclaimed
for two years after such principal and any premium or interest has become due
and payable shall be paid to the Company on Company Request, or (if then held
by the Company) shall be discharged from such trust; and the Holder of the
Debenture of such series or any Coupon appertaining thereto shall thereafter,
as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect
to such trust money and all liability of the Company as trustee thereof shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper in each Place
of Payment, notice that such money remains unclaimed and that after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be
repaid to the Company.
SECTION 10.4 LIMITATION ON DIVIDENDS; TRANSACTIONS WITH AFFILIATES.
If Debentures of any series are issued to a Sun Trust or a trustee of
such trust in connection with the issuance of Trust Securities by such Sun
Trust and (a) there shall have occurred any event that would constitute an
Event of Default, (b) the Guarantor shall be in default with respect to its
payment of any obligations under the Preferred Securities Guarantee or the
Common Securities Guarantee relating to such Sun Trust or (c) the Company
shall have given notice of its election to defer payments of interest on
Debentures of such series by extending the interest payment period and such
period, or any extension thereof, shall be continuing, then (y) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock (other than (i) purchases or acquisitions of shares of
Common Stock of the Company in connection with the satisfaction by the
Company of its obligations under any employee benefit plans, (ii) as a result
of a reclassification of capital stock of the Company or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of capital stock of the Company or, (iii) the purchase of
fractional interests in shares of the Company's capital stock pursuant to the
conversion or exchange provisions of such capital stock of the Company or the
security being converted or exchanged) or make any guarantee payments with
respect to the forgoing), and (z) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repur-
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chase or redeem any debt securities (including guarantees) issued by the
Company which rank PARI PASSU with or junior to Debentures of such series.
SECTION 10.5 COVENANTS AS TO SUN TRUSTS.
In the event Debentures of such series are issued to a Sun Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Sun Trust, for so long as such Trust Securities remain outstanding, the
Company will (a) maintain 100% direct or indirect ownership of the Common
Securities of such Sun Trust; provided, however, that any permitted successor
of the Company under the Indenture may succeed to the Company's ownership of
the Common Securities, (b) use its reasonable efforts to cause such Sun Trust
(i) to remain a statutory business trust, except in connection with a
distribution of Debentures of such series to the holders of Trust Securities
in liquidation of such Sun Trust, the redemption of all of the Trust
Securities of such Sun Trust, or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration of such Sun Trust, and
(ii) to continue to be classified as a grantor trust for United States
federal income tax purposes and (c) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Debentures of such series.
SECTION 10.6 ADDITIONAL AMOUNTS.
If the Debentures of any series provide for the payment of additional
amounts, the Company will pay to the Holder of any Debenture of such series
or any Coupon appertaining thereto additional amounts as provided therein.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of or any premium or interest on, or in respect of any
Debenture of any series or payment of any related Coupon or the net proceeds
received on the sale or exchange of any Debenture of any series, such mention
shall be deemed to include mention of the payment of additional amounts
provided for in this Section to the extent that, in such context additional
amounts are, were or would be payable in respect thereof pursuant to the
provisions of this Section and express mention of the payment of additional
amounts (if applicable) in any provisions hereof shall not be construed as
excluding additional amounts in those provisions hereof where such express
mention is not made.
If the Debentures of any series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with
respect to Debentures of such series (or if the Debentures of such series
will not bear interest prior to Maturity, the first day on which a payment of
principal and any premium is made), and at least 10 days prior to each date
of payment of principal and any premium or interest if there has been any
change with respect to the matters set forth in the below-mentioned Officers'
Certificate, the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an Officers'
Certificate instructing the Trustee and such Paying Agent or Paying Agents
whether such payment of principal of and any premium or interest on the
Debentures of such series shall be made to Holders of Debentures of such
series or
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any Coupons appertaining thereto who are United States Aliens without
withholding for or on account of any tax assessment or other governmental
charge described in the Debentures of such series. If any such withholding
shall be required, then such Officers' Certificate shall specify by country
the amount, if any, required to be withheld on such payments to such Holders
of Debentures of such series or any Coupons appertaining thereto and the
Company will pay to the Trustee or such Paying Agent the additional amounts
required by this Section. The Company covenants to indemnify the Trustee and
any Paying Agent for, and to hold them harmless against, any loss, liability
or expense reasonably incurred without negligence or willful misconduct on
their part arising out of or in connection with actions taken or omitted by
any of them in reliance on any Officers' Certificate furnished pursuant to
this Section.
SECTION 10.7 EXISTENCE.
Subject to Article VIII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 10.8 PURCHASE OF DEBENTURES BY COMPANY OR SUBSIDIARY.
If and so long as the Debentures of any series are listed on The
Stock Exchange of the United Kingdom and the Republic of Ireland and such
stock exchange shall so require, the Company will not, and will not permit
any of its Subsidiaries to, purchase any Debentures of such series by private
treaty at a price (exclusive of expenses and accrued interest) which exceeds
120% of the mean of the nominal quotations of the Debentures of such series
as shown in The Stock Exchange Daily Official List for the last trading day
preceding the date of purchase.
SECTION 10.9 STATEMENT BY OFFICERS AS TO DEFAULT.
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate signed by its principal executive officer, principal
financial officer or principal accounting officer stating whether or not to
the best knowledge of the signer thereof the Company is in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture, and if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company shall file with the Trustee written notice of the
occurrence of any default or Event of Default within five Business Days of
its becoming aware of any such default or Event of Default.
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SECTION 10.10 CALCULATION OF ORIGINAL ISSUE DISCOUNT
The Company shall file with the Trustee promptly at the end of each
year a written notice specifying the amount of Original Issue Discount
(including daily rates and accrual periods) accrued on Outstanding Debentures
as of the end of such year.
ARTICLE XI
REDEMPTION OF DEBENTURES
SECTION 11.1 APPLICABILITY OF ARTICLE.
Debentures of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Debentures of any
series) in accordance with this Article.
SECTION 11.2 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem Debentures of any series shall
be evidenced by an Officers' Certificate. In the case of any redemption, at
the election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Debentures of such series to be redeemed. In the
case of any redemption of Debentures of such series (a) prior to the
expiration of any restriction on such redemption provided in the terms of
Debentures of such series or elsewhere in this Indenture, or (b) pursuant to
an election of the Company which is subject to a condition specified in the
terms of Debentures of such series, the Company shall furnish the Trustee
with an Officers' Certificate evidencing compliance with such restriction or
condition.
SECTION 11.3 SELECTION BY TRUSTEE OF DEBENTURES TO BE REDEEMED.
If less than all the Debentures of any series and of like tenor are
to be redeemed, the particular Debentures of such series to be redeemed shall
be selected not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Debentures of such series and of like tenor not
previously called for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection, for redemption
of portions (equal to the minimum authorized denomination for Debentures of
such series or any integral multiple thereof) of the principal amount of
Registered Debentures of such series of a denomination larger than the
minimum authorized denomination for Debentures of such series. If so
specified in the Debentures of any series, partial redemptions must be in an
amount not less than $1,000,000 principal amount of Debentures.
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If Debentures of any series selected for partial redemption are
converted in part before termination of the conversion right with respect to
the portion of the Debentures of such series so selected, the converted
portion of the Debentures of such series shall be deemed (so far as may be)
to be the portion selected for redemption. Debentures (or portions thereof)
which have been converted during a selection of Debentures of such series to
be redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection. In any case where more than one Debenture of such series is
registered in the same name, the Trustee in its discretion may treat the
aggregate principal amount so registered as if it were represented by one
Debenture of such series.
The Trustee shall promptly notify the Company in writing of the
Debentures of such series selected for redemption and, in the case of any
Debentures of such series selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Debentures of any
series shall relate, in the case of any Debentures of such series redeemed or
to be redeemed only in part, to the portion of the principal amount of the
Debentures of such series which has been or is to be redeemed.
SECTION 11.4 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Debentures to be redeemed not less than 30 nor more
than 60 days prior to the Redemption Date.
All notices of redemption shall identify the Debentures (including
the CUSIP number) to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all the Outstanding Debentures of any series are to
be redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Debentures of such series to be
redeemed, and a statement to the effect that on or after the Redemption Date
upon surrender of such Debenture a new Debenture of such series in the
principal amount equal to the unredeemed portion will be issued;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture of such series to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date;
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(e) the place or places where such Debentures of such series,
together in the case of Bearer Debentures of such series with all Coupons
appertaining thereto, if any maturing after the Redemption Date, are to be
surrendered for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case;
and
(g) if applicable, the conversion rate or price, the date on which
the right to convert the Debentures of such series to be redeemed will
terminate and the place or places where such Debentures may be surrendered
for conversion.
A notice of redemption published as contemplated by Section 1.6 need
not identify particular Registered Debentures of such series to be redeemed.
Notice of redemption of Debentures to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 11.5 DEPOSIT OF REDEMPTION PRICE.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) an
amount of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Debentures which are to be redeemed on that date.
If any Debenture called for redemption is converted into Common Stock
of the Company, any money deposited with the Trustee or with any Paying Agent
or so segregated and held in trust for the redemption of such Debenture shall
(subject to any right of the Holder of such Debenture or any Predecessor
Debenture to receive interest as provided in the last paragraph of Section
3.7) be paid to the Company upon Company Request or, if then held by the
Company, shall be discharged from such trust.
SECTION 11.6 DEBENTURES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Debentures
so to be redeemed shall on the Redemption Date become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Debentures shall cease to bear interest and the Coupons for
such interest appertaining to any Bearer Debentures so to be redeemed except
to the extent provided below, shall be void. Upon surrender of any such
Debenture for redemption in accordance with said notice together with all
Coupons, if any, appertaining thereto maturing after the Redemption Date,
such Debenture shall be paid by the Company at the Redemption Price together
with accrued interest to the Redemption Date; provided, however, that
installments of interest on Bearer Debentures whose Stated Maturity
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is on or prior to the Redemption Date shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 10.2) and, unless otherwise specified as contemplated by Section 3.1,
only upon presentation and surrender of Coupons for such interest; and
provided, further, that, unless otherwise specified as contemplated by
Section 3.1, installments of interest on Registered Debentures whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Debentures or one or more Predecessor Debentures, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.
If any Bearer Debenture surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date,
such Debenture may be paid after deducting from the Redemption Price an
amount equal to the face amount of all such missing Coupons, or the surrender
of such missing Coupon or Coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Debenture shall surrender to the Trustee or any Paying Agent
any such missing Coupon in respect of which a deduction shall have been made
from the Redemption Price, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by Coupons
shall be payable only at an office or agency located outside the United
States (except as otherwise provided in Section 10.2) and unless otherwise
specified as contemplated by Section 3.1 only upon presentation and surrender
of those Coupons.
If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor
in the Debenture.
SECTION 11.7 DEBENTURES REDEEMED IN PART.
Any Registered Debenture of any series which is to be redeemed only
in part shall be surrendered at a Place of Payment therefor (with, if the
Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee
duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate
and make available for delivery to the Holder of such Debenture without
service charge, a new Registered Debenture or Debentures of such series and
of like tenor of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Debenture of such series so surrendered.
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ARTICLE XII
SINKING FUNDS
SECTION 12.1 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Debentures of any series except as otherwise
specified as contemplated by Section 3.1 for Debentures of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Debentures of any series is herein referred to as a "mandatory
sinking fund payment", and any payment in excess of such minimum amount
provided for by the terms of Debentures of any series is herein referred to
as an "optional sinking fund payment". If provided for by the terms of
Debentures of any series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 12.2. Each sinking fund payment
shall be applied to the redemption of Debentures of any series as provided
for by the terms of Debentures of such series.
SECTION 12.2 SATISFACTION OF SINKING FUND PAYMENTS WITH DEBENTURES.
The Company (a) may deliver Outstanding Debentures of any series
(other than any previously called for redemption), together in the case of
any Bearer Debentures of such series with all unmatured Coupons appertaining
thereto, and (b) may apply as a credit Debentures of such series which have
been redeemed either at the election of the Company pursuant to the terms of
the Debentures of such series or through the application of permitted
optional sinking fund payments pursuant to the terms of the Debentures of
such series, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Debentures of such series required to be
made pursuant to the terms of the Debentures of such series; provided that
the Debentures of such series have not been previously so credited. The
Debentures of such series shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in the Debentures of such
series for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
SECTION 12.3 REDEMPTION OF DEBENTURES FOR SINKING FUND.
Not less than 60 days prior to each sinking fund payment date for
Debentures of any series, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Debentures of such series pursuant to Section 12.2 and will also deliver to
the Trustee any Debentures of such series to be so delivered. Not less than
45 days before each such sinking fund payment date the Trust-
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ee shall select the Debentures of such series to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 11.4. Such notice
having been duly given, the redemption of such Debentures of such series
shall be made upon the terms and in the manner stated in Sections 11.6 and
11.7.
ARTICLE XIII
MEETINGS OF HOLDERS OF DEBENTURES
SECTION 13.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
If Debentures of any series are issuable as Bearer Debentures, a
meeting of Holders of Debentures of such series may be called at any time and
from time to time pursuant to this Article to make, give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be made, given or taken by Holders of
Debentures of such series.
SECTION 13.2 CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of
Debentures of any series for any purpose specified in Section 13.1, to be
held at such time and at such place in the Borough of Manhattan, The City of
New York, or in London as the Trustee shall determine. Notice of every
meeting of Holders of Debentures of such setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 1.6, not less than
21 nor more than 180 days prior to the date fixed for the meeting (or, in the
case of a meeting of Holders with respect to Debentures of any series all or
part of which are represented by a Book-Entry Debenture, not less than 20 nor
more than 40 days).
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding
Debentures of any series shall have requested the Trustee to call a meeting
of the Holders of Debentures of such series for any purpose specified in
Section 13.1, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
made the first publication of the notice of such meeting within 21 days after
receipt of such request or shall not thereafter proceed to cause the meeting
to be held as provided herein, then the Company or the Holders of Debentures
of such series in the amount above specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City of New
York or in London for such meeting and may call such meeting for such
purposes by giving notice thereof as provided in subsection (a) of this
Section.
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SECTION 13.3 PERSONS ENTITLED TO VOTE AT MEETINGS.
Upon the calling of a meeting of Holders with respect to the
Debentures of any series all or part of which are represented by a Book-Entry
Debenture, a record date shall be established for determining Holders of
Outstanding Debentures of such series entitled to vote at such meeting, which
record date shall be the close of business on the day the notice of the
meeting of Holders is given in accordance with Section 13.2. The Holders on
such record date, and their designated proxies, and only such Persons, shall
be entitled to vote at any meeting of Holders. To be entitled to vote at any
meeting of Holders a Person shall (a) be a Holder of one or more Debentures
of such series or (b) be a Person appointed by an instrument in writing as
proxy by a Holder of one or more Debentures of such series; provided,
however, that in the case of any meeting of Holders with respect to the
Debentures of any series all or part of which are represented by a Book-Entry
Debenture, only Holders, or their designated proxies, of record on the record
date established pursuant to Section 13.3 hereof shall be entitled to vote at
such meeting. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders shall be the Persons entitled to vote at such
meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 13.4 QUORUM; ACTION.
The Persons entitled to vote a majority in principal amount of the
Outstanding Debentures of any series shall constitute a quorum for a meeting
of Holders of Debentures of such series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver
which this Indenture expressly provides may be given by the Holders of a
specified percentage in aggregate principal amount of Outstanding Debentures
of such series that is less or greater than a majority in principal amount of
the Outstanding Debentures of such series, then, with respect to such action
(and only such action) the Persons entitled to vote such lesser or greater
percentage in principal amount of the Outstanding Debentures of such series
shall constitute a quorum. In the absence of a quorum within 30 minutes of
the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Debentures of such series, be dissolved. In any
other case the meeting may be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period of not less than 10
days as determined by the chairman of the meeting prior to the adjournment of
such adjourned meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 13.2 (a), except that such notice need
be given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened. Notice of the reconvening of an
adjourned meeting shall state expressly the percentage, as provided above, of
the principal amount of the outstanding Debentures of such series which shall
constitute a quorum. Notwithstanding the foregoing, no meeting of Holders
with respect to Debentures of any series which is represented in whole or in
part by a Book-Entry Debenture, shall be adjourned to a date more than 90
days after the record date for such meeting unless the
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Trustee shall send out a new notice of meeting and establish, in accordance
with Section 13.3, a new record date for Holders entitled to vote at such
meeting.
Except as limited by the proviso to Section 9.2, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum
is present as aforesaid may be adopted by the affirmative vote of the Holders
of a majority in principal amount of the Outstanding Debentures of such
series; provided, however, that, except as limited by the proviso to Section
9.2, any resolution with respect to any consent or waiver which this
Indenture expressly provides may be given by the Holders of a specified
percentage in aggregate principal amount of Outstanding Debentures of such
series that is less or greater than a majority in principal amount of the
Outstanding Debentures of such series may be adopted at a meeting or an
adjourned meeting duly convened and at which a quorum is present as aforesaid
only by the affirmative vote of the Holders of such specified percentage in
principal amount of the Outstanding Debentures of such series.
Any resolution passed or decision taken at any meeting of Holders of
Debentures of any series duly held in accordance with this Section shall be
binding on all the Holders of Debentures of such series and the Coupons
appertaining thereto, whether or not present or represented at the meeting.
SECTION 13.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT OF
MEETINGS.
(a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders of Debentures of any series in regard to proof of the
holding of Debentures of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission
and examination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it
shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Debentures of such series shall be proved in the
manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the signature of
the person executing the proxy witnessed or guaranteed by any trust company,
bank or banker authorized by Section 1.4 to certify to the holding of Bearer
Debentures of such series. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed valid
and genuine without the proof specified in Section 1.4 or other proof.
(b) The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called
by the Company or by Holders of Debentures of such series as provided in
Section 13.2(b), in which case the Company or the Holders of Debentures of
such series calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Persons entitled to vote a
majority in principal amount of the Outstanding Debentures of such series
represented at the meeting.
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(c) At any meeting each Holder of a Debenture of such series or
proxy shall be entitled to one vote for each $ 1,000 principal amount of the
Outstanding Debentures of such series held or represented by him; provided,
however, that no vote shall be cast or counted at any meeting in respect of
any Debenture challenged as not Outstanding and ruled by the chairman of the
meeting to be not Outstanding. The chairman of the meeting shall have no
right to vote, except as a Holder of a Debenture of such series or proxy.
(d) Any meeting of Holders of Debentures of any series duly called
pursuant to Section 13.2 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Debentures of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 13.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders of
Debentures of any series shall be by written ballots on which shall be
subscribed the signatures of the Holders of Debentures of such series or of
their representatives by proxy and the principal amounts and serial numbers
of the Outstanding Debentures of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written reports in duplicate of all votes cast at the meeting. A record, at
least in duplicate, of the proceedings of each meeting of Holders of
Debentures of any series shall be prepared by the secretary of the meeting
and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat and affidavits by one
or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 13.2 and, if applicable, Section 13.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company, and another to
the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
ARTICLE XIV
CONVERSION OF DEBENTURES
SECTION 14.1 APPLICABILITY OF ARTICLE.
The provisions of this Article shall be applicable to the Debentures
of any series which are convertible into shares of Common Stock of the
Company, and the issuance of such shares of Common Stock upon the conversion
of Debentures of such series, except as otherwise specified as contemplated
by Section 3.1 for the Debentures of such series. The
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terms and provisions applicable to the conversion of Debentures of any series
into securities of the Company (other than Common Stock) shall, if
applicable, be set forth in an Officers' Certificate or established in one or
more indentures supplemental hereto, prior to the issuance of Debentures of
such series in accordance with Section 3.1.
SECTION 14.2 EXERCISE OF CONVERSION PRIVILEGE.
In order to exercise a conversion privilege, the Holder of a
Debenture of any series with such a privilege shall surrender such Debenture
to the Company at the office or agency maintained for that purpose pursuant
to Section 10.2, accompanied by written notice to the Company that the Holder
elects to convert such Debenture or a specified portion thereof. Such notice
shall also state, if different from the name and address of such Holder, the
name or names (with address) in which the certificate or certificates for
shares of Common Stock which shall be issuable on such conversion shall be
issued. Debentures of such series surrendered for conversion shall (if so
required by the Company or the Trustee) be duly endorsed by or accompanied by
instruments of transfer in forms satisfactory to the Company and the Trustee
duly executed by the registered Holder or its attorney duly authorized in
writing; and, if expressly specified, as contemplated by Section 3.1, to be
applicable to any series of Debentures, Debentures of such series so
surrendered for conversion during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (excluding Debentures or portions thereof called for
redemption during such period) shall also be accompanied by payment in funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Debenture then being
converted, and such interest shall be payable to such registered Holder
notwithstanding the conversion of such Debenture, subject to the provisions
of Section 3.7 relating to the payment of Defaulted Interest by the Company.
As promptly as practicable after the receipt of such notice and of any
payment required pursuant to a Board Resolution and, subject to Section 3.1,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto setting forth
the terms of the Debentures and the surrender of such Debentures in
accordance with such reasonable regulations as the Company may prescribe, the
Company shall issue and shall deliver, at the office or agency at which such
Debenture is surrendered, to such Holder or on its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such Debenture (or specified portion
thereof), in accordance with the provisions of such Board Resolution,
Officers' Certificate or supplemental indenture, and cash as provided therein
in respect of any fractional share of such Common Stock otherwise issuable
upon such conversion. Such conversion shall be deemed to have been effected
immediately prior to the close of busi-
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ness on the date on which such notice and such payment, if required, shall
have been received in proper order for conversion by the Company and such
Debenture shall have been surrendered as aforesaid (unless such Holder shall
have so surrendered such Debenture and shall have instructed the Company to
effect the conversion on a particular date following such surrender and such
Holder shall be entitled to convert such Debenture on such date, in which
case such conversion shall be deemed to be effected immediately prior to the
close of business on such date) and at such time the rights of the Holder of
such Debenture as such Debenture Holder shall cease and the person or persons
in whose name or names any certificate or certificates for shares of Common
Stock of the Company shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented
thereby. Except as set forth above and subject to the final paragraph of
Section 3.7, no payment or adjustment shall be made upon any conversion on
account of any interest accrued on the Debentures of such series surrendered
for conversion or on account of any dividends on the Common Stock of the
Company issued upon such conversion.
In the case of any Debenture of any series which is converted in part
only, upon such conversion the Company shall execute and the Trustee shall
authenticate and make available for delivery to or on the order of the Holder
thereof, at the expense of the Company, a new Debenture or Debentures of such
series, of authorized denominations, in aggregate principal amount equal to
the unconverted portion of such Debenture.
SECTION 14.3 NO FRACTIONAL SHARES.
No fractional share of Common Stock of the Company shall be issued
upon conversions of Debentures of any series. If more than one Debenture of
such series shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be issuable upon conversion
shall be computed on the basis of the aggregate principal amount of the
Debentures of such series (or specified portions thereof to the extent
permitted hereby) so surrendered. If, except for the provisions of this
Section 14, any Holder of a Debenture or Debentures of such series would be
entitled to a fractional share of Common Stock of the Company upon the
conversion of such Debenture or Debentures, or specified portions thereof,
the Company shall pay to such Holder an amount in cash equal to the current
market value of such fractional share computed, (a) if such Common Stock is
listed or admitted to unlisted trading privileges on a national securities
exchange, on the basis of the last reported sale price regular way on such
exchange on the last trading day prior to the date of conversion upon which
such a sale shall have been effected, or (b) if such Common Stock is not at
the time so listed or admitted to unlisted trading privileges on a national
securities exchange, on the basis of the average of the bid and asked prices
of such Common Stock in the over-the-counter market, on the last trading day
prior to the date of conversion, as reported by the National Quotation
Bureau, Incorporated or similar organization if the National Quotation
Bureau, Incorporated is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of Directors. For
purposes of this Section, "trading day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday other than any day on which the Common Stock
is not traded on the New York Stock Exchange, or if the Common Stock is not
traded on the New York Stock Exchange, on the principal exchange or market on
which the Common Stock is traded or quoted.
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SECTION 14.4 ADJUSTMENT OF CONVERSION PRICE.
The conversion price of Debentures of any series that is convertible
into Common Stock of the Company shall be adjusted for any stock dividends,
stock splits, reclassification, combinations or similar transactions in
accordance with the terms of the supplemental indenture or Board Resolutions
setting forth the terms of the Debentures of such series.
Whenever the conversion price is adjusted, the Company shall compute
the adjusted conversion price in accordance with terms of the applicable
Board Resolution or supplemental indenture and shall prepare an Officers'
Certificate setting forth the adjusted conversion price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at each office or agency maintained for
the purpose of conversion of Debentures of such series pursuant to Section
10.2 and, if different, with the Trustee. The Company shall forthwith cause a
notice setting forth the adjusted conversion price to be mailed, first class
postage prepaid, to each Holder of Debentures of such series at its address
appearing on the Debenture Register and to any conversion agent other than
the Trustee.
SECTION 14.5 NOTICE OF CERTAIN CORPORATE ACTIONS.
In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its retained
earnings (other than a dividend for which approval of any shareholders of the
Company is required); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights (other than any
such grant for which approval of any shareholders of the Company is
required); or
(c) of any reclassification of the Common Stock of the Company
(other than a subdivision or combination of its outstanding shares of Common
Stock) or of any consolidation, merger or share exchange to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale of all or substantially all of the assets of the
Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed with the Trustee, and shall cause to
be mailed to all Holders at their last addresses as they shall appear in the
Debenture Register, at least 20 days (or 10 days in any case specified in
clause (a) or (b) above) prior to the applicable record date hereinafter
specified, a notice stating (i) the date on which a record is to be taken for
the
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purpose of such dividend, distribution, rights, options or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Stock
of record to be entitled to such dividend, distribution, rights, options or
warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, share exchange, sale, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, share
exchange, sale, dissolution, liquidation or winding up. If at any time the
Trustee shall not be the conversion agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
SECTION 14.6 RESERVATION OF SHARES OF COMMON STOCK.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock or
treasury shares, for the purpose of effecting the conversion of Debentures,
the full number of shares of Common Stock of the Company then issuable upon
the conversion of all outstanding Debentures of any series that has
conversion rights.
SECTION 14.7 PAYMENT OF CERTAIN TAXES UPON CONVERSION.
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of its Common Stock on conversion of
Debentures pursuant hereto. The Company shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of its Common Stock in a name other than that of
the Holder of the Debenture or Debentures to be converted, and no such issue
or delivery shall be made unless and until the person requesting such issue
has paid to the Company the amount of any such tax, or has established, to
the satisfaction of the Company, that such tax has been paid.
SECTION 14.8 NONASSESSABILITY.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Debentures will upon issue in accordance with the
terms hereof be duly and validly issued and fully paid and nonassessable.
SECTION 14.9 EFFECT OF CONSOLIDATION OR MERGER ON CONVERSION PRIVILEGE.
Unless otherwise provided as contemplated by Section 3.1 with respect
to Debentures of any series, in case of any consolidation of the Company
with, or merger of the Company into or with any other Person, or in case of
any sale of all or substantially all of the assets of the Company, the
Company or the Person formed by such consolidation or the Person into which
the Company shall have been merged or the Person which shall have acquired
such assets, as the case may be, shall execute and deliver to the Trustee a
supple-
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mental indenture providing that the Holder of each Debenture then outstanding
of any series that is convertible into Common Stock shall have the right,
which right shall be the exclusive conversion right thereafter available to
said Holder (until the expiration of the conversion right of such Debenture),
to convert such Debenture into the kind and amount of shares of stock or
other securities or property (including cash) receivable upon such
consolidation, merger or sale by a holder of the number of shares of Common
Stock into which such Debenture might have been converted immediately prior
to such consolidation, merger or sale, subject to compliance with the other
provisions of this Indenture, such Debenture and such supplemental indenture.
Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
such Debenture. The above provisions of this Section shall similarly apply to
successive consolidations, mergers or sales. Unless otherwise provided as
contemplated by Section 3.1 with respect to Debentures of any series, it is
expressly agreed and understood that anything in this Indenture to the
contrary notwithstanding, if, pursuant to such merger, consolidation or sale,
holders of outstanding shares of Common Stock do not receive shares of common
stock of the surviving corporation but receive other securities, cash or
other property or any combination thereof, Holders of Debentures shall not
have the right to thereafter convert their Debentures into common stock of
the surviving corporation or the corporation which shall have acquired such
assets, but rather, shall have the right upon such conversion to receive the
other securities, cash or other property receivable by a holder of the number
of shares of Common Stock into which the Debentures held by such Holder might
have been converted immediately prior to such consolidation, merger or sale,
all as more fully provided in the first sentence of this Section 14.9.
Anything in this Section 14.9 to the contrary notwithstanding, the provisions
of this Section 14.9 shall not apply to a merger or consolidation of another
corporation with or into the Company pursuant to which both of the following
conditions are applicable: (i) the Company is the surviving corporation and
(ii) the outstanding shares of Common Stock are not changed or converted into
any other securities or property (including cash) or changed in number or
character or reclassified pursuant to the terms of such merger or
consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Debentures may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate
or opinion of an independent certified public accountant with respect
thereto; and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely thereon, and shall not be responsible or
accountable to any Holder of Debentures for any provision in conformity
therewith or approved by such independent certified accountant which may be
contained in said supplemental indenture.
SECTION 14.10 DUTIES OF TRUSTEE REGARDING CONVERSION.
Neither the Trustee nor any conversion agent shall at any time be
under any duty or responsibility to any Holder of Debentures of any series
that is convertible into Common
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Stock to determine whether any facts exist which may require any adjustment
of the conversion price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, whether herein
or in any supplemental indenture (or whether a supplemental indenture need be
entered into), any resolutions of the Board of Directors or written
instrument executed by one or more officers of the Company provided to be
employed in making the same. Neither the Trustee nor any conversion agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Debentures and neither the Trustee nor any conversion agent makes any
representation with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer
or deliver any shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Debenture for the purpose of
conversion or to comply with any of the covenants of the Company contained in
this Article XIV or in the applicable supplemental indenture, resolutions of
the Board of Directors or written instrument executed by one or more duly
authorized officers of the Company. All Debentures delivered for conversion
shall be delivered to the Trustee to be cancelled by or at the direction of
the Trustee, which shall dispose of the same as provided in Section 3.9.
SECTION 14.11 REPAYMENT OF CERTAIN FUNDS UPON CONVERSION.
Any funds which at any time shall have been deposited by the Company
or on its behalf with the Trustee or any other paying agent for the purpose
of paying the principal of, and premium, if any, and interest, if any, on any
of the Debentures (including funds deposited for the sinking fund referred to
in Article III hereof) and which shall not be required for such purposes
because of the conversion of such Debentures as provided in this Article XIV
shall after such conversion be repaid to the Company by the Trustee upon the
Company's written request.
ARTICLE XV
SUBORDINATION OF DEBENTURES
SECTION 15.1 DEBENTURES SUBORDINATE TO SENIOR INDEBTEDNESS.
The Company covenants and agrees, and each Holder of a Debenture, by
the Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the
indebtedness represented by the Debenture and the payment of the principal of
(and premium, if any) and interest on each and all of the Debentures are
hereby expressly made subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred. No
provision of this Article shall prevent the occurrence of any default or
Event of Default hereunder.
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SECTION 15.2 PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all amounts due upon all
Senior Indebtedness of the Company shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any
payment is made by the Company on account of the principal (and premium, if
any) or interest on the Debentures; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, to which the Holders of the Debentures or the
Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Debentures or by the
Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such
holders, as calculated by the Company) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant
to which any instruments evidencing such Senior Indebtedness may have been
issued, as their respective interests may appear, to the extent necessary to
pay such Senior Indebtedness in full, in money or money's worth, after giving
effect to any concurrent payment or distribution to or for the holders of
such Senior Indebtedness, before any payment or distribution is made to the
Holders of the Debentures or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received
by the Trustee before all Senior Indebtedness of the Company is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and
shall be paid over or delivered to the holders of such Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under
any indenture pursuant to which any instruments evidencing such Senior
Indebtedness may have been issued, and their respective interests may appear,
as calculated by the Company, for application to the payment of all Senior
Indebtedness of the Company, as the case may be, remaining unpaid to the
extent necessary to pay such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which
are subordinated in right of payment to all Senior Indebtedness which may at
the time be outstanding to substantially the same extent as, or to a greater
extent than,
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the Debentures are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article
VIII shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshalling of
assets and liabilities of the Company for the purposes of this Section if the
Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance or transfer such properties and
assets substantially as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the
conditions set forth in Article VIII.
SECTION 15.3 PRIOR PAYMENT TO SENIOR INDEBTEDNESS UPON ACCELERATION OF
DEBENTURES.
In the event that any Debentures are declared due and payable before
their Stated Maturity, then and in such event the holders of Senior
Indebtedness shall be entitled to receive payment in full of all amounts due
or to become due on or in respect of all Senior Indebtedness or provision
shall be made for such payment in cash, before the Holders of the Debentures
are entitled to receive any payment (including any payment which may be
payable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Debentures) by the Company on
account of the principal of (or premium, if any) or interest on the
Debentures or on account of the purchase or other acquisition of Debentures;
provided, however, that nothing in this Section shall prevent the
satisfaction of any sinking fund payment in accordance with Article XII by
delivering and crediting pursuant to Section 12.2 Debentures which have been
acquired (upon redemption or otherwise) prior to such declaration of
acceleration or which have been converted pursuant to Article XIV.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Debenture prohibited by
the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the
case may be, such Holder, then and in such event such payment shall be paid
over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 14.2 would be applicable.
SECTION 15.4 NO PAYMENT WHEN SENIOR INDEBTEDNESS IN DEFAULT.
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment
due on any Senior Indebtedness of the Company, as the case may be, beyond any
applicable grace period with respect thereto, or in the event that the
maturity of any Senior Indebtedness of the Company, as the case may be, has
been accelerated because of a default,
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then, in any such case, no payment shall be made by the Company with respect
to the principal (including redemption and sinking fund payments) of, or
premium, if any, or interest on the Debentures until such default is cured or
waived or ceases to exist or any such acceleration or demand for payment has
been rescinded.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 15.4, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior
Indebtedness may have been issued, as their respective interests may appear,
but only to the extent that the holders of the Senior Indebtedness (or their
representative or representatives or a trustee) notify the Trustee in writing
within 90 days of such payment of the amounts then due and owing on the
Senior Indebtedness and only the amounts specified in such notice to the
Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 15.5 PAYMENT PERMITTED IN CERTAIN SITUATIONS.
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Debentures shall prevent (a) the Company, at any time except
during the pendency of any dissolution, winding-up, liquidation or
reorganization of the Company, whether voluntary or involuntary or any
bankruptcy, insolvency, receivership or other proceedings of the Company
referred to in Section 15.2 or under the conditions described in Section 15.3
or 15.4, from making payments at any time of principal of, or premium, if
any, or interest on the Debentures, or (b) the application by the Trustee of
any money deposited with it hereunder to the payment of or on account of the
principal of, or premium, if any, or interest on the Debentures or the
retention of such payment by the Holders, if, at the time of such application
by the Trustee, it did not have knowledge that such payment would have been
prohibited by the provisions of this Article.
SECTION 15.6 SUBROGATION TO RIGHTS OF HOLDERS OF SENIOR INDEBTEDNESS.
Subject to the payment in full of all Senior Indebtedness or the
provision for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Senior Indebtedness, the rights of the
Holders of Debentures shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of
indebtedness of the Company which by its express terms is subordinated to
indebtedness of the Company to substantially the same extent as the
Debentures are subordinated to the Senior Indebtedness and is entitled to
like rights of subrogation) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the
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Senior Indebtedness until the principal of (and premium, if any) and interest
on the Debentures shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of Debentures or the
Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to or for the
benefit of the holders of Senior Indebtedness by Holders of Debentures or the
Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Debentures, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
SECTION 15.7 PROVISIONS SOLELY TO DEFINE RELATIVE RIGHTS.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of Debentures on the
one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Debentures, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations
of the Company), to pay to the Holders of Debentures the principal of (and
premium, if any) and interest on the Debentures as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of Debentures and
creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 15.8 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder of a Debenture by such Holder's acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such
action as may be necessary or appropriate to effectuate the subordination
provided in this Article and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
SECTION 15.9 NO WAIVER OF SUBORDINATION PROVISIONS.
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such
holder may have or be otherwise charged with.
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Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time
to time, without the consent of or notice to the Trustee or the Holders of
Debentures, without incurring responsibility to the Holders of Debentures and
without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of Debentures to the holders of
Senior Indebtedness do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement
under which Senior Indebtedness is outstanding; (b) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
Senior Indebtedness; (c) release any Person liable in any manner for the
collection of Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company and any other Person.
SECTION 15.10 NOTICE TO TRUSTEE.
The Company shall give prompt written notice to a Responsible Officer
of the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of any Debentures
pursuant to the provisions of this Article. Notwithstanding the provisions
of this Article or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would
prohibit the making of any payment to or by the Trustee in respect of any
Debentures pursuant to the provisions of this Article, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior Indebtedness or from any
trustee therefor; and, prior to the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.2, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall have not received the notice provided for in this Section at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (or premium, if any) or interest on any
Debentures), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
Subject to the provisions of Section 6.2, the Trustee shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any Person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee
as to the amount of Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any
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other facts pertinent to the rights of such Person under this Article, and if
such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 15.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.2, and
the Holders of Debentures shall be entitled to conclusively rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the
Holders of Debentures, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 15.12 TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into the Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders or creditors
if it shall in good faith pay over or distribute to Holders of Debentures or
to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this
Article or otherwise.
SECTION 15.13 RIGHTS OF TRUSTEE AS HOLDER OF SENIOR INDEBTEDNESS,
PRESERVATION OF TRUSTEE'S RIGHTS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder
of Senior Indebtedness and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.6.
SECTION 15.14 ARTICLE APPLICABLE TO PAYING AGENTS.
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In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "TRUSTEE" as
used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee;
PROVIDED, HOWEVER, that SECTION 14.13 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 15.15 CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article only, (a) the issuance and delivery
of junior securities (or cash paid in lieu of fractional shares) upon
conversion of Debentures in accordance with Article XIV, or pursuant to the
terms set forth in an Officers' Certificate or established in one or more
indentures supplemental hereto in accordance with Section 3.1, shall not be
deemed to constitute a payment or distribution on account of the principal of
or premium or interest on Debentures or on account of the purchase or other
acquisition of Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Debenture shall be deemed to
constitute payment on account of the principal of such Debenture. For the
purposes of this Section, the term "junior securities" means (i) shares of
any stock of any class of the Company and (ii) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness which
may be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article. Nothing contained in this
Article or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Debentures, the right, which is
absolute and unconditional, of the Holder of any Debenture to convert such
Debenture in accordance with Article XIV.
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This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
SUN HEALTHCARE GROUP, INC.
By: ___________________________
Name:
Title:
THE BANK OF NEW YORK
By: ___________________________
Name:
Title:
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--------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
SUN FINANCING I
Dated as of
--------------
--------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION. . . . . . . . . . . . . 8
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES. . . . . . . . . . . . . . 8
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE . . . . . . . . . . . . . 8
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE. . . . . . . . . . . 9
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT. . . . . 9
SECTION 2.6 EVENTS OF DEFAULT; WAIVER . . . . . . . . . . . . . . . . 9
SECTION 2.7 EVENT OF DEFAULT; NOTICE. . . . . . . . . . . . . . . . . 11
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 OFFICE. . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.4 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST. . . . . . . . . . . . . . 12
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES . . . . . . . . 13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES. . . 16
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE . . . . . . . . 16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES
OF THE PROPERTY TRUSTEE . . . . . . . . . . . . . . . . . 18
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE . . . . . . . . . . . 20
SECTION 3.11 DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.12 EXECUTION OF DOCUMENTS . . . . . . . . . . . . . . . . . 23
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR
ISSUANCE OF SECURITIES . . . . . . . . . . . . . . . . . 23
SECTION 3.14 DURATION OF TRUST. . . . . . . . . . . . . . . . . . . . 23
SECTION 3.15 MERGERS. . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES . . . . . . . . . 25
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR . . . . . . . . . . . . . 25
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ARTICLE V
TRUSTEES
PAGE
SECTION 5.1 NUMBER OF TRUSTEES. . . . . . . . . . . . . . . . . . . . 26
SECTION 5.2 DELAWARE TRUSTEE. . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY . . . . . . . . . . . . . . 26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND
DELAWARE TRUSTEE GENERALLY . . . . . . . . . . . . . . . 27
SECTION 5.5 REGULAR TRUSTEES. . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.6 DELAWARE TRUSTEE. . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES. . . . . 28
SECTION 5.8 VACANCIES AMONG TRUSTEES. . . . . . . . . . . . . . . . . 30
SECTION 5.9 EFFECT OF VACANCIES . . . . . . . . . . . . . . . . . . . 30
SECTION 5.10 MEETINGS . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.11 DELEGATION OF POWER. . . . . . . . . . . . . . . . . . . 31
SECTION 5.12 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS . . . . . . . . . . . . . . . . . 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES . . . . . . . . . 32
SECTION 7.2 PAYING AGENT. . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST. . . . . . . . . . . . . . . . . . . 33
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES. . . . . . . . . . . . . . . . . . 34
SECTION 9.2 TRANSFER OF CERTIFICATES. . . . . . . . . . . . . . . . . 35
SECTION 9.3 DEEMED SECURITY HOLDERS . . . . . . . . . . . . . . . . . 35
SECTION 9.4 BOOK ENTRY INTEREST . . . . . . . . . . . . . . . . . . . 35
SECTION 9.5 NOTICES TO CLEARING AGENCY. . . . . . . . . . . . . . . . 36
ii
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PAGE
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY. . . . . . . . . 36
SECTION 9.7 DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES. . 36
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES . . . . 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 10.2 EXCULPATION. . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 10.3 FICUCIARY DUTY . . . . . . . . . . . . . . . . . . . . . 39
SECTION 10.4 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . 40
SECTION 10.5 OUTSIDE BUSINESSES . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.2 CERTAIN ACCOUNTING MATTERS . . . . . . . . . . . . . . . 43
SECTION 11.3 BANKING. . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.4 WITHHOLDING. . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES;
ACTION BY WRITTEN CONSENT. . . . . . . . . . . . . . . . 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE . . . 48
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE . . . 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 14.2 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 50
SECTION 14.3 INTENTION OF THE PARTIES . . . . . . . . . . . . . . . . 50
iii
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PAGE
SECTION 14.4 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 14.5 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . 50
SECTION 14.6 PARTIAL ENFORCEABILITY . . . . . . . . . . . . . . . . . 51
SECTION 14.7 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . 51
ANNEX I TERMS OF SECURITIES . . . . . . . . . . . . . . . . . . 53
EXHIBIT A-1 FORM OF CONVERTIBLE PREFERRED SECURITY
CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE . . . . . . . . . . 76
(FORM OF REVERSE OF SECURITY). . . . . . . . . . . . . . . . . . . . . . . 78
CONVERSION REQUEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
OF 1939, as amended Declaration
- ------------------- -----------
310(a) . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . 3.6(e)
_______________
* This Cross-Reference Table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SUN FINANCING I
_____________
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ____________, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Sun Financing I
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of ________, 1997, (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on November __, 1997, for the sole purpose of issuing
and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain
Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 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
of the Securities Act or any successor rule thereunder.
"AGENT" means any Paying Agent or Conversion Agent.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized
to bind such Person.
"BASE INDENTURE" means the Indenture dated as of __________, among
the Debenture Issuer and the Debenture Trustee.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York or Albuquerque,
New Mexico are permitted or required by any applicable law to close.
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"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time to
time, or any successor legislation.
"CERTIFICATE" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Convertible Preferred Securities and in whose name or in
the name of a nominee of that organization shall be registered a Global
Certificate and which shall undertake to effect book entry transfers and
pledges of the Convertible Preferred Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"CLOSING DATE" means __________.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to be
dated as of ___________ of the Sponsor in respect of the Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in
fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"COMPANY INDEMNIFIED PERSON" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular
Trustee; or (d) any officer, employee or agent of the Trust or its Affiliates.
"CONVERSION AGENT" has the meaning specified in Section 7.2.
"CONVERTIBLE PREFERRED SECURITIES GUARANTEE" means the guarantee
agreement to be dated as of __________, of the Sponsor in respect of the
Convertible Preferred Securities.
"CONVERTIBLE PREFERRED SECURITY" has the meaning specified in
Section 7.1.
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<PAGE>
"CONVERTIBLE PREFERRED SECURITY BENEFICIAL OWNER" means, with
respect to a Book Entry Interest, a Person who is the beneficial owner of
such Book Entry Interest, as reflected on the books of the Clearing Agency,
or on the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).
"CONVERTIBLE PREFERRED SECURITY CERTIFICATE" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"CORPORATE TRUST OFFICE" means the office of the Property Trustee at
which the corporate trust business of the Convertible Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at 101 Barclay
Street, Floor 21 West, New York, New York, [____].
"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 Sun Healthcare Group, Inc. in its capacity
as issuer of the Debentures under the Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, as trustee under the
Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES" has the
meaning set forth in Section 9.4.
"DISTRIBUTION" means a distribution payable to Holders of Securities
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing
Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
4
<PAGE>
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in Section
10.4(b).
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"INDENTURE" means the Base Indenture as supplemented by the
Supplemental Indenture.
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex I
hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding
Convertible Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of all outstanding Securities of the relevant class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"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;
5
<PAGE>
(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.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
"QUORUM" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"REGULAR TRUSTEE" has the meaning set forth in Section 5.1.
"RELATED PARTY" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee,
any officer within the Corporate Trust Office of the Property Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"RULE 3A-5" means Rule 3a-5 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Convertible
Preferred Securities.
6
<PAGE>
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SECURITIES GUARANTEES" means the Common Securities Guarantee and the
Convertible Preferred Securities Guarantee.
"SPONSOR" means Sun Healthcare Group, Inc., a Delaware corporation, or
any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section 2.6(a)(ii).
"SUPPLEMENTAL INDENTURE" means the First Supplemental Indenture dated
as of ____________, among the Debenture Issuer and the Debenture Trustee,
pursuant to which the Debentures are to be issued.
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holder(s) of outstanding Convertible
Preferred Securities or Holder(s) of outstanding Common Securities voting
separately as a class, who are the record owners of 10% or more
of the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"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.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement for the
offering and sale of Convertible Preferred Securities in the form of Exhibit C.
7
<PAGE>
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 Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity) provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, the Property Trustee shall
provide to the Holders of the Convertible Preferred Securities such reports as
are required by Section 313
8
<PAGE>
of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
required by Section 314 (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.
Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Sponsor's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Convertible
Preferred Securities may, by vote, on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect of
the Convertible Preferred Securities and its consequences, PROVIDED THAT, if the
underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Convertible Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly
9
<PAGE>
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Convertible Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose of
this Declaration, but no such waiver shall extend to any subsequent or other
default or an Event of Default with respect to the Convertible Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders
of the Convertible Preferred Securities of an Event of Default with respect
to the Convertible Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until all Events of Default with respect to the
Convertible Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Convertible Preferred Securities and only the
Holders of the Convertible Preferred Securities will have the right to direct
the Property Trustee in accordance with the terms of the Securities. The
foregoing provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon
such waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Declaration, but no
10
<PAGE>
such waiver shall extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any right consequent
thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Convertible Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders of the Securities, notices of all defaults with respect to the
Securities actually known to a Responsible Officer 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 or in the payment of any
sinking fund installment established for the Debentures, the Property Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Property Trustee 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.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Sun Financing I" as such name may be modified from
time to time by the Regular Trustees following written notice to the Holders of
Securities. The Trust's activities may be conducted under the name of the Trust
or any other name deemed advisable by the Regular Trustees.
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SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Sun Healthcare
Group, Inc., 101 Sun Lane, N.E., Albuquerque, New Mexico 87109. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Securities and use the proceeds from such sale to acquire the Debentures,
and (b) except as otherwise limited herein, to engage in only those other
activities necessary, or incidental thereto. The Trust shall not borrow money,
issue debt or reinvest proceeds derived from investments, pledge any of its
assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
SECTION 3.4 AUTHORITY.
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.
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 Convertible Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue
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no more than one series of Convertible Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be
no interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Convertible
Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Convertible Preferred
Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Convertible Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Convertible Preferred Securities in any
State in which the Sponsor has determined to qualify or register such
Convertible Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Convertible Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Convertible Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement providing for the
sale of the Convertible Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Property Trustee for the benefit of the Holders of
the Convertible Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of a Special Event; provided that the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or refraining
from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges,
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and to issue relevant notices to the Holders of Convertible Preferred
Securities and Holders of Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e) the Property Trustee has the
exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any 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, the Regular Trustees hereby initially
appointing [_________] for such purposes;
(m) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(o) 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:
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(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(p) 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 Debenture Issuer.
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. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(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;
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(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Amended and Restated Declaration
or Annex I, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of counsel to the effect that such modification
will not cause more than an insubstantial risk that 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 of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7. 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 of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the
Convertible Preferred Securities and Holders of the Common Securities from
the Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Convertible Preferred Securities by a "nation-
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ally recognized statistical rating organization", as that term is defined
for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Convertible Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature;
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the occurrence
of certain special events (as may be defined in the terms of the
Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities; and
(iv) give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises out
of or in connection with an Event of Default 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; provided however,
that if a Declaration Event of Default has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest on the Debentures having
a principal amount equal to the aggregate liquidation amount of the Preferred
Securities of such Holder (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the Holders of the Common Securities Holder will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in such Direct
Action. Except as provided in the preceding sentences, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
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(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.7.
(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 of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each, a
"Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee. The Property Trustee hereby initially appoints
[___________]as the Paying Agent.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), 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 provi-
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sions of this Declaration and the Property Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the Property
Trustee; and (B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Property 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 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
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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 or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its selection or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
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(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 attorneys' fees
and expenses and the expenses of the Property Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee; provided that nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the 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 written instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request written instructions from
the Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the 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;
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(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii)the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts, or to exercise any such right, power,
duty or obligation. No permissive power or authority available to the
Property Trustee shall be construed to be a duty.
SECTION 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 Section 3807 of the Business Trust Act.
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SECTION 3.12 EXECUTION OF DOCUMENTS.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence for fifty-five (55) years from the Closing Date.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either: (A)
expressly assumes all of the obligations of the Trust under the Securities;
or (B) substitutes for the Securities other securities having substantially
the same terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Convertible Preferred Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
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(iii) the Convertible Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization
on which the Convertible Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Convertible Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders' interests
in the Convertible Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or replacement,
the Sponsor has received an opinion of a nationally recognized independent
counsel to the Trust experienced in such matters to the effect that:(A)
such merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the Holders of the
Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity); and (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company;(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United States federal
income tax purposes; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Convertible Preferred Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the capital
of the Trust, at the same time as the Convertible Preferred Securities are sold.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Convertible Preferred
Securities and the Convertible Preferred Securities Guarantees, including any
amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Convertible Preferred Securities
and the Convertible Preferred Securities Guarantees and to do any and all such
acts, other than actions which must be taken by the Trust, and advise the Trust
of actions it must take, and prepare for execution and filing any documents to
be executed and filed by the Trust, as the Sponsor deems necessary or advisable
in order to comply with the applicable laws of any such States;
(c) to prepare for filing by the Trust an application to the New York
Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing upon notice of issuance of any Convertible Preferred
Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Convertible Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing for
the sale of the Convertible Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may
be increased or decreased by vote of the Holders of a majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities; provided, however, that the number of Trustees shall in
no event be less than two (2); provided further that (1) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (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
Delaware Trustee if it meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(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 Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Convertible Preferred Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Robert F. Murphy
Robert D. Woltil
William C. Warrick
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(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; and
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6, provided, that, the registration statement
referred to in Section 3.6, including any amendments thereto, shall be signed
by all of the Regular Trustees.
SECTION 5.6 DELAWARE TRUSTEE.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 5.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as 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 and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign
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from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and
the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective: (A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or (B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the holders
of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(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.
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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 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 48 hours before such meeting. Notice of any
telephonic meetings of the Regular Trustees or any committee thereof shall be
hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 24 hours before a
meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for
the express purpose of objecting to the transaction of any activity on the
ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees
may be taken at a meeting by vote of a majority of the Regular Trustees
present (whether in person or by telephone) and eligible to vote with respect
to such matter, provided that a Quorum is present, or without a meeting by
the unanimous written consent of the Regular Trustees. In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.
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 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
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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 either
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Property Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Property Trustee or the
Delaware Trustee, as the case may be, shall be the successor of the Property
Trustee or the Delaware Trustee, as the case may be, hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part
of any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in
accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Convertible Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a
payment of interest (including Compounded Interest (as defined in the
Indenture) and Additional Interest (as defined in the Indenture)), premium
and/or principal on the Debentures held by the Property Trustee (the amount
of any such payment being a "Payment Amount"), the Property Trustee shall and
is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue one
class of convertible preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Convertible Preferred Securities") and one class of convertible
common securities, representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Convertible Preferred Securities and the
Common Securities.
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(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual [or facsimile] signature
of any present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person
who signed such Certificates had not ceased to be such Regular Trustee; and
any Certificate may be signed on behalf of the Trust by such persons who, at
the actual date of execution of such Security, shall be the Regular Trustees
of the Trust, although at the date of the execution and delivery of the
Declaration any such person was not such a Regular Trustee. Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to the Regular Trustees, as evidenced by
their execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law
or with any rule or regulation of any stock exchange on which Securities may
be listed, or to conform to usage.
(c) 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.
(d) 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.
(e) Every Person, by virtue of having become a Holder or a
Convertible Preferred Security Beneficial Owner in accordance with the terms
of this Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration.
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SECTION 7.2 PAYING AGENT.
In the event that the Convertible Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan,
City of New York, State of New York, an office or agency where the
Convertible Preferred Securities may be presented for payment ("Paying
Agent"). The Trust shall maintain an office or agency where Securities may
be presented for conversion ("Conversion Agent"). The Trust may appoint the
Paying Agent and the Conversion Agent and may appoint one or more additional
paying agents and one or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any
additional conversion agent. The Trust may change any Paying Agent or
Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Paying Agent or Conversion Agent, the Property Trustee shall act as such.
The Trust or any of its Affiliates may act as Paying Agent or Conversion
Agent. The Trust shall act as Paying Agent and Conversion Agent for the
Common Securities.
The Trust initially appoints the Property Trustee as Conversion
Agent for the Convertible Preferred Securities.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 DISSOLUTION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor; the filing of a certificate of cancellation
with respect to the Trust or the revocation of the Holder of the Common
Securities or the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and
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all of the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities;
(vi) upon the distribution of the Guarantor's common stock to all
Securities Holders upon conversion of all outstanding Convertible Preferred
Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), after the completion of the winding up of the
affairs or the Trust, the Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
dissolution of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party
may only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition
precedent that the transferor obtain the written opinion of nationally
recognized independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal income
tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
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SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be
imposed in relation to it. Upon surrender for registration of transfer of
any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer
shall be accompanied by a written instrument of transfer in form satisfactory
to the Regular Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of
a Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed
to be bound by this Declaration. [The Trust shall not be required (i) to
issue, register the transfer of or exchange of any Securities during the
period beginning at the opening of business 15 days before the mailing of a
notice of redemption of Securities according to the terms of the Securities
and ending at the close of business on the day of the mailing of the relevant
notice of redemption or (ii) to register the transfer of or exchange of any
Security so selected for redemption, in whole or in part, except the
unredeemed portion of any Security being redeemed in part.]
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder
of such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever
and, accordingly, shall not be bound to recognize any equitable or other
claim to or interest in such Certificate or in the Securities represented by
such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Convertible Preferred
Securities, the Convertible Preferred Securities Certificates, on original
issuance, will be issued in the form of one or more, fully registered, global
Convertible Preferred Security Certificates (each a "Global Certificate"), to
be delivered to DTC, the initial Clearing Agency, by, or on behalf of, the
Trust. Such Global Certificates shall initially be registered on the books
and records of the Trust in the name of Cede & Co., the nominee of DTC, and
no Convertible Preferred Security Beneficial Owner will receive a definitive
Convertible Preferred Security Certificate representing such Convertible
Preferred Security Beneficial Owner's interests in such Global Certificates,
except as provided in Section 9.7. Unless and until definitive, fully
registered Convertible Preferred Security Certificates (the "Definitive
Convertible Preferred
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Security Certificates") have been issued to the Convertible Preferred
Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment
of Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Convertible Preferred Securities and
the sole holder of the Global Certificates and shall have no obligation to
the Convertible Preferred 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 Convertible Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such Convertible
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Convertible
Preferred Security Holders is required under this Declaration, unless and
until Definitive Convertible Preferred Security Certificates shall have been
issued to the Convertible Preferred Security Beneficial Owners pursuant to
Section 9.7, the Regular Trustees shall give all such notices and
communications specified herein to be given to the Convertible Preferred
Security Holders to the Clearing Agency, and shall have no notice obligations
to the Convertible Preferred Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred Securities,
the Regular Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Convertible Preferred Securities.
SECTION 9.7 DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES.
If:
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(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred Securities
and a successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor
to terminate the book entry system through the Clearing Agency with respect
to the Convertible Preferred Securities,
then:
(c) Definitive Convertible Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Convertible Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular Trustees shall
cause Definitive Certificates to be delivered to Convertible Preferred
Security Beneficial Owners in accordance with the instructions of the
Clearing Agency. Neither the Trustees nor the Trust shall be liable for any
delay in delivery of such instructions and each of them may conclusively rely
on and shall be protected in relying on, said instructions of the Clearing
Agency.
The Definitive Convertible Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as
is reasonably acceptable to the Regular Trustees, as evidenced by their
execution thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the Regular
Trustees may deem appropriate, or as may be required to comply with any law
or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which Convertible Preferred Securities
may be listed, or to conform to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security
or indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new
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Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE 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; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Convertible Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits,losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
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SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the 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 a Covered
Person and an Indemnified Person; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(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.
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SECTION 10.4 INDEMNIFICATION.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 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 Debenture
Issuer only as authorized
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in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in paragraphs (i) and
(ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were
not parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Regular Trustees, independent
legal counsel or Common Security Holder reasonably determine that such
person deliberately breached his duty to the Trust or its Common or
Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Convertible Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in such
capacity at any time while this Section 10.4(a) is in effect. Any repeal
or modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
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(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or
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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 Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
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(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 Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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 and executed by:
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(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee 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;
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(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision of the Amended
Declaration to such extent as may be necessary.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of
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determining whether the required percentage set forth in the second sentence
of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading, such vote, consent
or approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Convertible Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
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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 national banking association with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
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(a) The Delaware Trustee is a Delaware banking corporation with trust
powers, 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, the
Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
Sun Financing I
c/o Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention:__________________
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
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(c) if given to the Property Trustee, at its Corporate Trust Office
to the attention of ______________ (or such other address as the Property
Trustee may give notice of to the Holders of the Securities).
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder
of the Common Securities may give notice to the Trust):
c/o Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention:__________________
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience
of reference only and do not affect the interpretation of this Declaration or
any provision hereof.
SECTION 14.5 SUCCESSORS AND 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
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and agreements in this Declaration by the Sponsor and the Trustees shall bind
and inure to the benefit of their respective successors and assigns, whether
so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder
of this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed
a single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
_______________________________
Robert F. Murphy, as Regular Trustee
_______________________________
Robert D. Woltil, as Regular Trustee
The Bank of New York (Delaware), as Delaware
Trustee
By:____________________________
Name:
Title:
The Bank of New York, as Property Trustee
By:____________________________
Name:
Title:
Sun Healthcare Group, Inc., as Sponsor
By:____________________________
Name:
Title:
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ANNEX I
TERMS OF
___% CONVERTIBLE PREFERRED SECURITIES
___% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [________] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Convertible Preferred
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration or,
if not defined in such Declaration, as defined in the Prospectus referred to
below):
1. Designation and Number.
(a) Convertible Preferred Securities. [ ]
Convertible Preferred Securities of the Trust with an aggregate liquidation
amount with respect to the assets of the Trust of [ ] dollars
($[ ]) and a liquidation amount with respect to the assets of the
Trust of $50 per convertible preferred security, are hereby designated for
the purposes of identification only as "__% Convertible Trust Preferred
Securities" (the "Convertible Preferred Securities"). The Convertible
Preferred Security Certificates evidencing the Convertible Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Convertible Preferred Securities are
listed.
(b) Common Securities. [ ] Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $50 per common security, are
hereby designated for the purposes of identification only as "__% Convertible
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom
or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of __% (the "Coupon Rate") of the stated liquidation amount of $50 per
Security, such rate being the rate of interest payable on the Debentures to be
held by the Property Trustee. Distributions in arrears for more than one
quarter will bear interest thereon compounded quarterly at the Coupon Rate (to
the extent permitted by applicable law). The term "Distributions" as used
herein includes such cash distributions and any such interest payable unless
otherwise stated. A Distribution is payable only to the extent that payments
are made in
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respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will accrue
from [_______], and will be payable quarterly in arrears, on [_____], [______]
, [______] and [_______] of each year, commencing on [________], except as
otherwise described below. The Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment
period from time to time on the Debentures for a period not exceeding 20
consecutive quarters or extend beyond the maturity date of the Debentures
(each an "Extension Period"), during which Extension Period no interest shall
be due and payable on the Debentures, provided that no Extension Period shall
last beyond the date of maturity of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Convertible Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day
prior to the relevant payment dates which payment 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 Convertible Preferred Securities will be made as described
under the heading "Description of the Convertible Preferred Securities --
Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated______, 1997, to the Prospectus dated ____, 1997 (together,
the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor, the Trust and certain other business trusts. The
relevant record dates for the Common Securities shall be the same record date
as for the Convertible Preferred Securities. If the Convertible Preferred
Securities shall not continue to remain in book-entry only form, the relevant
record dates for the Convertible Preferred Securities, shall conform to the
rules of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be at
least one Business Day but less than 60 Business Days before the relevant
payment dates, which payment dates
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correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Sun's Common Stock pursuant to
the terms of the Securities as set forth in this Annex I to the Declaration,
no payment, allowance or adjustment shall be made with respect to accumulated
and unpaid Distributions on such Securities, or be required to be made;
provided that Holders of Securities at the close of business on any record
date for the payment of Distributions will be entitled to receive the
Distributions payable on such Securities on the corresponding payment date
notwithstanding the conversion of such Securities into Sun's Common Stock
following such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution, winding-up
or termination of the Trust, the Holders of the Securities on the date of the
dissolution, winding-up or termination, as the case may be, will be entitled
to receive out of the assets of the Trust available for distribution to
Holders of Securities after satisfaction of liabilities of creditors an
amount equal to the aggregate of the stated liquidation amount of $50 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection
with such dissolution, winding-up or termination, Debentures in an aggregate
stated principal amount equal to the aggregate stated liquidation amount of
such Securities, with an interest rate equal to the Coupon Rate of, and
bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation
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Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption
price of $50 per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in cash as set
forth below (the "Redemption Price"). Holders will be given not less than 30
nor more than 60 days notice of such redemption.
Except in connection with a Special Event, the Securities may not be
redeemed by the Trust prior to [_______]. On or after such date, the Trust
may, at its option, upon not less than 30 or more than 60 days notice, redeem
the Securities, in whole or in part, out of the proceeds received by the
Trust from the prepayment or repayment by Sun of the principal on the
Debentures, at any time or from time to time during the twelve month periods
beginning on [_______]in each of the following years at the following
redemption prices, plus accumulated and unpaid distributions to, but
excluding, the redemption date:
Year Redemption Price
If a partial redemption of the Securities resulting from a partial redemption
of the Debentures would result in the delisitng of the Securities, Sun may
only redeem the Debentures in whole.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Convertible Preferred Securities will
be redeemed Pro Rata and the Convertible Preferred Securities to be redeemed
will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each, as defined below, a "Special Event") shall occur and be continuing the
Regular Trustees shall, except in certain limited circumstances in relation
to a Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee,
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Trust on a Pro Rata basis, within 90 days
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following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally
recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the
Securities 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, and provided, further, that, if at the time there
is available to the Debenture Issuer the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial Action"),
the Debenture Issuer will pursue such Ministerial Action in lieu of
dissolution.
If in the event of a Tax Event (i) after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even after the
Debentures were distributed to the Holders of Securities in liquidation of
such Holders' interests in the Trust as described in this Section 4(c), or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust, the Debenture Issuer
shall have the right at any time, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash within 90 days
following the occurrence of such Tax Event, and, following such redemption,
Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed shall be redeemed by the Trust
at the Redemption Price on a Pro Rata basis; provided, however, that, if at
the time there is available to the Debenture Issuer or the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, the Trust or the Debenture Issuer will pursue such
Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that on or after the
date of the Prospectus Supplement, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority therefor or therein affecting
taxation, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change
in the official position or the interpretation of such Administrative Action
or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental
authority or regulatory body, irrespective of the manner in which
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such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after, the first date of issuance of the
Securities, there is more than an insubstantial risk that (i) the Trust is or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental charges,
or (iii) interest payable in cash by the Debenture Issuer to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel to
the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulations by any legislative body, court, governmental agency or regulatory
authority on or after the first date of the Prospectus Supplement pursuant to
which the Securities are offered (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 Investment
Company Act of 1940, as amended (the "1940 Act").
On and from the date fixed by the Regular Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Convertible Preferred Securities, will
receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution, and (iii) any certificates
representing Securities, except for certificates representing Convertible
Preferred Securities held by the Depository or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent Debentures
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Convertible Preferred Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before
the date of redemption.
(e) If the Debentures are distributed to holders of the Securities,
pursuant to the terms of the Indenture, the Debenture Issuer will use its
best efforts to have the Debentures listed on the New York Stock Exchange or
on such other exchange as the Convertible Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(f) Redemption or Distribution Procedures for Redemption by the
Trust.
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(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this 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 of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect
to any other Holder.
(ii) 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 Convertible Preferred Securities, it being understood
that, in respect of Convertible Preferred Securities registered in the name
of and held of record by the Depository or its nominee (or any successor
Clearing Agency or its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency
Participant (or Person on whose behalf such nominee holds such securities)
in accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Convertible Preferred Securities are in
book-entry only form, with respect to the Convertible Preferred Securities,
by 12:00 noon, New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Redemption Price with respect to the
Convertible Preferred Securities and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the Holders of
the Convertible Preferred Securities, and (B) with respect to Convertible
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or
on the
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redemption date, as applicable, distributions will cease to accrue
on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any 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
such Securities will continue to accrue 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.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Convertible
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been issued
or, if Definitive Convertible Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common Securities
to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities 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 Convertible Preferred Securities by
tender, in the open market or by private agreement.
(g) If at any time there occurs a Fundamental Change (as defined
below), each Holder of the Securities shall have the right, at the Holder's
option, to require the Trust to redeem all (and not less than all) of such
Holder's Securities in cash on the date (the "Repurchase Date") that is 45 days
after the date of Sun's notice of such Fundamental Change referred to below. In
such event, the Trust shall redeem the Securities at a price per Security equal
to (i) $___ if the Repurchase Date is during the 12-month period beginning
[________], (ii) $___ if the Repurchase Date is during the 12-month period
beginning [________], (iii) $____ if the Repurchase Date is during the 12-month
period beginning [________], and (iv) thereafter at the redemption price which
would be applicable to a redemption at the option of the Trust on the Repurchase
Date; provided that if the Applicable Price (as defined below) is less than the
Reference Market Price (as defined below), the Trust shall redeem such
Convertible Preferred Securities at a price equal to the foregoing
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redemption price multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. In each case, the Trust
shall also pay accrued distributions on the Securities to, but excluding, the
Repurchase Date; provided that, if such Repurchase Date is a distribution
payment date, then the distribution payable on such date shall be paid to the
Holder of record on the relevant record date. The Trust will have
corresponding rights to redeem the Debentures.
The term "Fundamental Change" means the occurrence of any transaction
or events in connection with which all or substantially all of the Sun Common
Stock shall be exchanged for, converted into, acquired for or constitute the
right to receive consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock which is (or, upon consummation of or immediately following such
transaction or event, will be) listed on a United States national securities
exchange or approved for quotation on Nasdaq National Market or any similar
United States system of automated dissemination of quotations of securities
prices. The term "Applicable Price" means (i) in the event of a Fundamental
Change in which the Holders of Sun Common Stock receive only cash, the amount of
cash received by the Holder of one share of Sun Common Stock and (ii) in the
event of any other Fundamental Change, the average of the last reported executed
trade price (regular way) for the Sun Common stock during the ten trading days
prior to the record date for the determination of the Holders of Sun Common
Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change, or, if no such record date exists, the
date upon which the Holders of the Sun Common Stock shall have the right to
receive such cash, securities, property or other assets in connection with the
Fundamental Change. The term "Reference Market Price" shall initially mean $
which is equal to 66 2/3% of the price of Sun Common Stock as of the date
hereof. In the event of any adjustment to the conversion rate, the Reference
Market Price shall also be adjusted so that the Reference Market Price, after
giving effect to any such adjustment, shall equal the Market Reference Price
multiplied by a fraction, the numerator of which is the conversion rate prior to
such adjustment and the denominator of which is the conversion rate after such
adjustment.
On or before the 10th day after the occurrence of a Fundamental
Change, the Trust shall mail to all Holders of record of the Securities a notice
of the occurrence of such Fundamental Change and of the redemption rights
arising as a result thereof. The Trust shall deliver a copy of such notice to
the Property Trustee. To exercise the redemption right, on or before the
Repurchase Date Holders of the Securities must deliver written notice to the
Property Trustee, as Conversion Agent, of the Holders' exercise of such right.
Payment for Securities surrendered for redemption (and not withdrawn) prior to
the Repurchase Date will be made promptly following the Repurchase Date.
Subject to the requirements of DTC, the redemption rights associated with
Securities may be exercised by the presentation to the Property Trustee of one
or more redemption notices duly completed by or on behalf of the participant of
DTC or any clearing system in which the relevant Convertible Preferred Security
is held at such time with an interest in such Security and, if required, payment
of
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any transfer or similar taxes (other than those described above). Surrender
of any global certificate to the Property Trustee shall not be required.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf of the
converting Holders, into shares of Sun's Common Stock in the manner described
herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Sun Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debentures theretofore held by the Trust on the
basis of one Security per $__ principal amount of Debentures, and immediately
convert such amount of Debentures into fully paid and nonassessable shares of
Sun Common Stock at an initial rate of ________ shares of Sun Common Stock per
$__ principal amount of Debentures (which is equivalent to a conversion price of
$___ per share of Sun Common Stock, subject to certain adjustments set forth in
the terms of the Debentures (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Sun's Common Stock the Holder
shall submit to the Conversion Agent at the office referred to above an
irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated form,
with such certificates. The Conversion Request shall (i) set forth the number
of Securities to be converted and the name or names, if other than the Holder,
in which the shares of Sun's Common Stock should be issued and (ii) direct the
Conversion Agent (a) to exchange such Securities for a portion of the Debentures
held by the Trust (at the rate of exchange specified in the preceding paragraph)
and (b) to immediately convert such Debentures on behalf of such Holder, into
Sun's Common Stock (at the conversion rate specified in the preceding
paragraph). The Conversion Agent shall notify the Trust of the Holder's
election to exchange Securities for a portion of the Debentures held by the
Trust and the Trust shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for exchange in
accordance with this Section. The Conversion Agent shall thereupon notify Sun
of the Holder's election to convert such Debentures into shares of Sun's Common
Stock. Holders of Securities at the close of business on a Distribution record
date will be entitled to receive the Distribution payable on such securities on
the corresponding Distribution payment date notwithstanding the conversion of
such Securities following such record date but prior to such distribution
payment date. Except as provided above, neither the Trust nor the Sponsor will
make, or be required to make, any payment, allowance or adjustment upon any
conversion on account of any accumulated and unpaid Distributions accrued on the
Securities (including any Additional Amounts accrued thereon) surrendered for
conversion, or on account of any accumulated and unpaid dividends on the shares
of Sun's Common Stock issued upon such conversion. Securities shall be deemed
to have been converted immediately prior to the close of business
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on the day on which a Notice of Conversion relating to such Securities is
received the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive Sun's Common
Stock issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Sun's Common Stock at such
time. As promptly as practicable on or after the Conversion Date, Sun shall
issue and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of Sun's Common Stock issuable
upon such conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the same,
unless otherwise directed by the Holder in the notice of conversion and the
Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
[___________] "Conversion Agent" for the purpose of effecting the conversion of
Securities in accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent shall be acting as
agent of the Holders of Securities directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust in connection with
the conversion of such Securities in accordance with this Section and (ii) to
convert all or a portion of the Debentures into Sun's Common Stock and thereupon
to deliver such shares of Sun's Common Stock in accordance with the provisions
of this Section and to deliver to the Trust a new Debenture or Debentures for
any resulting unconverted principal amount.
(d) No fractional shares of Sun's Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be in
cash by Sun to the Trust, which in turn will make such payment to the Holder or
Holders of Securities so converted.
(e) Sun shall at all times reserve and keep available out of its
authorized and unissued Sun Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar rights,
such number of shares of Sun Common Stock as shall from time to time be issuable
upon the conversion of all the Debentures then outstanding. Notwithstanding the
foregoing, Sun shall be entitled to deliver upon conversion of Debentures,
shares of Sun Common Stock reacquired and held in the treasury of Sun (in lieu
of the issuance of authorized and unissued shares of Sun Common Stock), so long
as any such treasury shares are free and clear of all liens, charges, security
interests or encumbrances. Any shares of Sun Common Stock issued upon
conversion of the Debentures shall be duly authorized, validly issued and fully
paid and nonassessable. The Trust shall deliver the shares of Sun Common Stock
received upon conversion of the Debentures to the converting Holder free and
clear of all liens, charges, security interests and encumbrances, except for
United States withholding taxes. Each of Sun and the Trust shall prepare and
shall use its best efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required by law, and shall
comply with all applicable requirements as to registration or qualification of
Sun Common Stock (and all requirements to list Sun Common Stock issuable upon
conversion of Debentures that are at the time applicable), in order to enable
Sun to lawfully issue Sun Common Stock to the Trust upon conversion of the
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Debentures and the Trust to lawfully deliver Sun Common Stock to each Holder
upon conversion of the Securities.
(f) Sun will pay any and all taxes that may be payable in respect of
the issue or delivery of shares of Sun Common Stock on conversion of Debentures
and the delivery of the shares of Sun Common Stock by the Trust upon conversion
of the Securities. Sun Healthcare Group, Inc. shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Sun Common Stock in a name other than that in
which the Securities so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Trust the amount of any such tax, or has established to the satisfaction of the
Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or set forth in this Annex I to the Declaration or to the Declaration
itself or otherwise require the Property Trustee or the Trust to pay any amounts
on account of such withholdings.
6. Voting Rights - Convertible Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Convertible Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities, voting separately as a class, may direct the time, method,
and place of conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee, as
holder of the Debentures, to (i) exercise the remedies available under the
Indenture with respect to the Debentures, (ii) waive any past default and its
consequences that is waivable under Section ___ of the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided, however, that, where a
consent under the Indenture would require the consent or act of the Holders of
greater than a majority of the Holders in principal amount of Debentures
affected thereby, (a "Super Majority"), the Property Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Convertible Preferred Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Convertible
Preferred Securities. Other than with respect to directing the time, method and
place of conducting any remedy available to the Property Trustee or the
Debenture Trustee as set forth above, the Property Trustee shall not take any
action in accordance with the directions of the Holders of the Convertible
Preferred Securities under
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this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on
the redemption date), then a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders
of the Common Securities Holder will be subrogated to the rights of such
holder of Preferred Securities to the extent of any payment made by the
Issuer to such holder of Preferred Securities in such Direct Action. Except
as provided in the preceding sentences, the Holders of Preferred Securities
will not be able to exercise directly any other remedy available to the
holders of the Debentures.
Any approval or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities in the Trust or pursuant to written consent. The Regular
Trustees will cause a notice of any meeting at which Holders of Convertible
Preferred Securities are entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of Convertible Preferred Securities. Each such notice will include a
statement setting forth (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 Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Convertible Preferred Securities that are owned 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.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), (c) and 8 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Convertible Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the requirements
of the second to last sentence of this paragraph, the Holders of a Majority
in liquidation amount of the Common Securities, voting separately as a class,
may direct the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section __ of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable, provided
that, where a consent or action under the Indenture would require the consent
or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Property Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized
or approved by a vote of the Holders of the Convertible Preferred Securities.
Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If the Property Trustee fails to enforce its rights under
the Declaration, any Holder of Common Securities may institute a legal
proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment
or proposal (but not on any other amendment or proposal) and such amendment
or proposal shall not be effective except with the approval of the Holders of
at least a Majority in liquidation amount of the Securities affected thereby;
provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Convertible Preferred Securities or
only the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount of
such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures,
the Property Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination
and shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the holders of greater than a majority
in aggregate principal amount of the Debentures (a "Super Majority"), the
Property Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that the Property Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this Section 7(b) unless the Property Trustee has obtained
an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a
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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 Convertible Preferred Securities pro rata
according to the aggregate liquidation amount of Convertible Preferred
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Convertible Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Convertible Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
10. Ranking.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where
a Declaration Event of Default occurs and is continuing, the rights of
Holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of the Holders of the Convertible Preferred Securities.
11. Listing.
The Regular Trustees shall use their best efforts to cause the
Convertible Preferred Securities to be listed for quotation on the New York
Stock Exchange, Inc.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and Common
Securities, by the acceptance thereof, agrees to the provisions of the
Convertible Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein and
to the provisions of the Indenture.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Convertible
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
[IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Convertible Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Convertible Preferred Security is exchangeable for Convertible
Preferred Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Declaration and no transfer of this Convertible Preferred Security (other than a
transfer of this Convertible Preferred Security as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Convertible Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Trust or its agent for registration of transfer,
exchange or payment, and any Convertible Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
Certificate Number Number of Convertible
Preferred Securities
CUSIP NO. [__________]
Certificate Evidencing Convertible
Preferred Securities
of
SUN FINANCING I
__% Trust Convertible Preferred Securities
(liquidation amount $50 per Trust
Convertible Preferred Security)
Sun Financing I, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of convertible preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the __% Trust Convertible Preferred Securities (liquidation amount
$50 per Trust Convertible Preferred Security) (the "Convertible Preferred
Securities"). The Convertible Preferred Securities are transferable on the
books and
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records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Convertible Preferred Securities represented
hereby are issued and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust of the Trust dated as of
___________, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Convertible
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Convertible
Preferred Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Convertible Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request
to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Convertible
Preferred Securities as evidence of indirect beneficial ownership in the
Debentures.
Unless the Property Trustee's Certificate of Authentication hereon
has been properly executed, these Convertible Preferred Securities shall not
be entitled to any benefit under the Declaration or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this __
day of _______.
Sun Financing I
By: ___________________
Name:
Title:
Property Trustee'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in
the within-mentioned Declaration.
Dated: _____________ The Bank of New York,
as Property Trustee
By:________________________________
Authorized Signatory
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(REVERSE OF SECURITY)
Distributions payable on each Convertible Preferred Security will be
fixed at a rate per annum of [__]% (the "Coupon Rate") of the stated
liquidation amount of $50 per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from ________ and will be payable
quarterly in arrears, on ________, _________, __________ and __________of
each year, commencing on ___________, which payment dates shall correspond to
the interest payment dates on the Debentures, to Holders of record at the
close of business on the regular record date for such distribution which
shall be the close of business on the Business Day next preceding such
distribution payment date unless otherwise provided in the Declaration. In
the event that this Convertible Preferred Security is not in book-entry only
form, the Regular Trustees shall have the right to select the relevant record
dates, which shall be more than one Business Day prior to the relevant
payment dates. The Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive quarters
(each an "Extension Period") provided that no Extension Period shall last
beyond the date of the maturity of the Debentures and, as a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; PROVIDED THAT such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Convertible Preferred Securities shall be redeemable as provided
in the Declaration.
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The Convertible Preferred Securities shall be convertible into
shares of Sun Healthcare Group, Inc. Common Stock, through (i) the exchange
of Preferred Securities for a portion of the Debentures and (ii) the
immediate conversion of such Debentures into Debenture Issuer Common Stock,
in the manner and according to the terms set forth in the Declaration.
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CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Sun Financing I
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Stock of Sun
Healthcare Group, Inc. (the "Sun Common Stock") in accordance with the terms
of the Amended and Restated Declaration of Trust (the "Declaration"), dated
as of ___________, by ________, __________, ____________ and __________, as
Regular Trustees, _______________, as Delaware Trustee, _______________, as
Property Trustee, Sun Healthcare Group, Inc., as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in
the Declaration) to (i) exchange such Convertible Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held
by the Trust (at the rate of exchange specified in the terms of the
Convertible Preferred Securities set forth as Annex I to the Declaration) and
(ii) immediately convert such Debentures on behalf of the undersigned, into
Sun Common Stock (at the conversion rate specified in the terms of the
Convertible Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check
in payment for fractional shares, be issued in the name of and delivered to
the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
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Date: ____________, ____
in whole __ in part
Number of Preferred Securities to be converted:
___________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the shares of Sun Common Stock are to be issued, along
with the address or addresses of such person or persons
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
Signature Guarantee:*
---------------------------------
- ----------------------
(Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Conversion Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.)
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------------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Preferred Security Certificate to:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
agent to transfer this Convertible Preferred Security Certificate on the
books of the Trust. The agent may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Convertible
Preferred Security Certificate)
Signature Guarantee **
------------------------------------------
- -------------------------
** Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934,
as amended.
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EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
SUN FINANCING I
__% Common Securities
(liquidation amount $50 per Common Security)
Sun Financing I a statutory business trust formed under the laws of the
State of Delaware (the "Trust"), hereby certifies that SUN HEALTHCARE GROUP,
INC. the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 0% Common Securities (liquidation amount $50 per Common
Security) (the "Common Securities"). The Common Securities are transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities represented hereby
are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of
____________, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities
as evidence of indirect beneficial ownership in the Debentures.
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IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ___________.
SUN FINANCING I
By: ________________
Name:
Title:
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(FORM OF REVERSE OF SECURITY)
Distributions payable on each Common Security will be fixed at a rate
per annum of __% (the "Coupon Rate") of the stated liquidation amount of $50
per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from ________ and will be payable
quarterly in arrears, on _______, __________, ___________ and ________of each
year, commencing on ____________, which payment dates shall correspond to the
interest payment dates on the Debentures, to Holders of record at the close
of business on the regular record date for such distribution which shall be
the close of business on the Business Day next preceding such distribution
payment date unless otherwise provided in the Declaration. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters (each an "Extension Period")
provided that no Extension Period shall last beyond the date of maturity of
the Debentures and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded quarterly during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further extend such Extension Period; PROVIDED THAT such
Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the date of
maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
The Common Securities shall be convertible into shares of Sun Healthcare
Group, Inc. Common Stock, through (i) the exchange of Common Securities for a
portion of the Debentures and (ii) the immediate conversion of such
Debentures into Sun Healthcare
79
<PAGE>
Group, Inc. Common Stock, in the manner and according to the terms set forth
in the Declaration.
80
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Sun Financing I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Sun Healthcare Group, Inc. Corporation (the
"Sun Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of __________, by
______________, _________________ and _____________, as Regular Trustees,
_____________, as Delaware Trustee, ________________, as Property Trustee,
Sun Healthcare Group, Inc., as Sponsor, and by the Holders, from time to
time, of individual beneficial interests in the Trust to be issued pursuant
to the Declaration. Pursuant to the aforementioned exercise of the option to
convert these Common Securities, the undersigned hereby directs the
Conversion Agent (as that term is defined in the Declaration) to (i) exchange
such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Common Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Sun Common Stock (at the conversion rate specified in the
terms of the Common Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check
in payment for fractional shares, be issued in the name of and delivered to
the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
81
<PAGE>
Date: __________, ____
in whole __ in part __
Number of Common Securities to be converted:
_____________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the shares of Sun Common Stock are to be issued, along
with the address or addresses of such person or persons
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
_______________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
_______________________________________________________
_______________________________________________________
_______________________________________________________
Signature Guarantee:(*)________________________________
_________________________
(*) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include membership
or participation in the Securities Transfer Agents Medalion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
82
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
_________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________
________________________________________________________________________________
________________________agent to transfer this Common Security Certificate on
the books of the Trust. The agent may substitute another to act for him or
her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee (**):_______________________________________________________
____________________________
(**) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
83
<PAGE>
EXHIBIT 4(G)
------------------------
------------------------
AMENDED AND RESTATED DECLARATION
OF TRUST
SUN FINANCING II
Dated as of ___________
------------------------
------------------------
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C> <C>
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION . . . . . . . . . . . . . . . . 8
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . . . . 8
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE. . . . . . . . . . . . . . . . . 8
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE . . . . . . . . . . . . . . 9
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT . . . . . . . . 9
SECTION 2.6 EVENTS OF DEFAULT; WAIVER. . . . . . . . . . . . . . . . . . . . 9
SECTION 2.7 EVENT OF DEFAULT; NOTICE . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 OFFICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 PURPOSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.4 AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.5 TITLE TO PROPERTY OF THE TRUST . . . . . . . . . . . . . . . . . 12
SECTION 3.6 POWERS AND DUTIES OF THE REGULAR TRUSTEES. . . . . . . . . . . . 13
SECTION 3.7 PROHIBITION OF ACTIONS BY THE TRUST AND THE TRUSTEES . . . . . . 16
SECTION 3.8 POWERS AND DUTIES OF THE PROPERTY TRUSTEE. . . . . . . . . . . . 16
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE. . . 18
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE. . . . . . . . . . . . . . . 20
SECTION 3.11 DELAWARE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.12 EXECUTION OF DOCUMENTS. . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. . . . . 23
SECTION 3.14 DURATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.15 MERGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES. . . . . . . . . . . . . 25
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR. . . . . . . . . . . . . . . . . 25
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE V
TRUSTEES
<S> <C> <C> <C>
SECTION 5.1 NUMBER OF TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.2 DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY. . . . . . . . . . . . . . . . . . 26
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE
TRUSTEE GENERALLY . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.5 REGULAR TRUSTEES . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.6 DELAWARE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES . . . . . . . . 28
SECTION 5.8 VACANCIES AMONG TRUSTEES . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.9 EFFECT OF VACANCIES. . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.10 MEETINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 5.11 DELEGATION OF POWER . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS . . 31
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES. . . . . . . . . . . . . 32
SECTION 7.2 PAYING AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 TERMINATION OF TRUST . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 34
SECTION 9.2 TRANSFER OF CERTIFICATES . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.3 DEEMED SECURITY HOLDERS. . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.4 BOOK ENTRY INTEREST. . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.5 NOTICES TO CLEARING AGENCY . . . . . . . . . . . . . . . . . . . 36
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY . . . . . . . . . . . . 36
SECTION 9.7 DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES . . . . . 36
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. . . . . . . . 37
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 10.2 EXCULPATION . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 10.3 FICUCIARY DUTY. . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 10.4 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 10.5 OUTSIDE BUSINESSES. . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI
ACCOUNTING
SECTION 11.1 FISCAL YEAR . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 11.2 CERTAIN ACCOUNTING MATTERS. . . . . . . . . . . . . . . . . . . 43
SECTION 11.3 BANKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 11.4 WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT 46
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 REPRESENTATIONS AND WARRANTIES OF PROPERTY TRUSTEE. . . . . . . 48
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE. . . . . . . 48
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 14.2 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 14.3 INTENTION OF THE PARTIES. . . . . . . . . . . . . . . . . . . . 50
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
SECTION 14.4 HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 14.5 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . 50
SECTION 14.6 PARTIAL ENFORCEABILITY. . . . . . . . . . . . . . . . . . . . . 51
SECTION 14.7 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . 51
ANNEX I TERMS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 53
EXHIBIT A-1 FORM OF CONVERTIBLE PREFERRED SECURITY
CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . 69
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE. . . . . . . . . . . . . . . 76
(FORM OF REVERSE OF SECURITY). . . . . . . . . . . . . . . . . . . . . . . . . . . 78
CONVERSION REQUEST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
OF 1939, AS AMENDED DECLARATION
------------------- -----------
310(a) . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
-------------
* This Cross-Reference Table does not constitute part of the
Declaration and shall not affect the interpretation of any
of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SUN FINANCING II
-------------
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of ____________, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of
undivided beneficial interests in the Trust to be issued pursuant to this
Declaration;
WHEREAS, the Trustees and the Sponsor established Sun Financing II
(the "Trust"), a trust under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of ________, 1997, (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on November __, 1997, for the sole purpose of issuing
and selling certain securities representing undivided beneficial interests in
the assets of the Trust and investing the proceeds thereof in certain
Debentures of the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have been
issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original
Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 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
of the Securities Act or any successor rule thereunder.
"AGENT" means any Paying Agent or Conversion Agent.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized
to bind such Person.
"BASE INDENTURE" means the Indenture dated as of __________, among
the Debenture Issuer and the Debenture Trustee.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"BUSINESS DAY" means any day other than a Saturday, Sunday or any
other day on which banking institutions in New York, New York or Albuquerque,
New Mexico are permitted or required by any applicable law to close.
2
<PAGE>
"BUSINESS TRUST ACT" means Chapter 38 of Title 12 of the Delaware
Code, 12 DEL. CODE Section 3801 ET SEQ., as it may be amended from time to
time, or any successor legislation.
"CERTIFICATE" means a Common Security Certificate or a Convertible
Preferred Security Certificate.
"CLEARING AGENCY" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Convertible Preferred Securities and in whose name or in
the name of a nominee of that organization shall be registered a Global
Certificate and which shall undertake to effect book entry transfers and
pledges of the Convertible Preferred Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"CLOSING DATE" means __________.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to be
dated as of ___________ of the Sponsor in respect of the Common Securities.
"COMMON SECURITY CERTIFICATE" means a definitive certificate in
fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"COMPANY INDEMNIFIED PERSON" means (a) any Regular Trustee; (b) any
Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular
Trustee; or (d) any officer, employee or agent of the Trust or its Affiliates.
"CONVERSION AGENT" has the meaning specified in Section 7.2.
"CONVERTIBLE PREFERRED SECURITIES GUARANTEE" means the guarantee
agreement to be dated as of __________, of the Sponsor in respect of the
Convertible Preferred Securities.
"CONVERTIBLE PREFERRED SECURITY" has the meaning specified in
Section 7.1.
3
<PAGE>
"CONVERTIBLE PREFERRED SECURITY BENEFICIAL OWNER" means, with
respect to a Book Entry Interest, a Person who is the beneficial owner of
such Book Entry Interest, as reflected on the books of the Clearing Agency,
or on the books of a Person maintaining an account with such Clearing Agency
(directly as a Clearing Agency Participant or as an indirect participant, in
each case in accordance with the rules of such Clearing Agency).
"CONVERTIBLE PREFERRED SECURITY CERTIFICATE" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"CORPORATE TRUST OFFICE" means the office of the Property Trustee
at which the corporate trust business of the Convertible Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at 101 Barclay
Street, Floor 21 West, New York, New York, [____].
"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 Sun Healthcare Group, Inc. in its capacity
as issuer of the Debentures under the Indenture.
"DEBENTURE TRUSTEE" means The Bank of New York, as trustee under
the Indenture until a successor is appointed thereunder, and thereafter means
such successor trustee.
"DEBENTURES" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, a
specimen certificate for such series of Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES" has the
meaning set forth in Section 9.4.
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event of
Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
4
<PAGE>
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in Section
10.4(b).
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"INDENTURE" means the Base Indenture as supplemented by the
Supplemental Indenture.
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex I
hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holders of outstanding
Convertible Preferred Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of
the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined)
of all outstanding Securities of the relevant class.
"MINISTERIAL ACTION" has the meaning set forth in the terms of the
Securities as set forth in Annex I.
"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;
5
<PAGE>
(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.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section
3.8(c).
"QUORUM" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"REGULAR TRUSTEE" has the meaning set forth in Section 5.1.
"RELATED PARTY" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that
owns, directly or indirectly, 100% of the outstanding voting securities of
the Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee,
any officer within the Corporate Trust Office of the Property Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"RULE 3A-5" means Rule 3a-5 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Convertible
Preferred Securities.
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"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time or any successor legislation.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SECURITIES GUARANTEES" means the Common Securities Guarantee and
the Convertible Preferred Securities Guarantee.
"SPONSOR" means Sun Healthcare Group, Inc., a Delaware corporation,
or any successor entity in a merger, consolidation or amalgamation, in its
capacity as sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section 2.6(a)(ii).
"SUPPLEMENTAL INDENTURE" means the First Supplemental Indenture
dated as of ____________, among the Debenture Issuer and the Debenture
Trustee, pursuant to which the Debentures are to be issued.
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Convertible Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a
single class or, as the context may require, Holder(s) of outstanding
Convertible Preferred Securities or Holder(s) of outstanding Common
Securities voting separately as a class, who are the record owners of 10% or
more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"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.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement for the
offering and sale of Convertible Preferred Securities in the form of Exhibit C.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide the Property Trustee (i) within 14 days after each record
date for payment of Distributions, a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the Holders of
the Securities ("List of Holders") as of such record date, provided that
neither the Sponsor nor the Regular Trustees on behalf of the Trust shall be
obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Property
Trustee by the Sponsor and the Regular Trustees on behalf of the Trust, and
(ii) at any other time, within 30 days of receipt by the Trust of a written
request for a List of Holders as of a date no more than 14 days before such
List of Holders is given to the Property Trustee. The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the
capacity as Paying Agent (if acting in such capacity) provided that the
Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PROPERTY TRUSTEE.
Within 60 days after May 15 of each year, the Property Trustee
shall provide to the Holders of the Convertible Preferred Securities such
reports as are required by Section 313
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of the Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Property Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PROPERTY TRUSTEE.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by Section 314 (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.
Delivery of such reports, information and documents to the Property
Trustee is for informational purposes only and the Property Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Sponsor's compliance with any of its covenants hereunder (as to which the
Property Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act.
Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
(a) The Holders of a Majority in liquidation amount of Convertible
Preferred Securities may, by vote, on behalf of the Holders of all of the
Convertible Preferred Securities, waive any past Event of Default in respect
of the Convertible Preferred Securities and its consequences, PROVIDED THAT,
if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
principal amount of the holders of the Debentures (a "Super Majority") to
be waived under the Indenture, the Event of Default under the Declaration
may only be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Convertible Preferred Securities that the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of Section
316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly
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excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such default shall cease to exist, and
any Event of Default with respect to the Convertible Preferred Securities
arising therefrom shall be deemed to have been cured, for every purpose of
this Declaration, but no such waiver shall extend to any subsequent or other
default or an Event of Default with respect to the Convertible Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders
of the Convertible Preferred Securities of an Event of Default with respect
to the Convertible Preferred Securities shall also be deemed to constitute a
waiver by the Holders of the Common Securities of any such Event of Default
with respect to the Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Holders of the Common
Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.6(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Declaration as provided below in this
Section 2.6(b), the Event of Default under the Declaration may only be
waived by the vote of the Holders of at least the proportion in liquidation
amount of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to
the Common Securities and its consequences until all Events of Default with
respect to the Convertible Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default have been so cured,
waived or otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Convertible Preferred
Securities and only the Holders of the Convertible Preferred Securities will
have the right to direct the Property Trustee in accordance with the terms of
the Securities. The foregoing provisions of this Section 2.6(b) shall be in
lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act. Subject to the foregoing provisions of
this Section 2.6(b), upon such waiver, any such default shall cease to exist
and any Event of Default with respect to the Common Securities arising
therefrom shall be deemed to have been cured for every purpose of this
Declaration, but no
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such waiver shall extend to any subsequent or other default or Event of
Default with respect to the Common Securities or impair any right consequent
thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Convertible Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be
in lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer 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 or in the payment of any sinking fund installment
established for the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Property Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the Indenture; or
(ii) any default as to which the Property Trustee 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.
ARTICLE III
ORGANIZATION
SECTION 3.1 NAME.
The Trust is named "Sun Financing II" as such name may be modified
from time to time by the Regular Trustees following written notice to the
Holders of Securities. The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Regular Trustees.
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SECTION 3.2 OFFICE.
The address of the principal office of the Trust is c/o Sun
Healthcare Group, Inc., 101 Sun Lane, N.E., Albuquerque, New Mexico 87109.
On ten Business Days written notice to the Holders of Securities, the Regular
Trustees may designate another principal office.
SECTION 3.3 PURPOSE.
The exclusive purposes and functions of the Trust are (a) to issue
and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary, or incidental thereto. The Trust shall not
borrow money, issue debt or reinvest proceeds derived from investments,
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United
States federal income tax purposes as a grantor trust.
SECTION 3.4 AUTHORITY.
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.
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 Convertible Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue
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no more than one series of Convertible Preferred Securities and no more than
one series of Common Securities, and, provided further, that there shall be
no interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a simultaneous issuance of both Convertible
Preferred Securities and Common Securities on the Closing Date;
(b) in connection with the issue and sale of the Convertible
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the registration statement on
Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining to the Convertible Preferred Securities;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Convertible Preferred Securities in any
State in which the Sponsor has determined to qualify or register such
Convertible Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market for listing upon notice of issuance
of any Convertible Preferred Securities;
(iv) execute and file with the Commission a registration statement on
Form 8-A, including any amendments thereto, prepared by the Sponsor,
relating to the registration of the Convertible Preferred Securities under
Section 12(b) of the Exchange Act; and
(v) execute and enter into the Underwriting Agreement providing for
the sale of the Convertible Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of the
Convertible Preferred Securities and the Common Securities; provided, however,
that the Regular Trustees shall cause legal title to the Debentures to be held
of record in the name of the Property Trustee for the benefit of the Holders of
the Convertible Preferred Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges,
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and to issue relevant notices to the Holders of Convertible Preferred
Securities and Holders of Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e) the Property Trustee has the
exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any 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, the Regular Trustees hereby initially
appointing [_________] for such purposes;
(m) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Convertible
Preferred Securities or to enable the Trust to effect the purposes for which the
Trust was created;
(o) 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:
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(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(p) 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 Debenture Issuer.
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. In particular, the Trust shall not and the Trustees
(including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of Securities
pursuant to the terms of this Declaration and of the Securities;
(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;
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(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in this Amended and Restated Declaration
or Annex I, (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless the Trust shall
have received an opinion of counsel to the effect that such modification
will not cause more than an insubstantial risk that 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 of the Securities. The right, title and interest of the Property
Trustee to the Debentures shall vest automatically in each Person who may
hereafter be appointed as Property Trustee in accordance with Section 5.7. 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 of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the
Convertible Preferred Securities and Holders of the Common Securities from
the Property Trustee Account in accordance with Section 6.1. Funds in the
Property Trustee Account shall be held uninvested until disbursed in
accordance with this Declaration. The Property Trustee Account shall be an
account that is maintained with a banking institution the rating on whose
long-term unsecured indebtedness is at least equal to the rating assigned
to the Convertible Preferred Securities by a "nation-
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ally recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Convertible Preferred
Securities and the Common Securities to the extent the Debentures are
redeemed or mature;
(iii) upon written notice of distribution issued by the Regular
Trustees in accordance with the terms of the Securities, engage in
such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain special events (as may be defined in the terms
of the Securities) arising from a change in law or a change in legal
interpretation or other specified circumstances pursuant to the terms of
the Securities; and
(iv) give prompt written notice to the Holders of the Securities of
any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment
period under the Indenture;
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default 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; provided however, that if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay interest or principal on the Debentures on the
date such interest or principal is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Preferred Securities
may directly institute a proceeding for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities of such
Holder (a "Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the rights of the
Holders of the Common Securities Holder will be subrogated to the rights of
such Holder of Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Preferred Securities in such Direct
Action. Except as provided in the preceding sentences, the Holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
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(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.7.
(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 of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee may authorize one or more Persons (each,
a "Paying Agent") to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act.
Any Paying Agent may be removed by the Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee. The Property Trustee hereby initially appoints
[___________]as the Paying Agent.
(i) Subject to this Section 3.8, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee must exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set
out in Section 3.3.
SECTION 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE PROPERTY TRUSTEE.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Declaration and no implied covenants shall be read into this Declaration
against the Property Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6), 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 provi-
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sions of this Declaration and the Property Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants or
obligations shall be read into this Declaration against the Property
Trustee; and (B) in the absence of bad faith on the part of the
Property Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Declaration; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Property 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 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
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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 or the Sponsor with their respective
duties under this Declaration, nor shall the Property Trustee be liable for
any default or misconduct of the Regular Trustees or the Sponsor.
SECTION 3.10 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular Trustees
contemplated by this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or established
before taking, suffering or omitting any action hereunder, the Property
Trustee (unless other evidence is herein specifically prescribed) may, in
the absence of bad faith on its part, request and conclusively rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its selection or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
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(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 attorneys' fees
and expenses and the expenses of the Property Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee; provided that nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property Trustee, upon
the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the 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 written instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request written instructions from
the Holders of the Securities which instructions may only be given by the
Holders of the same proportion in liquidation amount of the Securities as
would be entitled to direct the 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;
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(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 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 Section 3807 of
the Business Trust Act.
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SECTION 3.12 EXECUTION OF DOCUMENTS.
Except as otherwise required by the Business Trust Act, any Regular Trustee
is authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6;
provided that, the registration statement referred to in Section 3.6(b)(i),
including any amendments thereto, shall be signed by all of the Regular
Trustees.
SECTION 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained in this Declaration and the Securities shall be
taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as
to the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14 DURATION OF TRUST.
The Trust, unless dissolved pursuant to the provisions of Article VIII
hereof, shall have existence for fifty-five (55) years from the Closing Date.
SECTION 3.15 MERGERS.
(a) The Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular Trustees or, if
there are more than two, a majority of the Regular Trustees and without the
consent of the Holders of the Securities, the Delaware Trustee or the Property
Trustee, consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either: (A)
expressly assumes all of the obligations of the Trust under the Securities;
or (B) substitutes for the Securities other securities having substantially
the same terms as the Convertible Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Convertible Preferred Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties as the Property
Trustee as the Holder of the Debentures;
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(iii) the Convertible Preferred Securities or any Successor Securities
are listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another organization
on which the Convertible Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Convertible Preferred Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material
respect (other than with respect to any dilution of such Holders' interests
in the Convertible Preferred Securities as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect
that: (A) such merger, consolidation, amalgamation or replacement does not
adversely affect the rights, preferences and privileges of the Holders of
the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of the Holders' interest in the
new entity); and (B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will be required to
register as an Investment Company; (C) following such merger,
consolidation, amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for United States
federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities at least to the extent provided by the
Convertible Preferred Securities Guarantees.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with
the consent of Holders of 100% in liquidation amount of the Securities,
consolidate, amalgamate, merge with or into, or be replaced by any other entity
or permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger or replacement would
cause the Trust or Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
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ARTICLE IV
SPONSOR
SECTION 4.1 SPONSOR'S PURCHASE OF COMMON SECURITIES.
On the Closing Date the Sponsor will purchase all of the Common
Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Convertible Preferred
Securities are sold.
SECTION 4.2 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issue and sale of the Convertible Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Convertible Preferred
Securities and the Convertible Preferred Securities Guarantees, including any
amendments thereto;
(b) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Convertible Preferred
Securities and the Convertible Preferred Securities Guarantees and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and
filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of
any such States;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Convertible
Preferred Securities;
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
Convertible Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
(e) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Convertible Preferred Securities.
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ARTICLE V
TRUSTEES
SECTION 5.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a majority in
liquidation amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities; provided, however, that the number of
Trustees shall in no event be less than two (2); provided further that (1)
one Trustee, in the case of a natural person, shall be a person who is a
resident of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of Delaware
(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 Delaware Trustee if it
meets the applicable requirements.
SECTION 5.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
SECTION 5.3 PROPERTY TRUSTEE; ELIGIBILITY.
There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
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(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 Section 310(b) of the Trust Indenture Act, the
Property Trustee and the Holder of the Common Securities (as if it were the
obligor referred to in Section 310(b) of the Trust Indenture Act) shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
(d) The Convertible Preferred Securities Guarantee shall be deemed to
be specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
SECTION 5.4 CERTAIN QUALIFICATIONS OF REGULAR TRUSTEES AND DELAWARE TRUSTEE
GENERALLY.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
SECTION 5.5 REGULAR TRUSTEES.
The initial Regular Trustees shall be:
Robert F. Murphy
Robert D. Woltil
William C. Warrick
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(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; and
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, provided, that, the registration statement referred to
in Section 3.6, including any amendments thereto, shall be signed by all of the
Regular Trustees.
SECTION 5.6 DELAWARE TRUSTEE.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
SECTION 5.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 5.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of the Holders of a
Majority in liquidation amount of the Common Securities voting as a class
at a meeting of the Holders of the Common Securities.
(b)(i) The Trustee that acts as 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 and the
Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign
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from office (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the Sponsor and
the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective: (A) until a Successor Property Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or (B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the holders
of the Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(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.
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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 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 48
hours before such meeting. Notice of any telephonic meetings of the Regular
Trustees or any committee thereof shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 24 hours before a meeting. Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting. The presence (whether
in person or by telephone) of a Regular Trustee at a meeting shall constitute a
waiver of notice of such meeting except where a Regular Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Declaration, any action of the Regular Trustees may
be taken at a meeting by vote of a majority of the Regular Trustees present
(whether in person or by telephone) and eligible to vote with respect to such
matter, provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one Regular
Trustee, any and all action of such Regular Trustee shall be evidenced by a
written consent of such Regular Trustee.
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 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
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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 either may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any corporation succeeding to all or substantially
all the corporate trust business of the Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the Property Trustee or
the Delaware Trustee, as the case may be, hereunder, provided such corporation
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 DISTRIBUTIONS.
Holders shall receive Distributions (as defined herein) in accordance
with the applicable terms of the relevant Holder's Securities. Distributions
shall be made on the Convertible Preferred Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
Compounded Interest (as defined in the Indenture) and Additional Interest (as
defined in the Indenture)), premium and/or principal on the Debentures held by
the Property Trustee (the amount of any such payment being a "Payment Amount"),
the Property Trustee shall and is directed, to the extent funds are available
for that purpose, to make a distribution (a "Distribution") of the Payment
Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Regular Trustees shall on behalf of the Trust issue one class
of convertible preferred securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Convertible Preferred Securities") and one class of convertible common
securities, representing undivided beneficial interests in the assets of the
Trust having such terms as are set forth in Annex I (the "Common Securities").
The Trust shall issue no securities or other interests in the assets of the
Trust other than the Convertible Preferred Securities and the Common Securities.
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(b) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. Such signature shall be the manual [or facsimile] signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such Regular
Trustee before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Regular Trustee; and any Certificate may
be signed on behalf of the Trust by such persons who, at the actual date of
execution of such Security, shall be the Regular Trustees of the Trust, although
at the date of the execution and delivery of the Declaration any such person was
not such a Regular Trustee. Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Regular Trustees, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.
(c) 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.
(d) 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.
(e) Every Person, by virtue of having become a Holder or a
Convertible Preferred Security Beneficial Owner in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed to the
terms of, and shall be bound by, this Declaration.
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SECTION 7.2 PAYING AGENT.
In the event that the Convertible Preferred Securities are not in
book-entry only form, the Trust shall maintain in the Borough of Manhattan,
City of New York, State of New York, an office or agency where the
Convertible Preferred Securities may be presented for payment ("Paying
Agent"). The Trust shall maintain an office or agency where Securities may
be presented for conversion ("Conversion Agent"). The Trust may appoint the
Paying Agent and the Conversion Agent and may appoint one or more additional
paying agents and one or more additional conversion agents in such other
locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any
additional conversion agent. The Trust may change any Paying Agent or
Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any Agent not a party to this
Declaration. If the Trust fails to appoint or maintain another entity as
Paying Agent or Conversion Agent, the Property Trustee shall act as such.
The Trust or any of its Affiliates may act as Paying Agent or Conversion
Agent. The Trust shall act as Paying Agent and Conversion Agent for the
Common Securities.
The Trust initially appoints the Property Trustee as Conversion Agent
for the Convertible Preferred Securities.
ARTICLE VIII
DISSOLUTION OF TRUST
SECTION 8.1 DISSOLUTION OF TRUST.
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor; the filing of a certificate of cancellation
with respect to the Trust or the revocation of the Holder of the Common
Securities or the Sponsor's charter and the expiration of 90 days after the
date of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(v) upon the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms
of the Securities and
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all of the Debentures endorsed thereon shall have been distributed to the
Holders of Securities in exchange for all of the Securities;
(vi) upon the distribution of the Guarantor's common stock to all
Securities Holders upon conversion of all outstanding Convertible Preferred
Securities; or
(vii) before the issuance of any Securities, with the consent of all
of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a), after the completion of the winding up of the
affairs or the Trust, the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
dissolution of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 TRANSFER OF SECURITIES.
(a) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Convertible Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal income
tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee would
become an Investment Company.
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SECTION 9.2 TRANSFER OF CERTIFICATES.
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be effected without
charge but only upon payment (with such indemnity as the Regular Trustees may
require) in respect of any tax or other government charges that may be imposed
in relation to it. Upon surrender for registration of transfer of any
Certificate, the Regular Trustees shall cause one or more new Certificates to be
issued in the name of the designated transferee or transferees. Every
Certificate surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Regular Trustees duly
executed by the Holder or such Holder's attorney duly authorized in writing.
Each Certificate surrendered for registration of transfer shall be canceled by
the Regular Trustees. A transferee of a Certificate shall be entitled to the
rights and subject to the obligations of a Holder hereunder upon the receipt by
such transferee of a Certificate. By acceptance of a Certificate, each
transferee shall be deemed to have agreed to be bound by this Declaration. [The
Trust shall not be required (i) to issue, register the transfer of or exchange
of any Securities during the period beginning at the opening of business 15 days
before the mailing of a notice of redemption of Securities according to the
terms of the Securities and ending at the close of business on the day of the
mailing of the relevant notice of redemption or (ii) to register the transfer of
or exchange of any Security so selected for redemption, in whole or in part,
except the unredeemed portion of any Security being redeemed in part.]
SECTION 9.3 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall
be registered on the books and records of the Trust as the sole holder of such
Certificate and of the Securities represented by such Certificate for purposes
of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
SECTION 9.4 BOOK ENTRY INTERESTS.
Unless otherwise specified in the terms of the Convertible Preferred
Securities, the Convertible Preferred Securities Certificates, on original
issuance, will be issued in the form of one or more, fully registered, global
Convertible Preferred Security Certificates (each a "Global Certificate"), to be
delivered to DTC, the initial Clearing Agency, by, or on behalf of, the Trust.
Such Global Certificates shall initially be registered on the books and records
of the Trust in the name of Cede & Co., the nominee of DTC, and no Convertible
Preferred Security Beneficial Owner will receive a definitive Convertible
Preferred Security Certificate representing such Convertible Preferred Security
Beneficial Owner's interests in such Global Certificates, except as provided in
Section 9.7. Unless and until definitive, fully registered Convertible
Preferred Security Certificates (the "Definitive Convertible Preferred
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Security Certificates") have been issued to the Convertible Preferred
Security Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full force and
effect;
(b) the Trust and the Trustees shall be entitled to deal with the
Clearing Agency for all purposes of this Declaration (including the payment of
Distributions on the Global Certificates and receiving approvals, votes or
consents hereunder) as the Holder of the Convertible Preferred Securities and
the sole holder of the Global Certificates and shall have no obligation to the
Convertible Preferred 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 Convertible Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be limited to
those established by law and agreements between such Convertible Preferred
Security Beneficial Owners and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of Distributions on the Global
Certificates to such Clearing Agency Participants. DTC will make book entry
transfers among the Clearing Agency Participants.
SECTION 9.5 NOTICES TO CLEARING AGENCY.
Whenever a notice or other communication to the Convertible Preferred
Security Holders is required under this Declaration, unless and until Definitive
Convertible Preferred Security Certificates shall have been issued to the
Convertible Preferred Security Beneficial Owners pursuant to Section 9.7, the
Regular Trustees shall give all such notices and communications specified herein
to be given to the Convertible Preferred Security Holders to the Clearing
Agency, and shall have no notice obligations to the Convertible Preferred
Security Beneficial Owners.
SECTION 9.6 APPOINTMENT OF SUCCESSOR CLEARING AGENCY.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred Securities, the
Regular Trustees may, in their sole discretion, appoint a successor Clearing
Agency with respect to such Convertible Preferred Securities.
SECTION 9.7 DEFINITIVE CONVERTIBLE PREFERRED SECURITY CERTIFICATES.
If:
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(a) a Clearing Agency elects to discontinue its services as
securities depositary with respect to the Convertible Preferred Securities and a
successor Clearing Agency is not appointed within 90 days after such
discontinuance pursuant to Section 9.6; or
(b) the Regular Trustees elect after consultation with the Sponsor to
terminate the book entry system through the Clearing Agency with respect to the
Convertible Preferred Securities,
then:
(c) Definitive Convertible Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect to such
Convertible Preferred Securities; and
(d) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Certificates to be delivered to Convertible Preferred Security
Beneficial Owners in accordance with the instructions of the Clearing Agency.
Neither the Trustees nor the Trust shall be liable for any delay in delivery of
such instructions and each of them may conclusively rely on and shall be
protected in relying on, said instructions of the Clearing Agency.
The Definitive Convertible Preferred Security Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which Convertible Preferred Securities may be listed, or to conform
to usage.
SECTION 9.8 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such security or
indemnity as may be required by them to keep each of them harmless,
then, in the absence of notice that such Certificate shall have been
acquired by a bona fide purchaser, any Regular Trustee on behalf of the Trust
shall execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new
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Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 9.8, the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Certificate issued
pursuant to this Section shall constitute conclusive evidence of an ownership
interest in the relevant Securities, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time.
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ARTICLE 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; and
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Convertible Preferred Securities shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware.
SECTION 10.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits,losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders of Securities might properly be paid.
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SECTION 10.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions
of this Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the 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 a Covered
Person and an Indemnified Person; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner
that is, or provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Declaration or any
other agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(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.
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SECTION 10.4 INDEMNIFICATION.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified Person
did not act in good faith and in a manner which he reasonably believed to be in
or not opposed to the best interests of the Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or matter
as to which such Company Indemnified Person shall have been adjudged to be
liable to the Trust unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 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 Debenture
Issuer only as authorized
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in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has
met the applicable standard of conduct set forth in paragraphs (i) and
(ii). Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were
not parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees, (ii) if such a quorum is not obtainable,
or, even if obtainable, if a quorum of disinterested Regular Trustees so
directs, by independent legal counsel in a written opinion or (iii) the
Common Security Holder of the Trust, that, based upon the facts known to
the Regular Trustees, counsel or the Common Security Holder at the time
such determination is made, such Company Indemnified Person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the Trust, or, with respect to any
criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall
any advance be made in instances where the Regular Trustees, independent
legal counsel or Common Security Holder reasonably determine that such
person deliberately breached his duty to the Trust or its Common or
Convertible Preferred Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Convertible Preferred Security Holders of the Trust or otherwise,
both as to action in his official capacity and as to action in another
capacity while holding such office. All rights to indemnification under
this Section 10.4(a) shall be deemed to be provided by a contract between
the Debenture Issuer and each Company Indemnified Person who serves in such
capacity at any time while this Section 10.4(a) is in effect. Any repeal
or modification of this Section 10.4(a) shall not affect any rights or
obligations then existing.
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(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Declaration.
SECTION 10.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders of Securities shall
have no rights by virtue of this Declaration in and to such independent ventures
or the income or profits derived therefrom, and the pursuit of any such venture,
even if competitive with the business of the Trust, shall not be deemed wrongful
or improper. No Covered Person, the Sponsor, the Delaware Trustee, or
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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 Trust shall use the accrual method of accounting for
United States federal income tax purposes. The books of account and the records
of the Trust shall be examined by and reported upon as of the end of each Fiscal
Year of the Trust by a firm of independent certified public accountants selected
by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and delivered to
each of the Holders of Securities, within 90 days after the end of each Fiscal
Year of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
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(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 Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Regular Trustees shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of
any claimed over withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
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 and executed by:
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(i) the Regular Trustees (or, if there are more than two Regular
Trustees a majority of the Regular Trustees);
(ii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Delaware Trustee, the Delaware Trustee;
(b) no amendment shall be made, and any such purported amendment shall
be void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(A) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities); and
(iii) to the extent the result of such amendment would be to:
(A) cause the trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
(B) reduce or otherwise adversely affect the powers of the
Property Trustee 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;
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(d) Section 9.1(c) and this Section 12.1 shall not be amended without
the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities and;
(f) the rights of the holders of the Common Securities under Article
V to increase or decrease the number of, and appoint and remove Trustees shall
not be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration may be amended
without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration that may
be defective or inconsistent with any other provision of this Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor;
(iv) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body, court,
government agency or regulatory authority which amendment does not have a
material adverse effect on the right, preferences or privileges of the
Holders; and
(v) to modify, eliminate and add to any provision of the Amended
Declaration to such extent as may be necessary.
SECTION 12.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Regular Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of
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determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more than
60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Convertible
Preferred Securities are listed or admitted for trading, such vote, consent
or approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action so
taken is signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Regular Trustees may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Regular
Trustees;
(ii) each Holder of a Security may authorize any Person to act for it
by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and
the Holders of the Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the Regular Trustees or by such other Person that the Regular Trustees
may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of the
Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Convertible Preferred Securities are then listed or
trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of
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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 national banking association with trust
powers, duly organized, validly existing and in good standing under the laws of
the United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the Articles
of Organization or By-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.2 REPRESENTATIONS AND WARRANTIES OF DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration, and
each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
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(a) The Delaware Trustee is a Delaware banking corporation with trust
powers, 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, the
Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any State or Federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
Sun Financing II
c/o Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention:__________________
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
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(c) if given to the Property Trustee, at its Corporate Trust Office
to the attention of ______________ (or such other address as the Property
Trustee may give notice of to the Holders of the Securities).
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
c/o Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention:__________________
(e) if given to any other Holder, at the address set forth on the
books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 14.2 GOVERNING LAW.
This Declaration and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
SECTION 14.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that the Trust be classified
for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
SECTION 14.5 SUCCESSORS AND 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
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and agreements in this Declaration by the Sponsor and the Trustees shall
bind and inure to the benefit of their respective successors and
assigns, whether so expressed.
SECTION 14.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Declaration, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
------------------------------------
Robert F. Murphy, as Regular Trustee
------------------------------------
Robert D. Woltil, as Regular Trustee
The Bank of New York (Delaware), as Delaware
Trustee
By:
--------------------------------
Name:
Title:
The Bank of New York, as Property Trustee
By:
--------------------------------
Name:
Title:
Sun Healthcare Group, Inc., as Sponsor
By:
--------------------------------
Name:
Title:
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ANNEX I
TERMS OF
___% CONVERTIBLE PREFERRED SECURITIES
___% CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of [________] (as amended from time to time, the
"Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Convertible Preferred
Securities and the Common Securities are set out below (each capitalized term
used but not defined herein has the meaning set forth in the Declaration or,
if not defined in such Declaration, as defined in the Prospectus referred to
below):
1. Designation and Number.
(a) Convertible Preferred Securities. [ ]
Convertible Preferred Securities of the Trust with an aggregate liquidation
amount with respect to the assets of the Trust of [ ] dollars
($[ ]) and a liquidation amount with respect to the assets of the
Trust of $50 per convertible preferred security, are hereby designated for
the purposes of identification only as "__% Convertible Trust Preferred
Securities" (the "Convertible Preferred Securities"). The Convertible
Preferred Security Certificates evidencing the Convertible Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Convertible Preferred Securities are
listed.
(b) Common Securities. [ ] Common Securities of the
Trust with an aggregate liquidation amount with respect to the assets of the
Trust of [ ] dollars ($[ ]) and a liquidation amount
with respect to the assets of the Trust of $50 per common security, are
hereby designated for the purposes of identification only as "__% Convertible
Trust Common Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be substantially in the
form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom
or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of __% (the "Coupon Rate") of the stated liquidation amount of $50
per Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than
one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions"
as used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in
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respect of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 90-day quarter.
(b) Distributions on the Securities will be cumulative, will
accrue from [_______], and will be payable quarterly in arrears, on [_____],
[______], [______] and [_______] of each year, commencing on [________],
except as otherwise described below. The Debenture Issuer has the right
under the Indenture to defer payments of interest by extending the interest
payment period from time to time on the Debentures for a period not exceeding
20 consecutive quarters or extend beyond the maturity date of the Debentures
(each an "Extension Period"), during which Extension Period no interest shall
be due and payable on the Debentures, provided that no Extension Period shall
last beyond the date of maturity of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; provided that such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. While the Convertible Preferred Securities remain in
book-entry only form, the relevant record dates shall be one Business Day
prior to the relevant payment dates which payment 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 Convertible Preferred Securities will be made as described
under the heading "Description of the Convertible Preferred Securities --
Book-Entry Only Issuance -- The Depository Trust Company" in the Prospectus
Supplement dated______, 1997, to the Prospectus dated ____, 1997 (together,
the "Prospectus"), of the Trust included in the Registration Statement on
Form S-3 of the Sponsor, the Trust and certain other business trusts. The
relevant record dates for the Common Securities shall be the same record date
as for the Convertible Preferred Securities. If the Convertible Preferred
Securities shall not continue to remain in book-entry only form, the relevant
record dates for the Convertible Preferred Securities, shall conform to the
rules of any securities exchange on which the securities are listed and, if
none, shall be selected by the Regular Trustees, which dates shall be at
least one Business Day but less than 60 Business Days before the relevant
payment dates, which payment dates
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correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name
such Securities are registered on the special record date or other specified
date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then
payment of the Distribution payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Sun's Common Stock pursuant to
the terms of the Securities as set forth in this Annex I to the Declaration,
no payment, allowance or adjustment shall be made with respect to accumulated
and unpaid Distributions on such Securities, or be required to be made;
provided that Holders of Securities at the close of business on any record
date for the payment of Distributions will be entitled to receive the
Distributions payable on such Securities on the corresponding payment date
notwithstanding the conversion of such Securities into Sun's Common Stock
following such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will
be entitled to receive out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of liabilities of
creditors an amount equal to the aggregate of the stated liquidation amount
of $50 per Security plus accrued and unpaid Distributions thereon to the date
of payment (such amount being the "Liquidation Distribution"), unless, in
connection with such dissolution, winding-up or termination, Debentures in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of such Securities, with an interest rate equal to the Coupon Rate of,
and bearing accrued and unpaid interest in an amount equal to the accrued and
unpaid Distributions on, such Securities, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation
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Distribution, then the amounts payable directly by the Trust on the
Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part,
whether at maturity or upon redemption (either at the option of the Debenture
Issuer or pursuant to a Special Event as described below), the proceeds from
such repayment or payment shall be simultaneously applied to redeem
Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption
price of $50 per Security plus an amount equal to accrued and unpaid
Distributions thereon at the date of the redemption, payable in cash as set
forth below (the "Redemption Price"). Holders will be given not less than 30
nor more than 60 days notice of such redemption.
Except in connection with a Special Event, the Securities may not
be redeemed by the Trust prior to [_______]. On or after such date, the
Trust may, at its option, upon not less than 30 or more than 60 days notice,
redeem the Securities, in whole or in part, out of the proceeds received by
the Trust from the prepayment or repayment by Sun of the principal on the
Debentures, at any time or from time to time during the twelve month periods
beginning on [_______]in each of the following years at the following
redemption prices, plus accumulated and unpaid distributions to, but
excluding, the redemption date:
Year Redemption Price
If a partial redemption of the Securities resulting from a partial redemption
of the Debentures would result in the delisitng of the Securities, Sun may
only redeem the Debentures in whole.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Convertible Preferred Securities will
be redeemed Pro Rata and the Convertible Preferred Securities to be redeemed
will be as described in Section 4(f)(ii) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each, as defined below, a "Special Event") shall occur and be continuing the
Regular Trustees shall, except in certain limited circumstances in relation
to a Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Property Trustee,
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on,
and having the same record date for payment as the Securities, to be
distributed to the Holders of the Securities in liquidation of such Holders'
interests in the Trust on a Pro Rata basis, within 90 days
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following the occurrence of such Special Event (the "90 Day Period");
provided, however, that, as a condition of such dissolution and distribution,
the Regular Trustees shall have received an opinion of a nationally
recognized independent tax counsel experienced in such matters (a "No
Recognition Opinion"), which opinion may rely on published revenue rulings of
the Internal Revenue Service, to the effect that the Holders of the
Securities 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, and provided, further, that, if at the time there
is available to the Debenture Issuer the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, such as
filing a form or making an election, or pursuing some other similar
reasonable measure that has no adverse effect on the Trust, the Debenture
Issuer, the Sponsor or the Holders of the Securities ("Ministerial Action"),
the Debenture Issuer will pursue such Ministerial Action in lieu of
dissolution.
If in the event of a Tax Event (i) after receipt of a Tax Event
Opinion (as defined hereinafter) by the Regular Trustees, the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even after the
Debentures were distributed to the Holders of Securities in liquidation of
such Holders' interests in the Trust as described in this Section 4(c), or
(ii) the Regular Trustees shall have been informed by such tax counsel that a
No Recognition Opinion cannot be delivered to the Trust, the Debenture Issuer
shall have the right at any time, upon not less than 30 nor more than 60 days
notice, to redeem the Debentures in whole or in part for cash within 90 days
following the occurrence of such Tax Event, and, following such redemption,
Securities with an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so redeemed shall be redeemed by the Trust
at the Redemption Price on a Pro Rata basis; provided, however, that, if at
the time there is available to the Debenture Issuer or the Trust the
opportunity to eliminate, within such 90 day period, the Tax Event by taking
some Ministerial Action, the Trust or the Debenture Issuer will pursue such
Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have received an
opinion of a nationally recognized independent tax counsel experienced in
such matters (a "Dissolution Tax Opinion") to the effect that on or after the
date of the Prospectus Supplement, as a result of (a) any amendment to,
clarification of, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority therefor or therein affecting
taxation, (b) any judicial decision, official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change
in the official position or the interpretation of such Administrative Action
or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental
authority or regulatory body, irrespective of the manner in which
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such amendment, clarification or change is made known, which amendment,
clarification, or change is effective or such pronouncement or decision is
announced, in each case, on or after, the first date of issuance of the
Securities, there is more than an insubstantial risk that (i) the Trust is or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debentures,
(ii) the Trust is, or will be within 90 days of the date thereof, subject to
more than a de minimis amount of taxes, duties or other governmental charges,
or (iii) interest payable in cash by the Debenture Issuer to the Trust on the
Debentures is not, or within 90 days of the date thereof will not be,
deductible, in whole or in part, by the Debenture Issuer for United States
federal income tax purposes.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of a nationally recognized independent counsel to
the effect that, as a result of the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulations by any legislative body, court, governmental agency or regulatory
authority on or after the first date of the Prospectus Supplement pursuant to
which the Securities are offered (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 Investment
Company Act of 1940, as amended (the "1940 Act").
On and from the date fixed by the Regular Trustees for any
distribution of Debentures upon dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Convertible Preferred Securities, will
receive a registered global certificate or certificates representing the
Debentures to be delivered upon such distribution, and (iii) any certificates
representing Securities, except for certificates representing Convertible
Preferred Securities held by the Depository or its nominee (or any successor
Clearing Agency or its nominee), will be deemed to represent Debentures
having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accrued and unpaid interest equal to accrued and unpaid Distributions on
such Convertible Preferred Securities until such certificates are presented
to the Debenture Issuer or its agent for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accrued and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or before
the date of redemption.
(e) If the Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Convertible Preferred Securities
were listed immediately prior to the distribution of the Debentures.
(f) Redemption or Distribution Procedures for Redemption by the
Trust.
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(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be redeemed or exchanged not fewer than 30 nor more than 60 days before the
date fixed for redemption or exchange thereof which, in the case of a
redemption, will be the date fixed for redemption of the Debentures. For
purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this 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 of
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of Securities at the address of each such Holder appearing in the
books and records of the Trust. No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect
to any other Holder.
(ii) 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 Convertible Preferred Securities, it being understood
that, in respect of Convertible Preferred Securities registered in the name
of and held of record by the Depository or its nominee (or any successor
Clearing Agency or its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to each Clearing Agency
Participant (or Person on whose behalf such nominee holds such securities)
in accordance with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 4 (which notice will be
irrevocable), then (A) while the Convertible Preferred Securities are in
book-entry only form, with respect to the Convertible Preferred Securities,
by 12:00 noon, New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a sufficient amount of
cash in connection with the related redemption or maturity of the
Debentures, the Property Trustee will deposit irrevocably with the
Depository or its nominee (or successor Clearing Agency or its nominee)
funds sufficient to pay the applicable Redemption Price with respect to the
Convertible Preferred Securities and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the Holders of
the Convertible Preferred Securities, and (B) with respect to Convertible
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related redemption or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the books and records of the
Trust on the redemption date. If a Redemption/Distribution Notice shall
have been given and funds deposited as required, if applicable, then
immediately prior to the close of business on the date of such deposit, or
on the
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redemption date, as applicable, distributions will cease to accrue
on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but without
interest on such Redemption Price. Neither the Regular Trustees nor the
Trust shall be required to register or cause to be registered the transfer
of any Securities that have been so called for redemption. If any date
fixed for redemption of Securities is not a Business Day, then payment of
the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any 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
such Securities will continue to accrue 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.
(iv) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (A) in respect of the Convertible
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been issued
or, if Definitive Convertible Preferred Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the Common Securities
to the Holder thereof.
(v) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities 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 Convertible Preferred Securities by
tender, in the open market or by private agreement.
(g) If at any time there occurs a Fundamental Change (as defined
below), each Holder of the Securities shall have the right, at the Holder's
option, to require the Trust to redeem all (and not less than all) of such
Holder's Securities in cash on the date (the "Repurchase Date") that is 45 days
after the date of Sun's notice of such Fundamental Change referred to below. In
such event, the Trust shall redeem the Securities at a price per Security equal
to (i) $___ if the Repurchase Date is during the 12-month period beginning
[________], (ii) $___ if the Repurchase Date is during the 12-month period
beginning [________], (iii) $____ if the Repurchase Date is during the 12-month
period beginning [________], and (iv) thereafter at the redemption price which
would be applicable to a redemption at the option of the Trust on the Repurchase
Date; provided that if the Applicable Price (as defined below) is less than the
Reference Market Price (as defined below), the Trust shall redeem such
Convertible Preferred Securities at a price equal to the foregoing
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redemption price multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. In each case, the Trust
shall also pay accrued distributions on the Securities to, but excluding, the
Repurchase Date; provided that, if such Repurchase Date is a distribution
payment date, then the distribution payable on such date shall be paid to the
Holder of record on the relevant record date. The Trust will have
corresponding rights to redeem the Debentures.
The term "Fundamental Change" means the occurrence of any
transaction or events in connection with which all or substantially all of
the Sun Common Stock shall be exchanged for, converted into, acquired for or
constitute the right to receive consideration (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) which is not
all or substantially all common stock which is (or, upon consummation of or
immediately following such transaction or event, will be) listed on a United
States national securities exchange or approved for quotation on Nasdaq
National Market or any similar United States system of automated
dissemination of quotations of securities prices. The term "Applicable
Price" means (i) in the event of a Fundamental Change in which the Holders of
Sun Common Stock receive only cash, the amount of cash received by the Holder
of one share of Sun Common Stock and (ii) in the event of any other
Fundamental Change, the average of the last reported executed trade price
(regular way) for the Sun Common stock during the ten trading days prior to
the record date for the determination of the Holders of Sun Common Stock
entitled to receive cash, securities, property or other assets in connection
with such Fundamental Change, or, if no such record date exists, the date
upon which the Holders of the Sun Common Stock shall have the right to
receive such cash, securities, property or other assets in connection with
the Fundamental Change. The term "Reference Market Price" shall initially
mean $ which is equal to 66 2/3% of the price of Sun Common Stock as of the
date hereof. In the event of any adjustment to the conversion rate, the
Reference Market Price shall also be adjusted so that the Reference Market
Price, after giving effect to any such adjustment, shall equal the Market
Reference Price multiplied by a fraction, the numerator of which is the
conversion rate prior to such adjustment and the denominator of which is the
conversion rate after such adjustment.
On or before the 10th day after the occurrence of a Fundamental
Change, the Trust shall mail to all Holders of record of the Securities a
notice of the occurrence of such Fundamental Change and of the redemption
rights arising as a result thereof. The Trust shall deliver a copy of such
notice to the Property Trustee. To exercise the redemption right, on or
before the Repurchase Date Holders of the Securities must deliver written
notice to the Property Trustee, as Conversion Agent, of the Holders' exercise
of such right. Payment for Securities surrendered for redemption (and not
withdrawn) prior to the Repurchase Date will be made promptly following the
Repurchase Date. Subject to the requirements of DTC, the redemption rights
associated with Securities may be exercised by the presentation to the
Property Trustee of one or more redemption notices duly completed by or on
behalf of the participant of DTC or any clearing system in which the relevant
Convertible Preferred Security is held at such time with an interest in such
Security and, if required, payment
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of any transfer or similar taxes (other than those described above).
Surrender of any global certificate to the Property Trustee shall not be
required.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, at
their option, to cause the Conversion Agent to convert Securities, on behalf
of the converting Holders, into shares of Sun's Common Stock in the manner
described herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Sun Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debentures theretofore held by the Trust on
the basis of one Security per $__ principal amount of Debentures, and
immediately convert such amount of Debentures into fully paid and
nonassessable shares of Sun Common Stock at an initial rate of ________
shares of Sun Common Stock per $__ principal amount of Debentures (which is
equivalent to a conversion price of $___ per share of Sun Common Stock,
subject to certain adjustments set forth in the terms of the Debentures (as
so adjusted, "Conversion Price")).
(b) In order to convert Securities into Sun's Common Stock the
Holder shall submit to the Conversion Agent at the office referred to above
an irrevocable request to convert Securities on behalf of such Holder (the
"Conversion Request"), together, if the Securities are in certificated form,
with such certificates. The Conversion Request shall (i) set forth the
number of Securities to be converted and the name or names, if other than the
Holder, in which the shares of Sun's Common Stock should be issued and (ii)
direct the Conversion Agent (a) to exchange such Securities for a portion of
the Debentures held by the Trust (at the rate of exchange specified in the
preceding paragraph) and (b) to immediately convert such Debentures on behalf
of such Holder, into Sun's Common Stock (at the conversion rate specified in
the preceding paragraph). The Conversion Agent shall notify the Trust of the
Holder's election to exchange Securities for a portion of the Debentures held
by the Trust and the Trust shall, upon receipt of such notice, deliver to the
Conversion Agent the appropriate principal amount of Debentures for exchange
in accordance with this Section. The Conversion Agent shall thereupon notify
Sun of the Holder's election to convert such Debentures into shares of Sun's
Common Stock. Holders of Securities at the close of business on a
Distribution record date will be entitled to receive the Distribution payable
on such securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities following such record date
but prior to such distribution payment date. Except as provided above,
neither the Trust nor the Sponsor will make, or be required to make, any
payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accrued on the Securities (including any
Additional Amounts accrued thereon) surrendered for conversion, or on account
of any accumulated and unpaid dividends on the shares of Sun's Common Stock
issued upon such conversion. Securities shall be deemed to have been
converted immediately prior to the close of business
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on the day on which a Notice of Conversion relating to such Securities is
received the Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive Sun's Common
Stock issuable upon conversion of the Debentures shall be treated for all
purposes as the record holder or holders of such Sun's Common Stock at such
time. As promptly as practicable on or after the Conversion Date, Sun shall
issue and deliver at the office of the Conversion Agent a certificate or
certificates for the number of full shares of Sun's Common Stock issuable
upon such conversion, together with the cash payment, if any, in lieu of any
fraction of any share to the Person or Persons entitled to receive the same,
unless otherwise directed by the Holder in the notice of conversion and the
Conversion Agent shall distribute such certificate or certificates to such
Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
[___________] "Conversion Agent" for the purpose of effecting the conversion
of Securities in accordance with this Section. In effecting the conversion
and transactions described in this Section, the Conversion Agent shall be
acting as agent of the Holders of Securities directing it to effect such
conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debentures held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debentures into Sun's
Common Stock and thereupon to deliver such shares of Sun's Common Stock in
accordance with the provisions of this Section and to deliver to the Trust a
new Debenture or Debentures for any resulting unconverted principal amount.
(d) No fractional shares of Sun's Common Stock will be issued as a
result of conversion, but in lieu thereof, such fractional interest will be
in cash by Sun to the Trust, which in turn will make such payment to the
Holder or Holders of Securities so converted.
(e) Sun shall at all times reserve and keep available out of its
authorized and unissued Sun Common Stock, solely for issuance upon the
conversion of the Debentures, free from any preemptive or other similar
rights, such number of shares of Sun Common Stock as shall from time to time
be issuable upon the conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, Sun shall be entitled to deliver upon
conversion of Debentures, shares of Sun Common Stock reacquired and held in
the treasury of Sun (in lieu of the issuance of authorized and unissued
shares of Sun Common Stock), so long as any such treasury shares are free and
clear of all liens, charges, security interests or encumbrances. Any shares
of Sun Common Stock issued upon conversion of the Debentures shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Sun Common Stock received upon conversion of the
Debentures to the converting Holder free and clear of all liens, charges,
security interests and encumbrances, except for United States withholding
taxes. Each of Sun and the Trust shall prepare and shall use its best
efforts to obtain and keep in force such governmental or regulatory permits
or other authorizations as may be required by law, and shall comply with all
applicable requirements as to registration or qualification of Sun Common
Stock (and all requirements to list Sun Common Stock issuable upon conversion
of Debentures that are at the time applicable), in order to enable Sun to
lawfully issue Sun Common Stock to the Trust upon conversion of the
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Debentures and the Trust to lawfully deliver Sun Common Stock to each Holder
upon conversion of the Securities.
(f) Sun will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Sun Common Stock on conversion of
Debentures and the delivery of the shares of Sun Common Stock by the Trust
upon conversion of the Securities. Sun Healthcare Group, Inc. shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Sun Common Stock in
a name other than that in which the Securities so converted were registered,
and no such issue or delivery shall be made unless and until the person
requesting such issue has paid to the Trust the amount of any such tax, or
has established to the satisfaction of the Trust that such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or set forth in this Annex I to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to
pay any amounts on account of such withholdings.
6. Voting Rights - Convertible Preferred Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise
required by law and the Declaration, the Holders of the Convertible Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a majority in aggregate liquidation amount of the Convertible
Preferred Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy available to
the Property Trustee, or exercising any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee, as holder of the Debentures, to (i) exercise the remedies
available under the Indenture with respect to the Debentures, (ii) waive any
past default and its consequences that is waivable under Section ___ of the
Indenture, or (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable, provided,
however, that, where a consent under the Indenture would require the consent
or act of the Holders of greater than a majority of the Holders in principal
amount of Debentures affected thereby, (a "Super Majority"), the Property
Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of
the Convertible Preferred Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Convertible Preferred Securities.
Other than with respect to directing the time, method and place of conducting
any remedy available to the Property Trustee or the Debenture Trustee as set
forth above, the Property Trustee shall not take any action in accordance
with the directions of the Holders of the Convertible Preferred Securities
under
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this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on
the redemption date), then a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debentures having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder
(a "Direct Action") on or after the respective due date specified in the
Debentures. In connection with such Direct Action, the rights of the holders
of the Common Securities Holder will be subrogated to the rights of such
holder of Preferred Securities to the extent of any payment made by the
Issuer to such holder of Preferred Securities in such Direct Action. Except
as provided in the preceding sentences, the Holders of Preferred Securities
will not be able to exercise directly any other remedy available to the
holders of the Debentures.
Any approval or direction of Holders of Convertible Preferred
Securities may be given at a separate meeting of Holders of Convertible
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities in the Trust or pursuant to written consent. The
Regular Trustees will cause a notice of any meeting at which Holders of
Convertible Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed
to each Holder of record of Convertible Preferred Securities. Each such
notice will include a statement setting forth (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 Convertible Preferred
Securities will be required for the Trust to redeem and cancel Convertible
Preferred Securities or to distribute the Debentures in accordance with the
Declaration and the terms of the Securities.
Notwithstanding that Holders of Convertible Preferred Securities
are entitled to vote or consent under any of the circumstances described
above, any of the Convertible Preferred Securities that are owned 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.
7. Voting Rights - Common Securities.
(a) Except as provided under Sections 7(b), (c) and 8 and as
otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
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(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after the
Event of Default with respect to the Convertible Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the requirements
of the second to last sentence of this paragraph, the Holders of a Majority
in liquidation amount of the Common Securities, voting separately as a class,
may direct the time, method, and place of conducting any proceeding for any
remedy available to the Property Trustee, or exercising any trust or power
conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power
conferred on the Debenture Trustee with respect to the Debentures, (ii) waive
any past default and its consequences that is waivable under Section __ of
the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable, provided
that, where a consent or action under the Indenture would require the consent
or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Property Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this Section
6(c), the Property Trustee shall not revoke any action previously authorized
or approved by a vote of the Holders of the Convertible Preferred Securities.
Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debenture
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an opinion of tax
counsel to the effect that for the purposes of United States federal income
tax the Trust will not be classified as other than a grantor trust on account
of such action. If the Property Trustee fails to enforce its rights under
the Declaration, any Holder of Common Securities may institute a legal
proceeding directly against any Person to enforce the Property Trustee's
rights under the Declaration, without first instituting a legal proceeding
against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of record of Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents.
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No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or
the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described
in Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment
or proposal (but not on any other amendment or proposal) and such amendment
or proposal shall not be effective except with the approval of the Holders of
at least a Majority in liquidation amount of the Securities affected thereby;
provided, however, if any amendment or proposal referred to in clause (i)
above would adversely affect only the Convertible Preferred Securities or
only the Common Securities, then only the affected class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of a Majority in liquidation amount of
such class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect to any
amendment, modification or termination on the Indenture or the Debentures,
the Property Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination
and shall vote with respect to such amendment, modification or termination as
directed by a Majority in liquidation amount of the Securities voting
together as a single class; provided, however, that where a consent under the
Indenture would require the consent of the holders of greater than a majority
in aggregate principal amount of the Debentures (a "Super Majority"), the
Property Trustee may only give such consent at the direction of the Holders
of at least the proportion in liquidation amount of the Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding; provided, further, that the Property Trustee shall
not take any action in accordance with the directions of the Holders of the
Securities under this Section 7(b) unless the Property Trustee has obtained
an opinion of tax counsel to the effect that for the purposes of United
States federal income tax the Trust will not be classified as other than a
grantor trust on account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities outstanding unless, in relation to a
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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 Convertible Preferred Securities pro rata
according to the aggregate liquidation amount of Convertible Preferred
Securities held by the relevant Holder relative to the aggregate liquidation
amount of all Convertible Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Convertible Preferred
Securities, to each Holder of Common Securities pro rata according to the
aggregate liquidation amount of Common Securities held by the relevant Holder
relative to the aggregate liquidation amount of all Common Securities
outstanding.
10. Ranking.
The Convertible Preferred Securities rank pari passu and payment
thereon shall be made Pro Rata with the Common Securities except that, where
a Declaration Event of Default occurs and is continuing, the rights of
Holders of the Common Securities to payment in respect of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights to payment of the Holders of the Convertible Preferred Securities.
11. Listing.
The Regular Trustees shall use their best efforts to cause the
Convertible Preferred Securities to be listed for quotation on the New York
Stock Exchange, Inc.
12. Acceptance of Securities Guarantee and Indenture.
Each Holder of Convertible Preferred Securities and Common
Securities, by the acceptance thereof, agrees to the provisions of the
Convertible Preferred Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein and
to the provisions of the Indenture.
13. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights to
subscribe for any additional securities.
14. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Convertible
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF CONVERTIBLE PREFERRED SECURITY CERTIFICATE
[IF THE CONVERTIBLE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Convertible Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company (the "Depositary") or a nominee of the
Depositary. This Convertible Preferred Security is exchangeable for Convertible
Preferred Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Declaration and no transfer of this Convertible Preferred Security (other than a
transfer of this Convertible Preferred Security as a whole by the Depositary to
a nominee of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary) may be registered except in limited
circumstances.
Unless this Convertible Preferred Security is presented by an
authorized representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Trust or its agent for registration of transfer,
exchange or payment, and any Convertible Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by an
authorized representative of The Depository Trust Company and any payment
hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof,
Cede & Co., has an interest herein.]
Certificate Number Number of Convertible
Preferred Securities
CUSIP NO. [__________]
Certificate Evidencing Convertible
Preferred Securities
of
SUN FINANCING II
__% Trust Convertible Preferred Securities
(liquidation amount $50 per Trust
Convertible Preferred Security)
Sun Financing II, a statutory business trust formed under the laws of
the State of Delaware (the "Trust"), hereby certifies that CEDE & CO. (the
"Holder") is the registered owner of convertible preferred securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the __% Trust Convertible Preferred Securities (liquidation amount
$50 per Trust Convertible Preferred Security) (the "Convertible Preferred
Securities"). The Convertible Preferred Securities are transferable on the
books and
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records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Convertible Preferred Securities represented
hereby are issued and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust of the Trust dated as of
___________, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Convertible
Preferred Securities as set forth in Annex I to the Declaration. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Convertible
Preferred Securities Guarantee to the extent provided therein. The Sponsor
will provide a copy of the Declaration, the Convertible Preferred Securities
Guarantee and the Indenture to a Holder without charge upon written request
to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the
Convertible Preferred Securities as evidence of indirect beneficial ownership
in the Debentures.
Unless the Property Trustee's Certificate of Authentication hereon
has been properly executed, these Convertible Preferred Securities shall not
be entitled to any benefit under the Declaration or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Trust has executed this certificate this __
day of _______.
Sun Financing II
By: ___________________
Name:
Title:
Property Trustee'S CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Preferred Securities referred to in the
within-mentioned Declaration.
Dated: _____________
The Bank of New York,
as Property Trustee
By:________________________________
Authorized Signatory
71
<PAGE>
(REVERSE OF SECURITY)
Distributions payable on each Convertible Preferred Security will
be fixed at a rate per annum of [__]% (the "Coupon Rate") of the stated
liquidation amount of $50 per Preferred Security, such rate being the rate of
interest payable on the Debentures to be held by the Property Trustee.
Distributions in arrears for more than one quarter will bear interest thereon
compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes such cash
distributions and any such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect
of the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full quarterly Distribution
period on the basis of a 360-day year of twelve 30-day months, and for any
period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
Except as otherwise described below, distributions on the Preferred
Securities will be cumulative, will accrue from ________ and will be payable
quarterly in arrears, on ________, _________, __________ and __________of
each year, commencing on ___________, which payment dates shall correspond to
the interest payment dates on the Debentures, to Holders of record at the
close of business on the regular record date for such distribution which
shall be the close of business on the Business Day next preceding such
distribution payment date unless otherwise provided in the Declaration. In
the event that this Convertible Preferred Security is not in book-entry only
form, the Regular Trustees shall have the right to select the relevant record
dates, which shall be more than one Business Day prior to the relevant
payment dates. The Debenture Issuer has the right under the Indenture to
defer payments of interest by extending the interest payment period from time
to time on the Debentures for a period not exceeding 20 consecutive quarters
(each an "Extension Period") provided that no Extension Period shall last
beyond the date of the maturity of the Debentures and, as a consequence of
such deferral, Distributions will also be deferred. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Extension Period. Prior to the termination of any such
Extension Period, the Debenture Issuer may further extend such Extension
Period; PROVIDED THAT such Extension Period together with all such previous
and further extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity of the Debentures. Payments of accrued
Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
The Convertible Preferred Securities shall be redeemable as
provided in the Declaration.
72
<PAGE>
The Convertible Preferred Securities shall be convertible into
shares of Sun Healthcare Group, Inc. Common Stock, through (i) the exchange
of Preferred Securities for a portion of the Debentures and (ii) the
immediate conversion of such Debentures into Debenture Issuer Common Stock,
in the manner and according to the terms set forth in the Declaration.
73
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Sun Financing II
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Convertible Preferred
Securities, or the portion below designated, into Common Stock of Sun
Healthcare Group, Inc. (the "Sun Common Stock") in accordance with the terms
of the Amended and Restated Declaration of Trust (the "Declaration"), dated
as of ___________, by ________, __________, ____________ and __________, as
Regular Trustees, _______________, as Delaware Trustee, _______________, as
Property Trustee, Sun Healthcare Group, Inc., as Sponsor, and by the Holders,
from time to time, of individual beneficial interests in the Trust to be
issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Convertible Preferred Securities, the
undersigned hereby directs the Conversion Agent (as that term is defined in
the Declaration) to (i) exchange such Convertible Preferred Securities for a
portion of the Debentures (as that term is defined in the Declaration) held
by the Trust (at the rate of exchange specified in the terms of the
Convertible Preferred Securities set forth as Annex I to the Declaration) and
(ii) immediately convert such Debentures on behalf of the undersigned, into
Sun Common Stock (at the conversion rate specified in the terms of the
Convertible Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that
the shares issuable and deliverable upon conversion, together with any check
in payment for fractional shares, be issued in the name of and delivered to
the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
74
<PAGE>
Date: ____________, ____
in whole __ in part __________
Number of Preferred Securities to be converted:
___________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the shares of Sun Common Stock are to be issued, along
with the address or addresses of such person or persons
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
___________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
___________________________________________________
___________________________________________________
___________________________________________________
Signature Guarantee: ____________________________
_____________________
* (Signature must be guaranteed by an "eligible guarantor insti-tution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
75
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Preferred Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
___________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________
(Insert address and zip code of assignee)
and irrevocably appoints
_________________________________________________________________
_________________________________________________________________
___________________________________________________________ agent to transfer
this Convertible Preferred Security Certificate on the books of the Trust. The
agent may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Convertible
Preferred Security Certificate)
Signature Guarantee** ______________________________________
_____________________
** Signature must be guaranteed by an "eligible guarantor institution" that
is a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities and Exchange Act of 1934,
as amended.
76
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
TRANSFER OF THIS CERTIFICATE
IS SUBJECT TO THE CONDITIONS
SET FORTH IN THE DECLARATION
REFERRED TO BELOW
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
SUN FINANCING II
__% Common Securities
(liquidation amount $50 per Common Security)
Sun Financing II a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that SUN HEALTHCARE
GROUP, INC. the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the 0% Common Securities (liquidation amount $50 per Common
Security) (the "Common Securities"). The Common Securities are transferable
on the books and records of the Trust, in person or by a duly authorized
attorney, upon surrender of this certificate duly endorsed and in proper form
for transfer. The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities represented hereby
are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of
____________, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration.
The Holder is entitled to the benefits of the Common Securities Guarantee to
the extent provided therein. The Sponsor will provide a copy of the
Declaration, the Common Securities Guarantee and the Indenture to a Holder
without charge upon written request to the Sponsor at its principal place of
business.
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
77
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this _____
day of ___________.
SUN FINANCING II
By: ________________
Name:
Title:
78
<PAGE>
(FORM OF REVERSE OF SECURITY)
Distributions payable on each Common Security will be fixed at a
rate per annum of __% (the "Coupon Rate") of the stated liquidation amount of
$50 per Common Security, such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in arrears for
more than one quarter will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes such cash distributions and any such
interest payable unless otherwise stated. A Distribution is payable only to
the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be
computed for any full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days
elapsed per 30-day month.
Except as otherwise described below, distributions on the Common
Securities will be cumulative, will accrue from ________ and will be payable
quarterly in arrears, on _______, __________, ___________ and ________of each
year, commencing on ____________, which payment dates shall correspond to the
interest payment dates on the Debentures, to Holders of record at the close
of business on the regular record date for such distribution which shall be
the close of business on the Business Day next preceding such distribution
payment date unless otherwise provided in the Declaration. The Debenture
Issuer has the right under the Indenture to defer payments of interest by
extending the interest payment period from time to time on the Debentures for
a period not exceeding 20 consecutive quarters (each an "Extension Period")
provided that no Extension Period shall last beyond the date of maturity of
the Debentures and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent permitted by
applicable law) at the Coupon Rate compounded quarterly during any such
Extension Period. Prior to the termination of any such Extension Period, the
Debenture Issuer may further extend such Extension Period; PROVIDED THAT such
Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the date of
maturity of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period. Upon the
termination of any Extension Period and the payment of all amounts then due,
the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of Sun
Healthcare Group, Inc. Common Stock, through (i) the exchange of Common
Securities for a portion of the Debentures and (ii) the immediate conversion
of such Debentures into Sun Healthcare
79
<PAGE>
Group, Inc. Common Stock, in the manner and according to the terms set forth
in the Declaration.
80
<PAGE>
CONVERSION REQUEST
To: The Bank of New York,
as Property Trustee of
Sun Financing II
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Sun Healthcare Group, Inc. Corporation (the
"Sun Common Stock") in accordance with the terms of the Amended and Restated
Declaration of Trust (the "Declaration"), dated as of __________, by
______________, _________________ and _____________, as Regular Trustees,
_____________, as Delaware Trustee, ________________, as Property Trustee, Sun
Healthcare Group, Inc., as Sponsor, and by the Holders, from time to time, of
individual beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debentures (as that term is defined in the Declaration)
held by the Trust (at the rate of exchange specified in the terms of the Common
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debentures on behalf of the undersigned, into Sun Common Stock (at the
conversion rate specified in the terms of the Common Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
81
<PAGE>
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be converted:
_____________________
If a name or names other than the undersigned, please
indicate in the spaces below the name or names in which
the shares of Sun Common Stock are to be issued, along
with the address or addresses of such person or persons
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
_____________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
_____________________________________________________
_____________________________________________________
_____________________________________________________
Signature Guarantee:* _____________________
_____________________
* (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.)
82
<PAGE>
_________________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
________________________________________________________________________________
________________________________________________________________________________
___________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
____________________
(Insert address and zip code of assignee)
and irrevocably appoints ________________________________________
________________________________________________________________________________
_______________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee**: ______________________________________________________
__________________________
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
83
<PAGE>
====================================
FIRST SUPPLEMENTAL INDENTURE
between
SUN HEALTHCARE GROUP, INC.
and
THE BANK OF NEW YORK
Dated as of _________
=====================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS. . . . . . . . . . . . . . . . . . . 2
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT . . . . . . . . . . . . 5
SECTION 2.2. MATURITY . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3. FORM AND PAYMENT . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.4. GLOBAL DEBENTURE . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.5. INTEREST . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION . . . . . . . . . . . . . . . . 8
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY . . . . . . . . . . . . . 8
SECTION 3.3. NO SINKING FUND. . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD . . . . . . . . . . 10
SECTION 4.2. NOTICE OF EXTENSION. . . . . . . . . . . . . . . . . . . 10
SECTION 4.3. LIMITATION OF TRANSACTIONS . . . . . . . . . . . . . . . 11
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES. . . . . . . . . . . . . . . . . . . 11
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL. . . . . . . . . . . 12
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE . . . . . . . . . . . . . . . . . 12
ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS. . . . . . . . . . . . . . . . . . . . 13
SECTION 7.2. CONVERSION PROCEDURES. . . . . . . . . . . . . . . . . . 13
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS . . . . . . . . . . . . . . 15
SECTION 7.4. MERGER, CONSOLIDATION, OR SALE OF ASSETS . . . . . . . . 20
SECTION 7.5. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE. . . . . . . . 22
SECTION 7.6. PRIOR NOTICE OF CERTAIN EVENTS . . . . . . . . . . . . . 22
i
<PAGE>
Page
----
SECTION 7.7. DIVIDEND OR INTEREST REINVESTMENT PLANS. . . . . . . . . 23
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS. . . . . . . . . . . . . . . . 24
SECTION 7.9. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION
PRICE OR ADJUSTMENTS . . . . . . . . . . . . . . . . . . . 24
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE. . . . . . . . . . . . . . 25
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES . . . . . . . . 36
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL
INDENTURE CONTROLS. . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS. . . . . . . . . . 36
SECTION 10.3. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.4. SEPARABILITY. . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.5. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . 37
ii
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of _________ (the "First
Supplemental Indenture"), between Sun Healthcare Group, Inc., a Delaware
corporation (the "Company"), and The Bank of New York, as trustee (the
"Trustee") under the Indenture dated as of ______ between the Company and the
Trustee (the "Indenture").
WHEREAS, the Company executed and delivered the Indenture to the
Trustee to provide for the future issuance of the Company's unsecured junior
subordinated debt securities to be issued from time to time in one or more
series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Indenture;
WHEREAS, pursuant to the terms of the Indenture, the Company desires
to provide for the establishment of a new series of its Securities to be known
as its [__]% Convertible Junior Subordinated Debentures (the "Convertible
Debentures"), the form and substance of such Convertible Debentures and the
terms, provisions and conditions thereof to be set forth as provided in the
Indenture and this First Supplemental Indenture;
WHEREAS, Sun Financing I, a Delaware statutory business trust ( the
"Trust"), has offered to the public $________ aggregate liquidation amount of
its ___% Trust Convertible Preferred Securities (the "Convertible Preferred
Securities"), representing undivided beneficial interests in the assets of the
Trust and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by the Trust to the Company of $______
aggregate liquidation amount of its Common Securities, in $_______ aggregate
principal amount of the Convertible Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this First Supplemental Indenture and all requirements necessary to make
this First Supplemental Indenture a valid instrument in accordance with its
terms, and to make the Convertible Debentures, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the
Company, have been performed, and the execution and delivery of this First
Supplemental Indenture has been duly authorized in all respects:
NOW THEREFORE, in consideration of the purchase and acceptance of the
Convertible Debentures by the Holders thereof, and for the purpose of setting
forth, as provided in the Indenture, the form and substance of the Convertible
Debentures and the terms, provisions and conditions thereof, the Company
covenants and agrees with the Trustee as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITION OF TERMS.
For all purposes of this First Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms which are defined in the Indenture have the same
meanings when used in this First Supplemental Indenture;
(b) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(c) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States of America, and, except as otherwise herein
expressly provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States of
America at the date of such computation;
(e) a reference to a Section or Article is to a Section or
Article of this First Supplemental Indenture;
(f) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this First Supplemental Indenture as a whole
and not to any particular Article, Section or other subdivision;
(g) headings are for convenience of reference only and do not
affect interpretation; and
(h) the following terms have the meanings given to them in the
Declaration: (i) Business Day; (ii) Clearing Agency; (iii) Common Stock;
(iv) Convertible Preferred Security Certificate; (v) Delaware Trustee; (vi)
Dissolution Tax Opinion; (vii) DTC; (viii) Institutional Trustee; (ix)
Investment Company Event; (x) No-Recognition Opinion; (xi) Redemption Tax
Opinion; (xii) Regular Trustees; (xiii) Special Event; (xiv) Tax Event; and
(xv) Underwriting Agreement.
2
<PAGE>
"ADDITIONAL INTEREST" has the meaning specified in Section 2.5.
"APPLICABLE PRICE" means (i) in the event of a Non-Stock Fundamental
Change in which the holders of Common Stock receive only cash, the amount of
cash received by a holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the average of the daily Closing Price for one
share of Common Stock during the 10 Trading Days immediately prior to the record
date for the determination of the holders of Common Stock entitled to receive
cash, securities, property or other assets in connection with such Fundamental
Change or, if there is no such record date, prior to the date upon which the
holders of Common Stock shall have the right to receive such cash, securities,
property or other assets.
"CLOSING PRICE" of any common stock on any day shall mean the last
reported sale price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way of such common stock, in each case on the NYSE Composite Tape or, if the
common stock is not listed or admitted to trading on such exchange, on the
principal national securities exchange on which such common stock is listed or
admitted to trading, or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange member firm selected from time to time
by the Board of Directors of the Company for that purpose or, if not so
available in such manner, as otherwise determined in good faith by the Board of
Directors.
"COMMON STOCK FUNDAMENTAL CHANGE" means any Fundamental Change in
which more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Debentures continue to exist as outstanding
Convertible Debentures, or (ii) not later than the occurrence of such
Fundamental Change, the outstanding Convertible Debentures are converted into or
exchanged for debentures of a corporation succeeding to the business of the
Company, which debentures have terms substantially similar to those of the
Convertible Debentures.
"COMPOUNDED INTEREST" has the meaning specified in SECTION 4.1.
"CONVERSION PRICE" means $___ as of the date hereof and may be
adjusted from time to time as set forth in Section 7.3.
"CONVERTIBLE PREFERRED SECURITIES" has the meaning specified in the
recitals to this First Supplemental Indenture.
3
<PAGE>
"DECLARATION" means the Amended and Restated Declaration of Trust of
Sun Financing I, a Delaware statutory business trust, dated as of ______.
"DEFERRED INTEREST" has the meaning specified in Section 4.1.
"DISSOLUTION EVENT" means that, as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Declaration, and the Convertible Debentures held by the Institutional
Trustee are to be distributed to the holders of the Trust Securities issued by
the Trust pro rata in accordance with the Declaration.
"EXTENDED INTEREST PAYMENT PERIOD" has the meaning specified in
Section 4.1.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Stock shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Stock shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Stock received in the transaction or event as a result of
which more than 50% of the Common Stock outstanding shall have been exchanged
for, converted into or acquired for, or shall constitute solely the right to
receive, such cash, securities, property or other assets.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.4.
"MATURITY DATE" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
"NON BOOK-ENTRY CONVERTIBLE PREFERRED SECURITIES" has the meaning
specified in Section 2.4.
"NON-STOCK FUNDAMENTAL CHANGE" means any Fundamental Change other than
a Common Stock Fundamental Change.
"OPTIONAL REDEMPTION PRICE" has the meaning specified in Section 3.2.
"PURCHASER STOCK PRICE" means, with respect to any Common Stock
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Stock in such Common Stock
Fundamental Change during
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the 10 Trading Days immediately prior to the date fixed for the determination
of the holders of Common Stock entitled to receive such common stock or, if
there is no such date, prior to the date upon which the holders of Common
Stock shall have the right to receive such common stock.
"REFERENCE MARKET PRICE" initially means $__ and, in the event of any
adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving effect to any
such adjustment shall always be the same as the ratio of the initial Reference
Market Price to the initial Conversion Price of $__ per share.
"TRADING DAY" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
ARTICLE II
GENERAL TERMS AND CONDITIONS OF THE CONVERTIBLE DEBENTURES
SECTION 2.1. DESIGNATION AND PRINCIPAL AMOUNT.
There is hereby authorized a series of Debentures designated the "__%
Convertible Junior Subordinated Debentures", limited in aggregate principal
amount to $_________, which amount shall be as set forth in any written order of
the Company for the authentication and delivery of Convertible Debentures
pursuant to Section 3.3 of the Indenture.
SECTION 2.2. MATURITY.
The Maturity Date is _______.
SECTION 2.3. FORM AND PAYMENT.
Except as provided in Section 2.4, the Convertible Debentures shall be
issued in fully registered certificated form without Coupons, in denominations
of $50 in principal amount and integral multiples thereof. Principal and
interest on the Convertible Debentures issued in certificated form will be
payable, the transfer of such Convertible Debentures will be registrable and
such Convertible Debentures will be exchangeable for Convertible Debentures
bearing identical terms and provisions at the office or agency of the Trustee;
PROVIDED, HOWEVER, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Convertible Debentures held by the Institutional
Trustee will be made at such place and to such account as may be designated by
the Institutional Trustee.
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SECTION 2.4. GLOBAL DEBENTURE.
(a) In connection with a Dissolution Event,
(i) the Convertible Debentures in certificated form may be presented
to the Trustee by the Institutional Trustee in exchange for a global
Debenture in an aggregate principal amount equal to the aggregate principal
amount of all outstanding Convertible Debentures (a "Global Debenture"), to
be registered in the name of DTC, or its nominee, and delivered by the
Trustee to DTC for crediting to the accounts of its participants pursuant
to the instructions of the Regular Trustees. The Company upon any such
presentation shall execute a Global Debenture in such aggregate principal
amount and deliver the same to the Trustee for authentication and delivery
in accordance with the Indenture and this First Supplemental Indenture.
Payments on the Convertible Debentures issued as a Global Debenture will be
made to DTC; and
(ii) if any Convertible Preferred Securities are held in non book-
entry certificated form, any Convertible Preferred Security Certificate
which represents Convertible Preferred Securities other than Convertible
Preferred Securities held by the Clearing Agency or its nominee ("Non
Book-Entry Convertible Preferred Securities") will be deemed to represent
beneficial interests in Convertible Debentures having an aggregate
principal amount equal to the aggregate liquidation amount of the Non
Book-Entry Convertible Preferred Securities until such Convertible
Preferred Security Certificates are presented to the Debenture Registrar
for transfer or reissuance at which time such Convertible Preferred
Security Certificates will be cancelled and a Debenture, registered in the
name of the holder of the Convertible Preferred Security Certificate or the
transferee of the holder of such Convertible Preferred Security
Certificate, as the case may be, with an aggregate principal amount equal
to the aggregate liquidation amount of the Convertible Preferred Security
Certificate cancelled, will be executed by the Company and delivered to the
Trustee for authentication and delivery in accordance with the Indenture
and this First Supplemental Indenture. On issue of such Convertible
Debentures, Convertible Debentures with an equivalent aggregate principal
amount that were presented by the Institutional Trustee to the Trustee will
be deemed to have been cancelled.
(b) A Global Debenture may be transferred, in whole but not in
part, only to another nominee of DTC, or to a successor depositary selected
or approved by the Company or to a nominee of such successor depositary.
SECTION 2.5. INTEREST.
(a) Each Convertible Debenture will bear interest at the rate of
__% per annum (the "Coupon Rate") from ________ until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate,
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compounded quarterly, payable (subject to the provisions of Article IV)
quarterly in arrears on ________, __________, ________ and _______ of each
year (each, an "Interest Payment Date"), commencing on __________, to the
Person in whose name such Convertible Debenture or any predecessor
Convertible Debenture is registered, at the close of business on the Regular
Record Date for such interest installment, which, in respect of (i)
Convertible Debentures of which the Institutional Trustee is the Holder and
the related Convertible Preferred Securities are in book-entry only form or
(ii) a Global Debenture, shall be the close of business on the Business Day
next preceding that Interest Payment Date; provided, that if the Interest
Payment Date is a Redemption Date, then the record date for the interest
payment shall be as of the opening of business on such day for the purpose of
permitting the Holder of a Convertible Debenture to convert on such record
date while continuing to be the record holder for the interest payment and
therefore entitled to receive the interest payment on the Interest Payment
Date notwithstanding conversion on the record date. Notwithstanding the
foregoing sentence, if (i) the Convertible Debentures are held by the
Institutional Trustee and the Convertible Preferred Securities are no longer
in book-entry only form or (ii) the Convertible Debentures are not
represented by a Global Debenture, the Company may select a Regular Record
Date for such interest installment which shall be any date at least one
Business Day before an Interest Payment Date.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months. Except as
provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of interest
payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date.
(c) If, at any time while the Institutional Trustee is the Holder
of any Convertible Debentures, the Trust or the Institutional Trustee is
required to pay any taxes, duties, assessments or governmental charges of
whatever nature (other than withholding taxes) imposed by the United States,
or any other taxing authority, then, in any such case, the Company will pay
as additional interest ("Additional Interest") on the Convertible Debentures
held by the Institutional Trustee, such additional amounts as shall be
required so that the net amounts received and retained by the Trust and the
Institutional Trustee after paying such taxes, duties, assessments or other
governmental charges will be equal to the amounts the Trust and the
Institutional Trustee would have received had no such taxes, duties,
assessments or other government charges been imposed.
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ARTICLE III
REDEMPTION OF THE CONVERTIBLE DEBENTURES
SECTION 3.1. SPECIAL EVENT REDEMPTION.
If a Special Event has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion; or
(b) after receiving a Dissolution Tax Opinion, the Regular Trustees
shall have been informed by tax counsel rendering the Dissolution Tax
Opinion that a No-Recognition Opinion cannot be delivered to the Trust,
then, notwithstanding Section 3.2(a) but subject to Section 3.2(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures to redeem the Convertible
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event (the "90-Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and
unpaid interest (including Compounded and Additional Interest) thereon to the
date of such redemption (the "Redemption Price"), provided that if at the
time there is available to the Company or the Trust the opportunity to
eliminate, within the 90-Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election,
or pursuing some other similar reasonable measure which has no adverse effect
on the Company, the Trust or the Holders of the Trust Securities issued by
the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption, and, provided, further, that the Company shall have no right to
redeem the Convertible Debentures while the Trust is pursuing any Ministerial
Action pursuant to its obligations under the Declaration. The Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price prior to the redemption date.
SECTION 3.2. OPTIONAL REDEMPTION BY COMPANY.
(a) Subject to the provisions of Section 3.2(b) and to the
provisions of Article XI of the Indenture, except as otherwise may be
specified in Section 3.1 or elsewhere in this First Supplemental Indenture,
the Company shall have the right to redeem the Convertible Debentures, in
whole or in part, from time to time, on or after _______. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more
than 60 days notice to the Holder of the Convertible Debentures, at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with
accrued and unpaid interest, including Compounded and Additional Interest to,
but excluding, the Redemption Date, if redeemed during the 12-month period
beginning _____:
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YEAR REDEMPTION PRICE
---- ----------------
and 100% if redeemed on or after _______.
If Convertible Debentures are redeemed on any _______, ________,
________, or _______, accrued and unpaid interest shall be payable to holders
of record on the relevant record date.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Convertible Preferred Securities.
If the Convertible Debentures are only partially redeemed pursuant
to this Section 3.2, the Convertible Debentures will be redeemed pro rata or
by lot or by any other method utilized by the Trustee. The Optional
Redemption Price shall be paid prior to 12:00 noon, New York time, on the
Redemption Date or at such earlier time as the Company determines provided
that the Company shall deposit with the Trustee an amount sufficient to pay
the Optional Redemption Price by 10:00 a.m., New York time, on the date such
Optional Redemption Price is to be paid.
(b) If a partial redemption of the Convertible Debentures would
result in the delisting of the Convertible Preferred Securities issued by the
Trust from any national securities exchange or other organization on which
the Convertible Preferred Securities are then listed, the Company shall not
be permitted to effect such partial redemption and may only redeem the
Convertible Debentures in whole.
(c) The Company may not redeem fewer than all of the outstanding
Convertible Debentures unless all accrued and unpaid interest has been paid
on all of the outstanding Convertible Debentures.
SECTION 3.3. NO SINKING FUND.
The Convertible Debentures are not entitled to the benefit of any
sinking fund.
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ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1. EXTENSION OF INTEREST PAYMENT PERIOD.
As long as an Event of Default under Section 5.1(a) of the Indenture
shall not have occurred and be continuing, the Company shall have the right,
at any time and from time to time during the term of the Convertible
Debentures, to defer payments of interest by extending the interest payment
period of such Convertible Debentures for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable;
provided that no Extended Interest Payment Period may extend beyond the
Maturity Date or any earlier Redemption Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of
the extension of the interest payment period pursuant to this Section 4.1,
will bear interest thereon at the Coupon Rate compounded quarterly for each
quarter of the Extended Interest Payment Period ("Compounded Interest"). At
the end of the Extended Interest Payment Period, the Company shall pay all
interest accrued and unpaid on the Convertible Debentures, including any
Additional Interest and Compounded Interest (together, "Deferred Interest")
that shall be payable to the Holders of Convertible Debentures in whose names
the Convertible Debentures are registered in the Debenture Register on the
first record date after the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company
may further extend such period, provided that such period together with all
such further extensions thereof shall not exceed 20 consecutive quarters, or
extend beyond the maturity date of the Convertible Debentures. Upon the
termination of any Extended Interest Payment Period and upon the payment of
all Deferred Interest then due, the Company may commence a new Extended
Interest Payment Period, subject to the foregoing requirements. No interest
shall be due and payable during an Extended Interest Payment Period, except
at the end thereof, but the Company may prepay at any time all or any portion
of the interest accrued during an Extended Interest Payment Period.
SECTION 4.2. NOTICE OF EXTENSION.
(a) If the Institutional Trustee is the only registered Holder of
the Convertible Debentures at the time the Company selects an Extended
Interest Payment Period, the Company shall give written notice to the Regular
Trustees, the Institutional Trustee and the Trustee of its election of such
Extended Interest Payment Period one Business Day before the earlier of (i)
the next succeeding date on which Distributions on the Trust Securities
issued by the Trust are payable, or (ii) the date the Trust is required to
give notice of the record date, or the date such Distributions are payable,
to the New York Stock Exchange or other applicable self-regulatory
organization or to holders of Convertible Preferred Securities issued by the
Trust, but in any event at least one Business Day before such record date.
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(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company elects an Extended Interest
Payment Period, the Company shall give the Holders of Convertible Debentures
and the Trustee written notice of its selection of such Extended Interest
Payment Period at least 10 Business Days before the earlier of (i) the next
succeeding Interest Payment Date, or (ii) the date the Company is required to
give notice of the record or payment date of such interest payment to the New
York Stock Exchange or other applicable self-regulatory organization or to
Holders of Convertible Debentures.
(c) The quarter in which any notice is given pursuant to
paragraphs (A) or (B) of this Section 4.2 shall be counted as one of the 20
quarters permitted in the maximum Extended Interest Payment Period permitted
under Section 4.1.
SECTION 4.3. LIMITATION OF TRANSACTIONS.
If the Company shall exercise its right to defer payment of interest
as provided in Section 4.1, then (i) the Company shall not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital
stock (other than (A) purchases or acquisitions of shares of its common stock
in connection with the satisfaction by the Company of its obligations under
any employee benefit plans, (B) as a result of a reclassification of its
capital stock or the exchange or conversion of one class or series of its
capital stock for another class or series of its capital stock or, (C) the
purchase of fractional interests in shares of its capital stock pursuant to
the conversion or exchange provisions of such capital stock or security being
converted or exchanged), (ii) the Company shall not make any payment of
interest, principal or premium, if any, on or repay, repurchase or redeem any
debt securities issued by the Company which rank PARI PASSU with or junior to
the Convertible Debentures and (iii) the Company shall not make any guarantee
payment with respect to the foregoing (other than pursuant to the Guarantee).
ARTICLE V
EXPENSES
SECTION 5.1. PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the
Convertible Debentures to the Institutional Trustee and in connection with
the sale of the Trust Securities by the Trust, the Company, in its capacity
as borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Convertible Debentures, including commissions to the
underwriters payable pursuant to the Underwriting Agreement and compensation
of the Trustee under the Indenture in accordance with the provisions of
Section 6.6 of the Indenture;
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(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust, the
fees and expenses of the Institutional Trustee and the Delaware Trustee, the
costs and expenses relating to the operation of the Trust, including without
limitation, costs and expenses of accountants, attorneys, statistical or
bookkeeping services, expenses for printing and engraving and computing or
accounting equipment, paying agent(s), registrar(s), transfer agent(s),
duplicating, travel and telephone and other telecommunications expenses and
costs and expenses incurred in connection with the acquisition, financing,
and disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Convertible
Preferred Securities;
(d) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(e) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
SECTION 5.2. PAYMENT UPON RESIGNATION OR REMOVAL.
Upon termination of this First Supplemental Indenture or the
Indenture or the removal or resignation of the Trustee pursuant to Section
6.7 of the Indenture, the Company shall pay to the Trustee all amounts
accrued to the date of such termination, removal or resignation. Upon
termination of the Declaration or the removal or resignation of the Delaware
Trustee or the Institutional Trustee, as the case may be, pursuant to Section
5.6 of the Declaration, the Company shall pay to the Delaware Trustee or the
Institutional Trustee, and their respective counsel, as the case may be, all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE VI
COVENANT TO LIST ON EXCHANGE
SECTION 6.1. LISTING ON AN EXCHANGE.
If the Convertible Debentures are to be distributed to the holders
of Convertible Preferred Securities issued by the Trust upon a Dissolution
Event, the Company will use its best efforts to list such Convertible
Debentures on the New York Stock Exchange, Inc. or on such other exchange as
the Convertible Preferred Securities are then listed.
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ARTICLE VII
CONVERSION OF CONVERTIBLE DEBENTURES
SECTION 7.1. CONVERSION RIGHTS.
Subject to and upon compliance with the provisions of this Article
VII, the Convertible Debentures are convertible, at the option of the Holder,
at any time beginning _______ through the close of business on ________ (or,
in the case of Convertible Debentures called for redemption, prior to the
close of business on the Business Day prior to the corresponding redemption
date) into fully paid and nonassessable shares of Common Stock of the Company
at an initial conversion rate of _______ shares of Common Stock for each $50
in aggregate principal amount of Convertible Debentures (equal to a
Conversion Price of $___ per share of Common Stock), subject to adjustment as
described in this Article VII. A Holder of Convertible Debentures may
convert any portion of the principal amount of the Convertible Debentures
into that number of fully paid and nonassessable shares of Common Stock
obtained by dividing the principal amount of the Convertible Debentures to be
converted by such Conversion Price. All calculations under this Article VII
shall be made to the nearest cent or to the nearest 1/100th of a share, as
the case may be.
SECTION 7.2. CONVERSION PROCEDURES.
(a) In order to convert all or a portion of the Convertible
Debentures, the Holder thereof shall deliver to the Conversion Agent an
irrevocable Notice of Conversion setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the shares of Common Stock should be issued
upon conversion and, if such Convertible Debentures are definitive
Convertible Debentures, surrender to the Conversion Agent the Convertible
Debentures to be converted, duly endorsed or assigned to the Company or in
blank. In addition, a holder of Convertible Preferred Securities may
exercise its right under the Declaration to convert such Convertible
Preferred Securities into Common Stock by delivering to the Conversion Agent
an irrevocable Notice of Conversion setting forth the information called for
by the preceding sentence and directing the Conversion Agent (i) to exchange
such Convertible Preferred Securities for a portion of the Convertible
Debentures held by the Trust (at an exchange rate of $50 principal amount of
Convertible Debentures for each Convertible Preferred Security) and (ii) to
immediately convert such Convertible Debentures, on behalf of such holder,
into Common Stock pursuant to this Article VII and, if such Convertible
Preferred Securities are in definitive form, surrendering such Convertible
Preferred Securities, duly endorsed or assigned to the Trust or in blank. So
long as any Convertible Preferred Securities are outstanding, the Trust shall
not convert any Convertible Debentures except pursuant to a Notice of
Conversion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder on
the Regular Record Date will be entitled to receive the interest payable on
the subsequent Interest Payment Date on the
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portion of Convertible Debentures to be converted notwithstanding the
conversion thereof prior to such Interest Payment Date. Except as otherwise
provided in the immediately preceding sentence, in the case of any
Convertible Debenture which is converted, interest whose payment date is
after the date of conversion of such Convertible Debenture shall not be
payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
on the Convertible Debentures being converted, which shall be deemed to be
paid in full. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from
the Holder or from a holder of the Convertible Preferred Securities effecting
a conversion thereof pursuant to its conversion rights under the Declaration,
as the case may be. The Person or Persons entitled to receive Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such Common Stock as of the Conversion Date. As
promptly as practicable on or after the Conversion Date, the Company shall
issue and deliver at the office of the Conversion Agent, unless otherwise
directed by the Holder in the Notice of Conversion, a certificate or
certificates for the number of full shares of Common Stock issuable upon such
conversion, together with the cash payment, if any, in lieu of any fraction
of any share to the Person or Persons entitled to receive the same. The
Conversion Agent shall deliver such certificate or certificates to such
Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of
shares of Common Stock into which the Convertible Debentures are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall
be deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Convertible Debentures so converted and any unpaid
interest (including Compounded Interest) accrued on such Convertible
Debentures at the time of such conversion.
(c) No fractional shares of Common Stock will be issued as a
result of conversion, but in lieu thereof, the Company shall pay to the
Conversion Agent a cash adjustment in an amount equal to the same fraction of
the Closing Price of such fractional interest on the date on which the
Convertible Debentures were duly surrendered to the Conversion Agent for
conversion, or, if such day is not a Trading Day, on the next Trading Day,
and the Conversion Agent in turn will make such payment, if any, to the
Holder of the Convertible Debentures or the holder of the Convertible
Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture
in part only, a new Convertible Debenture or Convertible Debentures for the
unconverted portion thereof will be issued in the name of the Holder thereof
upon the cancellation thereof in accordance with Section 14.2 of the
Indenture.
(e) In effecting the conversion transactions described in this
Section 7.2, the Conversion Agent is acting as agent of the holders of
Convertible Preferred Securities (in the exchange of Convertible Preferred
Securities for Convertible Debentures) and as agent of the
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Holders of Convertible Debentures (in the conversion of Convertible
Debentures into Common Stock), as the case may be. The Conversion Agent is
hereby authorized (i) to exchange Convertible Debentures held by the Trust
from time to time for Convertible Preferred Securities in connection with the
conversion of such Convertible Preferred Securities in accordance with this
Article VII and (ii) to convert all or a portion of the Convertible
Debentures into Common Stock and thereupon to deliver such shares of Common
Stock in accordance with the provisions of this Article VII and to deliver to
the Trust a new Convertible Debenture or Convertible Debentures for any
resulting unconverted principal amount.
SECTION 7.3. CONVERSION PRICE ADJUSTMENTS.
The Conversion Price shall be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Convertible
Debentures are outstanding, (i) pay a dividend or make a distribution with
respect to Common Stock in shares of Common Stock, (ii) subdivide outstanding
shares of Common Stock, (iii) combine outstanding shares of Common Stock into
a smaller number of shares or (iv) issue by reclassification of shares of
Common Stock any shares of capital stock of the Company, the conversion
privilege and the Conversion Price for the Convertible Debentures shall be
adjusted so that the Holder of any Convertible Debenture thereafter
surrendered for conversion shall be entitled to receive the number of shares
of capital stock of the Company which such Holder would have owned
immediately following such action had such Convertible Debenture been
converted immediately prior thereto. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the record date in
the case of a dividend or other distribution and shall become effective
immediately after the effective date in case of a subdivision, combination or
reclassification (or immediately after the record date if a record date shall
have been established for such event). If, as a result of an adjustment made
pursuant to this subsection (a), the Holder of any Convertible Debenture
thereafter surrendered for conversion shall become entitled to receive shares
of two or more classes or series of capital stock of the Company, the Board
of Directors (whose determination shall be conclusive and shall be described
in a Board Resolution filed with the Trustee) shall determine the allocation
of the adjusted Conversion Price for the Convertible Debentures between or
among shares of such classes or series of capital stock.
(b) In case the Company shall, while any of the Convertible
Debentures are outstanding, issue rights or warrants to all holders of Common
Stock entitling them (for a period expiring within 45 days after the record
date mentioned below) to subscribe for or purchase shares of Common Stock at
a price per share less than the current market price per share of Common
Stock (as determined pursuant to subsection (g) below) on the record date
mentioned below, the Conversion Price for the Convertible Debentures shall be
adjusted so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the date of issuance of such
rights or warrants by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding on the date of
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issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of Common Stock are not so
delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in
effect if such date fixed for the determination of stockholders entitled to
receive such rights or warrants had not been fixed. For the purposes of this
subsection, the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company. The Company
shall not issue any rights or warrants in respect of shares of Common Stock
held in the treasury of the Company. In case any rights or warrants referred
to in this subsection in respect of which an adjustment shall have been made
shall expire unexercised within 45 days after the same shall have been
distributed or issued by the Company, the Conversion Price shall be
readjusted at the time of such expiration to the Conversion Price that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
(c) Subject to the last sentence of this subsection (c), in case
the Company shall, by dividend or otherwise, distribute to all holders of
Common Stock evidences of its indebtedness, shares of any class or series of
capital stock, cash or assets or rights or warrants to subscribe for or
purchase any of its securities (excluding any rights or warrants referred to
in subsection (b), any dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in subsection (a) of this Section
7.3), the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction contemplated by
this subsection (c) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (g)) of the
Common Stock on the date fixed for the payment of such distribution (the
"Reference Date") less the fair market value (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors), on the Reference Date, of the
portion of the evidences of indebtedness, shares of capital stock, cash and
assets so distributed or of such subscription rights or warrants applicable
to one share of Common Stock and the denominator shall be such current market
price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following the
Reference Date; provided, however, that in the event the numerator shall be
less than one, in lieu of the foregoing adjustment, adequate provision shall
be made so that each Holder of Convertible Debentures shall have the right to
receive upon conversion the amount of such distribution such Holder would
have received had such Holder converted each Convertible Debenture
immediately prior to the Reference Date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend
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or distribution had not occurred. If the Board of Directors determines the
fair market value of any distribution for purposes of this subsection (c) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per
share of Common Stock (determined as provided in subsection (g)). For
purposes of this subsection (c), any dividend or distribution that includes
shares of Common Stock or rights or warrants to subscribe for or purchase
shares of Common Stock shall be deemed instead to be (i) a dividend or
distribution of the evidences of indebtedness, shares of capital stock, cash
or assets other than such shares of Common Stock or such rights or warrants
(making any Conversion Price reduction required by this subsection (c))
immediately followed by (ii) a dividend or distribution of such shares of
Common Stock or such rights or warrants (making any further Conversion Price
reduction required by subsection (a) or (B)), except (A) the Reference Date
of such dividend or distribution as defined in this subsection (c) shall be
substituted as (1) "the record date in the case of a dividend or other
distribution," and (2) "the record date for the determination of stockholders
entitled to receive such rights or warrants" and (3) "the date fixed for such
determination" within the meaning of subsections (a) and (b) and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed outstanding for purposes of computing any adjustment of the Conversion
Price in subsection (a).
(d) In case the Company shall pay or make a dividend or other
distribution on the Common Stock exclusively in cash (excluding any quarterly
cash dividend on Common Stock to the extent that the aggregate cash dividend
per share of Common Stock in any quarter does not exceed the greater of (i)
the amount per share of Common Stock of the next preceding quarterly dividend
on Common Stock to the extent such preceding quarterly dividend did not
require an adjustment of the Conversion Price pursuant to this subsection (d)
(as adjusted to reflect subdivisions or combinations of Common Stock), and
(ii) 3.75% of the current market price per share determined as provided in
subsection (g), and excluding any dividend or distribution in connection with
the liquidation, dissolution or winding-up of the Company), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
subsection (d) by a fraction of which the numerator shall be the current
market price per share (determined as provided in subsection (g)) of Common
Stock on the date fixed for the payment of such distribution less the amount
of cash so distributed (and not excluded as provided above) applicable to one
share of Common Stock and the denominator shall be such current market price
per share of the Common Stock (determined as provided in subsection (g)),
such reduction to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of such
distribution; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater
than the current market price per share (as defined in subsection (g)) of
Common Stock on the record date mentioned above, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder of
Convertible Debentures shall have the right to receive upon conversion the
amount of cash such Holder would have received had such Holder converted each
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Convertible Debenture immediately prior to the record date for the
distribution of the cash. If an adjustment is required to be made pursuant
to this subsection (d) as a result of a distribution that is a quarterly
dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to
be excluded as provided above. If an adjustment is required to be made
pursuant to this subsection (d) as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of
the distribution. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such record date had not
been fixed.
(e) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Common Stock shall expire and such tender or exchange offer
shall involve the payment by the Company or such Subsidiary of consideration
per share of Common Stock having a fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive and
described in a resolution of the Board of Directors) at the last time (the
"Expiration Time") tenders or exchanges may be made pursuant to such tender
or exchange offer (as it shall have been amended) that exceeds the Closing
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction contemplated by
this subsection (e) by a fraction (which shall not be greater than one) of
which the numerator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time
multiplied by the Closing Price of Common Stock on the Trading Day next
succeeding the Expiration Time and the denominator shall be the sum of (i)
the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer) of all shares
validly tendered or exchanged and not withdrawn as of the Expiration Time
(the shares deemed so accepted, up to any such maximum, being referred to as
the "Purchased Shares") and (ii) the product of the number of shares of the
Common Stock outstanding (less any Purchased Shares) at the Expiration Time
and the Closing Price of Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become retroactively effective immediately
prior to the opening of business on the day following the Expiration Time.
(f) In case a tender or exchange offer made by a Person other than
the Company or any Subsidiary of the Company for all or any portion of the
Common Stock shall expire and such tender or exchange offer shall involve the
payment by a Person other than the Company or any Subsidiary of the Company
of consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors) at the
applicable Expiration Time that exceeds the Closing Price of the Common Stock
on the Trading Day next succeeding the applicable Expiration Time in which as
of the closing date of the offer the Board of Directors of the Company is not
recommending
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rejection of the offer, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price
reduction contemplated by this subsection (f) by a fraction (which shall not
be greater than one) of which the numerator shall be the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) at the
Expiration Time multiplied by the Closing Price of the Common Stock on the
Trading Day next succeeding the Expiration Time and the denominator shall be
the sum of (i) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares") and (ii) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration Time
and the Closing Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, such reduction to become retroactively effective
immediately prior to the opening of business on the day following the
Expiration Time; provided, however, that the reduction of the Conversion
Price contemplated by this subsection (f) will only be made if the tender
offer or exchange offer is made for an amount which increases that Person's
ownership of Common Stock to more than 25% of the total shares of Common
Stock outstanding and provided, further, that the reduction of the Conversion
Price contemplated by this subsection (f) will not be made if as of the close
of the offer, the offering documents with respect to such offer disclose a
plan or an intention to cause the Company to engage in a consolidation or
merger of the Company or a sale of all or substantially all of the assets of
the Company.
(g) For the purpose of any computation under subsections (b), (c)
or (d), the current market price per share of Common Stock on any date in
question shall be deemed to be the average of the daily Closing Prices for
the ten Trading Day period ending on the earlier of the day in question and,
if applicable, the day before the "ex" date with respect to the issuance or
distribution requiring such computation; provided, however, that if more than
one event occurs that would require an adjustment pursuant to subsections (a)
through (f), inclusive, the Board of Directors may make such adjustments to
the Closing Prices during such ten Trading Day period as it deems appropriate
to effectuate the intent of the adjustments in this Section 7.3, in which
case any such determination by the Board of Directors shall be set forth in a
Board Resolution and shall be conclusive. For purposes of this paragraph,
the term "ex" date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular
way on the New York Stock Exchange or on such successor securities exchange
as the Common Stock may be listed or in the relevant market from which the
Closing Prices were obtained without the right to receive such issuance or
distribution, and (2) when used with respect to any tender or exchange offer
means the first date on which the Common Stock trades regular way on such
securities exchange or in such market after the Expiration Time of such offer.
(h) The Company may make such reductions in the Conversion Price,
in addition to those required by subsections (a) through (f), as the Board of
Directors considers
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to be advisable to avoid or diminish any income tax to holders of Common
Stock or rights to purchase Common Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. The Company from time to time may reduce
the Conversion Price by any amount for any period of time if the period is at
least 20 days, the reduction is irrevocable during the period, and the Board
of Directors shall have made a determination that such reduction would be in
the best interest of the Company, which determination shall be conclusive.
Whenever the Conversion Price is reduced pursuant to the preceding sentence,
the Company shall mail to Holders of record of the Convertible Debentures a
notice of the reduction at least 15 days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(j) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to the Holder of Convertible
Debentures.
SECTION 7.4. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
(a) In the event that the Company shall be a party to any
transaction (including without limitation (i) any recapitalization or
reclassification of the Common Stock (other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination of the Common Stock), (ii) any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger
which does not result in a reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company), (iii) any
sale or transfer of all or substantially all of the assets of the Company or
(iv) any compulsory share exchange) pursuant to which either shares of Common
Stock shall be converted into the right to receive other securities, cash or
other property, or, in the case of a sale or transfer of all or substantially
all of the assets of the Company, the holders of Common Stock shall be
entitled to receive other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby the
Holder of each Convertible Debenture then outstanding shall have the right
thereafter to convert such Convertible Debenture only into:
(A) in the case of any such transaction that does not constitute a
Common Stock Fundamental Change and subject to funds being legally
available for such purpose under applicable law at the time of such
conversion, the kind and amount of
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the securities, cash or other property that would have been receivable
upon such recapitalization, reclassification, consolidation, merger,
sale, transfer or share exchange by a holder of the number of shares of
Common Stock issuable upon conversion of such Convertible Debenture
immediately prior to such recapitalization, reclassification,
consolidation, merger, sale, transfer or share exchange, after giving
effect, in the case of any Non-Stock Fundamental Change (as defined
below), to any adjustment in the Conversion Price in accordance with
clause (i) of subsection (c) of this Section 7.4; and
(B) in the case of any such transaction that constitutes a Common Stock
Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an
amount determined in accordance with clause (ii) of subsection (c) of
this Section 7.4.
(b) The company or the Person formed by such consolidation or
resulting from such merger or which acquired such assets or which acquires the
Company's shares, as the case may be, shall make provision in its certificate or
articles of incorporation or other constituent document to establish such right.
Such certificate or articles of incorporation or other constituent document
shall provide for adjustments which, for events subsequent to the effective date
of such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article VII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 7.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price of the Convertible Debentures immediately following such Non-Stock
Fundamental Change shall be the lower of (A) the Conversion Price in
effect immediately prior to such Non-Stock Fundamental Change, but after
giving effect to any other prior adjustments effected pursuant to Section
7.3, and (B) the product of (1) the greater of the Applicable Price and
the then applicable Reference Market Price and (2) a fraction, the
numerator of which is $50 and the denominator of which is (x) the amount
of the Optional Redemption Price set forth in Section 3.2 for $50 in
principal amount of Convertible Debentures if the redemption date were
the date of such Non-Stock Fundamental Change (or, for the period
commencing ________ and through _______ and the twelve-month periods
commencing and ________ and ________, the product of ________, _______
and ________, respectively, times $50) plus (y) any then-accrued and
unpaid interest on $50 in principal amount of Convertible Debentures; and
(ii) in the case of a Common Stock Fundamental Change, the Conversion
Price of the Convertible Debentures immediately following such Common
Stock Fundamen-
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tal Change shall be the Conversion Price in effect immediately prior to such
Common Stock Fundamental Change, but after giving effect to any other
prior adjustments effected pursuant to Section 7.3, multiplied by a
fraction, the numerator of which is the Purchaser Stock Price and the
denominator of which is the Applicable Price; provided, however, that in
the event of a Common Stock Fundamental Change in which (A) 100% of the
value of the consideration received by a holder of Common Stock is common
stock of the successor, acquiror or other third party (and cash, if any,
paid with respect to any fractional interests in such common stock
resulting from such Common Stock Fundamental Change) and (B) all of the
Common Stock shall have been exchanged for, converted into or acquired
for, common stock of the successor, acquiror or other third party (and
any cash with respect to fractional interests), the Conversion Price of
the Convertible Preferred Securities immediately following such Common
Stock Fundamental Change shall be the Conversion Price in effect
immediately prior to such Common Stock Fundamental Change multiplied by a
fraction, the numerator of which is one and the denominator of which is
the number of shares of common stock of the successor, acquiror or other
third party received by a holder of one share of Common Stock as a result
of such Common Stock Fundamental Change.
SECTION 7.5. NOTICE OF ADJUSTMENTS OF CONVERSION PRICE.
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and
shall prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and the
transfer agent for the Convertible Preferred Securities and the Convertible
Debentures; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Convertible Preferred
Securities and the Convertible Debentures at their last addresses as they
appear upon the stock transfer books of the Company and the Trust.
SECTION 7.6. PRIOR NOTICE OF CERTAIN EVENTS.
In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 7.3(c) or (d) or (ii) authorize a
tender or exchange offer that would require an adjustment pursuant to Section
7.3(e);
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(b) the Company shall authorize the granting to all holders of
Common Stock of rights or warrants to subscribe for or purchase any shares of
stock of any class or series or of any other rights or warrants;
(c) of any reclassification of Common Stock (other than a
subdivision or combination of the outstanding Common Stock, or a change in
par value, or from par value to no par value, or from no par value to par
value), or of any consolidation or merger to which the Company is a party and
for which approval of any stockholders of the Company shall be required, or
of the sale or transfer of all or substantially all of the assets of the
Company or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record
of the Convertible Preferred Securities, at their last addresses as they
shall appear upon the stock transfer books of the Trust or (ii) shall cause
to be mailed to all Holders at their last addresses as they shall appear in
the Debenture Register, at least 15 days prior to the applicable record or
effective date hereinafter specified, a notice stating (A) the date on which
a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution, rights or warrants are to be determined or (B) the
date on which such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock
for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up (but no failure to mail such notice or
any defect therein or in the mailing thereof shall affect the validity of the
corporate action required to be specified in such notice).
SECTION 7.7. DIVIDEND OR INTEREST REINVESTMENT PLANS.
Notwithstanding the foregoing provisions, the issuance of any shares
of Common Stock pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment
of additional optional amounts in shares of Common Stock under any such plan,
and the issuance of any shares of Common Stock or options or rights to
purchase such shares pursuant to any employee benefit plan or program of the
Company or pursuant to any option, warrant, right or exercisable,
exchangeable or convertible security outstanding as of _______, shall not be
deemed to constitute an issuance of Common Stock or exercisable, exchangeable
or convertible securities by the Company to which any of the adjustment
provisions described above applies. There shall
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also be no adjustment of the Conversion Price in case of the issuance of any
stock (or securities convertible into or exchangeable for stock) of the
Company except as specifically described in this Article VII.
SECTION 7.8. CERTAIN ADDITIONAL RIGHTS.
In case the Company shall, by dividend or otherwise, declare or make
a distribution on the Common Stock referred to in Section 7.3 (c) or 7.3(d)
(including, without limitation, dividends or distributions referred to in the
last sentence of Section 7.3(d)), the Holder of Convertible Debentures, upon
the conversion thereof subsequent to the close of business on the date fixed
for the determination of stockholders entitled to receive such distribution
and prior to the effectiveness of the Conversion Price adjustment in respect
of such distribution, shall also be entitled to receive for each share of
Common Stock into which Convertible Debentures are converted, the portion of
the shares of Common Stock, rights, warrants, evidences of indebtedness,
shares of capital stock, cash and assets so distributed applicable to one
share of Common Stock; provided, however, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in
lieu of distributing to such Holder any portion of such distribution not
consisting of cash or securities of the Company, pay such Holder an amount in
cash equal to the fair market value thereof (as determined in good faith by
the Board of Directors, whose determination shall be conclusive and described
in a resolution of the Board of Directors). If any conversion of Convertible
Debentures described in the immediately preceding sentence occurs prior to
the payment date for a distribution to holders of Common Stock which the
Holder of Convertible Debentures so converted is entitled to receive in
accordance with the immediately preceding sentence, the Company may elect
(such election to be evidenced by a resolution of the Board of Directors) to
distribute to such Holder a due bill for the shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets
to which such Holder is so entitled, provided, that such due bill (a) meets
any applicable requirements of the principal national securities exchange or
other market on which the Common Stock is then traded and (b) requires
payment or delivery of such shares of Common Stock, rights, warrants,
evidences of indebtedness, shares of capital stock, cash or assets no later
than the date of payment or delivery thereof to holders of shares of Common
Stock receiving such distribution.
SECTION 7.9. TRUSTEE NOT RESPONSIBLE FOR DETERMINING CONVERSION PRICE OR
ADJUSTMENTS.
Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or whether this
supplemental indenture need be entered into. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value
(or the kind of account) of any shares of Common Stock or of any securities
or property, which may at any time be issued or delivered upon the conversion
of any Convertible Debenture; and neither
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the Trustee nor any Conversion Agent makes any representation with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible
for any failure of the Company to make any cash payment or to issue, transfer
or deliver any shares of Common Stock or stock certificates or other
securities or property upon the surrender of any Convertible Debenture for
the purpose of conversion.
ARTICLE VIII
FORM OF CONVERTIBLE DEBENTURE
SECTION 8.1. FORM OF CONVERTIBLE DEBENTURE.
The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the
following forms:
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING -
- - This Debenture is a Book Entry Debenture within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary or a
nominee of a Depositary. This Debenture is exchangeable for Convertible
Debentures registered in the name of a Person other than the Depositary or its
nominee only in the limited circumstances described in the Indenture, and no
transfer of this Debenture (other than a transfer of this Debenture as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in such limited circumstances.
Unless this Debenture is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) to the
issuer or its agent for registration of transfer, exchange or payment, and
any Debenture issued is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.]
No. _______________ CUSIP No. _______________
SUN HEALTHCARE GROUP, INC.
__% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
Sun Healthcare Group, Inc., a Delaware corporation (the "Company",
which term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to, ___________ or
registered assigns, the principal
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sum of _____________ Dollars ($___________) on ________________, and to pay
interest on said principal sum from ___________, or from the most recent
interest payment date (each such date, an "Interest Payment Date") to which
interest has been paid or duly provided for, quarterly (subject to deferral
as set forth herein) in arrears on _______, _______, _______, and ______of
each year commencing ____________, at the rate of __% per annum until the
principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded
quarterly. The amount of interest payable on any Interest Payment Date shall
be computed on the basis of a 360-day year of twelve 30-day months. Except
as provided in the following sentence, the amount of interest payable for any
period shorter than a full quarterly period for which interest is computed,
will be computed on the basis of the actual number of days elapsed per 30-day
month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay),
except that, if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. The interest
installment so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in the Indenture (referred to on the
reverse hereof), be paid to the person in whose name this Convertible
Debenture (or one or more Predecessor Debentures, as defined in said
Indenture) is registered on the Regular Record Date for such interest
installment which shall be the close of business on the Business Day next
preceding such Interest Payment Date unless otherwise provided in the
Indenture. Any such interest installment not punctually paid or duly provided
for shall forthwith cease to be payable to the registered Holders on such
Regular Record Date and may be paid to the Person in whose name this
Convertible Debenture (or one or more Predecessor Debentures) is registered
at the close of business on a special record date to be fixed by the Trustee
for the payment of such defaulted interest, notice whereof shall be given to
the registered Holders of the Convertible Debentures not less than 10 days
prior to such special record date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities
exchange on which the Convertible Debentures may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in the
Indenture. The principal of (and premium, if any) and the interest on this
Convertible Debenture shall be payable at the office or agency of the Trustee
maintained for that purpose in any coin or currency of the United States of
America that at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such
address as shall appear in the Debenture Register. Notwithstanding the
foregoing, so long as the Holder of this Convertible Debenture is the
Institutional Trustee, the payment of the principal of (and premium, if any)
and interest on this Convertible Debenture will be made at such place and to
such account as may be designated by the Institutional Trustee.
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<PAGE>
The indebtedness evidenced by this Convertible Debenture is, to the
extent provided in the Indenture, subordinate and junior in right of payment
to the prior payment in full of all Senior Indebtedness, and this Convertible
Debenture is issued subject to the provisions of the Indenture with respect
thereto. Each Holder of this Convertible Debenture, by accepting the same,
(a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination so
provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each Holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each
such Holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become obligatory
for any purpose until the Certificate of Authentication hereon shall have
been signed by or on behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the
reverse side hereof and such continued provisions shall for all purposes have
the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
SUN HEALTHCARE GROUP, INC.
By: _____________________________________________
Name:
Title
Attest:
By: ________________________
Name:
Title:
27
<PAGE>
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures of the series of Convertible
Debentures described in the within-mentioned Indenture.
Dated:
--------------
The Bank of New York,
as Trustee or as Authentication Agent
By By
-------------------- --------------------
Authorized Signatory Authorized Signatory
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<PAGE>
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of a duly authorized series of
Debentures of the Company (herein sometimes referred to as the "Debentures"),
specified in the Indenture, all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of __________, duly executed and
delivered between the Company and The Bank of New York, as Trustee (the
"Trustee"), as supplemented by the First Supplemental Indenture dated as of
__________, between the Company and the Trustee (the Indenture as so
supplemented, the "Indenture"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the
rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the Holders of Convertible Debentures. By
the terms of the Indenture, the Debentures are issuable thereunder in series
that may vary as to amount, date of maturity, rate of interest and in other
respects as provided in the Indenture. This series of Debentures is limited
in aggregate principal amount as specified in said First Supplemental
Indenture and is herein sometimes referred to as the "Convertible Debentures.
Because of the occurrence and continuation of a Special Event, in
certain circumstances, this Convertible Debenture may become due and payable,
in whole or in part, at the principal amount together with any interest
accrued thereon, including Compounded Interest and Additional Interest (the
"Redemption Price"). The Redemption Price shall be paid prior to 12:00 noon,
New York time, on the date of such redemption or at such earlier time as the
Company determines. In addition, the Company shall have the right to redeem
this Convertible Debenture at the option of the Company, upon not less than
30 nor more than 60 days notice, without premium or penalty, in whole or in
part at any time on or after _______ (an "Optional Redemption") at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with
accrued and unpaid interest, including Additional Interest and Compounded
Interest to, but excluding, the redemption date, if redeemed during the
12-month period beginning ____:
YEAR REDEMPTION PRICE
and 100% if redeemed on or after _______.
If Convertible Debentures are redeemed on any __________, _________,
___________, or ___________, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
So long as the corresponding Convertible Preferred Securities are
outstanding, the proceeds from the redemption of any of the Convertible
Debentures will be used to redeem Convertible Preferred Securities.
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<PAGE>
If the Convertible Debentures are only partially redeemed by the
Company pursuant to an Optional Redemption, the Convertible Debentures will
be redeemed PRO RATA or by lot or by any other method utilized by the Trustee.
In the event of redemption of this Convertible Debenture in part
only, a new Convertible Debenture or Convertible Debentures of this series
for the unredeemed portion hereof will be issued in the name of the Holder
hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible
Debentures may be declared, and upon such declaration shall become, due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of the Debentures of each series affected at the
time outstanding, as defined in the Indenture, to execute supplemental
indentures for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or of modifying in any manner the rights of the
Holders of the Debentures of such series; provided, however, that no such
supplemental indenture shall (a) extend the fixed maturity of any Debenture
of any series, or reduce the principal amount thereof, or reduce the rate or
extend the time of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, or make any change that adversely affects the
right to convert any Debenture of any series or make any change in the
subordination provisions that adversely affects the rights of any Holders of
any Debenture of any series, without the consent of the Holder of each
Debenture so affected, or (b) reduce the aforesaid percentage of Debentures
of such series, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
of any series then outstanding and affected thereby. The Indenture also
contains provisions permitting the Holders of a majority in aggregate
principal amount of the Debentures of any series at the time outstanding
affected thereby, on behalf of all of the Holders of the Debentures of such
series, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture with
respect to such series, and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any Debentures of such
series or a failure to convert any Debentures of such series in accordance
with its terms upon an election by the Holders thereof. Any such consent or
waiver by the registered Holder of this Convertible Debenture (unless revoked
as provided in the Indenture) shall be conclusive and binding upon such
Holder and upon all future Holders and owners of this Convertible Debenture
and of any Convertible Debenture issued in exchange herefor or in place
hereof (whether by registration of transfer or otherwise), irrespective of
whether or not any notation of such consent or waiver is made upon this
Convertible Debenture.
No reference herein to the Indenture and no provision of this
Convertible Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is
30
<PAGE>
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Convertible Debenture at the time and place and at the rate
and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the Indenture
shall not have occurred and be continuing, the Company shall have the right
at any time during the term of the Convertible Debentures and from time to
time to extend the interest payment period of such Convertible Debentures for
up to 20 consecutive quarters (an "Extended Interest Payment Period"), at the
end of which period the Company shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for the
Convertible Debentures to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such
Extended Interest Payment Period, the Company may further extend such
Extended Interest Payment Period, provided that such Extended Interest
Payment Period together with all such further extensions thereof shall not
exceed 20 consecutive quarters. At the termination of any such Extended
Interest Payment Period and upon the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may commence a new
Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations
therein set forth, this Convertible Debenture is transferable by the
registered Holder hereof on the Debenture Register of the Company, upon
surrender of this Convertible Debenture for registration of transfer at the
office or agency of the Trustee in the City and State of New York accompanied
by a written instrument or instruments of transfer in form satisfactory to
the Company or the Trustee duly executed by the registered Holder hereof or
his or her attorney duly authorized in writing, and thereupon one or more new
Convertible Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Convertible Debenture, the Company, the Trustee, any paying agent and the
Debenture Registrar may deem and treat the registered holder hereof as the
absolute owner hereof (whether or not this Convertible Debenture shall be
overdue and notwithstanding any notice of ownership or writing hereon made by
anyone other than the Debenture Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if any, and
interest due hereon and for all other purposes, and neither the Company nor
the Trustee nor any paying agent nor any Debenture Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture,
against any incorporator, stockholder, officer or director, past, present or
future, as such, of the Company or of any predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law,
or by the en-
31
<PAGE>
forcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the
issuance hereof, expressly waived and released.
The Holder of any Convertible Debenture has the right, exercisable
at any time beginning _________ through the close of business (New York time)
on _________ (or, in the case of a Convertible Debenture called for
redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date), to convert the principal amount thereof (or
any portion thereof that is an integral multiple of $50) into shares of
Common Stock at the initial conversion rate of _____ shares of Common Stock
for each Convertible Debenture (equivalent to a Conversion Price of $__ per
share of Common Stock), subject to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and
sign a conversion notice substantially in the form attached hereto, (b)
surrender the Convertible Debenture to a Conversion Agent, (c) furnish
appropriate endorsements or transfer documents if required by the Conversion
Agent and (d) pay any transfer or similar tax, if required. Upon conversion,
no adjustment or payment will be made for interest or dividends, but if any
Holder surrenders a Convertible Debenture for conversion on or after the
Regular Record Date for the payment of an installment of interest and prior
to the opening of business on the next Interest Payment Date, then,
notwithstanding such conversion, the interest payable on such Interest
Payment Date will be paid to the registered Holder of such Convertible
Debenture on such Regular Record Date. In such event, such Convertible
Debenture, when surrendered for conversion, need not be accompanied by
payment of an amount equal to the interest payable on such Interest Payment
Date on the portion so converted. The number of shares issuable upon
conversion of a Convertible Debenture is determined by dividing the principal
amount of the Convertible Debentures converted by the Conversion Price in
effect on the Conversion Date. No fractional shares will be issued upon
conversion but a cash adjustment will be made for any fractional interest.
The outstanding principal amount of any Convertible Debenture shall be
reduced by the portion of the principal amount thereof converted into shares
of Common Stock.
[The Convertible Debentures of this series are issuable only in
registered form without Coupons in denominations of $50 and any integral
multiple thereof.] [This Global Debenture is exchangeable for Convertible
Debentures in definitive form only under certain limited circumstances set
forth in the Indenture. Convertible Debentures of this series so issued are
issuable only in registered form without Coupons in denominations of $50 and
any integral multiple thereof.] As provided in the Indenture and subject to
certain limitations therein set forth, Convertible Debentures of this series
are exchangeable for a like aggregate principal amount of Convertible
Debentures of this series of a different authorized denomination, as requested
by the Holder surrendering the same.
All terms used in this Convertible Debenture that are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
32
<PAGE>
THE INTERNAL LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THE CONVERTIBLE DEBENTURES WITHOUT REGARD TO CONFLICT OF LAW
PROVISIONS THEREOF.
33
<PAGE>
[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Sun Healthcare Group, Inc.
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of SUN HEALTHCARE GROUP, INC. in accordance with
the terms of the Indenture referred to in this Convertible Debenture, and
directs that the shares issuable and deliverable upon conversion, together with
any check in payment for fractional shares, be issued in the name of and
delivered to the undersigned, unless a different name has been indicated in the
assignment below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto.
Date: ____________, ____
in whole __
Portions of Convertible Debenture to be converted ($50
or integral multiples-thereof): $
--------------------
------------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Signature Guarantee:(1)
-------------------------------
- ------------------------
(1) Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings loan association or credit union
meeting the requirements of the Conversion Agent, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Conversion Agent in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
34
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Convertible
Debenture to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ----------------------------------------------------------------
(Insert assignee's social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
----------------------------------------
- ------------------------------------------------------------------------------
- --------------------------- agent to transfer this Convertible Debenture 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 Convertible
Debenture)
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 Debenture Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities and Exchange Act of 1934,
as amended.
35
<PAGE>
ARTICLE IX
ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES
SECTION 9.1. ORIGINAL ISSUE OF CONVERTIBLE DEBENTURES.
Convertible Debentures in the aggregate principal amount of
$________ may, upon execution of this First Supplemental Indenture, be
executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and make available for delivery said
Convertible Debentures to or upon the written order of the Company, signed by
its Chairman, its Vice Chairman, its President, or any Vice President and its
Treasurer or an Assistant Treasurer, without any further action by the
Company.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE CONTROLS.
The Indenture, as supplemented by this First Supplemental Indenture,
is in all respects ratified and confirmed, and this First Supplemental
Indenture shall be deemed part of the Indenture in the manner and to the
extent herein and therein provided. The provisions of this First Supplemental
Indenture shall supersede the provisions of the Indenture to the extent the
Indenture is inconsistent herewith.
SECTION 10.2. TRUSTEE NOT RESPONSIBLE FOR RECITALS.
The recitals herein contained are made by the Company and not by the
Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to the validity or
sufficiency of this First Supplemental Indenture.
SECTION 10.3. GOVERNING LAW.
This First Supplemental Indenture and each Debenture shall be deemed
to be a contract made under the internal laws of the State of New York, and
for all purposes shall be construed in accordance with the laws of said State.
SECTION 10.4. SEPARABILITY.
In case any one or more of the provisions contained in this First
Supplemental Indenture or in the Convertible Debentures shall for any reason
be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this First Supplemental Indenture or of the Convertible
Debentures,
36
<PAGE>
but this First Supplemental Indenture and the Convertible Debentures shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
SECTION 10.5. COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
37
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed on the date or dates indicated in
the acknowledgements and as of the day and year first above written.
SUN HEALTHCARE GROUP, INC.
By: ________________________
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By: _________________________
Name:
Title:
38
<PAGE>
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Sun Financing I
Dated as of ___________
====================================
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . 4
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee . . . . . . . . 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee. . . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . 6
SECTION 2.6 Events of Default; Waiver. . . . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Conflicting Interests. . . . . . . . . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee. . . . . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustee. . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand. . . . . . . . . . . . . . . . 13
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . 13
SECTION 5.4 Rights of Holders. . . . . . . . . . . . . . . . . . . . . 14
i
<PAGE>
Page
----
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations. . . . . . . . . . . . . . . . . . 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . 16
SECTION 6.2 Ranking. . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4 Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 19
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of __________, is executed and delivered by Sun Healthcare Group,
Inc., a Delaware corporation (the "Guarantor"), and The Bank of New York, as
trustee (the "Preferred Guarantee Trustee"), for the benefit of the Holders
(as defined herein) from time to time of the Preferred Securities (as defined
herein) of Sun Financing I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust
(the "Declaration"), dated as of __________, 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 __________ preferred securities, having an
aggregate liquidation amount of $____________, designated the ___% Trust
Convertible Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
WHEREAS, as of the date hereof the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except
that if an Event of Default (as defined in the Indenture), has occurred and
is continuing, the rights of holders of the Common Securities to receive
Guarantee Payments under the Common Securities Guarantee are subordinated to
the rights of Holders of Preferred Securities to receive Guarantee Payments
under this Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when
used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person provided, however that the Authorized Officer
signing an Officers' Certificate given pursuant to Section 314(a)(4) of the
Trust Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"CORPORATE TRUST OFFICE" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at 101
Barclay Street, Floor 21 West, New York, New York 10286.
2
<PAGE>
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with the conversion of all of the Trust Securities into the
Guarantor's common stock or the distribution of Debentures to the Holders in
exchange for Preferred Securities as provided in the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the
extent the Issuer shall have funds available therefor, and (b) the amount of
assets of the Issuer remaining available for distribution to Holders in
liquidation of the Issuer (in either case, the "Liquidation Distribution").
If an event of default 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 Preferred Securities to receive Guarantee Payments.
"HOLDER" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that,
in determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"INDENTURE" means the Base Indenture dated as of _____________,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee, as supplemented by the First Supplemental Indenture dated as of
_____________, among the Debenture Issuer and The Bank of New York, as
trustee.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided in the terms of the Convertible Preferred Securities or
except as provided by the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities, voting separately as a class,
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of more than 50% of the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"PREFERRED GUARANTEE TRUSTEE" means The Bank of New York, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Preferred Securities Guarantee
and thereafter means each such Successor Preferred Guarantee Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TRUST SECURITIES" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed
by Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Preferred Guarantee Trustee
with a list, in such form as the Preferred Guarantee Trustee may reasonably
require, of the names and addresses of the Holders of the Preferred
Securities ("List of Holders") as of such date, (i) within 1 Business Day
after January 1 and June 30 of each year, and (ii) at any other time within
30 days of receipt by the Guarantor of a written request for a List of
Holders as of a
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date no more than 14 days before such List of Holders is given to the
Preferred Guarantee Trustee provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the
form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
Delivery of such reports, information and documents to the
Preferred Guarantee Trustee is for informational purposes only and the
Preferred Guarantee Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Guarantor's compliance with any
of its covenants hereunder (as to which the Preferred Guarantee Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to
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exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Preferred Securities Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such
notice, provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 CONFLICTING INTERESTS
The Declaration shall be deemed to be specifically described in
this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Preferred Guarantee Trustee.
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(b) If an Event of Default actually known to a Responsible Officer
of the Preferred Guarantee Trustee has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall
be read into this Preferred Securities Guarantee against the Preferred
Guarantee Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall exercise such of the rights and powers vested in it
by this Preferred Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
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unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the
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terms and provisions of this Preferred Securities Guarantee, both of which
shall be conclusively evidenced by the Preferred Guarantee Trustee's or
its agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal,
or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Preferred Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
SECURITIES GUARANTEE
The recitals contained in this Preferred Securities Guarantee shall
be taken as the statements of the Guarantor, and the Preferred Guarantee
Trustee does not assume any responsibility for their correctness. The
Preferred Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or
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a corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then, for the purposes of this Section 4.1(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee
Trustee may resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred Guarantee
Trustee and delivered to the Guarantor, which resignation shall not take
effect until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment by instrument in writing executed by such
Successor Preferred Guarantee Trustee and delivered to the Guarantor and the
resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor
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Preferred Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Preferred
Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full
to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Preferred Securities
to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of
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any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period on 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 Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 RIGHTS OF HOLDERS
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may
institute a legal proceeding directly against the Guarantor to enforce the
Preferred Guarantee Trustee's rights under this Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer,
the Preferred Guarantee Trustee or any other person or entity. The Guarantor
waives any right or remedy to require that any action be brought first
against the Issuer or any other person or entity before proceeding directly
against the Guarantor.
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SECTION 5.5 GUARANTEE OF PAYMENT
This Preferred Securities Guarantee creates a guarantee of payment
and not of collection.
SECTION 5.6 SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Preferred Securities Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Preferred Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS
So long as any Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of Common Stock in connection with
the satisfaction by the Guarantor of its obligations under any employee
benefit plans, (ii) as a result of a reclassification of the Guarantor's
capital stock or the exchange or conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's
capital stock or, (iii) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock of the Guarantor or the security being converted or
exchanged) or make any guarantee payments with respect to the foregoing, (b)
the Guarantor shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities
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(including guarantees) issued by the Guarantor which rank pari passu with or
junior to the Debentures and (c) the Guarantor shall not make any guarantee
payments with respect to the foregoing (other than pursuant to this
Guarantee).
SECTION 6.2 RANKING
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right
of payment to all other liabilities of the Guarantor, (ii) pari passu with
the most senior Preferred or preference stock now or hereafter issued by the
Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any Preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Guarantor's common stock to all of the Holders in respect
of the conversion of the Preferred Securities into the Guarantor's common
stock or upon the distribution of the Debentures to the Holders of all of the
Preferred Securities or (iii) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Preferred Securities must restore payment of any sums paid
under the Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person
for any loss, damage, liability, expense or claim incurred by reason of any
act or omission performed or omitted by such Indemnified Person in good faith
in accordance with this Preferred Securities Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Preferred Securities
Guarantee or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's negligence or willful misconduct with respect to such acts or
omissions.
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(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 Preferred
Securities might properly be paid.
SECTION 8.2 INDEMNIFICATION
The Guarantor agrees to indemnify each Indemnified Person for, and
to hold each Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Preferred Securities
Guarantee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 5.1(5)
or Section 5.1(6) of the Indenture, the expenses (including the reasonable
charges and expenses of its counsel) and the compensation for services are
intended to constitute expenses of administration under any applicable
federal or state bankruptcy, insolvency or other similar law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2 AMENDMENTS
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred
Securities. The provisions of
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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 Preferred Securities Guarantee
shall be in writing, duly signed by the party giving such notice, and shall
be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received
in person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 BENEFIT
This Preferred Securities Guarantee is solely for the benefit of
the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
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SECTION 9.5 GOVERNING LAW
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and
year first above written.
Sun Healthcare Group, Inc., as Guarantor
By:
------------------------------------
Name:
Title:
The Bank of New York, as Preferred Guarantee
Trustee
By:
------------------------------------
Name:
Title:
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------------------------------------
------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
Sun Financing II
Dated as of ___________
------------------------------------
------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . 4
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee . . . . . . . . 5
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee. . . . . . 5
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . 6
SECTION 2.6 Events of Default; Waiver. . . . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . 6
SECTION 2.8 Conflicting Interests. . . . . . . . . . . . . . . . . . . 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee. . . . . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Preferred
Securities Guarantee . . . . . . . . . . . . . . . . . . . 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . . 11
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustee. . . . . . . . . . . . . . . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand. . . . . . . . . . . . . . . . 13
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . 13
SECTION 5.4 Rights of Holders. . . . . . . . . . . . . . . . . . . . . 14
<PAGE>
Page
----
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation. . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations. . . . . . . . . . . . . . . . . . 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . 16
SECTION 6.2 Ranking. . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination. . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification. . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4 Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of __________, is executed and delivered by Sun Healthcare Group, Inc., a
Delaware corporation (the "Guarantor"), and The Bank of New York, as trustee
(the "Preferred Guarantee Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Preferred Securities (as defined herein) of Sun
Financing II, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of __________, 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 __________ preferred securities, having an aggregate
liquidation amount of $____________, designated the ___% Trust Convertible
Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture), has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) Capitalized terms used in this Preferred Securities Guarantee but
not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Declaration as at the date of execution of
this Preferred Securities Guarantee have the same meaning when
used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles
and Sections are to Articles and Sections of this Preferred
Securities Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Preferred Securities Guarantee, unless
otherwise defined in this Preferred Securities Guarantee or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized
to bind such Person provided, however that the Authorized Officer signing an
Officers' Certificate given pursuant to Section 314(a)(4) of the Trust Indenture
Act shall be the principal executive, financial or accounting officer of such
Person.
"CORPORATE TRUST OFFICE" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 101 Barclay Street, Floor 21
West, New York, NewYork 10286.
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"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as
defined in the Declaration) that are required to be paid on such Preferred
Securities to the extent the Issuer shall have funds available therefor, (ii)
the redemption price (the "Redemption Price"), and all accrued and unpaid
Distributions to the date of redemption to the extent the Issuer has funds
available therefor, with respect to any Preferred Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of the Issuer (other than in connection with the
conversion of all of the Trust Securities into the Guarantor's common stock or
the distribution of Debentures to the Holders in exchange for Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent the Issuer shall have funds
available therefor, and (b) the amount of assets of the Issuer remaining
available for distribution to Holders in liquidation of the Issuer (in either
case, the "Liquidation Distribution"). If an event of default 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 Preferred Securities to receive
Guarantee Payments.
"HOLDER" shall mean any holder, as registered on the books and records
of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.
"INDENTURE" means the Base Indenture dated as of _____________, among
the Guarantor (the "Debenture Issuer") and The Bank of New York, as trustee, as
supplemented by the First Supplemental Indenture dated as of _____________,
among the Debenture Issuer and The Bank of New York, as trustee.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided in the terms of the Convertible Preferred Securities or
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class,
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of more than 50% of the liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"PREFERRED GUARANTEE TRUSTEE" means The Bank of New York, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"TRUST SECURITIES" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES
(a) The Guarantor shall provide the Preferred Guarantee Trustee with
a list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such date, (i) within 1 Business Day after January 1 and June 30
of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a
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date no more than 14 days before such List of Holders is given to the
Preferred Guarantee Trustee provided, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List
of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE
Within 60 days after May 15 of each year, the Preferred Guarantee
Trustee shall provide to the Holders of the Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act, if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Guarantee Trustee is entitled to rely
exclusively on Officers' Certificates).
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to
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exist, and any Event of Default arising therefrom shall be deemed to have
been cured, for every purpose of this Preferred Securities Guarantee, but no
such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Declaration shall have
obtained actual knowledge.
SECTION 2.8 CONFLICTING INTERESTS
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
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(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Preferred Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred Guarantee
Trustee, the Preferred Guarantee Trustee shall be under a duty to
examine the same to determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee,
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unless it shall be proved that the Preferred Guarantee Trustee was
negligent in ascertaining the pertinent facts upon which such judgment was
made;
(iii) the Preferred Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
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(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the
9
<PAGE>
terms and provisions of this Preferred Securities Guarantee, both of which
shall be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED SECURITIES
GUARANTEE
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency of
this Preferred Securities Guarantee.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or
10
<PAGE>
a corporation or Person permitted by the Securities and Exchange Commission
to act as an institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by federal, state,
territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE TRUSTEE
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor
11
<PAGE>
Preferred Guarantee Trustee. Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Preferred
Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3 OBLIGATIONS NOT AFFECTED
The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of
12
<PAGE>
any other obligation under, arising out of, or in connection with, the
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum
payable that results from the extension of any interest payment period on 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 Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 RIGHTS OF HOLDERS
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such
Preferred Securities Guarantee, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
13
<PAGE>
SECTION 5.5 GUARANTEE OF PAYMENT
This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.
SECTION 5.6 SUBROGATION
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS
So long as any Preferred Securities remain outstanding, if there shall
have occurred an Event of Default or an event of default under the Declaration,
then (a) the Guarantor shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit
plans, (ii) as a result of a reclassification of the Guarantor's capital stock
or the exchange or conversion of one class or series of the Guarantor's capital
stock for another class or series of the Guarantor's capital stock or, (iii) the
purchase of fractional interests in shares of the Guarantor's capital stock
pursuant to the conversion or exchange provisions of such capital stock of the
Guarantor or the security being converted or exchanged) or make any guarantee
payments with respect to the foregoing, (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities
14
<PAGE>
(including guarantees) issued by the Guarantor which rank pari passu with or
junior to the Debentures and (c) the Guarantor shall not make any guarantee
payments with respect to the foregoing (other than pursuant to this
Guarantee).
SECTION 6.2 RANKING
This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, (ii) pari passu with the most
senior Preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any Preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION
This Preferred Securities Guarantee shall terminate upon (i) full
payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Guarantor's common stock to all of the Holders in respect of
the conversion of the Preferred Securities into the Guarantor's common stock or
upon the distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, liability, expense or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith in
accordance with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Preferred Securities Guarantee or
by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
15
<PAGE>
(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 Preferred Securities might properly be paid.
SECTION 8.2 INDEMNIFICATION
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee.
When the Preferred Guarantee Trustee incurs expenses or renders
services in connection with an Event of Default specified in Section 5.1(5) or
Section 5.1(6) of the Indenture, the expenses (including the reasonable charges
and expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding.
SECTION 9.2 AMENDMENTS
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus accrued
and unpaid Distributions to the date upon which the voting percentages are
determined) of all the outstanding Preferred Securities. The provisions of
16
<PAGE>
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 Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Preferred Securities):
Sun Healthcare Group, Inc.
101 Sun Lane, N.E.
Albuquerque, New Mexico 87109
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4 BENEFIT
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
17
<PAGE>
SECTION 9.5 GOVERNING LAW
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
18
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
Sun Healthcare Group, Inc., as Guarantor
By:
---------------------------------------------
Name:
Title:
The Bank of New York, as Preferred Guarantee
Trustee
By:
---------------------------------------------
Name:
Title:
19
<PAGE>
EXHIBIT 12
SUN HEALTHCARE GROUP, INC.
RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS OF DOLLARS, EXCEPT RATIO)
(UNAUDITED)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------------
NINE MONTHS
ENDED
SEPTEMBER
30,
-----------
EARNINGS: 1992 1993 1994 1995 1996 1997
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
Earnings before income taxes and
extraordinary items............. $ 7,258 $ 22,710 $ 36,807 $ 12,794 $ 52,466 $ 87,178
Add Fixed Charges (excluding
portion capitalized)............ 7,891 9,634 39,742 65,444 75,553 86,849
--------- --------- --------- --------- --------- -----------
Earnings available for fixed
charges........................... $ 15,149 $ 32,344 $ 76,549 $ 78,238 $ 128,019 $ 174,027
--------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- -----------
FIXED CHARGES:
Interest charges (including
portion capitalized)............ $ 925 $ 379 $ 14,253 $ 24,668 $ 28,371 $ 44,408
Estimated interest factor on
rental expense.................. 6,966 9,293 29,194 43,615 49,654 43,865
--------- --------- --------- --------- --------- -----------
Total fixed charges................. $ 7,891 $ 9,672 $ 43,447 $ 68,283 $ 78,025 $ 88,273
--------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- -----------
RATIO OF EARNINGS TO FIXED
CHARGES........................... 1.92 3.34 1.76 1.15 1.64 1.97
--------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- -----------
</TABLE>
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 27, 1997
included in Sun Healthcare Group, Inc.'s Form 10-K for the year ended December
31, 1996, the incorporation by reference of our report dated March 26, 1997 on
the financial statements of Golden Care, Inc. for the year ended December 31,
1994 included in Sun Healthcare Group, Inc.'s Current Report on Form 8-K filed
with the Securities and Exchange Commission on March 28, 1997, and to all
references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Albuquerque, New Mexico
November 7, 1997
<PAGE>
Exhibit 25(a)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- ---------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- ---------------------------------------------------
SUN HEALTHCARE GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 85-0410612
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General Information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ---------------------------------------------------
Name Address
- ---------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /S/ THOMAS B. ZAKRZEWSKI
-------------------------
Name: Thomas B. Zakrzewski
Title: Assistant Vice President
<PAGE>
Exhibit 25(b)
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- ------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- ------------------------------------------------------
SUN HEALTHCARE GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 85-0410612
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General Information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ------------------------------------------------------
Name Address
- ------------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the Obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /S/ THOMAS B. ZAKRZEWSKI
-------------------------------
Name: Thomas B. Zakrzewski
Title: Assistant Vice President
<PAGE>
Exhibit 25(c)
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- ------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- ------------------------------------------------------
SUN FINANCING I
(Exact name of obligor as specified in its charter)
Delaware To be Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Trust Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General Information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ------------------------------------------------------
Name Address
- ------------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the Obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /S/MARY BETH A. LEWICKI
-------------------------------
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
<PAGE>
EXHIBIT 25(d)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- ---------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- ---------------------------------------------------
SUN FINANCING II
(Exact name of obligor as specified in its charter)
Delaware To be Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Trust Preferred Securities
(Title of the indenture securities)
===============================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(A) Name and address of each examining or supervising authority to
which it is subject.
- -----------------------------------------------------
Name Address
- -----------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "ACT") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /s/ MARY BETH A. LEWICKI
-------------------------
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
<PAGE>
Exhibit 25(e)
===============================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
- -------------------------------------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
NEW YORK 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- -------------------------------------------------------------------------------
SUN HEALTHCARE GROUP, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 85-0410612
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Trust Preferred Securities of
Sun Financing I
(Title of the indenture securities)
===============================================================================
<PAGE>
1. General Information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
- ------------------------------------------------------
Name Address
- ------------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the Obligor is an affiliate of the Trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to
exercise corporate trust powers. (Exhibit 1 to Amendment No. 1
to Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration Statement
No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /S/MARY BETH A. LEWICKI
-------------------------------
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
<PAGE>
Exhibit 25(f)
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
- ------------------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
- ------------------------------------------------
SUN HEALTHCARE GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 85-0410612
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
101 Sun Lane, N.E.
Albuquerque, NM 87109
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Trust Preferred Securities of
Sun Financing II
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------
Name Address
- ------------------------------------------------
Superintendent of Banks of the State of New York
2 Rector Street, New York, N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains
the authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b
to Form T-1 filed with Registration Statement No. 33-21672 and
Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 7th day of November, 1997.
THE BANK OF NEW YORK
By: /s/ MARY BETH A. LEWICKI
-------------------------------
Name: Mary Beth A. Lewicki
Title: Assistant Vice President
